Executive Dialogue on Sustainability

The Onward Group has established the mission statement "enriching and adding color to people's lives while caring for the planet," and aims to promote management that coexists with the Earth. We have set "workstyles that enhance and add color to employees' lifestyle as well" and "workplace where diverse individuals are engaged" as priority issues, and have launched the "Work Style Design" project in 2019 to reform the way employees work, with the aim of improving productivity by increasing work efficiency and realizing work-life balance.
We sat down with Yoshie Komuro, President and CEO of WORK LIFE BALANCE Co., Ltd., who has provided consulting services to more than 1,000 companies to help them achieve work-life balance, and has also held several public positions, such as a member of a government agency, to speak with our company President and CEO Michinobu Yasumoto about work style design.

To shift from valuing uniformity to leveraging diversity

Yasumoto:I first met Ms. Komuro when I asked her to speak at a management training program for several hundred people in 2018. At the time, as customers' values and lifestyles were becoming more diverse, I felt that the company culture was too uniform, even though we needed to create products and services for a wide variety of customers. We're a company that grew significantly in the Showa era (1926-1989), so we might have been placing too much importance on those roots.

Komuro:When I first went to the management training program, I got a huge shock seeing how few women there were in middle management and above. To me, I perceived the fashion industry as a place where women really thrive, so it surprised me. I then remember honestly communicating my thoughts to Mr. Yasumoto.
Five years have passed since "Work Style Design" was launched, and quantitative results have been achieved in almost all categories. When I met you in 2018, could you have imagined that we would be living in a society where companies need to disclose such figures?

Yasumoto:I didn't imagine it. We weren't thinking in terms of IR or anything like that, we thought of it as a sales strategy. I felt that I wanted us to become a company that could come up with diverse proposals, and I thought that it was important to be able to make such decisions as management as well.

Komuro:From the time we met, you have been thoroughly aware that the market is demanding a variety of products and services, but that ONWARD does not have a system in place to create products and services that meet the market's needs. Since 2018, there have been big changes--overtime hours have been reduced by 52.5%, 66.7%*1 of men take paternity leave, and women represent 29.4%*2 of leadership. The speed of the initiative and launch was wonderful, and while many companies who start these kinds of initiatives end up abandoning them midway, I believe that pushing forward and continuing with this project is what drove results. Why were you able to steadily push forward with the project each year?

Yasumoto:Diversity is necessary, and, on the contrary, I believed that we would not be able to survive in the current era as a uniform organization. Rather than it being a case of "such and such will happen if we become diverse," at the time I was thinking more that our atmosphere for realizing diverse voices was lacking. So, I firmly believed that this was definitely the right direction to take. I did go back and forth on what sort of timeline we should proceed on, but the COVID-19 pandemic sped everything up.
ONWARD KASHIYAMA alone has 2,451*3 fashion stylists (sales staff) around Japan. It was extremely difficult to communicate carefully with all of them. With digital technologies rapidly expanding as a means of communication in the COVID-19 pandemic, ONWARD became able to communicate with all store managers every month. By continuing with such initiatives, I think I now have a better understanding of what is happening in the field and how people think. The power of digital transformation is indeed large.

Komuro:The fact that you started communicating directly with each site online must have had a great impact on the sites. Not only that, but you worked remotely for 17 days consecutively. Back in 2018, there were many who said that it would be difficult to do important work online in your company, but I no longer hear anyone say that. I think it was your 17 consecutive days of remote work that led to a significant turning point, would you agree?

Yasumoto:I did my 17 consecutive days of remote work as I thought that I should experience what it is like in case we would no longer be able to go to the office. A large natural disaster could occur, and I felt it was necessary from the perspective of crisis management.

Komuro:There are few people who actually do that. That's because it is not a short period like five days, but a long span of 17 days. I remember you saying that you were able to do most things despite not going into the office at all during that period. With as many as 17 days, you must have been able to do various types of work at home. What insights did you gain?

Yasumoto:Before doing it, I thought that the meaning and enthusiasm behind instructions would be hard to communicate when not face-to-face. However, I was able to see that is not necessarily the case. So, I now feel that work can be done without being at head office. I have been able to go to various sites and increase my contact with those in the field. If the president of the company has to be at head office, you get tied down. Instead, I changed my mindset to go to the field and do the work on site myself.

Komuro:That legwork is what leads to business performance, isn't it? The number of people who actually come to see the site in this way is rapidly increasing now, and that boost motivation. It's precisely the president of a company that should be able to work no matter where in Japan.

