Cover_final.pdf 8/31/2010 10:37:37 AM Paper size: 210mm x 270mm Talent strategies for innovation: Japan A report from the Economist Intelligence Unit Supported by the Government of Ontario, Canada C M Y LONDON 26 Red Lion Square London WC1R 4HQ United Kingdom Tel: (44.20) 7576 8000 Fax: (44.20) 7576 8500 E-mail: london@eiu.com CM MY CY CMY K NEW YORK 750 Third Avenue 5th Floor New York, NY 10017, US Tel: (1.212) 554 06000 Fax: (1.212) 586 0248 E-mail: newyork@eiu.com HONG KONG 6001, Central Plaza 18 Harbour Road Wanchai Hong Kong Tel: (852) 2585 3888 Fax: (852) 2802 7638 E-mail: hongkong@eiu.com GENEVA Boulevard des Tranchées 16 1206 Geneva Switzerland Tel: (41) 22 566 2470 Fax: (41) 22 346 93 47 E-mail: geneva@eiu.com Talent Strategies for Innovation: Japan Contents Preface Executive summary Introduction C-Level responsibility Case study 1: Canon The Japanese way Case study 2: Dentsu 11 Characteristics of innovative talent 12 13 Case study 3: Namco Bandai An evolving concept 14 Conclusion 16 Appendix: survey results 17 © Economist Intelligence Unit 2010 Talent Strategies for Innovation: Japan © 2010 The Economist Intelligence Unit All rights reserved All information in this report is verified to the best of the author’s and the publisher’s ability However, the Economist Intelligence Unit does not accept responsibility for any loss arising from reliance on it Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the Economist Intelligence Unit © Economist Intelligence Unit 2010 Talent Strategies for Innovation: Japan Preface Talent strategies for innovation: Japan is an Economist Intelligence Unit research paper, supported by the Government of Ontario, Canada The Economist Intelligence Unit’s editorial team conducted the interviews, executed the survey and wrote the report The views and opinions expressed in the report are those of the Economist Intelligence Unit alone Gavin Blair was the author of the report and David Line was the editor Gaddi Tam was responsible for layout and design Our thanks go to all survey respondents and interviewees for their time and insights September 2010 © Economist Intelligence Unit 2010 Talent Strategies for Innovation: Japan Executive summary Talent strategies for innovation: Japan examines how Japanese companies face the challenge of recruiting, nurturing and retaining talented people to ensure their organisations remain innovative Following on from a global survey of 179 senior executives on the same topic conducted in mid-2009, this paper analyses the results of a new survey of 50 senior executives from Japanese companies, comparing and contrasting them with the results of the earlier research In doing so it reveals several aspects of talentmanagement strategy that are unique to Japanese companies—and suggests ways in which the pressures of competition and globalisation are forcing them to evolve these strategies Its key findings include: • Japanese companies place less emphasis on the importance of talent management in their organisation’s ability to innovate, and consequently delegate responsibility for it lower down the chain of seniority In the survey 56% of Japanese respondents rate talent management for innovation as “very important”, compared to 75% globally Consequently just 38% of Japanese companies report that C-level executives have responsibility for the formulation of talent-management strategy, compared to 65% in the global results But they think this is changing: 51% of respondents in the Japanese survey expect C-suite executives will be more involved in defining strategy in five years’ time, compared to 38% of global companies • Japanese companies are more likely to employ structured, long-term talent-management strategies, and rely on internal development Employee loyalty and a lack of labour mobility mean many Japanese companies place a greater emphasis on graduate schemes to attract talent, and internal training schemes to develop it But these characteristics are changing with the demands of global competition: although 78% of respondents in Japan say training internal staff to fill key positions is a major part of their talent-management strategy now, only 24% expect this to be the case in five years’ time • Japanese companies tend to value technical knowledge and learning ability over creativity and entrepreneurship The surveys uphold the common perception that Japanese companies value different attributes in their search for talent than those elsewhere in the world: the most highly-valued attributes are the ability to learn quickly (picked by 78% of respondents) and a high degree of technical knowledge (60%), while the global results placed a higher value on creativity and collaboration However, many Japanese firms, although emphasising the importance of a unified corporate culture, recognise the need to broaden their search for talented staff to remain innovative • The pressures of globalisation and competition mean Japanese companies will have to look farther afield for talent Japanese companies are certainly aware of the need to attract employees from a broader pool of talent: 82% of Japanese companies think the availability of talent is a vital external factor for innovation strategy, far higher than the 55% of global companies that think so Increasingly this means they will have to go where the talent is: 48% think their companies will “locate innovation centres where there is an abundance of talent” in five years’ time, versus 