Dan Bean, Robert Musson, and Chermaine Li
WeOrg: The Freedom to Choose
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Story:
From bureaucratic, divided, passive, and exhausted to productive, creative, autonomous, and happy company
June 22, 2011 at 3:22am
Moonshots
Summary
Tokio Marine Nichido Systems (hereafter "TMNS") was a bureaucratic, vertically divided, passive and exhausted IT company. In 2004, a System Engineer (SE) initiated an action to address that dysfunctional and stagnant environment and that action triggered a series of transformational initiatives. This eclectic portfolio of change efforts, some grassroots, many voluntary, and some organization-wide, includes everything such as;
- a volunteer-driven project aimed at breaking down organizational silos and creating a more collaborative culture.
- three internal social networks, including regular postings from board members on their activities and thoughts.
- self-generated "invent the future" projects
- a dramatic reform of HR policy to eliminate internal competition and expand individual autonomy.
The result: now, TMNS is not only a truly "happiest place to work"; it is an organization equipped to respond quickly and change with the times, and in which innovation is every person's job.
Context
Tokio Marine Nichido Systems ("TMNS") is a solution provider 100% owned by Tokio Marine & Nichido Fire Insurance Co.,Ltd. Located in the suburbs of Tokyo, it has 1,440 employees.and 17 billion annual Gross Sales.
It was originally founded in Sept. 1970 as a subsidiary of Tokio Marine and Fire Insurance. It merged with Tokio Marine System Service and Nichido Fire System Development in Oct.2004.
Although TMNS had successfully completed the consolidation of two computer systems of "Tokio Marine" and "Nichido Fire" when they merged in2004, employees were “burned out” in the course of hard and stressful work. Stagnant and dismal mood proliferate all over the company and several employees even suffered mental disorder resulting from heavy stress.
Triggers
The transformation movement was initiated by Mr. Hideki Iwai, then a System Engineer and now the General Manager of Human Resources Dept. In 2005, Iwai-san proposed to take a corporate culture assessment by an outside consulting firm. The outcome was far worse than he imagined.
The report indicated that
- TMNF Systems was vertically divided
- The work style of the employees was passive
- Employees held less interest in new technologies or end-users who use the system,
- There were no spontaneous activities
- The employees didn’t feel the sense of accomplishment for their work.
The analyst even said “I have seen a lot of bureaucratic organizations. The most bureaucratic one I had seen was a municipal office in a local government. But TMN Systems is worse than that”
Shocked by the report, Iwai-san formed a voluntary group of 30’s and 40's employees named “Work Style Reform committee” in 2005.The committee aimed to change the corporate culture beyond the barrier of organizational silos. The senior managements, who also held a sense of crisis by the report, agreed to proceed the reform project.
Key Innovations & Timeline
Big Picture;
Since 2005, TMNS has been undertaking a lot of projects.The objectives are summed up in 6 elements; Motivation, Autonomy, Innovation, Diversity & Inclusion, Communication, and Fun.And the final goal is to make society, country and the world happy.
Timeline;
Initiatives;
"Visit Users"
The first step was "Visit Users" initiative, encouraging TMNS's people to visit the system users (e.g the employees of Tokio Marine & Nichido, insurance agencies, etc) to see how their systems are used and hear the user's voices directly. Before that, TMNS was a kind of "order taker" who is just building systems as told by Tokio Marine & Nichido, and they didn't know much about the end users. After the experience, they got confidence that they know what the users really want, often encouraged by their "thank you" voices.Of course they hear complaints more often.But listening to the complaints sincerely and fixing the system as soon as possible, they receive more trust and appreciation from end users, which in turn motivate them to build better systems to meet the end users' expectations.
"Next Dream" projects
"Next Dream" is a group of voluntary, cross-organizational, free-theme projects. Anyone can raise a theme which he or she thinks TMNS could be the world's No.1, and can become the leader of the team.Anyone who likes the theme can join the team anytime.
The themes include
The themes include
- Create the world's best Communication platform(Future Center project)
- Become the world's best Innovative Saving Guru (Save Electricity project)
- Hack the world's coolest "Positive Cut Corners"(Kaizen Camp)
- Invent the worlds' coolest Environment aware Logistics (Green Logistics)
- Establish the world's hottest collaboration with agencies (Collabo Next) etc.
- Become the worlds' most aggressive General Affairs Dept.(Smart&Agressive Soumu) etc.
40 teams were established."No.1" should not necessarily be subjective.If they feel confident that they are the No.1, they are the No,1.People's' mindset changed appealingly through this project.There's a huge difference between "better" and "No.1".You should have strong will to aim No.1, and the team members put 120% energy to the project.It brought positive effects to their daily jobs, too. The management will NOT
- Poke any nose into the themes or activities.
- Control progress of the projects.
- Filter the projects by ROI
- Evaluate the team with monetary gain.
Budget for the project is distributed first come, first served basis.
| Q&A Q.Did the teams work on the projects beyond work hours or was it part of their work? A.Actually, there's no clear distinction between work hours and after-work hours, nor formal and informal.Teams can do their activities anytime they think it's appropriate. If you draw a strict line between work and non-work, people tend to think work as something non-pleasant, stressing duty and try to spare power.But if work and play is integrated, people are willing to put their 120% power into the project. |
"Future Center"
Future Center is a facility with an entrance-lounge and a discussion room.The facility is located in a building five minutes' walk from TMNS's building, deliberately separated from the daily work environment.
The entrance-lounge is a gateway to the world of unlimited imagination.It is equipped with ambient light and music.Abstract pictures painted by the board members are hung on the wall.Attendees are expected to unleash their mind in this room before discussion. Discussion room is surrounded by white boards on the wall.Tables are not in the usual rectangle shape to avoid "square" way of thinking.Sometimes, clay or paintings are used to visualize the ideas.
