Business

Not just another day at the office: Rethinking Japan’s business culture amid the COVID-19 pandemic

by Andrew McKirdy

STAFF WRITER

Masatoshi Shioda, Japan sales director for office furniture company Steelcase Asia Pacific, has a pretty clear idea of what the average Japanese workplace looks like.

“Most traditional Japanese companies use an open-type office with people sitting in lines so that the manager can easily monitor what they’re doing,” Shioda says. “They’re either sleeping or they’re working. That’s how Japanese management works.”

Or, at least, it did until COVID-19 came along.

Now, as employees who have been working remotely for the past two months emerge from their homes, blinking into the sun, and return to their offices following the end of the country’s state of emergency, companies are considering how to deal with the seismic changes that the global pandemic has forced upon working life.

The offices that employees go back to are unlikely to be the same as the ones they left. In fact, companies all around the country are waking up to the idea that Japan’s entire business culture may have to abandon years of tradition and embrace a new reality if it is to survive and flourish in a post-pandemic world.

“This natural experiment has made us acutely realize the ‘essentials’ versus the ‘nonessentials,’” says Hiroshi Ono, a professor of human resource management at Hitotsubashi University Business School. “I think this has been a wonderful experience in identifying the waste in the way that Japanese people work.”

Working from home, once considered impossible by many Japanese companies who feared their employees would slack off the minute they escaped their manager’s watchful eye, has been widely adopted since the state of emergency was declared in parts of the country on April 7. Although the transition has been far from smooth, a survey taken between April 14 to 17 by the Japan Business Federation — known as Keidanren — found that roughly 66 percent of employees of companies who responded were working remotely.

Hiroshi Ono, a professor of human resource management at Hitotsubashi University Business School, thinks the COVID-19 pandemic has given companies an opportunity to identify the waste in the way they operate. | COURTESY OF HIROSHI ONO
Hiroshi Ono, a professor of human resource management at Hitotsubashi University Business School, thinks the COVID-19 pandemic has given companies an opportunity to identify the waste in the way they operate. | COURTESY OF HIROSHI ONO

The start of the first full week since the state of emergency was lifted in Tokyo and its surrounding prefectures on May 25 is likely to see millions of people return to their workplaces on Monday morning. The number of passengers packing themselves into the capital’s trains, however, is unlikely to be as high as it was before.

“Office rent is expensive,” says Go Imamura, managing director of workplace design and project management company DE-SIGN INC., which has created offices for SoftBank, TripAdvisor and Cisco Systems, among others. “Fixed costs are especially high in Tokyo, and if you’ve got a big floor space and you’re practicing social distancing, you might need to tell half the workers to come in on Mondays, Wednesdays and Fridays, and the other half to come in on Tuesdays and Thursdays. If you want to practice social distancing with the floor space you have, you’ll need half the workforce not to be there.”

Steelcase has been working with companies to redesign their office spaces during the pandemic, and Shioda says many firms have installed transparent acrylic dividers between desks to guard against potential transmissions of the virus. Other physical alterations might include leaving some seats empty to open up safe distances between employees, adjusting the angle of desks so that workers are not sitting directly opposite each other and requiring employees to wear masks.

Many companies are considering how best to use their office space, as workers return to their workplaces following the end of the state of emergency. | COURTESY OF STEELCASE INC.
Many companies are considering how best to use their office space, as workers return to their workplaces following the end of the state of emergency. | COURTESY OF STEELCASE INC.

“We’re thinking about and preparing lots of different measures,” says Eiji Ogawa, head of management strategy at Ushio, Inc., a lighting equipment company that has its head office over two floors covering 2,400 square meters in Tokyo’s Marunouchi Kitaguchi Building. “But rather than the actual facilities, it will be more important to think about how we use the space in the office.”

While some firms redesign their office layout and stagger working times, others might be content to just hose the place down with disinfectant every once in a while.

Virus Busters is a cleaning and disinfecting service that has proved popular since it was launched in early March. | COURTESY OF VIRUS BUSTERS
Virus Busters is a cleaning and disinfecting service that has proved popular since it was launched in early March. | COURTESY OF VIRUS BUSTERS

Toshiro Tanoue is the president and CEO of Daiichi Service Solutions Co., Ltd., a building maintenance company founded in 1988 whose services include cleaning and disinfecting water tanks and production lines in food factories.

When business began to drop off during the pandemic, Tanoue struck upon the idea of using the company’s equipment, personnel and knowhow to launch a new cleaning and disinfecting service called Virus Busters. The service is aimed at workplaces or homes where people have tested positive for COVID-19, or as a preventative measure for people worried that the virus may be present in their buildings.

