Q&A with Toyohiro Matsuda of Mitsubishi Corporation

Toyohiro Matsuda, head of HRD for Asia at Mitsubishi Corporation, speaks to Akankasha Dewan about the company’s efforts to establish a global mindset among its employees, and the HR practices needed to facilitate such an endeavour.

The forces of globalisation have forced Mitsubishi Corporation (MC) to become more international. What is the HR team currently focused on?

At MC, we trade with approximately 10,000 companies worldwide. We have 200 offices around the world, and have about 40,000 people in Japan and 30,000 overseas.

These 30,000 people are very important at the moment because the business is growing outside of Japan. We are currently looking at how to manage our employees better, especially with regards to diversity.

We are also working towards ensuring that they have the global competencies required to work to the best of their capabilities. Our focus is on regional and national human capital development, especially in MC Group companies.

Lastly, our teams are targeted towards ensuring our global and regional recruiting programmes are in alignment with our business transformation.

What do you mean by diversity management? Why is it an issue in MC?

Until 2000, we were concentrated mainly in Japan and in businesses which originated in Japan. But since then, we have really started focusing on our employees in other countries.

We have discovered there is an unconscious bias between Japanese and non-Japanese staff. Our Japanese staff work via a tacit understanding of the Japanese corporate culture. They prefer reading between the lines rather than direct communication.

The reason for this is that Japan is still a very homogeneous country. Professionals don’t need or have to communicate very well. But when working in multi and cross-cultural environments, they have to try to communicate and express themselves – and that isn’t part of the culture.

Communication is also a problem while working across borders now because very few companies in Japan do business in English, such as our headquarters in Japan. Staff today need to have bilingual competency.

That is precisely why Japanese employees, especially those working at our headquarters, are very weak at competency and skill management.

In such a case, sometimes diversity prevents efficiency for an initial period of time. But we know it also goes on to promote innovation.

In the 30 years of working in the global human resources development (HRD) team here, we are now witnessing the changes as a Japanese-run company which has been struggling to globalise for a long time.

I believe this will be a lesson for other Japanese companies as well who are also struggling to work effectively overseas.

So what are you doing to overcome this difference in culture?

We are now concentrating on how to transform the behaviour of our Japanese staff. When staff visit the Singapore team for the first time, coming from Japan, naturally they keep some distance, as they want to maintain their uniqueness.

However, the younger generation is different. Their mindsets are evolving as they gain global experiences. But we can’t expect all the generations to change simultaneously and quickly. This is especially because the older you are the more difficult it is to change mindsets.

So while we wait for this shift in mindset, we need to look at organisational development. What I came up with is that we need to bring in a brand new concept, a common universal philosophy that will apply to anyone in the organisation.

As part of this, my agenda has been on developing new methodology which preserves and maintains the way of the Japanese, including the system of seniority, for example, but with modifications. We also want to develop a new way of meritocracy for performance, and a process to manage training and development.

We are now targeted at working from a more regional perspective, rather than simply from the headquarters’ point of view. I have been in the headquarters for 10 years, managing the global HRD. But I found it is very difficult to control and change the whole world while viewing it only from the headquarters’ perspective.

One of the things I did to support this was to initiate an Asian regional meeting when I was in Hong Kong. After my transfer back to Tokyo, I initiated the global HRD conference, with the regional HRD managers coming to Japan every year. Today, we have 100 of them gathering in the HQ every year – which is an example of how we have regionalised.

When I moved to Singapore I found I had more autonomy. We had the methodology, the staff and a strong network that we needed.

My dream is to make Singapore the global headquarters. Establishing headquarters here in Singapore would reduce dependence on Japanese people. If successful, then this will become a symbol and benchmark for other countries.

We are now about 100 HRD professionals in the Asia Pacific region. We follow a grid-by-grid approach – so there are managers on the top, and managers below in the hierarchy.

Alongside regional management we are simultaneously working on responsibilities such as succession planning. These managers will go on to be the change leaders, aiming eventually to become strategic business partners.

We have not been 100% successful yet, but so far, we know what we have to do. Each manager must learn more about the business and be an interface between the business strategy and HR strategy.

The same transformation is underway with the rest of the corporate staff, such as finance and accounting, IT and strategy.

