1. 0 How business growth and people development come together - a Japanese perspective - February 26, 2009 TAKATSU, Naoshi Editor in Chief, Works Magazine Works Institute, Recruit Co., Ltd. takatsu@r.recruit.co.jp The 8 th Middle East HR Conference & Expo

2. Introduction of CLIENT Spirit Project “Transfer of manufacturing system is in good progress. But the diffusion of the values and beliefs that should support it is not sufficient.” “There are now risks of us ruining the excellent quality and customer trust that we have strived so hard to build and to sustain.” –General Manager, Global Human Resource Department, CLIENT

3. Values and beliefs Desirable actions and behaviors “Stipulation of the tacit values since foundation” １９５６１９９４２００４ CLIENT Philosophy Based on Credo, defined Corporate Mission, Management Principles and Individual Code of Conduct CLIENT Philosophy Based on Credo, defined Corporate Mission, Management Principles and Individual Code of Conduct CLIENT Credo Defined how CLIENT should be like CLIENT Credo Defined how CLIENT should be like Revised with changes in society and values Defined Values and Beliefs CLIENT Spirit Values and Beliefs all the associates should respect CLIENT Spirit Values and Beliefs all the associates should respect Tacit values and beliefs

4. Anticipating change Set clear targets through anticipating future needs CLIENT Spirit CLIENT Spirit Thoughts & Actions Creating new values Pursue as many solutions as possible with flexible ideas Overcoming difficulties Persevere with determination until you succeed Ensuring the best quality for our customers Prevent all defects. Only results you are proud of should move to the next page Grasping the facts firmly Always go to the site. Then decide based on the facts Striving to reach higher levels Never be satisfied; Continuously look for improvements Understanding one another completely Talk with people, whatever organization or job position, to find a solution Doing your best as a team Share your high goals with colleagues, and respect the contributions of one another Developing yourself and the next generation Develop people, including yourself, through challenges at work Providing surprises and impressions in a way that only CLIENT can do Providing quality and reliability beyond customer expectations Achieving the highest results by working as a team ・・・ Foresight Vision Creativity Challenge Credibility Quality First On-site Verification Kaizen Collaboration Communication Teamwork Human Development

5. CLIENT Spirit brochure Thoughts Words of wisdom Illustrative story Spirit Actions

6. General Manager says… “I don’t want to just distribute brochures and put posters.” “With more than 100,000 associates in over 30 countries in view, we need a historically and empirically proven method of spreading the values.” “Would you help us find it?”

7. -6- Trial and error at work is the way. “Striving together in a same boat is the best way for changing people’s mind.” Superiors’ should grasp opportunities. To help subordinates think about the philosophy by talking to them on various workplace situations. Learn together via daily business Every team holds daily morning meetings. For embedding the Philosophy into daily behaviors and actions. -Reflect it to activity on the day. -Otherwise it can’t work in case of emergency. Remind the philosophy daily Company A is serious about embedding the philosophy to the daily business. ＋ States one’s opinion referring to the Philosophy Sing a company song Read Philosophy aloud together Other information Presentation by member Source: Project Team interviews and researches.

8. -7- The top’s practice is the most important. “A mechanism is worth a million trainings. A performance by top management is worth a million mechanisms.” -“Founder Konosuke Company A once arrived late to a general employees’ meeting due to a traffic trouble. He voluntarily chose to get unpaid for a month.” Top management shows examples. (Company A) Chairman and President placed the Philosophy and Amoeba Management * as the bedrock for Company B group. “Diluted philosophy brings corporate survival at risk.” Founder Inamori and the executives he directly mentored take part in the trainings. Discussion with section/division managers thoroughly, in Japan and abroad. Top management talks directly. (Company B) Top management embodies and refers to the Philosophy. Source: Project Team interviews and researches. ＊ a business management based on small independent business units.

9. -8- Training offers an opportunity for thorough discussions. Various visible tools are offered. Company B’s training and promotional tools. ＋ Three pocketbooks are designed… The Philosophy Handbook –A tutorial on philosophy The Action Guideline Company B Accounting Handbook –A tutorial on management approaches …And given to all employees in Japan. English/ Chinese versions coming. French, German and Thai versions are scheduled. Most employees take part in biannual two- day Philosophy training program. Discuss philosophy materialization beyond organizational hierarchy. Executives attend manager trainings. View tutorial videos Upper-level participants present their own experiences of practice Group discussion on how to implement Discussion over dinner ＋ Repeat Source: Project Team interviews and researches.

