Introduction: DX is merely the starting point. Which phase is your company currently in?

To deepen our understanding of the main topic, Mr. Sato from Macnica 's Innovation Strategy Division presented the four stages starting with DX to the audience. First, let's check which phase your company is currently in.

The term "DX" has become widely known, but now the discussion is expanding to what lies beyond it: AX (AI Transformation), IX (Innovation Transformation), and even BX (Business Transformation). Companies that have achieved DX and AX will then implement IX (intelligence of the company) based on that foundation. The ultimate goal is to provide new value and grow the company through BX (transformation of the business model).

On the other hand, it has been pointed out that factors hindering this realization may lie in traditional organizations and management structures. Therefore, in this session, we will hear practical advice on organizational development that should be carried out in parallel with the evolution from DX to BX, including examples of factory startups in the United States.

OX and LX form the foundation for various X (transformations).

Hello again, I'm Aoki from ZooKeep. We are a company that supports Japanese companies in achieving business growth and improving corporate value through HR strategies and talent management. This time, as a consultant, I would like to speak not about the technology itself, but from the perspective of someone with many years of experience in the field of human resources.

I joined Bridgestone in 1981, and for 15 of those years, I was involved in global human resources in the United States. After that, I continued to serve as the head of human resources in the manufacturing and retail industries both domestically and internationally, and due to the circumstances of the time, I have witnessed many instances of globalization and business transformation firsthand.

Based on my more than 40 years of experience in the HR field, I can say that organizational management reform is always required as the foundation for business transformation.

Let's take a closer look at OX (Organization Transformation) and LX (Leadership Transformation) as the foundation supporting various forms of X (Transformation).

Technological advancement is a history of liberalization.

First, when considering the major factors driving organizational change today, one that stands out is the dramatic change in the information environment.

Information used to be held by managers and executives. However, with the advent of email, the internet, smartphones, social media, cloud computing, web conferencing, and generative AI, everyone can now access the information they need and acquire advanced knowledge and expertise.

In today's world, where information is no longer confined to a select few administrators, traditional "management-based organizations" are becoming increasingly ineffective. This is because there is a growing demand for employees on the ground to understand the situation, make their own judgments, and utilize AI to make optimal decisions.​

However, these changes do not automatically translate into autonomous organizations. New organizational management strategies are needed that are adapted to the liberalization brought about by technology.

Transition from a management-oriented organization to a team-oriented organization

So, what kind of organization is needed in a workplace where liberalization through technology is progressing?

In traditional organizations, the management layer held information and authority, controlling the organization through detailed rules and procedures. Decision-making was carried out according to job title, and the organization was hierarchical. The continuous optimization of each department enabled efficient management during the period of rapid economic growth.

However, in today's rapidly changing market environment, this system alone is insufficient to maintain a competitive edge. What is needed is a team-based organization.

In a team-based organization, the focus is on the customer, not management. Information is widely shared, and decisions are made close to the front lines. Instead of rules, the company's philosophy and values serve as the basis for decisions, and each employee pursues results as a team with a strong sense of ownership. The organization becomes flatter, and it is expected to lead to continuous value creation.

In the age of AI, creating such autonomous organizations has become a common theme for companies seeking to enhance their competitiveness, but in fact, this concept is by no means new.

This approach has been researched and practiced in the United States since the 1990s, and it is a concept that is still relevant to organizational management emphasized by companies like Google and Netflix today. Its value is being re-evaluated now, especially with the advancements in technology.

Case study of organizational transformation: The Bridgestone case

Having understood the importance of a "team-based organization," how can we actually implement it? As a concrete example, I will discuss the case of the new factory that Bridgestone established in South Carolina, USA, in 1997.

This project had a clear mission: to create the most productive and lowest-cost factory in North America. Moreover, the start-up period was extremely short, about one-third​ ​of the conventional timeframe. It was believed that success would depend not just on introducing the latest equipment, but on "what kind of organization to create."

As the head of the human resources department, I joined the factory manager and I from the very beginning. We designed the entire factory, including not only equipment and production technology, but also a system where "people produce results." I think it was a unique approach for its time, putting people at the center.

The starting point for organizational design is the idea that "the customer is the top priority."

The first step in the project was for the executive members leading the new factory to thoroughly discuss "what kind of factory they wanted to create." The conclusion they reached was that "the most important thing is the customer, and the factory floor, where customer value is created, is the heart of the organization." Based on this idea, the organizational chart also took on a different structure from the typical pyramid.

The factory manager and administrative staff are not positioned at the top of the organization, but rather play a supporting role for the teams working on the front lines. Administrative departments such as HR, IT, and accounting are positioned as "service leaders," designed to "support" the production floor so that it can perform at its best.

From an organization focused on management to an organization that supports the front lines of value creation—this shift in thinking became the starting point for all our initiatives.

Factory Layout: Fostering Organizational Culture Through Work Environment Management

Organizational transformation cannot be achieved through systems alone. We made sure that the message, "The heart of the organization lies in the front lines where value is created," could be felt even in the building's layout.