The Virus Busters team will go into an office once the employees have left and thoroughly disinfect it, which can take anywhere between two and 10 hours, depending on the size. Tanoue says he has had bookings for almost every day since the service launched in early March, and he expects to see similar companies emerge in the months ahead.

“Even if a worker gets infected, there’s a tendency not to shut the entire office down,” says Tanoue, who admits he is worried about the risk of heat stroke, with his team working in full protective gear in the steamy summer months.

“The office will be shut for a day and disinfected, then it’s opened up again,” he says. “I think we’re moving in the direction where we’ll have to co-exist with the virus.”

If physical changes to workplaces seem inevitable in the short term, what of Japan’s long-ingrained and sometimes arcane business practices? Can they survive in the new post-pandemic landscape?

Virus Busters chief Toshiro Tanoue believes similar cleaning and disinfecting companies will emerge as Japan guards against further COVID-19 outbreaks. | COURTESY OF VIRUS BUSTERS
Virus Busters chief Toshiro Tanoue believes similar cleaning and disinfecting companies will emerge as Japan guards against further COVID-19 outbreaks. | COURTESY OF VIRUS BUSTERS

The hanko, the personal seal that has been a feature of Japanese offices since time immemorial, looks set to become the first major casualty. Hankos function as a replacement for a signature and are widely used to verify and approve documents in a Japanese office culture that still relies heavily on paper.

Hankos have been blamed as an impediment to working from home during the pandemic, with many employees complaining that they have been forced to travel to their office simply to stamp documents.

Authorities have taken note. On April 27, Prime Minister Shinzo Abe instructed his government to review the long-standing custom, while the very same day, Hiroaki Nakanishi, the head of Keidanren, called the hanko “nonsense.”

“We need somebody at the very top like that to make those bold statements and, hopefully, it will percolate down so that companies can start taking the initiative,” Ono says. “Many years ago, we had Cool Biz. That practice came straight from the prime minister. This is a very hierarchal society, so if the top people say something, hopefully it can have some effect.”

If Japanese companies are prepared to consign the hanko to history, what other sacred cows might they be willing to slaughter?

Japanese firms are renowned for holding frequent meetings, often with large numbers of employees in attendance. With less workers likely to be in the office at any one time, however, will meetings continue to be held as regularly? Will they be attended by the same number of people? And if an attendee isn’t likely to contribute anything anyway, is it even worth their time attending via videoconference?

Even after the end of the state of emergency, many companies are continuing staggered working times and allowing employees to work from home. | COURTESY OF DE-SIGN INC.
Even after the end of the state of emergency, many companies are continuing staggered working times and allowing employees to work from home. | COURTESY OF DE-SIGN INC.

Ono believes the pandemic will help companies identify waste right across the board, and force them to evaluate what things they really need.

“The drive toward productivity is basically a drive toward a sorting of individuals based on ability,” Ono says. “I think you’ll see more of that happening. ‘Hey, this company can actually survive without 10 percent of its staff’ — the dead weight. It will be easier to see who those people are. Not just people, but also tasks and certain things that need to be done in the company. It will be easier to identify what we can do with and what we can do without.

“At the same time, Japan still does have this social contract,” he continues. “We have a system of lifetime employment where there is an implicit understanding that the companies will retain their workers, especially at a very difficult time like this. It’s not going to be like in the United States, where they have 36 million people unemployed within two months. That’s just not going to happen here.”

Many companies are redesigning their workspaces to allow for social distancing once workers have returned following the end of the state of emergency. | COURTESY OF STEELCASE INC.
Many companies are redesigning their workspaces to allow for social distancing once workers have returned following the end of the state of emergency. | COURTESY OF STEELCASE INC.

What of the employees themselves, though? In this new and uncertain environment, where direct contact is discouraged and co-workers’ faces remain hidden behind acrylic dividers and computer screens, what kind of working lives can Japan’s employees expect to lead in the months and perhaps years to come?

A 2016 report by Steelcase in conjunction with market research company Ipsos, titled “Engagement and the Global Workplace,” found that only 1 percent of Japanese employees surveyed feel “highly engaged and highly satisfied” at work, compared with 13 percent of employees globally.

The report revealed that only 35 percent of Japanese workers are “happy to go to work,” compared with 71 percent globally, and that 39 percent think their company “gets the best out of” them, compared with 63 percent worldwide. The report concluded that “more than workers in any other nation, the Japanese are dissatisfied with the quality of their life at work.”

Masatoshi Shioda | COURTESY OF STEELCASE INC.
Masatoshi Shioda | COURTESY OF STEELCASE INC.