Anyone can use this facility anytime when they have (or doesn't have) topics to discuss.But there's one strict rule; "Do not use it for usual business meetings"."This rule makes Future Center a special place", Said Mt.Takanori Sunahata, a manager in charge of operating Future Center."People are accustomed to think differently without any considerations of their affiliations or titles when they enter this room".
Future Center facilitates 10 meetings a month in average. The Future Center is operated by special organizing team and now there are 30 facilitators in TMNS who had special training to navigate vivid and open discussions.To date, TMNS is an only Japanese company which has an exclusive facility and trained facilitators for the Future Center.
The entrance-lounge is a gateway to the world of unlimited imagination.It is equipped with ambient light and music.Abstract pictures painted by the board members are hung on the wall.Attendees are expected to unleash their mind in this room before discussion. Discussion room is surrounded by white boards on the wall.Tables are not in the usual rectangle shape to avoid "square" way of thinking.Sometimes, clay or paintings are used to visualize the ideas.
Anyone can use this facility anytime when they have (or doesn't have) topics to discuss.But there's one strict rule; "Do not use it for usual business meetings"."This rule makes Future Center a special place", Said Mt.Takanori Sunahata, a manager in charge of operating Future Center."People are accustomed to think differently without any considerations of their affiliations or titles when they enter this room".
Future Center facilitates 10 meetings a month in average. The Future Center is operated by special organizing team and now there are 30 facilitators in TMNS who had special training to navigate vivid and open discussions.To date, TMNS is an only Japanese company which has an exclusive facility and trained facilitators for the Future Center.
| Episode The flexible thinking fostered in the Future Center triggered many breakthroughs in the business. One example is the reform of operation rule for mainframe system.There are 7,500 programs running every night.They are called "Batch programs" and operated by "Batch Operation Team".There are some programs which should not be run on the certain night because of maintenance, upgrade, etc., Program Development teams were responsible for sending a cue to run their programs by 4:00 pm.Batch Operation team waits for the "OK" mails from 38 Program Development teams and then type "GO" commands for 7,500 programs.Approximately 30% of the OK mails didn't arrive by 4:00 pm by the circumstances of Program team.Batch team was very busy prompting the Program team.It took three and a half hours to get all the OK mails and type GO commands every day. Two young SEs, Ms.Yoshida and Ms.Takada changed this.They proposed a new rule.All the batch programs start automatically at 4:00 PM unless they receive "Stop" mail from Program team.After the change, what they have to do is type "STOP" command for several programs requested by the Program team.The process was shortened from three and a half hours to five minutes. It sounds like an obvious idea, but the old process has been around 20 years and no one dared to change.It was no easy task to assess the impact and risk of the new process, persuade people who are accustomed with old rules and implement changes, but Yoshida-san and Takada-san made it.The flexible and positive mind fostered by the Future Center and other projects made this happen. Another example is the reform of Internal Audit Team. Usually, internal audit team is a "sniffer dog" to find small errors and omissions in the business processes, and points out risks of changing processes.They tend to be a resistance force to any innovative ideas.Internal audit team of TMNS changed this attitude.They try to find and report as many "Good points" as possible, support changes and cooperate with audited to address the issues they find.So, audited are very grateful for the audit.President Mr.Yokotsuka reads the audit report intensively and praise good initiatives in the articles he contributes to various computer magazines, his presentations and internal blogs."The audit report is my eyes.The point is which direction you see with it", Yokotsuka-san says. |
"Scrum" system development and work style
Scrum is an agile approach to software development.Instead of pre-defining complete, detailed descriptions of software by upstream system designers, software development team starts from a prototype, then shape it up by short-term try-and-modify cycles called "Sprint".
Software development is conducted by several numbers (differs according to the size of the software) of Scrum team.It is a small (not more than 5 people), self-organizing and cross-functional team.It doesn't have a team manager who controls everything.Instead, it has a "Scrum Master" who helps team members to perform at their highest level.Team members as a whole decides task assignment, system design and problem solving.Progress, ideas, problems and issues are shared within the team by daily meeting called "Stand-up meeting".Everyone stands up during the meeting to make short and vivid
The length of a Sprint cycle is one to four weeks.At the end of each Sprint cycle, the team demonstrates the functions and interfaces to the product owner and receives feedback for the next sprint cycle.
Compared with the conventional software development method called "Waterfall", Scrum is very fun and exciting workstyle.In Waterfall style, software development team is just writing programs according to the pre-defined and documented requirements.In Scrum style, people work with autonomy, and there are a lot of opportunities to take their new ideas and opinions into the software.
But Scrum is a two-edged blade, If you use it under the "blaming" culture, Scrum may become a "tight management" tool, and the daily meetings will be unproductive and stressful, looking at the list of troubles and finding persons to blame. "Early stage of our Scrum implementation, we sometimes failed into the bad pattern.We just tried to mimic the Scrum style and forgot about the spirit", recalls Mr.Kusume, who leads the implementation of Scrum method."Some managers required detailed report when, how, why the trouble happened and who is responsible for that.It took a long time to make the report and the action for fixing the troubles often delayed, which made things worse". "After the series of reform project including the implementation of Scrum, the mood has changed.People focus on fixing the problem rather than blame and offer help.Under that "care and cooperate" culture, Scrum became a strong tool for sharing new ideas, feel the progress, and solve problems together.The morning meetings turned into fun and productive ones.To make Scrum a happy and productive tool, you have to change the culture and mindset of the people", Kusume-san concluded.
