Hitachi’s consensual culture means you have to persuade rather than prescribe, says HR director Stephen Pierce
“Most people think we only make TVs,” says Stephen Pierce, HR director of Hitachi Europe. “Or they had one of our cassette players or CD players as a kid.” If he’s weary at having to recount, for what must be far from the first time, exactly what his company does, he’s doing a good job of hiding it. And at least the explanation ought to be trotted out a bit less in future.
Hitachi’s recent £1.2 billion contract to supply the East Coast main line, on top of its forthcoming deal for the Great Western line, will make its trains as ubiquitous in the UK as they are in Japan, where it designed and constructed the bullet train (“but nobody knows we did that”). And then there are the IT services, power systems, construction, consultancy and credit arms. Not to mention nuclear power – Hitachi is seeking planning permission to build new reactors in Anglesey and Gloucestershire which could provide employment for thousands.
In HR and OD terms, the setup presided over by Pierce – who joined the company six years ago after spells as HR director in large packaging and chemicals firms – looks unusual. For a Japanese multinational, however, it’s par for the course. Hitachi comprises 900 different businesses, 100 of them in Europe, where it employs around 11,000 people. Some of the firms fall directly under centralised HR control, others operate under a shared services model and others are almost entirely autonomous, joining in on some learning and development programmes and enjoying a dialogue with Pierce’s team.
The model feels natural to Hitachi, which operates, like Toyota, on the concept of nemawashi (roughly, consensus-building). “It means we don’t mandate change,” says Pierce. “We have to work with companies, persuade and influence them in order to create change. It gives businesses the freedom to run themselves in a way that is appropriate for their own markets and customers.
“It’s a bottom-up and top-down model, whereas other companies are focused on the top-down. It doesn’t shirk decisions – the top people still make a call when they need to, but it ensures a greater degree of engagement before you get to that point.”
It works because Hitachi’s traditional values (“harmony, sincerity and pioneering spirit”) emphasise collaboration, and Pierce has found areas where sharing HR resources provides impeccable logic and doesn’t threaten the status quo. Under his watch, the company has centralised much of its payroll and pooled its buying power for benefits. It now has a global database showing reporting structures and skills, a performance management system, and 140,000 of its 320,000 staff took part in its first worldwide employee survey.
There are still frustrations, including a “variety in HR practices” but Pierce says nemawashi has become inseparable from Hitachi itself: “Hitachi has been a very successful company for more than 100 years and one of the ways it’s achieved that is its culture. I’d love to be able to mandate change when it was necessary, but if you do that you damage some of the very things that have brought you the organisation you have today. You have to think about what you lose in the process.” What else has life at Hitachi taught him?
Networking is king
Hitachi doesn’t really do decision-making, says Pierce. At least not in the way we’d normally define it. “There’s not many meetings where you sit round in a room, debate what you’re going to do, make a decision, then go out and do it.” Instead, building an internal network and gaining trust and influence over time is the way to get things done.
“When you don’t have a mandate for change, you have to engage people and the time and effort that takes is huge. We’re judged by what we do, not what we say, and good engagement will give you people who really want to work with you on effective implementation.”
By bringing people together, particularly on development programmes, HR has been able to play its own part in growing those networks. And the consensual management style certainly shines a light on some unexpected talent: “If you look at a traditional meeting environment, who gets heard most? The people who speak up most. But we’ve discovered that those with the most to say might be different people.”
Ambiguity is OK
If you’re not flexible and need to be told exactly what to do, you may not prosper at Hitachi. “Japanese culture is comfortable with ambiguity,” says Pierce. “It gives you a gap and tells you to go and fill it with the expertise you were hired for.” That’s empowering for most, he adds, but it requires a certain type of mindset.
“You need some skills in Hitachi that are perhaps less important in other companies. You need consensus-building and you also need patience, as well as a level of emotional intelligence to get people on board with where you need to go. But once you have trust, you get a lot of freedom.”
Not everyone can cope in such an environment, so hiring those with experience in other Japanese companies can offer a head start, as well as careful questioning during interviews to ferret out the right sort of characteristics.
Don’t outsource talent
The new rail contract will also mean an £82 million factory in County Durham, employing more than 700 people. Two thousand have already expressed an interest in working there, but Pierce will handle recruitment the way he always has – resisting the temptation to outsource or use a bulk handler and instead constructing an internal team of specialists who understand the business and will deliver the right sort of candidates.
“We’re not like Tesco, where you have one brand everyone knows and a small number of similar jobs,” he says. “We have so many companies and customers, and so much complexity, that understanding the complexity makes recruitment work better for us. Where you have a clear economy of scale, you might look to do it differently – we’re not wedded to the model forever, but it works for us.”
Each business has its own separate recruitment strategy, but Pierce’s most pressing task is to raise Hitachi’s overall employer brand. “There is a lower awareness than I’d like,” he says. “But we’re working on it.”
Offer a sympathetic ear
“Every time there’s a new business to work with, it’s like you’re stepping up again to an HR director position for the first time,” says Pierce, who spent the early part of his HR career in a Glasgow biscuit factory. Learning to talk the language is key, as well as mastering the numbers (“understanding the P&L, being commercially savvy… it sounds obvious, but I’m not sure that in HR we always do that”) and offering value during periods of change.
But the single best way to advance both your own career and the HR cause is to be a good listener, he believes. “When an HR director is appointed, it’s typically by the CEO or MD so they’ve got an open door. That person wants them to be there.
“But being the MD is a very lonely business. Who can they talk to? Typically nobody, because they’re the boss and they can’t have the conversations with a member of staff that they’d like to have. Very often they use the HR director as a sounding board. When you step up to a new HR position, getting to know the top person and becoming their confidant is very important. And once that relationship builds, they will ask you what you think.”