39% of firms in the global survey © Economist Intelligence Unit 2010 Talent Strategies for Innovation: Japan Introduction “T alent management is the single most important factor for Japanese companies to continue to operate successfully on the global stage.” So says Michihiro Homma, senior general manager of the Human Resources Development Centre at Canon, a camera and office equipment manufacturer and one of Japan’s most successful international brands That Canon thinks this way is testimony to the evolution of the Japanese corporation Many of the Japanese companies that were at the forefront of the post-war “economic miracle” have seen their once seemingly unassailable competitive edges eroded by both lower-cost manufacturing rivals from Asia, and innovative competitors in technology and software from the West However, even as international competition has become tougher, faced with a shrinking domestic marketplace, many Japanese companies beyond the established electronics and automobiles exporters are seeking to expand their operations overseas With the global marketplace evolving at an ever faster pace, the need to innovate more quickly has never been greater Companies that don’t acquire and nurture the best talent available simply won’t be able to innovate effectively enough to compete Research conducted globally by the Economist Intelligence Unit in 2009 showed that 98% of companies regard talent management as either “important” or “very important” to their ability to innovate That research, entitled Talent Strategies for Innovation (also produced with support from Chart Respondents by job title the government of Ontario, Canada) took an (% respondents) Other C-level executive in-depth look at the relationship between 54 talent management and innovation This paper, Manager 20 Talent Strategies for Innovation: Japan, based on CEO/President/Managing director interviews and a survey of 50 Japanese companies, 12 CFO/Treasurer/Comptroller looks at the particular challenges facing Japanese corporations in nurturing innovative workforces SVP/VP/Director It also examines the differences in attitudes Head of department and approaches to talent management between CIO/Technology director Japanese companies and those surveyed in the previous global paper, and whether there are Board member differences between domestic-focused and exportSource: Economist Intelligence Unit oriented firms in Japan © Economist Intelligence Unit 2010 Talent Strategies for Innovation: Japan About the survey A total of 50 executives from Japanese companies with annual sales of between US$250m and US$10bn took part in the online survey Some 72% of respondents were C-level executives and the remainder were senior vice-presidents, vice-presidents, directors or managers © Economist Intelligence Unit 2010 (see Chart 1) Some 40% of respondents are in the HR department • Respondents represented a range of industries, with 32% coming from the manufacturing sector, 22% from retailing and 16% from consumer goods • Survey totals may not add to 100 either due to rounding or because respondents could pick multiple answers Talent Strategies for Innovation: Japan C-Level responsibility T he value of talent management is being increasingly recognised in Japanese companies, with 100% of survey respondents regarding it as either “important” or “very important” to their organisation’s ability to innovate However, companies worldwide place a slightly greater emphasis on this, with 75% in the 2009 survey citing it as “very important”, whereas just 56% in Japan rate it the same way (see Chart 2) Reflecting this, the responsibility for talent management is still being delegated lower down the corporate ladder in Japan relative to global practice At the very top, just 38% of Japanese companies report that C-level executives have responsibility for the formulation of talent-management strategy, compared to 65% in the global results Slightly lower down the chain of command the story is the same: at only 20% of Japanese companies are senior vice-president, vice-president and director level executives in charge of formulating talentmanagement strategy, whereas at firms globally the figure is 49% For the execution of these strategies, only 18% of Japanese companies say senior vice-president, vice-president and director level execs are responsible, compared to 46% globally (Respondents in both surveys were able to choose more than one level of executive.) Although the surveys show that on average Chart Japanese companies are placing less emphasis How important is good talent management to your organisation’s ability to innovate? on talent management than their global (% respondents) Japan Global counterparts, with fewer senior executives taking Very important 56 charge of it, many of the nation’s most forward75 Somewhat important looking organisations are placing it at the heart of 44 their business strategy 23 Not at all important Canon, which has been an early adopter in the field, began implementing a formal talent Don’t know/Not applicable management strategy in 2000, and involvement goes all the way to the top “Our CEO, [Fujio] Source: Economist Intelligence Unit Mitarai, is fully committed to talent management and puts a lot of effort into its development,” says Mr Homma It is not only Japan’s technology powerhouses that have taken the importance of talent management on board “Our way of innovation is not the technology innovation