Software development is conducted by several numbers (differs according to the size of the software) of Scrum team.It is a small (not more than 5 people), self-organizing and cross-functional team.It doesn't have a team manager who controls everything.Instead, it has a "Scrum Master" who helps team members to perform at their highest level.Team members as a whole decides task assignment, system design and problem solving.Progress, ideas, problems and issues are shared within the team by daily meeting called "Stand-up meeting".Everyone stands up during the meeting to make short and vivid
The length of a Sprint cycle is one to four weeks.At the end of each Sprint cycle, the team demonstrates the functions and interfaces to the product owner and receives feedback for the next sprint cycle.
Compared with the conventional software development method called "Waterfall", Scrum is very fun and exciting workstyle.In Waterfall style, software development team is just writing programs according to the pre-defined and documented requirements.In Scrum style, people work with autonomy, and there are a lot of opportunities to take their new ideas and opinions into the software.
But Scrum is a two-edged blade, If you use it under the "blaming" culture, Scrum may become a "tight management" tool, and the daily meetings will be unproductive and stressful, looking at the list of troubles and finding persons to blame. "Early stage of our Scrum implementation, we sometimes failed into the bad pattern.We just tried to mimic the Scrum style and forgot about the spirit", recalls Mr.Kusume, who leads the implementation of Scrum method."Some managers required detailed report when, how, why the trouble happened and who is responsible for that.It took a long time to make the report and the action for fixing the troubles often delayed, which made things worse". "After the series of reform project including the implementation of Scrum, the mood has changed.People focus on fixing the problem rather than blame and offer help.Under that "care and cooperate" culture, Scrum became a strong tool for sharing new ideas, feel the progress, and solve problems together.The morning meetings turned into fun and productive ones.To make Scrum a happy and productive tool, you have to change the culture and mindset of the people", Kusume-san concluded.
Scrum method can visualizes progress, can adopt ideas and refinement incrementally, and the people can choose their task at their will.Those characteristics lead to foster motivation, innovation and less management.Recognizing those merits, Scrum workstile is adopted to many divisions such as Corporate Plannning Dept, General Affairs Dept.which don't have system developement job.
"Pair Management"
TMNS is now testing a new management style, "Pair Management" inspired by "Pair Programming" in Agile method. One department, which populates 7 divisions and 500 people, has two general managers, Mr.Kobayashi and Mr.Tsunoda.Although they have different specialties, their responsibilities and authorities are identical.They do their management in pair.People in the division can talk to either one (not both) they like for approval, report or advice.It sounds like redundant and ineffective, but Kobayashi-san says "We keep close communication with each other and make decisions .By consulting with Tsunoda-san, the speed of decision making became dramatically fast.Also the queue in our " In-box" disappeared.We are feeling more free to go out for conferences, meetings, and take vacations"."We are acting with one heart and mind, and we are perfect match" says Tsunoda-san.They are in the same age, and have been good friends since they joined the company."I know it's hard to find a pair like us, so I don't think this management model works everywhere.But if there is a good pair, I think it's worth trying" Kobayashi-san said.
Reform of Human Resource Management
Dramatically reformed human resource management policy.
- Banned result-based payment system.
- Payment is determined 50% by the competency of the employee, and 50% by his/her age and years of experience in TMN systems.
- Competency is measured by 5 factors: Conception, Action, Communication, Teamwork and Engagement.Each factor has detailed descriptions.Different competencies are required according to the employee's career path, Producer and Expert (described afterwards)
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- Dual-line career path.
- In many companies, IT engineers go up their career path from a Member, Group Sub-Leader, Group Leader, Deputy Manager, Manager, General Manager.Each time they go up the hierarchy, the percentage of "Management job" goes up.But not all the engineers want to be a manager.So TMN Systems set up two career paths, Producer and Expert as shown in the chart.There's no difference between Producer and Expert in terms of payment.Staff can choose their path and can transfer their path anytime..
- Respect people's autonomy
- Staff are free to choose their work hour and workplace
- Reduce approval process by supervisors
- Staff are encouraged to choose their own job according to their ability and preference.
| Episode When TMN Systems was considering the reform of their human resource management, HR consultants strongly insisted that TMN Systems should introduce result based payment.President Yokotsuka turned it down.He had been inspired by the education system in Finland.In Finland, they don't give exams to students until they become 17.They don't let the students compete nor rank them by the score.What they do is to teach students how to think by themselves and let them experience the joy and excitement of studying, not threating them to study by doing exams.In this way, Finland is scored world's No.1 in OECD's student assessment, PISA.Yokotsuka-san was confident that it is not competition or scorering that motivate people.It's the fun of work, autonomy and freedom. |
| Q&A Q.If your work results won't affect your salary, what makes you work hard? A.Money is not only the source of motivation.Sometimes it drive people to the "Dark Side".In result based payment system, people would be reluctant to collaborate with their colleagues or even try to drag them down because others' success may lead to their demotion.On the other hand, "Create", Grow", "Help People" are healthy instincts of human.TMN Systems' various initiatives are related to these "Light side of the Force". Please refer to Enhance the Light Side of the Force", not the "Dark Side"  |
| Episode Recently, TMNS had a serious system trouble.When the news was announced via intranet, all the members who participated in the development of that system but now working in other divisions gathered voluntarily without any orders or approval from their managers and settled the trouble in a very short time before it caused any inconvenience to the customers.This kind of autonomic movement would not have happened if TMNS had applied strict job descriptions and result based payment system.Autonomic action transferred the disastrous trouble into the victory of teamwork.President Yokotsuka was very proud of this. |
| Q&A Q: If all the people are free to choose their job, won't everybody want to take high profile job or easygoing job? How can you fill all the positions? A:The reality was that the jobs people took were surprisingly diversified.President Yokotsuka takes football as an analogy."If I were a football player, I definitely want a Forward position.But some people are brave enough to take Goal Keeper position and others prefer to take Defender position.People are diversified.Their talents are most unleashed when they are working at the position they like best" |
Reform of Workflow system
TMNS is replacing paperwork with electronic workflow system.In the course of transformation, staff reviewed all the application-approval flow and find out there were many unnecessary approval processes by line managers such as marriage report.So they banned 48 line managers' approval within 54 workflows.With that, 63% of the applications are processed on the day of submission.