Gradually, we are also building our professional network in the country – a process which is now accelerating. Each country in the region is autonomously promoting this initiative. That’s a strong trend for our business at the moment.

What are some of these main issues in the overseas offices, which are not inherent in the Japanese headquarters?

Staff from around the world have highlighted a lack of transparency, especially with regards to career progression and feedback. A lack of communication was also mentioned, especially between national staff and regional staff. Much more improvement can be made to overcome the lack of proprietary information in English.

We can also do more when it comes to our career as well as performance management skills.

You have mentioned the shift to a more English-friendly culture. How are you planning to implement this philosophy?

What is requested most in English is information on our business group and the strategies of our business units. We aim to enrich this information by providing all information in English and Japanese. This is necessary for our overseas offices.

To enhance bilingual competence within our employees, we have crafted a bilingual project. For a start, we are looking at providing management strategy information, internal announcements, senior management changes, internal rules and knowledge management in English.

However, the enhancement of regional intelligence as well as national intelligence issues is a clear and present imperative.

We have also come up with a monthly booklet titled “Ryowa” which includes all the information identified above in both English and Japanese.

While the bilingual booklet has cleared the “mist” which prevented overseas staff from direct access to all the corporate-wide information, we need to include English-based knowledge management systems throughout the organisation.

In my personal view, bilingual competencies are the real key to the successful globalisation of Japanese corporations, including MC and other Asian companies where English is the second or third language.

Is there any training in the pipeline for MC staff?

Yes, we have a sophisticated grade-based management development system which is fairly aligned with the headquarters’ common management training programmes. It brings together participants from both the headquarters and regional offices.

What kind of employees are you recruiting to ensure the business is capable to handle the change it is going through?

In many companies, staff hired locally are able to lead in regional roles – but that isn’t happening here at the moment.

Therefore, it is more about changing the mindsets and skills of Japanese employees. This is in line with our corporate goal of doubling our assets as well as profit by the year 2020.

As such, we need to do something different. We need to recruit, nurture and retain people who can create and maintain the business.

Therefore, the total paradigm of our national staff is changing. We’re creating a new generation of Japanese people who can’t be called local staff or national staff anymore. We are looking at creating a higher number of strategic managers who will be able to become strategic officers who can create glocal strategies as well as nurture the next generation of global talent.

As part of our regional strategy, we studied the regional recruiting systems. We re-evaluated what we have right now, then we sought for who we should recruit now and in the future. That is what we call a strategic manager.

When they are promoted to the next level, like deputy general manager or general manager, then they are called strategic officers.

How do you define who a strategic officer is?

A strategic officer is an entirely new grade of employees who underpin MC’s future business strategy. We target the highest performing staff for this role.

These employees are fully accountable and responsible for achieving the group’s targets as agreed with the top management. They are members of the company’s management team and contribute to formulating group strategic plans and policies, both business and non-business.

They execute complex high-level tasks that require deep professional knowledge and have a worldwide network, both internally and externally.

When I was in Japan, I initiated a global leadership programme for entrepreneurship. I would like to expand in this area, but the Japanese cannot do that. So I encouraged the Indians, Pakistanis, and other nationalities to come over to Japan. Only three out of the 460 business plans were implemented.

I had a sense we could continue this programme in each region, but we needed to be attentive to each person. I found it only worked for those with entrepreneurial potential.

That raises another question – we can nurture some of the existing people who happen to have potential, but we need to do that more intentionally.

So who we would like to hire is very obvious – people with potential to become strategic managers, who can then take on general manager roles, and then create the next generation after them.

They are people who can manage a small organisation initially, and expand it into a larger one in the longer term.

For such talent, we need to be most attentive to their rapidly growing job size with a focus on tangible achievements, be attentive to their quicker career clock and their aspiration for progression, in accordance with their career orientations.

Is it a good idea for MC to transform locally recruited trainees into high-level international managers?

Well, yes and no. In some parts in Asia, members of our top management have nurtured a significant number of strategic officers and managers.

But in some ASEAN countries, there has been a significant shortage. There, we need to pay more attention to our corporate and employer branding issues first, and then try recruiting for strategic managerial potential.

For us, it turned out to be rather difficult to change the mindsets of locally hired staff into the said regional professionals who can conduct cross-border business or who can successfully manage multi-localisation strategies in two or more countries or consumer markets.

