The Journal The Authority on Global Business in Japan

As the Covid-19 threat appears to be receding in Japan, and businesses inch back toward some level of normalcy, a strong shift in the labor winds may be blowing. With breathtaking speed, the coronavirus may have permanently changed Japan’s business culture in the space of a few months, executives told The ACCJ Journal.

Some companies plan never to return to their old pattern of requiring everyone to work at the office. Instead, they are adopting a new, hybrid model—in which teleworking remains a key part of regular operations. It’s a stunning turnaround for a country that has long resisted adopting flexible work practices.

The change is widely welcomed by women and younger generations—vital pools of talent that are critical to Japan’s future as the population and workforce shrink. We talked to some leading companies to find out what steps they are taking as they transition.

Fujitsu Ltd., the digital technology company that has been on the cutting edge of workplace flexibility in Japan, is making teleworking the rule, not the exception. For the foreseeable future, it plans to limit the portion of its employees going to the office to just 25 percent, although it may raise that in coming weeks.

“Our general rule now is not commuting into the office—it’s teleworking,” said a company spokesperson. “Rather than aiming to return to 50 or 100 percent, we want everyone to think about making teleworking a regular part of their behavior, and we aim to keep office use to a minimum. The coronavirus has caused us to adopt a new approach to work.”

SoftBank Corp. has also seized on the pandemic as a catalyst for embracing a new philosophy that promotes work­ing from home as an equally valid option alongside coming into the office. Softbank aims to cap the portion of employees in its offices to 50 percent of its non-retail workforce over the coming months, and internal surveys show that 80 percent of staffers say working from home 2–4 days a week is optimal for their productivity.

Not all Japanese companies are taking such dramatic steps. But the experience of working from home the past few months has begun to change the ingrained assumption in Japan that going to work means riding packed trains to a downtown office and sitting at a desk next to colleagues and within eyeshot of the boss.

“Covid-19 has forced us into this new workstyle—maybe uncomfortably for many companies—but it really has com­panies rethinking their culture,” said Dave West, president and general manager at Cisco Systems GK. “I don’t think we’ll ever go back to the way things were. I hope we don’t, honestly. We’re in a new normal, and it’s going to be a hybrid world.”

The change has generated numerous knock-on effects across Japanese society as well, from freeing up more personal time to reducing demand for office space. It has even altered family dynamics: Working women have found greater flexibility in caring for their young children while men have gotten a firsthand taste of the pressures at home and are pitching in more on household duties.

Although people are concerned about the outbreak’s impact on the economy, it will bring positive changes to workplaces, said West. “All of this is going to help Japan become more productive and more competitive.”

Japanese businesses, which have lagged behind those in the United States when it comes to teleworking capabilities and practice, had to scramble to ensure their employees could work from home. Prior to the pandemic, less than 20 percent had teleworking systems in place, according to a government survey. Now, among members of Keidanren, the country’s most influential business lobby, that’s jumped to 98 percent.

Cisco Systems, whose Webex video-conferencing plat­form has surged in Japan from 1.5 million users in February to nearly 15 million in May, has also experienced a flood of inquiries and requests for advice on flexible work prac­tices from Japanese corporate and government officials, West said. “It’s been fascinating. They’re all asking me to share best practices and how do we know that employees are working productively?”

Adopting new technologies may be “the easiest part,” West said. Changing an entire business culture—and the mindset of millions of workers—is much harder, he and other exec­utives agree.

One challenge facing some Japanese managers is the need to shift from exerting control over their direct reports to trusting them, said Dominic Carter, president and CEO of The Carter Group, a market research company with offices in Tokyo, Osaka, and Singapore. Bosses accustomed to keeping an eye on their team members in the office can’t see what they’re doing in their homes, and that makes some nervous.

“The fear of loss of control is really a factor,” he said. “The whole philosophy of work and management in Japan is very control-based. Everybody has to go into the office at the same time. It’s a huge cultural change . . . and we have elements of that in our company, too.”

Cisco’s West agrees: “Trust is really important. You have to trust in the individuals and the talent, that no matter where they are, their intentions are good and they can find ways to work productively—and maybe even more productively at home or remotely than in the office.”

Training managers to be effective “remote leaders” is also vital, said AbbVie President James Feliciano, who is a governor of the American Chamber of Commerce in Japan (ACCJ) and also co-chair of the chamber’s CEO Forum. The pharmaceutical company adjusted well to teleworking during the outbreak, when it closed its downtown office for a few weeks, because it has had a flexible “work anywhere, anytime” policy in place for a few years in Japan, so employees and managers were familiar with oper­ating remotely, he said.

The changes come amid increased dissatisfaction among the Japanese public with their workplaces. A March survey by The Carter Group showed that 68 percent of respondents agree that workplaces must change, up from 59 percent a year ago. The sentiment was particularly strong among women.

Adjusting to working from home was a huge transition, even for a major tech company such as Fujitsu that had teleworking options in place, although it had previously been used mostly by employees who needed to care for elderly parents at home, not the entire company.

The biggest challenges were ensuring that all employees could work seamlessly from Fujitsu’s secure virtual network and learning to effectively communicate online, the spoke­sperson said. There weren’t problems with the laptops or the network itself, since Fujitsu had already been introducing phased teleworking from 2017, but the logistical feat of enabling all employees to work seamlessly on the virtual network at once was unique.

The pandemic has forced companies to adapt quickly and creatively—or not survive.

The Carter Group had to pivot immediately when the crisis struck. Normally, it gathers small focus groups of consumers in a studio to record their reactions to products, from coffee to movie scenes, while their clients watch from another room. Or they line up face-to-face interviews with consumers in their homes. But these options became impossible due to fears of spreading the coronavirus.