Reform of General Affairs Dept
General Affairs Dept.were very passive and bureaucratic organization.The reform project started from free-discussing what they can do to maximize the performance of TMNS people.One of the answers was to provide free workplace that enables free workstyle.They banned rigid office layout and people are free to arrange their desks as they like and sit wherever they like.As the result, many small islands of desks in different shape and size are scattered in the office floor."It looks like a chaos, but that is the best place for people to work", says Ms.Ikumi Yamashita of General Affairs Dept.As a side-effect, space efficiency increased by 30%,
Also, they reviewed thousands of internal rules and banned unnecessary ones.For example, if you wanted to put a poster on the wall, you had to get permission from General Affairs Dept.They changed it so that anyone can post anything on the wall without permission.This initiative changed the mindset of people.Everyone started to think "is this rule really necessary?", and hundreds of rules were banned or simplified.They changed their role from ruling people to actively supporting people.The department won "General Affairs Dept.Grand Prize" and "Japan Facilitate Management Grand Prize (encouraging prize)" in 2011.
Also, they reviewed thousands of internal rules and banned unnecessary ones.For example, if you wanted to put a poster on the wall, you had to get permission from General Affairs Dept.They changed it so that anyone can post anything on the wall without permission.This initiative changed the mindset of people.Everyone started to think "is this rule really necessary?", and hundreds of rules were banned or simplified.They changed their role from ruling people to actively supporting people.The department won "General Affairs Dept.Grand Prize" and "Japan Facilitate Management Grand Prize (encouraging prize)" in 2011.
Internal SNSs
TMNS built three in-house SNS to ban the vertical (organizational) and horizontal (hierarchical) barriers and boost open communication.Those three SNSs differ in objectives and usage.
- "Waku-Waku(Exciting) SNS" Facebook-like SNS.Staff are free to post any messages, private or official, anytime.Individual timelines (diaries) are linked to the internal who's who directory.
- "Otasuketter"(helping twitter) In-house built Twitter-like system Anyone who need help can tweet his/her problems and those who know the solution will offer help.
- "Open Terrace" Bulletin Board System (BBS) for Board members.Board members post their day-to-day activities and thoughts, such as whom they met and what they talked, what they thought about current system, or how they made their decisions.Everyone can access the site and leave comments.By sharing what board members have in mind, staff are expected to make their own decisions autonomously in consistent with the company's policy and goal
Ms.Mikiko Kawano took the responsibility to plan, built or upgrade and operate these systems only two years after she joined to TMNS as a freshperson."Approximately 90% of the entries in "Waku-Waku SNS" are about private affairs.We think it's OK.Sometimes such kind of informal information is quite useful", says Kawano-san."TMNS is a big company.There are a lot of people I don't know well.Whenever I meet someone in TMNS for the first time, I check the person's diary.It makes me feel very familiar with the person, and the communication goes very well", she says. "To the contrary, "Otasketter (Help Twitter)" focuses to help people with difficulties or questions.I named the system to make sure the people understand its purpose.Many issues were solved with "Otasketter" in a very short time".
| Episode Information posted on "Open Terrace" or "Waku-Waku SNS" is a very strange mixture of business and private.To name some episodes;
In between those topics, there are business discussion trees about new technology, new project, or new ideas, etc. The secret of TMNS' free, open and vivid culture lies here. |
"Happy work & Life Style Project".
A group of women voluntarily started a project named "Happy work & Life Style Project".The project aimed to provide work environment where female women can unleash their talents.Initially, 10 requests were drafted by the member and submitted to the board, all of which were granted instantly.The group expanded its scope from women to all the people to include those with disabilities and people with other nationalities.In 2010, the group was officially approved as an organization reporting directly to the board.
Diversity & Inclusion
Established three service functions operated by people with physical or mental disabilities;
- A coffee shop named "Smile Cafe"
- A massage room named "Smile Relaxation Room"
- General affairs office named "Smile Office Services".
Initially, those facilities ware established to employ and empower people with disabilities.But it turned out that other people are often encouraged to see those staff working with pure passion and sincerity.Mr.Toshitsugu Hisai, Director, Member of the board of TMNS says, "I always drink iced coffee, even in winter.One of the Smile Cafe staff learned my preference and always gets an iced coffee ready for me whenever I show up to the shop.They work very proudly and happily.I feel very happy to see them"
| Q&A Q: were these initiatives "Top-down" or "Bottom-up"? A: Most of the initiatives could be said as "Bottom-up".Some ideas such as HR reform and "Open Terrace" were proposed by the management. But neither "Bottom-up" nor "Top-down" is appropriate to describe these initiatives.Usually, Bottom-up" meet "Top's" objection and/or resistance, and vice-versa.But in TMNS, management buyspeople's ideas instantly and take action immediately.Also, people understand management's proposal and collaborate to make it better.In other case, initiative such as "Scrum workstyle" started in a division and then spread horizontally.So, most suitable expression would be "Resonance".Just like tuning-forks, when a party stats singing, other parties start humming and make beautiful harmony.It is only possible when they share the same goal, trust each other, and know each other including the very personal aspects.After all, a Flat-organization doesn't have Top nor Bottom, by definition. |
The initiatives shown above may correspond to the three points "Total Passion"," Outside in", "Managing without managers" stated by Dr.Hamel in his article http://www.managementexchange.com/blog/m-prize/beyond-bureaucracy-challenge-creating-inspired-open-and-free-organizations
Challenges & Solutions
Challenges
- Vertically divided organization.
