Who Is the Agent of Change?

Not Giving Up the Future

During the booming economy, the CEO of Nishio Glass & Mirror rushed to adopt an aggressive strategy to earn higher profit. When the Great Recession hit Japan’s economy in 2009, the backlash of the aggressive growth strategy haunted him, and the firm sunk in a three-year-long loss. The CEO decided to downsize the firm to survive; however, it resulted in losing dignity and trust within the firm (see Table 1).

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Table 1.

Timeline of the Case

1932	Grandfather started mirror business at the same place.
1960s	1967: CEO was born as the only child; the father of the CEO succeeded the firm.
1991	Graduate from Aoyamagakuin University; enter into Sumitomo Trading Co.
1992	Father passed away; the Nishios decided to name her mother interim CEO and an uncle as the plant manager.
1993	Quit Sumitomo and entered the firm as a person who was supposed to be the next CEO.
2000	Promoted as the new CEO at age 33, and her mother assumed the role of the chairperson.
2008	Japan’s economy was looking up, but after the great recession in 2008, the firm struggled for survival.
2011	March: A gigantic earthquake hit the east coast; Japan’s economy stagnates; CEO meets Mr Hirao. June: The first retreat for the new senior managers; CEO’s mother and uncle quit their jobs. December: The party of making the profit.
2012	April: The second retreat got into conflict; Summer, ‘Basic Management’ lectures start.
2013	January: The retreat for all employees and chaotic discussions occurred. June: Inclusive talking by using ‘World Café’ at the annual gathering.
2014	April: The third retreat for senior managers by using ‘Future Search Conference’.
2018	Received ‘Kaika Awards’ as an exemplary organizational change among SMEs Japan.
Remarks	Capital about 10 million Japanese yen; enrolment: 23, including part-time, temporary and other workers; business domain: the glass and mirror processing businesses, Manufacturing showcase; main customers: construction, housing, retailing and boutique.

Source: Created by author for this case. Sources of the data are the following: company’s website, multiple interview data, and archival data in Corporate Culture & Identity Inc.

In February 2011, during a seminar in Shinagawa conducted by Mr Hirao, a senior consultant of Corporate Culture & Identity Inc., Mr Tomoyuki the CEO of Nishio Glass approached him to fix a time to visit his firm. Throughout the discussion with the consulting team, Tomoyuki noticed a reason why the employees failed to execute the strategy he decided. Tomoyuki decided to change the organization structure by adding a senior management team reporting to the CEO. The move was to give the firm another ‘Brain’ to decide on their own future course of action. The CEO selected five senior managers to form the team. At the same time, he checked financial data of the firm to figure out the possibility of the recovery and the financial target to pursue. Calculation suggested that at least an increase of 18 per cent of sales would be needed to come out of the red zone. He set aside 10 million Japanese yen cash for implementing the plan, including employees’ retirement payment.

During another meeting with the consulting team, Tomoyuki realized the need for a new approach for their change initiatives. The first retreat for the managers was planned in June 2011. The goal was to build a team of senior managers with a trusted, responsible and productive relationship through honest dialogue. Regardless of the 23 employees who were discussing freely their daily lives, their shallow and defensive communication was not effective in arriving at a high-quality decision. On day one, through experiential learning, they understood the essential skills of the human relationship and that of self-awareness. On day two, they focused on discussing what the core problem was and how they dealt with it. Invisible, but predominant culture affected by founders’ family emerged through the dialogue, and it kept them away from managing supported by honest feedback. Besides, they realized that the firm did not have a culture of valuing the promise.

Small Success

Soon after the retreat, Hirao’s team designed a series of training programmes for the senior managers to learn the broad management knowledge and skills. Enthusiastic efforts to make the firm adaptable to dynamic market demands elicited excellent responses that translated into small, but effective profit. In the latter half in 2011, the situation was getting better, and the high speculation to achieve the goals boosted their morale to work even harder. At the end of the year in 2011, the CEO and senior managers held a special gathering for all employees to achieve the recovery plan successfully, as they expected. The party was full of joy and belongingness to the social community. At the party, a special ceremony arranged by the senior members gave a tribute to the family members who had chosen an honourable retirement. It was a terrific moment for all in the room.