that Japan is famous for, but creating innovation in terms of ideas and ways of working, and developing talent that can that,” says Yotaro Okuda, deputy director of the Corporate Strategy Division at Dentsu, which controls over 20% of the Japanese advertising market At Namco Bandai, a maker of toys and electronic games with sales in the financial year 2009-10 of ¥378.5bn (US$4.2bn), innovation is also essential to the success of the company © Economist Intelligence Unit 2010 Talent Strategies for Innovation: Japan “Because of the nature of our business, making games and toys, if we don’t develop good talent and they don’t enjoy their working environment and create innovative products, we can’t survive as a company,” says Norifumi Hayashi, general manager of human resources “So the organization is important, but individual development is the most important thing we have.” Case study 1: Canon With less than half of its 194,000 worldwide workforce based in Japan, and just over a fifth of its US$37bn sales in calendar 2009 coming from the domestic market, Canon has for decades looked at business through a global perspective The company has also seen the core activity of its operations, optical imaging, become almost entirely digitised in a relatively short space of time “In recent years technological advancement is so fast that the challenge is to business at that speed,” says Michihiro Homma, senior general manager of the Human Resources Development Centre at Canon The company’s comprehensive talent management system covers employees from new recruits through to senior executives, and includes three levels of Canon Innovative Leader courses for managers, which are held at different locations worldwide In addition, there is a Canon Corporate Executive Development © Economist Intelligence Unit 2010 Program which was created with the IMD business school in Lausanne, Switzerland This course, for around 20 people per year, is designed for senior foreign managers and Japanese managers who work overseas, so is all conducted in English For senior executives a Keiei Juku, or intensive management course, focuses on management training and personal development “At present [this course] is only designed for Japanese executives, but in the future is likely to be taken by foreign executives too,” Mr Homma says Canon was one of the few major manufacturers not to post losses during the global slowdown, though Mr Homma is reluctant to credit the company’s talent strategies “It’s true we didn’t go into the red, and the managers responsible were brought through by Canon,” he says, “but we couldn’t say it’s due to our talent management policies The program started formally from 2000 so the results should be visible from here on in.” Talent Strategies for Innovation: Japan The Japanese way J apanese corporate culture is often characterized as being different to that in the rest of the business world, and although its uniqueness may sometimes be overstated, there are factors that distinguish it from elsewhere One of these differences is employee loyalty to the company, and a central tenet of that is not moving from one organisation to another every few years—something that is “still regarded as kind of immoral in the Japanese business world”, says Izumi Miyajima, deputy director at the HR Development Department of Dentsu Although there is more mobility than there once was in the Japanese labour market, at big corporations in particular, joining the company on April 1st straight after graduation and remaining there for decades is still far from unusual In line with this, a “fast-track scheme for able graduates” is cited as the most highly-rated strategy for recruiting talented staff by 58% of Japanese companies, versus 34% globally Similarly, the survey results found that a far smaller proportion of Japanese companies than global companies regard the “desire of employees to switch jobs frequently” as a major challenge to keeping talented staff (20% compared to 43%; Chart 3) “We don’t have a lot of staff who leave the company,” says Mr Miyajima Although the lack of mobility between companies undoubtedly makes it more difficult to procure talent from outside, it does allow organisations to create long-term talent management programmes that span employees’ working lifetimes According to the survey, more companies in Japan (66%) regard internal development as the most effective method for talent management than global companies (46%; Chart 4) According to Ichiro Hara, general manager of Chart Which of the following challenges does your organisation Canon’s HR Management Division, the company currently face in recruiting and retaining talented staff? does have staff join mid-career, “but their numbers Please select all that apply (% respondents) are pretty low” With this in mind, Canon has Japan Global Increasing labour costs 44 created a comprehensive, company-wide “HR 42 Older employees retiring Development System” that implements talent 36 27 management for its workforce—from new recruits Lack of skilled graduates for entry-level jobs 34 right through to senior management 36 Desire of employees to switch jobs frequently Dentsu too has a very structured career and 20 43 training path for employees to follow through Greater comptition from global marketplace 20 their working lives at the company “Our basic HR 45 Restrictive labour regulations system is different to Western companies because 16 16 employees don’t