- Passive workstyle.
- No voluntarly activities.
- Lack the feel of accomplishment.
- Bureaucracy
Solutions
- Create horizontal communities.
- Ban the internal competition.
- Trust employees: let them do what they really want to do.
- Encourage employees to talk with end-users directly. Let them see how their systems help end users.
- Keep every information open
The key factor for success is "Be Flexible. Do not push hard.Trust!".
Although there were tons challenges in TMNS and many initiatives were quite radical, it looks like that the transformation went smoothly. There was no banging on the table, no shouting, no blackemails. Mr. Shingo Sakamoto, the leader of "Waku-Waku (Exciting) Work Style Reform Project, reveals the Secret. "I know not all the people are participating in the reform movements. Maybe there are some "silent resistance forces" says Sakamoto-san. "We don't worry about that. Japanese tend to think that everyone should participate in the company project. But it is not realistic. There should be people who don't want to join the project team, or don't use SNS. We think it's OK. We are flexible. What we need is several small teams of passionate and heretic people. They are acting as catalysts and spreading the movement bit by bit. Human beings like to create, grow and helping each other by nature. Those who had been resisting the change gradually being attracted by the happy looks of the forerunners". "The harder you push, the harder the resistance force pushes back. Flexibility beats Force. It's the spirit of Judo", he laughs.
"I assume some of the "Next Dream" projects or "Communities" are not going well." says President Yokotsuka. "Why I say "assume" is because I don't check their activities. If I supervise the projects, some lackluster ones may go better. But supervision may spoil the passion of other well-going projects. Supervision on those voluyntary projects doesn't pay in the long run"
When I asked Yokotsuka-san "Was there any project which went in a wrong direction and had to change course?" he answered, "Wrong direction? There is no "wrong" direction. My people are always right. I trust them". The people in TMNS say, "We know that top managements trust us. We have to return their trust. We don't hesitate to change our attitude if we think we went too far or we are heading to the wrong direction."
Benefits & Metrics
It is hard to calculate the accurate correlation between those change initiatives and business figures such as income, profit, or productivity. Also, it doesn't seem to me that those figures represent the real value of change. But business metrics did improved and it did help TMNS a lot to turn down some criticism from outside old style management world where money is always right.
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- Busienss Benefits
- Gross sales: JPY 7,611M(FY2004) > JPY 17,285M(FY2010)
- Ordinary profit:JPY -6M(FY2004) >JPY475M(FY2010)
- Increase in system design productivity: +77% (2006>2009)
- Increase in system developement productivity: +14% (2006>2009)
- Busienss Benefits
- Humanity Benefits
- Won various awards and recognitions
- "Great Place to Work in Japan" (2009, 2010, 2011, and 2012)
- 29th Information Technology Award: IT Procuction Department Award (2011)
- 2nd “General Affairs Dept. Grand Prize":Corporate and Organization Vitalization Award (2011)
- 5th “Japan Facility Management Award"(2011)
- 22nd “Human Resource Development Excellence Award" (2009)
- Low turnover rate : as low as 1%.
- Accomplished employment rate of people with disabilities 3.5%, which exceeds the Japanese legal rate of 1.8%
Also,TMN Systems successfully completed a large scale system reform in TMNF's "Business Innovation Project". The TMNF's project also won Asia Insurance Review's "General Insurance Company of the year 2008", Financial Insights'"Innovation Award 2008", and "Celent's Model Carrier 2010".Above all, look at the happy smiles and vivid workstyle of TMNS people!
EpisodeTokio Marine & Nichido Fire was very fast to react the earthquake and paid more than170,000 earthquake insurance claims (97% of the claims filed) by the end of July. TMN Systems and TMNF’s IT Dept. played very important role. They deployed 110 new terminals for claims settlement on the next day, 800 terminals in a week,and finally 1,800 in two months to support 8,800 (in accumulate) employees temporally dispatched to the disaster area. They visited agencies one by one to help agents to restart their business, deployed three “Mobile Office", a van equipped with terminals, and wireless devices. Systems developed several innovative support tools such as overlaying claims payment status on a Google Maps in a very short time. Those actions were very autonomic and collaborative, thanks to the culture fostered through various initiatives. They shared ideas, information, emotion, pictures and videos on internal BBS and videoconferences. There was no trace of sectionalism nor passive work-style pointed out in the report 6 years ago.
http://www.managementexchange.com/story/beat-bureaucracy-and-overcome-disaster
- Won various awards and recognitions
Lessons
- People unleash their abilities when they do the job they love.
- Pure motivation come from the desire to glow oneself, help people and thanked by people.
- Desire to become rich, beat colleagues, rule people does drive people, but often to the wrong direction.
- People are most motivated when they do the job they choose by their will, not by the job assigned by someone else.
- Trusting people is the best way to guide them to do the right things.
- Performance based payment is the best way to ruin a company especially when the differentiator is innovative ideas.
- Informal communication and activities pull the walls between organizations down.
