The Journal The Authority on Global Business in Japan

Work anywhere, anytime—as long as you deliver results. That’s the workplace philosophy at the Tokyo office of AbbVie, and it’s one that is radical and rare in Japan. Since the US research-based biopharmaceutical company moved into its new free-seating office last February, employees—98 percent of whom are Japanese—can work from home or offsite as often as they want, as long as they fulfill monthly working-hour quotas and meet their job objectives. About 70 percent take advantage of the option, and most report feeling more productive after switching to the flexible work style, an internal company survey shows.

LIFE CHANGER
That freedom has meant less stress, more free time, and greater productivity for Yuichi Hashida, a 33-year-old who helps oversee AbbVie’s clinical trials. He works from home about once a week, saving 90 minutes in commute time, which he uses to take an online English conversation class or work out at the gym. He has adjusted to participating in more conference calls from home, and uses chats and phone calls to communicate with his boss and colleagues. He’s grateful for the flexibility, especially as his wife is expecting their first child later this year.

“I feel like I’m more productive working from home because I can concentrate better,” said Hashida. “Typhoons and snow can affect the train lines and that’s stressful, so I can work from home on those days. It just makes my work and life so much easier.”

That’s the reaction that Japanese Prime Minister Shinzo Abe’s government hopes will spread during the Tokyo 2020 Olympic and Paralympic Games. With 10 million visitors projected to descend on the city, authorities want companies to encourage their employees to work from home to ease congestion during the Games. More than 700,000 workers from 3,000 companies and organizations—including Fujitsu Ltd., Ricoh Company, Ltd., and SoftBank Corp.—are expected to work remotely during the Olympics, which will run from July 24 to August 9, and many are planning to do so again from August 25 to September 6 during the Paralympics.

CATALYST
Already, the coronavirus scare is driving home the need for remote work capabilities, and it may end up being a more powerful force than the Games when it comes to pushing companies to embrace teleworking.

“Covid-19 is pushing companies to put into practice policies they already adopted, but had not used in earnest,” said Nancy Ngou, an associate partner at EY Advisory and Consulting Co., Ltd. and a governor of the American Chamber of Commerce in Japan (ACCJ). “From a change management perspective, a crisis is always a strong driver of behavior change—especially in cultures that historically had not had a need to change, so are not accustomed to it.

Some 19.1 percent of Japanese companies have remote work systems, and another 7.2 percent plan to introduce them soon, according to a 2018 government survey. Abe wants to raise that above 30 percent this year. But when individual workers were asked if they had actually teleworked within the past year, only 8.5 percent said they had, the survey shows. A recent Reuters poll finds that 83 percent of Japanese companies don’t allow employees to work from home, and 73 percent say they aren’t considering allowing them to do so even during the Games.

Teleworking is vital for business continuity plans, “so com­­panies will need to embrace it in order to become more effective,” said Mie Kitano, senior director of corporate affairs at Eli Lilly and Company, which expanded its work-from-home policy without limitation of days or requirements in 2018. “It allows employees to bring better balance to their lives by repurposing their commuting time for personal things.”

Ultimately, the government wants Tokyo 2020 to be a cat­a­lyst for longer-term change in Japan, which has lagged behind the West in workplace flexibility. In the United States, 38 percent of employers allow some employees to telecommute on a regu­lar basis, but only eight percent offer this option to all, Global Workplace Analytics research shows.

Teleworking is part of Abe’s broader “workplace reforms,” or hataraki-kata kaikaku, which he has championed to make corporate Japan more efficient, productive, and competitive on the global stage. The government wants to reshape Japan’s economy so it can better cope with an aging, declining popu­lation—particularly by creating ways for women and middle-aged employees caring for elderly parents to shore up a shrinking labor force. Adding more workers will also boost government tax revenues.