For example, instead of HR personnel and technical staff working in separate rooms from the production floor, they are seated in the same area as the production team. By having them work close to the employee break area, we have created an environment where daily communication can easily occur.

Furthermore, the factory entrance is shared by both management and factory workers. The factory manager's office is located near the entrance, making it easy for anyone to consult with them. In addition, there is no distinction in parking based on job title; the rule is "first come, first served."

These may seem like small efforts at first glance, but it is the accumulation of these small actions that continuously sends the message that "this is an organization where everyone is respected regardless of their position." Our most important policy in factory management is that organizational culture is formed not only by systems, but also by the work environment and daily experiences.

Rotation system for personnel and training: Delegating authority to the front lines and fostering autonomous team development.

At the heart of our organizational reform was an operational method called the "team concept."

In a typical factory, team leaders and supervisors are responsible for production management, quality control, training, and safety management. However, in this factory, these roles were shared among the factory workers themselves, and they were assigned to them on a rotating basis. The role of a leader is not to give orders, but to support the team so that it can function smoothly.

Each member of the team on site took responsibility not only for production but also for quality, safety, and training, fostering a sense of ownership and ownership in "running the factory ourselves."

This way of thinking remains important even in the age of AI. As AI takes over routine tasks, what will be required of people is the ability to assess situations, devise solutions, and achieve results as a team. Unless an organization is one where the people on the ground can think for themselves and act autonomously, it will be impossible to fully utilize AI.

Result Sharing: The evaluation system also emphasizes "achieving results as a team."

Simply changing the organizational structure won't change people's behavior. That's why they introduced the "RS (Result Sharing)" evaluation system, where results are shared across the entire team.

This system involved employees receiving incentives based on performance such as production volume and quality, and the same program was applied to all employees, including the factory manager, not just those on the factory floor. Performance was evaluated every two weeks, and the results were shared with all employees (the image shows a leaflet distributed at the time).

The company's mission statement was "Make Money." By sharing the simple message, "Let's create good products and generate profits together," they linked the company's goals with the achievements of each individual employee. The evaluation system was also designed as an important mechanism to encourage value creation by teams rather than individual competition.

Recruitment and training are also designed with the premise of "individuals who continuously learn autonomously."

To make these team-based organizations function effectively, the way we think about the people we look for also changes.

In our recruitment process, we didn't just focus on "experience" or "skills," but rather emphasized the attitude of "sharing values and being able to act proactively within a team." We called this "Attitude Based Hiring," and it was based on the idea that while experience can be acquired after joining the company, a collaborative attitude and proactiveness are difficult to change in a short period of time.

Furthermore, we have adopted "Just-in-Time Training" for employee development. By creating a system where employees can learn the necessary knowledge when needed, they can immediately put what they have learned into practice on the job. By repeatedly practicing and learning, knowledge is more easily retained, and employees themselves can develop the habit of continuous learning.

Traditional education often involves teaching a collection of knowledge that "might be needed someday." However, in this rapidly changing era, knowledge quickly becomes obsolete. This approach is becoming increasingly important now, as technological advancements rapidly change the skills required.

What roles are required of leaders in the age of AI?

In team-based organizations, the role of the leader changes significantly. In traditional organizations, leaders were seen as "those who give orders and manage." Decision-making was top-down, and the focus at the operational level was on reliably executing established procedures.

However, in an autonomous organization, the leader takes on the role of a "supporter." The important thing is not to give detailed instructions on "how" to do something, but to clearly define "what" to aim for. Once the objective is shared, the team on the ground takes the initiative to figure out the specific methods.

This changes the purpose of a leader's visit to the site. Instead of simply checking whether the rules are being followed, the focus naturally shifts to a supportive perspective of "what can I do to help?"

In terms of corporate transparency, a different approach is needed compared to top-down organizations. For example, when mistakes occur, it's important to view them not as individual responsibility, but as learning opportunities for the entire organization. In an environment where psychological safety is ensured, employees are more likely to share problems without hiding them. As a result, early detection of issues and improvement activities are promoted, leading to the growth of the entire organization.

What is needed in leaders in the age of AI is not "excellent managers," but rather "facilitators who create an environment where teams can perform to their full potential."

In conclusion: Competitiveness in the AI era will be determined by "people and organizations".

With the advancement of generative AI, many tasks will be further automated in the future. However, it is not AI itself that will determine a company's competitive advantage. The key lies in whether or not a company can create new value by utilizing AI. Talent development, organizational culture, and leadership are the key factors in achieving this.

At the end of the lecture, it was pointed out that while the concepts of "team-based organizations" and "supportive leadership" have existed for nearly 30 years, they are still not sufficiently widespread in Japanese companies. On the other hand, looking at the organizational management of leading companies such as Google and Netflix, the essence of these principles remains unchanged. Now, more than ever, with the advancement of technology, these organizational structures are becoming increasingly important.

The lecture left me with the impression that simply introducing AI is no longer a source of competitive advantage. It's the companies that can effectively utilize AI, enable autonomous decision-making by their employees, and build organizations that continuously learn that will achieve sustainable growth in the coming era.

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