- The role of management is not managing people. It’s to help people to maximize their performance and happiness
Most of the he initiatives introduced in this article such as Next Dream, Future Center, Scrum, Happy Project (diversity and inclusion), Reform of the General Affairs Dept., were started voluntarily. The root of the series of reform projects, Waku-Waku workstyle reform project started voluntarily, to begin with. Top managements never try to control, distort or stop them. Instead, They encourage people to do what they really want to. But that doesn’t mean TMNS is totally in a freedom. TMNS is responsible for building, maintaining and operating Tokio Marine & Nichido’s huge mainframe system, which requires 100% accuracy and no fault. In that part, strict top-down type project management and detailed quality control are required. So, it may be said that TMNS is propelled by two engines. One is an old style engine governed by conventional-style management. Another is a new type of engine with autonomic control system and fueled by voluntarily passion. This report focuses on new type engine, but actually TMNS has both. Yokotsuka-san calls it “Hybrid System”. “I understand we still need old style management in some part of our business. But in the future , I want to dismount old engine and run TMNS with 100% autonomy”, he said.![](https://lh3.googleusercontent.com/-iwVcBXIxg4U/Tyl8bnKr6iI/AAAAAAAAAPw/4UJL_vTMYfY/s1816/Hybrid.jpg")
| Column:Agricultural people and Hunting people When discussing about the business practices or mindset with European and American people, I can't help but thinking about the difference between agricultural people and hunting people. In agriculture, people work together in the farm It is very difficult to measure the difference of contribution of each individual farmers, because they work almost in the same way. Also, it is difficult to measure the correlation between the amount of harvest and the effort of farmers, because the outcome depends more on the weather conditions, rather than the productivity of each farmers. To the contrarily, hunting people go to field individually or in a small team. It's quite clear who got the game and who didn't. So productivity of the hunters are obvious. The difference of agricultural people and hunting people explains a lot of Japanese people's characteristics. My private feeling is that one of the reasons why most of us feel uncomfortable with performance based payments is because we are agricultural people in origin. |
Credits
Hiroshi Yokotsuka, President of Tokio Marine Nichido Systems Hideki Iwai, General Manager of Human Resource Dept., Tokio Marine Nichido Systems. All the members of Tokio Marine Nichido Systems and their families All the supporting companies of Tokio Marine Nichido Systems
Materials
TMN Systems website http://www.tmn-systems.co.jp/recruit_2010/index.html (in Japanese)
"Beat bureaucracy and overcome disaster" (Tokio Marine & Nichido's big reform project and how it worked at the Great East Japan Earthquake on March 2011 http://www.managementexchange.com/story/beat-bureaucracy-and-overcome-disaster
Images
Videos
July 18, 2011 at 10:32am
Some nice innovations here. I wonder how easily it can be translated however. Time served isn't going to be, and certainly isn't going to be seen to be, an appropriate framework for reward in the US which rightly or wrongly seems to be the focus of the Mix. And competency based reward was tried by quite a few organisations around 2000 and generally didn't lead to very good performance.
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July 29, 2011 at 4:53pm
Dear Mr. Ingham Thank you very much for your comment. As you pointed out, the mindset in the US would be quite different. They like competition. They believe in free market. But I assume there’s a growing concern that those styles are making people less and less happy and burning them out. I think this is one of the very issues which MIX is focusing on. In Japan, many companies introduced performance based payment in the late 90’s. So far, it looks like that it did more harm than good in most companies. In December 2007, Nikkei Business Online Magazine conducted a survey upon the performance based payment. More than 1,000 businesspersons responded to the survey. The outcome was quite negative to the performance based payment. “Do you think that the performance-based payment improved your motivation?” Yes:18%, No:41.4%, Neutral:40.6% “Do you think that the performance-based payment helped you to grow? “ Yes:25.5% No:59.2% Don’t know:15.3% “Are you satisfied with your evaluation in the performance-based payment system?” Yes: 17.3%, No: 50.1%, Don't know: 32.6% Also there were a lot of narrative responses *Invisible factors such as the relationship with the customers, communication with colleagues are not evaluated at all *Japanese virtue of teamwork was lost. Wonderful human relations became awkward and capable people left the company. *Employee started to turn to their boss, not their customers. *Young people tend to focus on small and short-term success, try to avoid risks and forget long term strategy. Mr. Yokotsuka, the CEO of Tokio Marine Nichido Systems says that “performance-based payment will ruin the company” I agree with you that time-served based payment would not be well translated into the U.S. Vice-versa, performance based payment wasn’t translated into Japan well. It is partly because the performance-based payment system was used as an excuse to cut salary, and mostly because of the difference of culture. I don’t think that competency based payment is perfect. There’s no perfect way to measure and price people accurately, so to say. Mr. Yokotsuka thinks that salary is a mean to cover the employees’ basic life needs, which increase according to the age, and a mean to reward their effort to grow. Salary is not a “carrot in front” to drive people to work. He thinks that motivation comes from somewhere else, such as appreciation from customers and colleagues, fun of creating something innovative, and grow oneself.
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July 27, 2011 at 2:10pm
Motivation is a unique combination of desire, commitment, and energy.
Passion would be an engagement and burnout beyond autonomous and controlled motivation.
In case of Tokio Marine Nichido Systems, they encourage communities of passion and revising management processes by connecting employees who share mind and kizuna '絆'.
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July 30, 2011 at 2:42am
Yamazaki-san,
Thank you very much for your comment.
Yes, Tokio Marine Nichido Systems has been making great effort to remove the barriers between organizations. They encourage employees to create cross-organizational communities of the same interests (whatever they are), hold a lot of social events and use various communication tools such as twitter-like microblogs and facebook-like internal SNS. They are establishing and strengthening the connection ‘絆’ among employees.
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August 16, 2011 at 10:19am
I find the TMNS approach and vision very refreshing, and as far as I can, exceedingly rare.