change careers often, and usually Restrictive immigration laws stay with us for 20 or 30 years,” says Mr Miyajima 11 “So our development and career plans are based Source: Economist Intelligence Unit around that fact.” © Economist Intelligence Unit 2010 Talent Strategies for Innovation: Japan Chart Which methods are most effective for your organisation in recruiting talent for innovation? Please rate on a scale of to where 1=Very effective and 3=Not at all effective Don’t know/Not applicable Japan: Very effective Not at all effective (% respondents) Global: Internal development Very effective Not at all effective Don’t know/Not applicable 66 46 28 49 2 12 Open competition 44 42 22 54 Referrals through formal networks (eg, associations) 37 19 18 53 56 Referrals through informal networks 20 21 52 36 43 Recruiting from competitors 18 20 18 58 10 26 22 52 20 Source: Economist Intelligence Unit Chart Which of the following statements are true about your organisation’s talent-management strategy now, and which will be true in the next five years? Please select those with which you agree My organisation: (% respondents, select answers) Today Looks outside country borders for talent In five years 42 40 Trains and develops staff internally to fill key positions 78 24 Moves staff between countries to address talent gaps 40 38 Locates innovation centres where there is an abundance of talent 38 48 Does not consider availability of talent in defining overall strategy 48 36 Source: Economist Intelligence Unit 10 © Economist Intelligence Unit 2010 Talent Strategies for Innovation: Japan The least traditionally Japanese of the three case study companies in this report, Namco Bandai, takes a more flexible approach to career planning “We have no age-based promotions at all; people who produce results get rewarded,” says Mr Hayashi Most staff training programmes are negotiated between the company and individual employees, who are “rarely forced to go on courses”, Mr Hayashi says Employees joining mid-career is also fairly common at Namco Bandai, reports Mr Hayashi, who himself had stints in human resources at a number of other companies before his present position Despite Japan’s relatively strict immigration laws, only 4% of Japanese companies surveyed regard them as a major challenge in recruiting and retaining talented staff, below the 11% that hold that opinion globally Dentsu’s Mr Miyajima concedes that while Japanese companies are “behind in terms of diversity, particularly with regard to gender equality and foreign employees”, he believes the situation is improving The current norm of training internal staff to fill key positions looks set to change dramatically, according to the survey results Although 78% of respondents say this is true of their talent-management strategy now, only 24% expect this to be the case in five years’ time (Chart 5) However, only 40% of respondents believe Japanese companies will look outside the country’s borders for talent in five years’ time, compared to 42% today, suggesting slow progress on the lack of diversity Mr Miyajima highlights Case study 2: Dentsu Dominating its domestic advertising market to the extent that it is the envy of agencies worldwide, Dentsu has a history that goes back over a century Even in the perfect storm that devastated the media and advertising industries through 2009, the group managed to pull in sales of ¥1.678trn (US$19.3bn) and return to the black Although in many ways Dentsu is a traditional Japanese company with many employees who stay with the organisation for their whole working lives, its need for creative innovation and overseas expansion have meant it places a great deal of emphasis on talentmanagement strategy Dentsu created a training course jointly with Virginia Commonwealth University’s Brandcenter that started in 2006 These off-site courses were initially run by lecturers from the US advertising world, but they have been gradually replaced with Dentsu employees who have taken the courses themselves In April this year, Dentsu launched two new talent initiatives: the Dentsu Management Institute—a one year course with Hitotsubashi University Graduate School of International Corporate Strategy in Tokyo—and Dentsu Management Juku (cram school), a threemonth course There are two main reasons for implementing these now, according to Yotaro Okuda, deputy director of the Corporate Strategy Division: “Firstly, the digital media environment that Dentsu and our clients are operating in has become extremely complex [Secondly,] we also need to understand the way our clients’ businesses work and their management strategies in order to respond to their needs.” © Economist Intelligence Unit 2010 11 Talent Strategies for Innovation: Japan Characteristics of innovative talent A t Japanese companies, the most highly-valued attributes for innovation in employees are the ability to learn quickly (picked by 78% of respondents) and a high degree of technical knowledge (60%)—both selected by more than twice the percentage of Japanese firms than their global counterparts Creativity, however, is less highly prized by Japanese firms (34%, compared to 51% globally) Entrepreneurial skills too are lower down the list of attributes necessary for successful innovation, picked by only 4% of Japanese companies, compared to 22% in the global survey (Chart 6) While these findings may be in line with the general perception of a Japanese corporate world that