Steelcase’s Shioda believes the problem lies with Japan’s hands-on micromanagement culture, but he is optimistic that the pandemic can change things for the better.

“Physically, companies need to reduce the numbers of employees reporting to the head office every day, and that’s why they will have more space for each employee,” Shioda says. “They will be able to focus on their work. I’m sure the satisfaction level among Japanese employees will improve from a few years ago.”

Shioda believes the changes to people’s work-life balance and the time saved by not having to commute, thanks to a wider practice of working from home, will also enrich employees’ lives.

Not everyone thinks remote work is always a positive thing, though.

“People were suddenly told not to come to their offices and to work from home, and through this experience, we’ve learned that working from home is not impossible,” says DE-SIGN’s Imamura. “But on an emotional level, an office can be a place where people can connect and feel part of a community, and that’s something that can’t be lost completely. If you work from home, it’s difficult to get it into your head that you actually belong to the company you’re working for. I think there will always be offices to act as a place where people can come together as a kind of community.”

The explosive popularity of online drinking parties during the state of emergency suggests that socializing with colleagues and clients, a practice so embedded in the fabric of Japanese work life that it gave rise to the term “nomunication” — a portmanteau of the Japanese verb “nomu” (to drink) and the English “communication”— is likely to survive in one form or another. Tacnom, a video chat website designed for online drinking parties and launched earlier this year, attracted 2.4 million users in its first two months.

Many people think the COVID-19 pandemic will force Japanese companies to fundamentally change their business practices. | COURTESY OF DE-SIGN INC.
Many people think the COVID-19 pandemic will force Japanese companies to fundamentally change their business practices. | COURTESY OF DE-SIGN INC.

Online communication as a whole has become far more widespread in the Japanese workplace during the pandemic. Some even suggest it could lead to a greater democratization of Japanese companies.

“In Japan, you have a clear hierarchy of section chief, division chief, director, president,” says Ushio’s Ogawa. “That’s the sequence that things go through. But when you’re communicating online, it’s very easy to connect the top to the bottom. The good thing about that is that you can make quick decisions. The distance between the top and the bottom shrinks.”

With the economic effects of the pandemic sure to be keenly felt in the months ahead, however, will shaking up the established order really be at the forefront of executives’ minds?

Japan sank into a recession in this year’s January-March quarter, with gross domestic product shrinking an annualized 3.4 percent. Analysts predict that worse is in store for the current quarter through June, projecting a 21.5 percent contraction that would be a record for official data going back to 1955.

Fundbook is a mergers and acquisitions advisory firm with its head office located in Tokyo’s Toranomon Hills building. | COURTESY OF FUNDBOOK
Fundbook is a mergers and acquisitions advisory firm with its head office located in Tokyo’s Toranomon Hills building. | COURTESY OF FUNDBOOK

“I think most companies’ priority will be how they can turn their performance around,” says Keisuke Wada, a spokesperson for Tokyo-based mergers and acquisitions advisory firm Fundbook. “We consult with around 3,000 companies a year, and we’ve spoken to hundreds of company owners since the pandemic began. What they’re talking about is less how they can change their work culture and more how they can stop their losses and improve their financial performance.”

Many, however, would argue that the two things are not mutually exclusive. Living with COVID-19 will be a fact of life for businesses for the foreseeable future, and having worked so hard to adapt over the past few months, can they really afford to go back to the way things were now?

James Riney, founding partner and CEO of Tokyo-based venture capital firm Coral Capital, says the pace of change in Japan is fast once the ball starts rolling. | COURTESY OF CORAL CAPITAL, INC.
James Riney, founding partner and CEO of Tokyo-based venture capital firm Coral Capital, says the pace of change in Japan is fast once the ball starts rolling. | COURTESY OF CORAL CAPITAL, INC.

James Riney, founding partner and CEO of Tokyo-based venture capital firm Coral Capital, thinks not.

One of the companies that Coral invests in is Graffer, a service that allows people to deal online with the administrative paperwork that would usually necessitate a trip to the local ward or city office. Riney says that government offices have been contacting Graffer to bring these services online, and he expects the pace of change to only accelerate from now on.

“Something that seems to be a recurring theme in Japan is that things take a long time to happen, and then they happen all of a sudden,” Riney says. “What this coronavirus stuff has done is serve as a forcing function for a lot of things that were taking forever to change, things that were almost a joke in Western media that Japan is very paperwork-orientated. What’s happened with this coronavirus situation is that it’s served as a forcing function to disrupt those existing processes.

“When things happen in Japan, they happen really, really quickly.”

This is the final installment of a two-part series that focuses on the future of workspaces in response to the novel coronavirus pandemic. The first installment examines the future of remote work.

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