I believe many organizations would never even begin to seriously dream about reinventing compensation systems, allowing employees to set their own hours, and letting employees self assign their roles based on interest.
Your approach inspires imagination and a curiousity. I have many questions, but I will limit myself to the following:
When you set out to embark on radical change, how much resistance did you face? What was the essence of the concern?
What other interesting ideas did you say no to and why?
In practice, how do systems such as the self-assignment of roles work? What boundaries facilitate the success of these practices?
Where have you had to adjust to employee reactions the most? And what mechanisms do you use to sustain an ongoing dialogue with employees in steering change forward?
The conceptual and practical achievement here is exceptional. Thank you for sharing!
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August 22, 2011 at 4:13am
Thank you very much for your kind comment and questions.
I’m pleased to share with you our thoughts in response to your questions.
I’m pleased to share with you our thoughts in response to your questions.
>When you set out to embark on radical change, how much resistance did you face? What was the essence of the concern?
There was not remarkable resistance within the company. A HR consultant insisted strongly that we should introduce performance-based payment but we turned it down.
>What other interesting ideas did you say no to and why?
We haven’ t said NO to any interesting ideas. The board kept saying GO as far as the employees believe it’s a good idea.
I>n practice, how do systems such as the self-assignment of roles work? What boundaries facilitate the success of these practices?
The factor for success was “autonomy”. You may concern that everybody might want to take high profile job or easygoing job. The reality was not. The jobs employees took were surprisingly diversified. President Yokotsuka takes football as an analogy. “If I were a football player, I definitely want a Forward position. But some people are brave enough to take GK position and others prefer to take defending role. People are diversified. Their talents are most unleashed when they are working at the position they like best”.
>Where have you had to adjust to employee reactions the most? And what mechanisms do you use to sustain an ongoing dialogue with employees in steering change forward?
I don’t see any compromise or adjustment with employees. Management and employees are working in resonance. I think that’s because we are very open and transparent, sharing any information, ideas and thoughts.
Those answers may sound idealistic and strange, but those are what we honestly feel.
Thank you again for your questions. Please don’t hesitate to add any questions or comments.
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August 16, 2011 at 4:21pm
One of the best, practical, transformation stories I've seen in a while. Next Dream, Smile services and Open Terrace are very very good ideas.
Story would be better if it included business performance metrics showing overall strategic impact. 1% turnover and awards are nice. But the organization does not exist to win awards. How did the overall business perform? What was the impact on customer retention? New business wins?
Can anyone OUTSIDE of the company detect the change in culture?
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August 22, 2011 at 4:35am
Thank you very much for your kind comment and advice.
Actually there have been increase in revenue, rise in productivity and reduction of errors. In response to your advice, we are now working on those metrics and will be sharing with you shortly.
The change of culture is obvious to the users, business partners, ant parent company, Tokio Marine & Nichido. Stories are often quoted in newspapers and IT magazines. One of the users, the president of an insurance agency in Kyoto even came all the way to Tokyo to give us “thank you” speech at our gathering.
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October 4, 2011 at 4:55am
Mr. Makino,
Thank you very much for sharing this inspirational story, it is great to see how your company has been able to sucessfuly change it's management philosophy.
Despite the differences in eastern and western cultures (very nicely illustrated in the "Agricultural people and Hunting people" segment), I believe that people all over the world are motivated to do work that exites, challenges, grows them and which has lasting purpose. Considering this also allows organizations to adapt and innovate faster in an era with extreme uncertainty and rapid, destructive changes, this is really a win-win-win situation for employees, organizations and society.
What is up to us is to use these fundamental lessons and apply them appropriately in different cultures. Challenging current assumptions is also important. For example, performance based pay might (and I repeat might) be due to the assumption that individuals performing better equals the organization performing better as well. Therefore individual performance rewards might create a individualistic culture instead of the other way round. Just a though, of which your story has triggered many.
Thank you again for sharing these lessons, truly inspiring.
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October 23, 2011 at 4:08am
Mr. Mcduling,
Thank you very much for your insightful comment.
I’m glad that you liked my analogy of “Agriculture people and Hunting people”. Actually, it explains a lot. But as you pointed out, there should be more common “root” motivations of human being, or living thing in a broader perspective.
One of them is apparently “competition”. Living things compete to leave stronger gene to next generation. After all, all of us are the result of the competition of sperm.
So, no wonder we like competition by instinct.
But competition has very cruel aspect. War is a type of competition. Human being has been creating substitute to satisfy the competitive instinct without atrociousness, such as sports. Perhaps performance based payment is using (or abusing?) this human instinct to compete.
There is another instinct of living thing, “collaborate”. The root is not as clear as the instinct “competition”, but apparently we feel happy when we hear the word “thank you” from others.
I imagine that human being is seeking a new way of evolution. Instead of leaving a good gene in a strong individual (competition), people are willing to pool their wisdom on the network (collaboration). I imagine that’s why social media is so rapidly growing.
Your question inspired me a lot. Thank you very much.
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October 17, 2011 at 9:11am
Makino-san, I had lots of interest going through both your story and questions and comments.
Thank you for all materials and ideas.
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October 17, 2011 at 9:13am
Question and comments about the transposition into other cultures from John and Chris are fair, and one of my favorite challenge. I always ask myself not about "is it possible " ?, but " how will we make it acceptable in a different context "? Because even if not a perfect match, the gap will help to get awareness to other groups dynamics, or approaches and interest coming from diversity and remote places to move local heavy roadblocks.
My personal best take away is the light vs dark force diagram.