regards technical knowledge and corporate conformity as more important than creative thinking, this does not necessarily reflect the approaches of Japan’s more forward-looking companies And while this traditional characterisation emphasises group responsibility and collaboration over individual enterprise, Chart What you regard as the most important skills required for successful innovation in your organisation? (% respondents) Japan Ability to learn quickly 78 36 High degree of technical knowledge 60 23 Ability to collaborate 40 40 Creativity 34 Ability to solve problems 30 Self-motivation 25 R&D management skills Entrepreneurial skills Knowledge transfer skills 22 17 Networking skills 11 Ability to work across functions Source: Economist Intelligence Unit 12 © Economist Intelligence Unit 2010 23 34 Global 51 Talent Strategies for Innovation: Japan in the survey, ”ability to collaborate” was rated highly by exactly the same percentage of companies (40%) in both the Japanese and global surveys Canon, Dentsu and Namco Bandai all report that on-the-job training and job rotation are crucial to nurturing an innovative workforce that understands the needs of the entire organisation “Having employees experience various aspects of our business develops the best talent, but it’s difficult to well—it’s our biggest challenge regarding talent management,” says Canon’s Mr Hara This view is echoed by Namco Bandai’s Mr Hayashi, who says that “managers not wanting to let their most capable staff move to other divisions” is one of the biggest barriers to effective talent management in the organisation Another problem encountered at Dentsu is that “sections are often so busy that there is not enough time to dedicate to on-the-job training, or send staff away on training courses,” reports Mr Miyajima Dentsu’s solution is the implementation of short-term intensive training programmes Both Canon and Dentsu have a clearly defined company ”way”, and educating employees in this is integral to their talent-management strategies Canon’s “San-ji”, or ”three selfs”, are pillars of its corporate philosophy: self-motivation, self-management and self-awareness Meanwhile, Yoji Ando, senior manager at Dentsu’s Recruiting & Talent Development Department, describes the overarching goal of the company’s training programmes as: “to create value, increase the capabilities of employees and pass on the ‘Dentsu Way’ to the next generation” Whereas Namco Bandai “doesn’t have a strict group ‘way’ like some companies”, says Mr Hayashi “We have policies but don’t dictate exactly how things should be done at ground level.” Case study 3: Namco Bandai While the number of C-suite executive titles seems to be perpetually expanding, the Bandai division of Namco Bandai must certainly be the only company with a CGO, a Chief Gundam Officer, who manages the brand of video games, toys and model figures based around the company’s iconic, and highly profitable, “robot-suit” franchise As befits a creator of fantastical games and toys, the company has an unorthodox approach to talent management This doesn’t mean it takes the issue lightly, just that it operates in a world of unconventional creativity and adjusts its strategies accordingly Nor has it been insulated from the global slowdown Despite the oft-touted recession-proof nature of the entertainment industries, it did suffer a fall in sales last year that resulted in it posting a record loss In response, this year it launched a “Group Restart Plan”, with one of the main pillars being to “transform into a speedy group” According to Norifumi Hayashi, general manager of human resources, “This means we make decisions fast, develop fast and bring new products to market fast—the product cycle in our business is very quick Young people are more suited to this way of working so we give them a lot of responsibility early on So before they make big mistakes, they are allowed to make small ones.” Namco Bandai also brings in more staff mid-career than most Japanese companies because “any corporate mono-culture has its limits, so stimulation from outside is essential for innovation and development,” according to Mr Hayashi It is also less concerned about staff leaving “We don’t spend money on retention, on bonuses and the like Even if an employee is exceptional, if their heart is not in the job, we don’t need them,” he adds “I think the best way is to try and create a company where employees want to work.” © Economist Intelligence Unit 2010 13 Talent Strategies for Innovation: Japan An evolving concept T he awareness of, and focus on, talent-management strategy at Japanese companies looks set to increase While 56% of Japanese companies currently think that a lack of involvement from C-suite executives in shaping talent strategy is a major internal barrier to innovation, compared to 31% of global firms, some 51% of respondents in the Japanese survey expect C-suite executives will be more involved in defining strategy in five years’ time, compared to 39% of global companies (see Chart 7) Dentsu’s Mr Miyajima believes that the top executives in his company “will be more involved in talent management for innovation in five years, and that will make it easier for our [HR] work too” Chart 7a Are C-level executives in your organisation more or less involved in defining talent strategy now than they were five years ago? How involved will they be in five years? The same Don’t know/Not applicable Japan: More