“The concept that a job involves going to a certain location to work is expanding. That shell needs to be broken,” said Hiroshi Onishi, chief of IT Innovation at the Ministry of Economy, Trade and Industry (METI). “Even if you’re not in the office, work can be done. The former mindset needs to change, and we hope that 2020 will be a turning point.”

TRANSFORMATION
Western companies in Japan have been spearheading this change, while domestic ones have been slower to adapt, says Timothy Langley, president of Langley Esquire, a Tokyo-based public affairs consultancy. “It’s one of the beautiful things that for­eigners bring in: experiences and practices that, hopefully, can be implemented in Japanese society through the sieve of having a subsidiary here,” he said.

Langley, who advises the Japanese government and companies involved in flexible work policies, said he is sometimes asked by officials here: “How do you do this? It’s a challenge for us, and we’re looking for best practices.” While the technology is available, cultural mindsets, business practices, and sheer inertia make it hard for Japan to embrace teleworking, he said. But demographic and competitive forces are bringing change.

“What we’re confronting is a transformation,” Langley said. “We’re right on the cusp of it.”

To help companies prepare for the Games, the Japanese government held Telework Days during the past three summers, when it urged companies to let employees work from home for increasingly longer periods, rising to five days in July. “It’s hard to suddenly do this for the Olympics, so we thought it was better to train people in stages,” said Onishi. “This isn’t a law. We wanted to approach it as a group effort for our society as a whole.”

BUSINESS BOOST
Keidanren—the Japan Business Federation—is also getting behind the Olympics teleworking effort, encouraging members to participate and passing along information from the Tokyo Metropolitan Government about expected disruptions, said Soji Samikawa, head of the organization’s 2020 Olympics office. “For corporations, there’s lots of interest because they want to be informed about what to expect,” he said.

Companies are also planning to ask employees to move up their summer vacations, typically taken in mid-August, and to avoid commuting during rush hour, Samikawa said. Keidanren would like to see companies adopt more flexible work policies. “After the Olympics are over, we think a lot of companies will say, ‘We’re glad we tried it.’ So, we think it’ll be a good impetus for change.”

Japanese electronics and finance companies are the farthest along. Electronics and copier maker Ricoh Company, Ltd., which adopted a remote work system in 2018, plans to close its Tokyo head office during the Olympics. This means that about 5,000 staff will be working from home or at satellite offices. Employees faced few issues during last year’s “Telework Days” and saved two hours and 10 minutes on average each day in commuting time, said Sayaka Matsuda, a Ricoh spokesperson. “Based on this experience, we hope to further promote remote work.”

SoftBank expects that about 7,000 of its force will work from home, avoid rush hour, or take a vacation. At Fujitsu, where teleworking became an option for all employees in 2017, some 32,000 staffers will work from home, at 19 branch offices, or at 250 other contracted temporary work locations. Fujitsu has generated business helping companies find teleworking solutions, often showing customers their own systems. “As Japan carries out workplace reforms, we are trying to support that,” said Masakatsu Kiguchi, a human resources manager.

SEEN WORKING
But many Japanese companies, particularly smaller ones, haven’t yet allowed employees to access the company email or network from outside the office, said Yuko Yogo, an independent strategic human resources consultant who advises Japanese firms on such matters. Others don’t want to allow access outside the office for confidentially or security reasons, she said.

Investing in remote work hardware and software can be a daunting up-front cost, said Langley, on top of having to figure out security protection, corporate governance, and how the HR team will be involved.

Much of the resistance, however, is for cultural and relational reasons. Workers “have this fundamental belief that the hours you are seen working are important,” said Yogo, who is also a vice-chair of the ACCJ Human Resource Management Committee. “Employees are very conscious of being seen by their boss,” she said, and many are reluctant to leave until the manager does. This can lead to wasted hours in the office, but also more overtime pay.

Managers, meanwhile, typically like to be able to see those directly reporting to them. Allowing them to work from home makes some managers feel as though they can’t easily commu­nicate or keep track of their activities, which they perceive as a loss of control, she said.