10. -9- Company A drills the Philosophy into its people at their career turning points. (1) Screening at the recruitment Recruit people who can find their own vocation in the company’s mission. (2) Extensive training for newcomers “Strike while the iron is hot.” (3) Training for the promoted So that they perform their expected role in the new function. “People are amenable when they get promoted” (2) (3) (1) Source: Project Team interviews and researches.

11. -10- Company A respects ideas of local offices. Headquarters develops local trainers. Usually locally-hired HR staff –Respected by colleagues and familiar with business Japanese expatriates on some occasions –The persons in charge commit on their own CLIENT expects and respects local ideas and initiatives. Headquarters offers basic instruments. Founder’s ideas, importance of the Philosophy, explanations… Expressions and examples are entrusted to local offices. For better inspiring people into action Source: Project Team interviews and researches.

12. -11- Veteran employees mentored by the founder continue to refer to his thoughts and actions. “When recruiting staff, he always asked if he/she thought his/her life fortunate. Because…” “He had a deep bow for thousands of employees when he retired.” Do you know the reason why?” Executives refer daily to the legendary episodes Founder’s life and the history of the company are displayed. Founder’s actions and statements are displayed in parallel with the contemporary products and events. Original premise is rebuilt in the site. Its contrast with the current buildings symbolizes the achievement. Founder’s bronze statue stands in front. A tribute from the labor union. Company A Memorial Hall as a sacred place Company A is committed to transmit legends from one generation to another. Source: Project Team interviews and researches.

13. -12- (1) Top management’s commitment Every executive embodies and talks about CLIENT Spirit as a CSO (Chief Spiritual Officer) (2) Promotion Handbooks and other tools Trainings and workshops ： missionaries, career turning points… (4) Mechanism Introduce a monitoring system Reflect it eventually into personnel management system Diffusion Model: Four elements urge practice at work. (0) Practice at work Embed it into daily work Use small-group activities Learn together, equally Both knowledge and action-based (3) Legend Gather and hand down Corporate infrastructure

14. -13- “Our missionaries have always been led by the trust in people.” “People from the different culture may not know the name of our prophet. But I am sure that they have some notions of God or some ideas about the nature of things.” (1) Trust and respect people “(To promote our religion to foreigners) we must send certain number of our people to their land – we must cultivate and farm their land with them, learn their language and work for them.” “A missionary from medieval Europe has successfully won the esteem of Japanese people, by fitting into contemporary Japanese life style.” (2) Invest to gain people’s trust and respect Intercultural missions start from mutual trust & respect. ＋ Source: Project Team interviews and researches.

15. -14- Mutual learning is the original and effective approach. Wrong approach taken before Missionaries give people what people lack. Missionaries are superior and people are lower. Missionaries take advantage of their advanced technologies and culture that people respect and awe. Original approach revaluated now Missionaries try to discover “the treasure” in the heart of people. Believing that people have it without noticing. Both stand on a same ground, and Learn from each other Gain spiritual enrichment together Missionaries respect the cultural tradition and customs of people Find out culturally-compatible approaches with observation and creativity. Source: Project Team interviews and researches.

16. -15- Learning shouldn’t be solely knowledge or action-based. (1) Personal will – “I want to…” Ideally inspired by the interaction with other devotees. (1) Sense of duty – “I have to…” Forced by societal pressure or convenience. (2) Experience (Actions/ behaviors) Try to live in an appropriate way. Guided by a mentor for a few years. (2) Knowledge cramming Missions centered on knowledge. People get accepted after mere conceptual understanding. (3) Discourse and dialogue Emerging curiosity for the underlying spirits finally fulfilled. It all makes sense, then. (3) No review on actions/ behaviors Quality of the devotees made in such a way is dubious. Wrong approach taken before Original approach revaluated now Source: Project Team interviews and researches.

17. -16- Basic Principle for Diffusing CLIENT Spirit Mastery of CLIENT Spirit by all associates of the CLIENT Group is the ultimate goal of the diffusion. By mastery we mean profound understanding and constant application of the Spirit. With this goal in mind, we will start a continuing mixed diffusion approach of “discourse” and “shared experience”, so as to promote knowledge-based and action-based learning. The learning will then be deepened into the mastery level by means of “dialogue”. All companies, offices and associates of the CLIENT Group will grow together and learn from one another. Each company or office has its own right and responsibility to opt for the best way to diffuse the Spirit to its associates.

18. -17- (1) Top management’s commitment (2) Promotion (4) Mechanism (0) Practice at work (3) Legend Five-box model: Four elements urge practice at work.