involved Less involved (% respondents) Today Global: More involved 38 The same Less involved Don’t know/Not applicable 46 51 41 10 In five years 51 39 39 44 12 Source: Economist Intelligence Unit Like companies everywhere, the biggest Chart 7b What are the main internal barriers to successful talent challenges facing Japanese organisations are management for innovation in your organisation? related to globalisation These range from the (% respondents) Japan Global fact that “business opportunities are appearing C-suite executives are not involved enough in shaping talent strategy 56 in places where they didn’t previously occur,” as 31 Dentsu’s Mr Miyajima puts it, through to “how to Source: Economist Intelligence Unit work effectively with foreign board members, or a future number one or number two at the company”, says Namco Bandai’s Mr Hayashi The challenges of working with foreign staff and managing overseas subsidiaries are recurring themes for Japanese companies planning talent-management strategies to train their staff for business in an increasingly globalised future “Taking over foreign companies and having employees that are able to run them is one of the biggest challenges facing Canon,” says Mr Hara Even Dentsu, often seen as a traditional domestic Japanese firm, already has more staff overseas than the 6,500 who work at its huge Tokyo headquarters This figure is set to grow, notes Mr Okuda, as Dentsu is “expanding as a group, often through M&A—and if we are taking over companies, then of course we have to nurture talent that can manage them.” Already 82% of Japanese companies think the availability of talent is a vital external factor for innovation strategy, considerably higher than the 55% of global companies that think so—though it 14 © Economist Intelligence Unit 2010 Talent Strategies for Innovation: Japan was the top answer in both surveys (Chart 8) Similarly, 48% of Japanese respondents think their companies will “locate innovation centres where there is an abundance of talent” in five years’ time, versus 39% of firms in the global survey (Chart 5) Chart In developing a strategy for innovation, what external factors are most important for your organisation? (Top only) (% respondents) Japan Availability of talent 82 Access to people with flexibility with regard to work demands (eg, hours, mobility, relocation) 38 Cluster of companies/institutions in the same industry 30 Global Availability of talent 55 Business environment (eg, tolerance of risk) 41 Access to people with flexibility with regard to work demands (eg, hours, mobility, relocation) 29 Source: Economist Intelligence Unit © Economist Intelligence Unit 2010 15 Talent Strategies for Innovation: Japan Conclusion W hile parts of the Japanese corporate world may have begun to adopt formal talent management programmes slower than their overseas counterparts, many of its leading and forward-looking companies have long been aiming for global best practices in the discipline But even these acknowledge that there is still a way to go Even Canon, which has operated successfully worldwide for decades, acknowledges that it can’t rest on its laurels “The other big challenge for us is creating a fully global talent management system, which isn’t in place yet,” says the company’s Mr Homma “We have to create one that can respond to the emerging markets of Asia and other developing countries, and it’s not easy to predict what will happen in those areas.” As the shrinking population in Japan continues to squeeze the domestic market, the numbers of Japanese companies seeking to expand operations overseas is set to grow With that, as the survey and case studies illustrate, there will be a growing emphasis on the importance of talent management for innovation 16 © Economist Intelligence Unit 2010 Talent Strategies for Innovation: Japan Appendix Survey results Appendix: survey results In which country are you personally located? (% respondents) In which country is your company headquartered? (% respondents) Japan Japan 100 100 Who is (are) the most senior executive(s) with responsibility to formulate and execute your organisation’s talent strategy? Please select all that apply (% respondents) How important is good talent management to your organisation’s ability to innovate? (% respondents) Very important Formulate C-level executive 56 Execute 38 Somewhat important 28 44 SVP/VP/Director 20 24 18 Head of business unit 30 30 Head of department 22 10 Manager 12 16 Are C-level executives in your organisation more or less involved in defining talent strategy now than they were five years ago? How involved will they be in five years? (% respondents) More involved Today The same Less involved 38 Don’t know/Not applicable 46 10 In five years 51 39 In your opinion, how important are the following for innovation? Please rate where 1=Very important and 3=Not important (% respondents) Policies to attract and retain qualified professionals Very important Not important Don’t know/Not applicable 70 28 Location within a cluster (geographic concentrations of companies and institutions operating in a particular field) 33 42 17 Investment in research and development 53 33 14 Strong channels of communication with customers 84 16 Strong relationships with suppliers 74 24 © Economist Intelligence Unit 2010 17 Appendix Survey results Talent Strategies for Innovation: Japan What you regard as the most important skills required for successful innovation