Haruki Atarashi never thought his company’s flagship software, Recog, which fosters communication between employees within companies, would ever evolve beyond just an internal project.

A cross between an internal communication service and a video game where points and rewards are earned, the software began as a way to improve the work environment at Atarashi’s own company, Cinqsmile Inc., an operator of beauty care websites.

However, Atarashi, the 46-year-old CEO of the company, soon realized he was on to something when his employees started using Recog, with staff earning points the more they praised and messaged each other, making communication more enjoyable and helping employees see eye to eye and recognize each other’s hard work. That gave him the idea other companies might be interested in buying his software.

“Many managers and CEOs tell their employees to do this task or that task, and try to inspire them. But many fail to praise their employees” Atarashi told the The Japan Times in an interview.

“If you praise your employees, you will also recognize their strengthens and the values of their ideas, and the morale of the employees will rise as well as their work ethic,” he added.

The pitch

A toxic work environment can cost a company time and money, both directly, such as having to replace employees, and indirectly, as disgruntled employees may be less motivated to put in extra effort.

While Japan’s economy has a relatively low rate of worker turnover, certain industries see their employees quit in far higher numbers.

Atarashi said that many of the businesses using Recog’s software, the majority of which are in the sales industry, are those that have trouble retaining employees.

The service is also affordable, costing ¥30,000 ($260) a month with the option for additional consulting services on how to foster a better work environment, which runs ¥300,000 a month.

The system goes beyond fostering stronger work relations and a better environment — it also provides, through its website and phone application, a visualization of a company’s communications, giving managers insights on how employees and teams interact and helping them take proactive measures to ensure they retain talent.

Recog uses machine learning software to warn managers when communication appears to be breaking down for an individual employee. Atarashi said that when an employee’s name continuously comes up in reports, managers can reach out to the employee to try to get to the heart of the problem before the person quits.

The technology also analyzes messages to identify the strengths of each employee on six separate categories such as teamwork, hospitality and speed. The information can then be used to help companies assign employees to work that best fits their skills.

Reports at the end of the month also show company-wide leader boards that detail the employees who have interacted the most with other employees.

Since the company started marketing the product over three years ago, more than 50 companies have embraced the idea that healthier communications can pay off.

The hurdles

One of the biggest challenges is getting the employees to buy into the idea and start using the software, according to Atarashi.

“About 20 percent of people really want to use the service,” he said. “Then another 20 percent don’t want to use it because they are too busy.”

In order to make it more appealing to reluctant users and help their customers get the most value out of the service, Recog offers what they call “customer success teams.”

After a few months using the service, these teams analyze the companies communications and make suggestions on how to better use the software or how to create a working environment where employee efforts are praised.

The outlook

Atarashi thinks that systems like this will only grow in importance as a new generation of workers looks for more from work than just money.

A May 2018 survey released by Mynavi Corp. showed that 33 percent of college graduates considered enjoyment to be the most important consideration when searching for a job, while only 3.6 percent said that a good salary was exclusively what they would look for when choosing a company.

This new outlook by graduates appears to be part of a broader trend in the changing work culture of Japan, where a number of high-profile cases of death from overwork have been reported in the past few years.

The company has also expanded beyond the private sector, and the software is currently being used by a few city governments, including Nichinan in Miyazaki Prefecture.

Atarashi said he plans to continue investing in Recog by tapping into the cash flow from his profitable beauty care websites. And he is certain that demand for better communication will lead to an expansion of his workforce as well, which currently comprises around 85 employees across his various businesses.

“There are a growing number of companies that realize they need to create a better work environment,” said Atarashi. “We are trying to help these companies encourage their workers while also helping the employees realize their individual strengths.”

This section runs exclusive stories on startup founders with unique business models interviewed by The Japan Times.


Company Name: Cinqsmile Inc.
Founder: Haruki Atarashi, CEO
Industry: Communication software
Headquarters: Minato Ward, Tokyo

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