Such changes require managers to trust their subordinates and delegate authority—ideas that don’t have deep roots in Japan’s hierarchical corporations or society, said Langley. Managers need to learn “how to delegate in a way that people embrace.”

Another obstacle is the heavy reliance on paper and hanko (personal seals) which are stamped on internal documents and proposals circulated in the office. “Companies are rethinking workplace assumptions, but being physically present to stamp and circulate papers still tie many employees to the office,” said Masayuki Kita, a Fujitsu salesperson.

The most effective way of convincing Japanese companies and bureaucrats to adopt teleworking is to present data that shows how it is advantageous to them, said Langley. He gave productivity surveys, how less commuting can reduce their carbon footprint, and how adding more teleworkers to the labor force might reduce the need for foreign workers as examples. “With Japanese companies, it’s always based on evidence—factual demonstrations of how things are actually done,” he said.

Research on the US labor market from Global Workplace Analytics shows that a typical company saves $11,000 per half-time telecommuter each year as a result of reduced real estate (shared desks or free-office seating), increased produc­­tivity, reduced absenteeism and turnover, as well as better conti­nuity of operations, said Kate Lister, the company’s president.

CULTURE OF TRUST
Charting a new course needs to come from the top in Japan’s vertically oriented corporate culture, human resource experts say. Top management needs to initiate the change and department managers need to get on board. “Unless that happens, it’s very hard for the rank and file to move,” Yogo said.

Google gives its employees in Japan and around the world freedom to decide when and where they work, as long as they get their work done, Lee Murphy, director of People Consultants, told The ACCJ Journal. “Our overall philosophy is to give Googlers ownership of their own schedule, time, and even workplace culture,” Murphy said. “We want to build a culture of trust.”

By using cloud-based tools, staffers can conduct meetings over Google Hangouts, its video conferencing tool, and access their documents from any authenticated device through G Suite wherever they are. “We are starting to see more organizations in Asia transforming the way their employees work and finding solutions like G Suite a good way to build collaboration among teams,” he explained.

An internal study of Google employees found no difference in effectiveness, performance rating, or promotions for indi­viduals and teams whose work requires collaboration with colleagues around the world versus staffers who spend most of their day working with others in the same office. In Japan, since 2015, Google has introduced various initiatives to help the wider Japanese community adopt more flexible work environments. One program, called “Women Will,” aims to create economic opportunities by providing e-learning courses about working remotely.

COLOR-CODED ZONES
AbbVie went one step further to promote work flexibility by setting up an activity-based workplace and eliminating assigned desks for everyone in its 800-strong Tokyo office. This includes the president and senior managers—a practice more common in the United States but very unusual for Japan. It has four color-coded zones interspersed across two floors, each with different furniture and lighting. Orange “collaborative areas” have oval tables and diner-like nooks, while a purple-carpeted “focus area” offers a quiet space to work on deadline. The blue-hued “standard area” has a mixture of higher tables with stools and lower desks, and the green-themed “refresh area” allows workers to chill out in comfy chairs with free drinks and snacks.

Initially, many employees were skeptical that the new “work anywhere, anytime” plan would be successful—and the greatest resistance came from managers, said Yukimi Ito, director of public affairs. Some objected to giving up their hard-earned offices. Others wondered, “How do we manage our direct reports when they can start working any time, finish working at any time, and work anywhere?”

But everyone adapted quickly, and reaction to teleworking and the new office layout was overwhelmingly positive, Ito said. Chats became a key communication tool, and virtual meetings were held using WebEx. To help managers keep track of their team members’ work, employees logging on from home send a brief email listing the day’s objectives, and another reporting progress when they stop.

“At first, I wasn’t that crazy about all the conference calls, but no longer. It’s become normal,” said Hashida, a clini­cal trial team member. “I also had a hard time initially finding people in the new office, but then I was just using chats to contact people. As I walked around, I mingled with people, and that would lead to conversations. So, I feel like communication is freer and the place generally feels ‘flatter,’ ” meaning fewer corporate layers and less distance between managers and subordinates.