Communicate a readiness for long-term support, with health first

Yasumoto:Even as we have been increasing the ratio of female leaders, I have been thinking about how to promote and encourage female directors to play an active role in the company ever since I became president. We previously had female directors, but we didn't manage to sustain that. Appointing directors is just a start point, and what happens after that is important. I also consulted with you about how to create a stress-free place to play an active role, and you suggested "dialogue sessions" to share perceptions and values among the director candidates, which was implemented in FY2023.
The themes for the first dialogue session with four director candidates was "do you want to become a director" and "if you do, what do you want to achieve?" However, all of the candidates started with very strong hesitations about becoming directors. I was asked why I wanted to push forward with women's participation, and I also sensed that they were skeptical that the purpose was to keep up appearances with the world's current trends. So, it took time for them to trust me at first.

Komuro:I am impressed that you were able to feel their skepticism. If management does not send out a message that it expects something genuine, women in particular will not be able to trust and demonstrate their abilities. I think it is rare for management to have that awareness. We tend to think it's because there is a lack of motivation on their part, or because it's difficult for them to juggle the various work/life time commitments. That is not the case--it is because they are uncertain whether the attitude of management toward appointment is genuine or if they will just be used to look good in society. I think it could even be a first in Japan that management has been able to understand that it is very important for candidates to feel that they are being evaluated fairly. What sort of discussion did you have after that?

Yasumoto:We had various conversations. I understand that I am genuinely trying to promote the advancement of women, but we talked about what to expect when a woman becomes a director. Some voiced concerns that a woman, and not a man, becoming a director will need to achieve impressive results and that women must be successful. Of course, not all directors, including men, can produce 100% results, so I told them I wanted them to continue in good spirits. It would be sad for them if they become physically or mentally ill as a result of being directors, or if they are unable to serve because of it, and it would be most unfortunate for the company if these attempts are seen as unsuccessful. They told me that they felt a lot more relaxed after I said that.

Komuro:I think it was also very important to take the stance of calmly waiting. Women and men alike sometimes produce results, and sometimes not due to various external factors. While going through both of these periods, the person is to be evaluated, continued, expected, and nurtured well as a director. This is the pressure that many women who become candidates for director positions, including those at other companies, feel when they are told that they must be excellent when they are promoted, or when they are told "as expected of a woman" when they do not produce perfect results. Too much attention is paid to the success of female directors, and this creates a negative cycle in which the individual becomes very nervous, and this becomes a factor in her inability to produce results. In such a situation, I think it was really significant that you communicated through the "dialogue session" that you want people to continue to value their health first and foremost and that you are prepared to support them in the long term.
Did talking to these female candidates for directors change any ideas that you had?

Yasumoto:All candidates for director that attended were women, but they were all completely different. I was able to reaffirm how much diversity there is among women themselves. Making assumptions about someone just because she is a woman is a very one-size-fits-all way of thinking. Of course, this is true for men as well, but I don't think I was able to follow them that closely. I also realized that I may not have imposed on myself that I am a sales professional or that I look at people in terms of career or category and grasp the true inner workings of a person.

Komuro:It is true that at your company, it was common practice to promote people based on their background careers, for example, how many years they have been in charge of XX brand, so they must have this skill. However, the system has been changed so that each person's strengths and weaknesses are considered and individual characteristics are considered in the hiring process, and it seems as if you yourself have levelled up as a management.

Yasumoto:You're right. I've improved myself. However, I did think that management is a difficult task. By getting that deeply involved, decisions become very complicated.

Komuro:You have set a target of increasing the ratio of female directors to 30% in the future. I would very much like to know what you think about it and what it means for management.

Yasumoto:You're right. We are just getting started here, but we have appointed two female directors in FY2024. I would like to make a little effort every year from now on to achieve the goal. Right now, the ratio is around 10%, and I hope that more diverse opinions will come forward if we are able to achieve 30%.
However, in the Daiichi Company, which generates almost half of ONWARD KASHIYAMA's profits, one out of two directors is female, and eight out of 15 managers and higher are female. Here alone, the ratio of female leaders is 50%, and there are active opinions at meetings.

Komuro:When it comes to women's advancement, what often happens is that women increase in non-central departments. While there are many companies like this, half of the leaders at the core Daiichi Company are women. This is an arrangement that I believe is being promoted because it captures the essential nature of the project. When do you think you will achieve the goal of 30% female directors?

Yasumoto:We have 2030 as one goalpost. Simply put, we expect to achieve this by creating one female director each year. It might not go simply each year, but I do not think it is impossible at all.
Furthermore, I am very optimistic about the future. At this point, approximately 50%*1 of assistant manager positions are held by women, and the effects of the "Work Style Design" are beginning to be felt there. Perhaps if we work hard until around 2030, it will happen so naturally that there will be no need to use the term "women's advancement" beyond that point.