Instead, staffers sent tablets loaded with special software to consumers and asked them to respond to the test products on camera from their homes during a live video conference watched by clients. Some were even asked to show clients the inside of their kitchens and how they used various items.

The results were actually better than those of the studio-based focus groups in several ways because clients got a closer look at the consumers and their homes than they would get in the usual focus groups, Carter said.

“Our big clients, they don’t want to just shut down their whole machine of understanding their consumers because it’s a volatile time now. There’s a lot of change, so staying on top of that is important,” said Debbie Howard, chairman at The Carter Group and ACCJ president emeritus. “This digital alternative is simply giving clients a way to stay in touch with people during a difficult time.”

Staffers have found that they can do a lot of their work from home, including research, preparation for the video sessions, writing reports, and drawing up contracts, Howard said.

Before the outbreak, nearly all 70 employees at The Carter Group worked from the office. That dropped to about 10 percent during the state of emergency and has risen to about a quarter now. Where that ratio will settle remains to be seen, but Carter has a hunch that having about two-thirds of workers in the office will be optimum.

West predicts that the ratio among Cisco’s 1,200 employees in Japan will be closer to fifty–fifty. “At any point in time, about half the staff will work from home or the road or from a coffee shop. It will be extremely fluid.”

More people working from home means at least some com­panies will need less office space. “I’d love to cut my overhead,” said Carter, who has already decided to eliminate one of his two focus group studios. “We won’t need it.”

Declining demand for office space could hit developers and real estate companies. But, so far, the pandemic has not affected the construction schedules of Mori Building Co., Ltd.’s urban redevelopment projects, including the Toranomon–Azabudai Project, said Masa Yamamoto, senior manager of the Public Relations Department.

From late March, Mori Building shifted to a company-wide work-from-home policy. Once the government lifted the state of emergency on May 25, employees began returning to offices, Yamamoto said. Currently, about one-third of staff are working in the office while practicing physical distancing. Face-to-face internal and external meetings are permitted if social distancing and other infection-prevention measures can be assured, he said. “It is difficult to accurately forecast the future effects of Covid-19 at this moment.”

AbbVie has split its Japan staff into three groups and plans to allow each to come into the office for a week at a time, explained Feliciano. When they do, employees will be asked to stay in one spot instead of moving around, as they could previously in the free-seating, activity-based workplace. The company will move on to the next phase while monitoring Covid-19 and government guidelines, he said.

Cisco has also divided its staff into three teams, but they will be rotating into the office every third workday, not week by week, West said. Two-thirds of the chairs have been moved to storage so that employees will have to sit at every third desk, and they will all be re­quired to wear masks and make calls on headsets instead of desk phones.

Employees over 50 years of age had the hardest time adjusting to remote work, Carter said. “It’s very hard to stop them from coming into the office. But the young guys just seemed really happy working from home.”

Women and young people will benefit the most from the more flexible workstyles. “It’s very difficult for women if they’ve got to pick up their kid from daycare at a certain time, and that, up until now, has been disruptive,” Carter said. Teleworking gives them much more flexibility, and less guilt.

These days, more women than men graduate from Japanese universities, Cisco’s West pointed out, and yet some have difficulty finding rewarding jobs. “There’s a huge talent gap in Japan. There’s a tremendous amount of female talent that potentially can’t work in an office every day from morning to night. Engaging women so they can be productive is going to be important for Japan, especially as we see the aging population and potential declining population over the next 30 years.”

Likewise, fresh college grad­uates will want to join com­panies that have flexible work policies, West said. “I don’t think they’re excited about sitting in an office all day at a cubicle. Their workstyles are much different, and they use technology differently. Providing cre­ative workstyles is going to be fundamental to recruiting the next wave of talent.”

To be sure, teleworking has drawbacks and, in many ways, cannot replace working with colleagues in person, the exec­utives said. Communicating and collaborating is almost always easier and more effective when done face-to-face. Building teamwork is hard when everyone is scattered. Teams can cope with emergencies if they have worked together previ­ously, but it’s much harder when the members don’t really know each other, said Carter.

It’s also harder to deal with thorny issues from a distance, from personnel conflicts to operational headaches. And some people are very productive working alone while others thrive on human interaction. Cisco and others have tried to compen­sate with virtual yoga sessions and one-on-one video check-ins, but there’s nothing like talking with someone in person. “We’re human, we like social engagement, that’s our nature,” West said.

On the positive side, West said he has heard from many of his male employees that the extra time at home has been an eye-opening and educational experience for them. Typically, they leave the house in the early morning and don’t come back until late at night. But the past few months have made them see the pressures their partners are under and some have been pitching in more around the house.

“Through Covid-19, the beau­tiful thing was that I saw more men engaging,” he said. “When you’re at home, you have to play a role in cooking, cleaning, and taking care of the kids. I thought it was fantastic.”

Overall, while adopting a more flexible work culture is bound to have its growing pains and drawbacks, it is a positive change for Japan that will help make the economy and people thrive, the executives said.

“I welcome it. It adds to our repertoire of options that we can have around work, and I think that’s a good thing. I’m very glad especially if this helps women,” said Carter. “There are also very strong advantages to working together in person, and I think we need to think about how we can engineer that kind of balance.”

Malcom Foster is a freelance journalist who has been covering Japan for more than a decade.
I don’t think we’ll ever go back to the way things were. I hope we don’t, honestly. We’re in a new normal, and it’s going to be a hybrid world.