in your organisation? Please select up to three (% respondents) Ability to learn quickly 78 High degree of technical knowledge 60 Ability to collaborate 40 Creativity 34 Ability to solve problems 34 Self-motivation R&D management skills Entrepreneurial skills Knowledge transfer skills Networking skills Ability to work across functions Other, please specify In developing a strategy for innovation, what external factors are most important for your organisation? Please select up to three (% respondents) Availability of talent 82 Access to people with flexibility with regard to work demands (eg, hours, mobility, relocation) 38 Cluster of companies/institutions in the same industry 30 Financial and/or fiscal incentives 26 Cost/availability of capital 26 Protection of intellectual property rights 14 Quality of education system 14 Proximity to universities and other sources of fundamental research Business environment (eg, tolerance of risk) Diversity of available talent Liberal labour laws (eg, easy to hire and fire) 18 © Economist Intelligence Unit 2010 Talent Strategies for Innovation: Japan Appendix Survey results In your opinion, which methods are most effective for your organisation in recruiting talent for innovation? Please rate on a scale of to where 1=Very effective and 3=Not at all effective (% respondents) Very effective Internal development Not at all effective Don’t know/Not applicable 66 28 Open competition 44 42 Referrals through formal networks (eg, associations) 37 12 53 Referrals through informal networks 20 10 52 Recruiting from competitors 18 26 58 22 What are the main internal barriers to successful talent management for innovation in your organisation? Please select all that apply (% respondents) C-suite executives are not involved enough in shaping talent strategy 56 Talent strategy not effectively aligned with business strategy 56 Not enough collaboration and resource-sharing among different parts of the organisation 48 Reluctance to look outside the organisation for talent 28 Lack of relevant training opportunities for people within the organisation 26 Lack of resources in our community for developing workforce skills 24 Lack of labour pool with appropriate skills 22 Other, please specify Which of the following challenges does your organisation currently face in recruiting and retaining talented staff? Please select all that apply (% respondents) Increasing labour costs 44 Older employees retiring 36 Lack of skilled graduates for entry-level jobs 34 Desire of employees to switch jobs frequently 20 Greater competition from global marketplace 20 Restrictive labour regulations 16 Restrictive immigration laws Other, please specify © Economist Intelligence Unit 2010 19 Appendix Survey results Talent Strategies for Innovation: Japan 10 What strategies does your organisation use for attracting and retaining the most talented staff? Please select all that apply (% respondents) Fast-track scheme for able graduates 58 Individual coaching and mentoring 52 Opportunity to train for industry qualifications 44 Flexible working opportunities 24 Rewards and incentive schemes for achievements 24 Employee perquisites such as health club membership 22 Bonus offered when new hire joins from a rival firm (eg, golden hellos) 20 Opportunity to move between countries 18 On-site child care 10 Rewards for loyalty 10 Other, please specify 11 Which of the following statements are true about your organisation’s talent-management strategy now, and which will be true in the next five years? Please select those with which you agree My organisation: (% respondents) Today Looks outside country borders for talent In five years 42 40 Trains and develops staff internally to fill key positions 78 24 Gives the C-suite main responsibility for talent management 74 26 Moves staff between countries to address talent gaps 40 38 Locates innovation centres where there is an abundance of talent 38 48 Seeks to create an environment that is conducive to innovation 54 46 Does not consider availability of talent in defining overall strategy 48 36 20 © Economist Intelligence Unit 2010 Talent Strategies for Innovation: Japan Appendix Survey results 14 Which of the following best describes your title? (% respondents) 12 What is your primary industry? (% respondents) Board member Manufacturing 32 CEO/President/Managing director 12 CFO/Treasurer/Comptroller CIO/Technology director Other C-level executive Retailing 22 Consumer goods 16 Construction and real estate Entertainment, media and publishing 54 IT and technology SVP/VP/Director Logistics and distribution Head of department Telecommunications Manager 20 Chemicals Energy and natural resources 15 What are your organisation's global annual revenues in US dollars? (% respondents) Financial services Professional services $250m to $500m 54 Transportation, travel and tourism $500m to $1bn 28 13 What are your main functional roles? Please choose no more than three functions (% respondents) $1bn to $5bn 14 $5bn to $10bn Human resources 40 General management 32 Customer service 16 Finance 10 Information and research Legal Marketing and sales Risk Strategy and business development IT Other © Economist Intelligence Unit 2010 21 Whilst every effort has been taken to verify the accuracy of this information, neither The Economist Intelligence Unit Ltd nor the Government of Ontario, Canada can accept any responsibility or liability for reliance by any person on this report or any of the information, opinions or conclusions set out herein Cover image - Asia Images/Getty Images Cover_final.pdf 8/4/2010 3:10:42 PM Paper size: 210mm x 270mm Talent strategies for innovation: Japan C M Y LONDON 26 Red Lion Square London WC1R 4HQ United Kingdom Tel: (44.20) 7576 8000 Fax: (44.20) 7576 8500 E-mail: london@eiu.com CM MY CY CMY K NEW YORK 750 Third Avenue 5th Floor New York, NY 10017, US Tel: (1.212) 554 06000 Fax: (1.212) 586 0248 E-mail: newyork@eiu.com HONG KONG 6001, Central Plaza 18 Harbour Road Wanchai Hong Kong Tel: (852) 2585 3888 Fax: (852) 2802 7638 E-mail: hongkong@eiu.com GENEVA Boulevard des Tranchées 16 1206 Geneva Switzerland Tel: (41) 22 566 2470 Fax: (41) 22 346 93 47 E-mail: geneva@eiu.com An Economist Intelligence Unit research paper Sponsored by the Government of Ontario [...]