A praise system that produces a hero/heroine every month

Komuro:ONWARD's performance is showing a beautiful V-shaped recovery when viewed graphically. In this context, you have succeeded in reducing overtime hours, but what do you see as having led to this performance?

Yasumoto:I suppose it means that there is an open atmosphere and we can talk about various things in a frank and honest manner. It all boils down to the process of coming up with ideas together to concretize what will satisfy customers, but it is difficult to have substantive discussions if there is a lack of openness and psychological safety at that time. Things don't go well when you come up with products and services in a decision-making process whereby it is safer to act in accordance with what a certain person says.
There are a large number of female employees in the field of customer-facing sales, and when members of the field become more energetic, their performance improves. The same is true of manufacturing. Product creation and design is another area where women are quite active, so if the products improve and the sales floor becomes more vibrant, performance will naturally improve.

Komuro:When companies want to revitalize their manufacturing and sales sites, they usually provide training for front-line employees. At your company, the director class, which is the key to this process, received training on psychological safety for communicating with front-line employees in a way that gives them energy. Instead of telling the field that we are going to stay tough and they should do their best, I felt that the flow of energy coming down from the upper levels was working very well.

Yasumoto:There is energy, but I feel that respect is very important, and I think it is the executive's job to convey that. Frankly communicating that you respect and support both selling and producing is a necessary skill for those in positions of responsibility. It is important to create such a culture.
ONWARD KASHIYAMA selects 10 outstanding stores each month from approximately 700 stores and commends store managers each month. The selected store managers will present their innovations and receive praise from the approximately 700 store managers listening to them. I hear this is a motivating factor. Until then, we had gathered once or twice a year to hold award ceremonies, but starting in FY2022, we conduct them online without fail every month.
Rather than listening to a preaching by a senior management executive, it is a very practical lecture about what the manager who achieved excellent results last month did, which is both informative and stimulating for the listener.

Komuro:Heroes are created every month. It's motivating to be praised in an effective forum as if broadcast on TV, where about 700 store managers participate. What lead to this idea?

Yasumoto:We decided to do it quick, partly because the retail world changes rapidly every month, and it is important to be praised immediately for things that have been done, and partly because we wanted it to be a study group that we could make use of right away. For online meetings, it took only an hour and a half for all stores to be able to participate.
At first I was not used to praising people and was often scolded by various people for being too stiff. It was a trial-and-error process to make the event enjoyable by adding applause, sound effects, and other creative touches along the way. It was that way for about half a year, but I've gradually gotten used to it.

Komuro:Some managers say that it is not about reforming work styles but about reforming job satisfaction, and they drift into the theory that in order to create job satisfaction, people will want to do all the work they want to do and should be allowed to do it regardless of the hours, and that they will be happier if they can do the work they like as much as they like. However, it would be great to see more and more job satisfaction from people who see their work in short cycles and get feedback from them. I now understand that the kind of workplace that is rewarding to work in, as practiced by your company, is one where people feel that they are appropriately praised and looked after.
Finally, can you tell us what you are thinking about for the future?

Yasumoto:In terms of diversity, we have made a good start in the area of promoting women's advancement, but I feel that we need to do more to promote other areas as well. For example, we are also promoting the selection of young people, but there is a lot of turnover, etc., regardless of the industry. I feel that such a career-building approach must go beyond the confines of the company in order to grow. The idea of lifetime employment is changing, so the company's roadmap and the individual's career ideas are not necessarily aligned. I foresee an increase in diversity from such a career perspective.
In such an environment, it is necessary to create an organization where individuals can do their best and utilize each other's strengths, and I think that will be a challenge for the future. We are still in the process of creating a system to harmonize human resources with different values, and will continue to do so through trial and error.

Komuro:That's right. There is a difficulty in creating a company-wide system that will ensure that enough excellent human resources will stay. Even the traditional ways of working that we have considered inevitable may come to require revision, and if we don't do something that is that pioneering, we may not be chosen by the best talent. The remaining challenges are becoming fewer and fewer, and we look forward to further progress.

*1 Figure from among "Work Style Design" target group
*2 Figures for ONWARD KASHIYAMA's original career-track positions
*3 Figures from the end of February 2024

Profile of Yoshie Komuro, President, WORK-LIFE BALANCE CO., LTD.

Hold governmental posts such as Member of Prime Minister Abe 's Industrial Competitiveness Council, Member of Central Council for Education of the Ministry of Education, Culture, Sports, Science and Technology. Provided consultation services to over 1,000 companies to raise labor efficiency, so greater business results are achieved with shorter working hours. Changing Japanese people's style of work can be the solution for many of the problems Japan is facing such as low birth rate and aging population.