Two months after the move, an internal survey of AbbVie’s Tokyo workers found that 68 percent felt more productive and workplace satisfaction had risen to 83 percent by November.

Companies usually benefit when they take steps that improve employees’ quality of life, because that makes workers more motivated and engaged, said Yogo. “And companies with more engaged employees are generally more productive.”

FREEDOM AND ACCOUNTABILITY
AbbVie’s management made it clear that with freedom came responsibility. “Accountability was very important,” said Toshiya Saito, manager of general affairs and finance. Employees can work as little as three hours a day, but they must make up for those hours later. Every employee is expected to manage not only their working hours but also their performance, he said.

The more flexible work culture has been a boon to Fumio Aoki at AbbVie. She is a pharmaco-vigilance manager—someone who keeps track of drug safety­—and typically works one day a week from home or from her elderly parents’ place in Shikoku Prefecture. The past two years, as her father’s health declined, she visited them two to four times a month, often flying there on Thursday evening and working Fridays from their home. She felt equally productive in the office and at home, whether writing reports, analyzing data, or preparing presentations.

“I like it that I can choose the time and space to work,” said Aoki. At the previous office, where everyone sat in clusters of desks, she didn’t like drawing unwanted attention to herself when she had to leave early. But now, she can slip out virtually unnoticed and get her work done when it suits her schedule. “In the new system, everyone is working in a way that is best for them, so that change in the corporate culture has made it an easier place to work,” she said.

FACE TIME
One danger in pushing teleworking too much is that it can cut into face-to-face meetings, which can make it hard to build relationships, cautioned Yumiko Ohta, an employment lawyer at the Tokyo office of US law firm Orrick, Herrington & Sutcliffe LLP and a vice-chair of the ACCJ Human Resource Management Committee. In her work with US companies based in Japan, she has found that they generally encouraged employees to come into the office rather than work from home because of the importance of personal contact.

“Japan may be moving in the wrong direction in that the government and companies are trying to implement remote work just for the sake of efficiency without really thinking about the value of face-to-face time,” Ohta said.

Managers may have to try new things to ensure unity across increasingly scattered teams. Eli Lilly’s Kitano has a common lunchtime with her staff once a month, when they all use Skype to connect from various locations to share ideas and learn from each other. “I can see that, if you’re working 100 percent from home, you would start to miss meeting in person,” she said. “But if you’re two or three days at home a week, it shouldn’t affect things too much. It’s not like we’re abolishing face-to-face meetings. It’s a balance.”

ATTRACTING TALENT
Demographic and competitive forces will drive change as well. As Japan’s pool of university graduates and other prospective workers shrinks, “companies that provide more flexibility will be able to capture more employees, but also women, who are grossly underrepresented in our society,” said Kitano. “As years go by, the shortage of workers will be inevitable. So they will have choices, and they will choose companies that are friendlier toward them.”

AbbVie’s Hashida said his friends at foreign companies generally all telework, and friends at Japanese companies tell him it is coming to their workplaces soon. “So, it seems like it’s spreading,” he said. “This will create differences, and people will go to places where it’s easier to work.” METI’s Onishi also hears that more college graduates ask prospective employers about teleworking. “Companies are realizing that if they don’t offer this option, they can’t hire the best talent,” he said.

What Langley has found works best in changing the status quo is to suggest ideas—in a non-threatening way—that will show intended, specific results. “I’ve always been optimistic about Japan,” he said, “but these kinds of things, they do take time.”

“It’s hard, but the Japanese have proved time and again in the face of crises that they come together and get things done that just astound the rest of the world,” Langley added. “The technology is there. It’s just bringing the mindset, the management style up to speed. It could happen. I’m hopeful.” 

Malcom Foster is a freelance journalist who has been covering Japan for more than a decade.
The concept that a job involves going to a certain location to work is expanding. That shell needs to be broken.