... 13 Talent Strategies for Innovation: Japan An evolving concept T he awareness of, and focus on, talent- management strategy at Japanese companies looks set to increase While 56% of Japanese companies currently think that a lack of involvement from C-suite executives in shaping talent strategy is a major internal barrier to innovation, compared to 31% of global firms, some 51% of respondents in the Japanese... Intelligence Unit 2010 Talent Strategies for Innovation: Japan was the top answer in both surveys (Chart 8) Similarly, 48% of Japanese respondents think their companies will “locate innovation centres where there is an abundance of talent in five years’ time, versus 39% of firms in the global survey (Chart 5) Chart 8 In developing a strategy for innovation, what external factors are most important for your organisation?... [Secondly,] we also need to understand the way our clients’ businesses work and their management strategies in order to respond to their needs.” © Economist Intelligence Unit 2010 11 Talent Strategies for Innovation: Japan Characteristics of innovative talent A t Japanese companies, the most highly-valued attributes for innovation in employees are the ability to learn quickly (picked by 78% of respondents).. .Talent Strategies for Innovation: Japan Chart 4 Which methods are most effective for your organisation in recruiting talent for innovation? Please rate on a scale of 1 to 3 where 1=Very effective and 3=Not at all effective 2 Don’t know/Not applicable Japan: Very effective 1 Not at all effective 3 (% respondents) Global: Internal... borders for talent In five years 42 40 Trains and develops staff internally to fill key positions 78 24 Moves staff between countries to address talent gaps 40 38 Locates innovation centres where there is an abundance of talent 38 48 Does not consider availability of talent in defining overall strategy 48 36 Source: Economist Intelligence Unit 10 © Economist Intelligence Unit 2010 Talent Strategies for Innovation: ... Economist Intelligence Unit © Economist Intelligence Unit 2010 15 Talent Strategies for Innovation: Japan Conclusion W hile parts of the Japanese corporate world may have begun to adopt formal talent management programmes slower than their overseas counterparts, many of its leading and forward-looking companies have long been aiming for global best practices in the discipline But even these acknowledge... Business environment (eg, tolerance of risk) 4 Diversity of available talent 4 Liberal labour laws (eg, easy to hire and fire) 2 18 © Economist Intelligence Unit 2010 Talent Strategies for Innovation: Japan 7 Appendix Survey results In your opinion, which methods are most effective for your organisation in recruiting talent for innovation? Please rate on a scale of 1 to 3 where 1=Very effective and... Japan continues to squeeze the domestic market, the numbers of Japanese companies seeking to expand operations overseas is set to grow With that, as the survey and case studies illustrate, there will be a growing emphasis on the importance of talent management for innovation 16 © Economist Intelligence Unit 2010 Talent Strategies for Innovation: Japan Appendix Survey results Appendix: survey results In... graduates for entry-level jobs 34 Desire of employees to switch jobs frequently 20 Greater competition from global marketplace 20 Restrictive labour regulations 16 Restrictive immigration laws 4 Other, please specify 2 © Economist Intelligence Unit 2010 19 Appendix Survey results Talent Strategies for Innovation: Japan 10 What strategies does your organisation use for attracting and retaining the most talented... staff between countries to address talent gaps 40 38 Locates innovation centres where there is an abundance of talent 38 48 Seeks to create an environment that is conducive to innovation 54 46 Does not consider availability of talent in defining overall strategy 48 36 20 © Economist Intelligence Unit 2010 Talent Strategies for Innovation: Japan Appendix Survey results 14 Which of the following best ... Intelligence Unit © Economist Intelligence Unit 2010 Talent Strategies for Innovation: Japan Preface Talent strategies for innovation: Japan is an Economist Intelligence Unit research paper, supported... Strategies for Innovation: Japan Executive summary Talent strategies for innovation: Japan examines how Japanese companies face the challenge of recruiting, nurturing and retaining talented people to... between 54 talent management and innovation This paper, Manager 20 Talent Strategies for Innovation: Japan, based on CEO/President/Managing director interviews and a survey of 50 Japanese companies,