The Journal The Authority on Global Business in Japan

Like it or not, the robots are coming. C-3PO, the loveable yet anxious protocol droid from Star Wars may have replaced human interpreters, but that was a long time ago in a galaxy far, far away.

It does foretell developments in our own world, however. In 2017, robots and their underlying programming are revolutionizing the way we live and work. This spring, the American Chamber of Commerce in Japan held the CEO HR Dialogue, sponsored by the Human Resource Management Committee and hosted by JPMorgan Chase & Co. At the event, CEOs and HR leaders explored the inevitable explosive growth in innovation.

Steve Monaghan, CEO of Gen.Life Limited, a start-up that is transforming the insurance industry through artificial intelligence (AI) and blockchain, noted that technological change has been exponential, and that workers and leaders “can’t keep up with this acceleration.” He pointed to the recent layoff of 60,000 people by Foxconn Technology Group, which replaced the workers with robots, as just the tip of the iceberg.

According to the March 2017 MIT report Robots and Jobs: Evidence from the US Labor Market, the number of jobs taken over by robots in the United States to date is between 360,000 and 670,000. But by 2025, the number of robots in the world could quadruple. This would mean 5.25 more robots per thousand workers in the United States, leading not only to reduced wage growth but also displacement of 1.9 to 3.4 million jobs.

And these aren’t just blue-collar jobs. Monaghan explained that radiologists in the medical industry, and underwriters in the insurance industry, are already being replaced by AI.

INNOVATION MINDSET
So, the future is exciting! Or scary! Or a bit of both. As Coca-Cola (Japan) Company Limited President Tim Brett explained during a panel discussion with CEOs and senior leaders, creating an organizational attitude that balances excitement and concern is key. You need a level of what he calls constructive discontent. “Be proud, but be discontented. We need to balance motivation and discontent to encourage big and small risk-taking in our company.”

The leaders agreed that, within the context of an organization, innovation shouldn’t be a function or a department—it must be a mindset. Sachin N. Shah, president of MetLife Insurance K.K., said that “innovation is a convenient word that represents behavior for our people, like challenging the status quo, or having a deep understanding of customer problems.”

For Lacoste Japan CEO Dieter Haberl, it is all about the customer: “Focusing on a culture of innovation is not the right focus. It’s outside in, it is what the customers focus on. That will enable us to focus on the right strategy to create the discontent, discomfort that [Brett] talked about. Then you need to create a culture of execution. Everybody needs to own it.”

SEEKING SAFETY
But in Japan, these behaviors can create high levels of discomfort. Akiko Nakajo, a director at Google G.K., talked about the Google value of experimentation and prototyping: failing fast. She explained that in a recent internal study, teams that felt high “psychological safety” exceeded their sales targets by 17 percent, on average, compared to teams that felt low safety, who missed their targets by approximately the same amount, on average.

And yet, it’s hard for Japanese to get used to this. “We need to ensure it’s okay to fail in front of team members,” she said. “At Google, we are always pushing people to go to the next level. With a psychologically safe environment, my team and I feel comfortable trying new things.”

To ensure that people are failing fast in the right areas, a clear corporate strategy is vital. As Shah said: “You [must] organize the company around a clear and challenging strategy—what we are doing and why. Otherwise, people are doing random activities.”

So, the robots are coming; but with them comes the drive of innovation. Will you be rallying troops around a meaningful strategy and purpose, leveraging the advances in technology to profoundly impact customer experience? Or will the robots be eating your lunch? How you encourage your teams will make all the difference.

Roy Tomizawa is co-chair of the Human Resource Management Committee
Innovation shouldn’t be a function or a department—it must be a mindset.