Unless we recruit employees who have potential to become regional professionals, it will be rather difficult to just turn them into this.

What are the biggest problems you’ve encountered while recruiting in Japan and overseas?

In Japan, we are among the top 10 companies, so it is easy to hire the best people. We recruit about 150-170 new graduates in Japan every year, given our strong employer branding.

But the population of Japan is decreasing and so are the number of students available. The economy is shrinking, with a birth rate of 1.4%.

We are therefore now very serious about the quality of our employees. They are good, but we need people from other countries. In order to hire the best talent for the future, we need to enhance our corporate branding.

How do you enhance your employer branding in countries outside of Japan?

It is very difficult because first of all people aren’t even sure of what we are actually doing. People still think Mitsubishi Corporation is about Mitsubishi Electric or banking.

But Mitsubishi is not only doing trading, but also focusing on business investment. Students get more interested when we tell them we are looking for entrepreneurial and business mindsets. To enhance employer branding, we are increasing our direct contact with universities in Singapore, Thailand, etc.

One of the biggest elements of our employee value proposition is that we offer opportunities for employees to own their business within the company, under the name of Mitsubishi.

Because we are looking for people with glocal skills, we try to send each new hire out all over the world to get some global experience. This requires a tremendous amount of mindset change.

We have also developed a new system for recruiting which has made the process easier. We now make it very clear that upon hiring, staff can be sent abroad within two years for training or to attend conferences.

We make this information very transparent to them. After every seminar, we ask them to review what they have learnt.

With your offices spread out all over the world, how do you establish a common working culture across Mitsubishi’s businesses?

Our working culture is focused on three corporate principles which have been in place since 1934. That’s 80 years of sticking to this kind of culture.

We believe they are the DNA of the organisation. They are only three, but they are profound, and imply exactly what we have to do when we are conducting business. These include corporate responsibility to society, integrity and fairness, and a global understanding through business.

CSR was advocated eight years ago, since when we have been trying to contribute to society – Japan first, and then Asia. I believe in the future of Africa and other continents.

We are also working on penetrating (this idea) into each employee – from fresh graduates right up to when they become retirees. We have pride in what we do, and its compliance is of utmost importance. We have been doing this for 15 years already – putting the DNA into each person in the organisation.

We are maintaining principles of transparency and openness in conducting business with integrity and fairness.

Finally, developing a global understanding though business is our third corporate principle and is very important to us.

While the extreme diversity in business around the world necessitates a complex strategic direction, with a variety of implementation plans, these three corporate principles can be applied to any business on Earth.

Needless to say, struggles such as a lack of effective communication will also continue in each one.

Do you have any equal employment policies in place to avoid discrimination or conflicts through the employee life cycle?

We have two major HRD principles. The first is hiring the right person for the right position and providing them with the right training. Second is to provide the right training for the right person at the right career development stage.

To ensure their continued implementation, the transformation of HQ staff is the absolute must. To guarantee this continuous transformation, it is inevitable for the regional as well as headquarters to collaborate on change leadership. This is, in the strict sense of the word, a never-ending story for every globalising organisation.

Is the Singapore HR landscape conducive to Japanese companies?

Yes and no. The advantages are the enormous variety of economic, industrial and tax benefits for foreign enterprises. The disadvantages are, although Japan has been a developmental model for Singapore for decades, Singapore has superseded Japan in terms of GDP, and other material standards.

In addition to that, the significant number of regional headquarters and global headquarters of European and American global companies in Singapore has overshadowed the traditional charms of the slow, but steady kind of Japanese corporate culture.

In other words, the younger generations of Singaporeans have grown in an affluent society, whose keen interest is a clearer result-based leadership based on the meritocracy or pay-for-performance principles.

Looking to the future, what will be the biggest HR challenges Mitsubishi will face in the next five to 10 years?

The answer to this question is rather simple, but difficult to realise. The biggest challenge is in the executive resources development.

After having created a pool of strategic managers and officers at GM levels, we need to tackle the quality of directors of Group companies.

So the focal point will be on balancing the nurturing of strategic directors, from the current lot of strategic officers, or headhunting new blood. Needless to say, this balance will be significantly affected by our corporate and employer branding in the region.