19. -18- Three-path model: To achieve the mastery of CLIENT Spirit. Knowledge-based learning Action-based learning “Discourse” path tell/ teach through speeches/ logics Mastery understand deeply / apply “Shared experience” path act/l earn together through actual/ simulated experiences “Dialogue” path turn learning into mastery at workplace/ individually

20. -19- (1) Top management’s commitment (2) Promotion (4) Mechanism (0) Practice at work (3) Legend Knowledge based Action based Discourse Shared experience Mastery Dialogue The organizational sharing model: Three-path in the five box

21. -20- Promoters as a driving force for sharing CLIENT Spirit Each sites to lead its own sharing activities Taking local characteristics into account Promoters play a pivotal role in planning and executing sharing activities Build activity plan Get buy-ins from other managers Talk and discuss CLIENT Spirit Localize tools Selection of promoters is important 3 to 5 per site Future leaders respected by colleagues Locally hired and Japanese expats

22. -21- A decade long effort for the mastery by all the global associates Ideal Situation in 2015 Systems and climate which enable associates to carry out the CLIENT Spirit are taking root, and actions which embody the CLIENT Spirit can be seen worldwide. 2005-2006 Diffusion 2005-2006 Diffusion 2007-2011 Establishment & Reinforcement 2007-2011 Establishment & Reinforcement 2012-2015 Maturity & Kaizen 2012-2015 Maturity & Kaizen Steps to achieve the ideal situation Goals CLIENT Spirit is known at all CLIENT Group companies. Diffusion plan is developed, and is started to implement. Tools to check degree of diffusion is studied. “Seed”“Sapling”“Tree”

23. -22- Enable promoters To understand CLIENT Sprit and to talk about it to colleagues To understand the expected role and to get motivated Goal Contents Design a promoter workshop Deepen understanding by Watching videos and discussing impressions and findings Using case studies and planning practice at work Link with own experience by Presenting own experience Finding how CLIENT Spirit exists in it Plan sharing activities Tools from HQ + local initiatives

24. -23- Promoter workshop Day One Day Two ９：００ １０：００ １１：００ １２：００ １３：００ １４：００ １５：００ １６：００ １７：００ １８：００ ９：００ １０：００ １１：００ １２：００ １３：００ １４：００ １５：００ １６：００ １６：３０ Reflection Action & judgment based on Spirit Departure Recognize Spirit in him/herself Visualize embodiment Nurture motivation and confidence as a promoter Plan activities concretely My Spirit story Lunch Introduction Understanding (credibility) (foresight) Wrap up Expectation & commitment shared Purpose presented Icebreaking Feel the depth and heights of Spirit Link with own values and experience Lunch (collaboration) From Executives

25. -24- Three stories covered for the workshop Foresight Credibility Collaboration Two additional stories for production sites Videos Dialogue tools Videos and dialogue tools provided Videos initially shown to all the managers 30 managers X 30 times Distribute a manual for dialogue Managers show the videos in their offices Using the manual Share impressions and thoughts on videos

26. -25- Power of stories Values & Beliefs Story of others Story of yours

27. -26- CEO speaks on Spirit New year greetings New comer orientations Union discussions etc Division top speaks To his own division Opportunities “Ask yourselves daily if your actions are in line with CLIENT Spirit. Always think how you can embody the Spirit” “Improve the quality of work and let our clients say that they need us!” Examples of contents Clarify top management’s commitment

28. -27- Survey reflection session designed and executed All directors and managers 40 times, 1,000 people, one hour Spirit sharing activities Result of survey (all company) Result of survey (each office) Activity examples Q & A Background, goal, milestone, major activities Survey structure, all company trend Report structure, interpretation guidance Request from HR ０ １０ ２５ ４０ ５０ ５５ ６０ Best practice of Spirit sharing activities On how to promote activities in each office Dialogue opportunities offered in each office

29. -28- Products of Spirit sharing Values and beliefs shared at the workplaces Through the discourses and dialogues on Spirit From superiors to subordinates, from seniors to juniors Quality of actions improved Thorough execution of basis actions Improvement in people development Initial goalsSide benefits Unity of workplace heightened By sharing thoughts and by deepening mutual respect and understanding Motivation improved With heightened unity of workplace and with improved quality of work

30. -29- Methods and means for sharing CLIENT Spirit Historically and empirically proven: –5-box model from corporate benchmarking –3-path model from religious research Discover “the treasure” in the heart of people and grow together Promoters to bring the sharing activities forward Leverage power of storytelling in workshops and in videos Surveys as tools for urging dialogues HQ to produce the basic, local to be creative Summary