Trying to define and experiment new rewards or recognition elements (not to replace performance but to give it a more compound index) is key when moving to what I call advanced 2.0, or even 3.0 management.
Thank you again for sharing such experience.
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November 5, 2011 at 7:59am
Frederic –san
Thank you very much for your comment.
I’m glad to know you liked my “light side and dark side” chart. It’s one of my favorite works.
I like your idea not to worry about possibility but think how to make it happen.
Recognition or appreciation could be great motivators. Of course we can’t eat them, so we need “some” money.
Recently, Japanese younger people get less and less interested in having luxury cars, jewelries, expensive clothes or handbags. That doesn’t mean they are not aspirational.
Mercedes, Tiffany or Louis Viton were substituted by the number of Twitter followers, comments and likes in Facebook or Youtube as the means of social recognition.
You can buy a Ferrari but can’t buy followers. I assume that’s part of the reason why younger people are becoming less interested in money.
Thank you again for your inspiring comment.
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November 6, 2011 at 6:34am
I am impressed by the simplicity of the goals and the reported achievements.
I am intrigued, though, by the statement : " Recognition or appreciation could be great motivators. Of course we can’t eat them, so we need “some” money. " I usually feel : I can not eat money - what good is it? - All I can do with "money" is either "spend" or "save" - either way, it benefits others who will either provide service to earn that money when I "spend" or invest that money which creates jobs when I "save".
What I get in return when I "spend" or buy does not guarantee either happiness or satisfaction as it leads me to an entirely different sets of circumstance and does not connect me with what created the new states or have memory of the original things that gave me the money, in the first place.
I would rather have "recognition" or "appreciation" which gives me an instant feed-back and hence a sense of gratification. I am told the millennial generation is in this mode. You seem to be also aware of that feeling where you mention tweets and number of followers as metrics.
Are we unnecessarily quibbling about the usage/meanings of words and contexts/perspectives? or is there a higher order learning opportunity here?
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November 6, 2011 at 6:23am
Tsukasa Makino - San
I am impressed by the simplicity of the goals and the reported achievements.
I am intrigued, though, by the statement : " Recognition or appreciation could be great motivators. Of course we can’t eat them, so we need “some” money. " I usually feel : I can not eat money - what good is it? - All I can do with "money" is either "spend" or "save" - either way, it benefits others who will either provide service to earn that money when I "spend" or invest that money which creates jobs when I "save".
What I get in return when I "spend" or buy does not guarantee either happiness or satisfaction as it leads me to an entirely different sets of circumstance and does not connect me with what created the new states or have memory of the original things that gave me the money, in the first place.
I would rather have "recognition" or "appreciation" which gives me an instant feed-back and hence a sense of gratification. I am told the millennial generation is in this mode. You seem to be also aware of that feeling where you mention tweets and number of followers as metrics.
Are we unnecessarily quibbling about the usage/meanings of words and contexts/perspectives? or is there a higher order learning opportunity here?
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November 12, 2011 at 8:44am
Bala Subramanian-san
Thank you very much for your comment.
I think we are discussing very important points, money recognition, appreciation, happiness or satisfaction. Recently I came across a very interesting chart. Ths is not perfect, but it’s a good template to organize our thoughts.
source:"Mattsunn" http://mattsun.type-c.com/
We have been focusing too much on Money (the first line), then the recognition(the second line).
The word “fortune and fame” represents our desire.
And recently, I feel more and more people have shifted their energy source from money to satisfaction.
Thank you again for your comment and let's keep discussing!
Tsukasa
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November 13, 2011 at 5:12pm
Mr. Makino,
This is an excellent example of an organization transforming from a vertical top-down management style to a more horizontal, collaborative environment. I find it inspiring to hear about the positive results of this 7 year case study, especially from a global perspective. I believe that much of the implementation success can be attributed to the fact that changes were made across the organization, not just to one area of the business. To make a dramatic shift, the entire company must pivot so that each component of the business is aligned with the new strategic direction.
Although I agree with most of the organizational changes made within TMN, I’m struggling to understand the use of the SCRUM work style. I’ve experienced SCRUM to be time consuming, stressful for employees, and potentially counterproductive. Instead of encouraging collaboration and transparency, employees feel forced to scramble to come up with their weekly achievements instead of providing comprehensive, productive updates when appropriate throughout the development process. In theory, SCRUM seems to have the appropriate mix of collaboration, goal setting, and transparency, however in practice I’ve witnessed weekly update meetings take hours to complete where employees are ‘zoning out’, which seems to be counterproductive. Perhaps these findings are more relevant to my experience in product marketing within the consumer goods industry.
Beyond my concerns on the use of SCRUM, I’m thrilled to hear about such a successful transformation – it gives me hope that more companies will take the same decisive action to drive change.
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December 17, 2011 at 5:12pm
Dear Rachel
Thank you very much for your comment.
Yes as you pointed out, the key success factor was the destruction of sectionalism and bureaucracy that prevented horizontal cooperation.
Regarding to SCRUM, also as you pointed out, it is two-edged blade.
If you use it as a cooperation and innovation method, the daily morning meeting is quite fun. It becomes the field to share new ideas, feel the progress, and solve problems together. (Please refer to my attached video. http://youtu.be/dhOjwIc-isM SCRUM team is introduced in latter part. They look so happy! ).
But if you use it as a “management” tool, the daily meetings will be, as you wrote, time consuming and stressful, just looking at the long list of troubles and delays and finding persons to blame. Also SCRUM may not be suitable for a quite large, critical and rigidly defined system such as core banking system.
To make SCRUM a happy and productive tool, we have to change the culture and mindset of the team members from “find and blame” to “share and cooperate.”
Thank you again for your kind and inspiring comment!
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