Blaming Others with Small Hubris

In the workplace, the situation remains the same. Coming to the facility, the CEO expressed his frustration, criticized the work of employees and berated them in public. Naturally, with ill-feeling employees and senior managers showed an intense backlash against the CEO. In April 2012, the CEO convened the second retreat for the senior managers the same way as they did last year.

The day one began with reflecting on the successes and failures of the firm as judged from the point of view of managers and employees. Then, they shared the reflections proven by the financial figures with an open mind they absorbed those figures. In the afternoon, every manager set the visions and goals to achieve, presented those before the group and shared their feedback. Hirao’s team facilitated to find themselves how they behaved with one another and what human relationship was. On day two, the presentation to the CEO started. Hirao’s team expected that managers would give their presentations with high motivation and showing responsibilities for their plans. Then, as a team, the managers demonstrated their jobs to be supported by human connection. The group rehearsal was done in the absence of the CEO. Everything seemed well; however, once their presentations started, the CEO’s frustration for their plans exploded and grilled their plans for a while. Avoiding meaningless battles over their presentation, Hirao’s team separated them into a different room to calm down. They listened to their intentions about what they wanted to do. In another room, Hirao recounted his very reason for getting upset and how he felt. In the process of calm down, he had a dominant feeling of guilt about what he did to the managers and employees. After a few hours, they came together again in the room, expressed their forgiveness and finally went back to normal.

Hirao describes the situation:

Surprisingly, they began complaining about the work environment and wages because those fell short of their expectations. It seemed to be the negotiation between the union and the employer. I acknowledged those as essential to care, but the situation was very unstable because it was just after turning the deficit into a small surplus. Once they seemed to agree on getting back on the right track.

However, both sides were holding on such an unsatisfied shadow until April in 2013.

Kneeling in the Dark

Hirao’s team was designing the next retreat where all the employees could share their honest feelings and thoughts about the visions and goals of the firm to achieve in the next financial year. In November 2012, the team started to set up a one-day meeting to decide the planning of the first two-day retreat for all employees. At the preparation meeting, their primary task was to pick the theme for the retreat. During the meeting, though the senior managers were clear about what to do, their discussions were wavering. To them, it seemed right to display a commitment to their jobs; however, excessively idealistic and realistic discussions led to a sense of exhaustion.

Roughly a month before the retreat, senior managers were busy working for the event to design the contents that they will deliver and the procedures that they should follow. There were many tasks for them to build a sense of unity among themselves. Along with the pressure of the regular job to achieve the targets, senior managers put in extra time and effort to create an event that must be worth taking part in. Meanwhile, Hirao faced with another awkward move, the CEO wanted to postpone the event. The first time, Hirao ignored it as it was, but his negative emotion to the event grew increasingly and became intense at the end of the year 2012.

Hirao tells us his feelings:

Over the phone, the CEO asked me the purpose of the retreat. I was surprised, but I said to him that it was important to find common ground to share the value and meaning of work and life. Though our conversation finished, he frequently asked me the same thing again and again through the phone calls and emails. Finally, I asked him, ‘What do you want?’ He admitted to himself, ‘I feel so fearful of leading the event as CEO’. Eventually, he started speaking up to me that he wanted to postpone the event ever.

Getting into Chaos

In January 2013, the retreat was held after all. On day one, all employees were divided into three groups with their status. Then, they were told to seek the problems that they felt wrong and analyse those to figure out the solutions. In the afternoon, having finished their tasks, they expressed their solutions and exchanged their feedback about those. The design team felt that such a task functioned well as an agent of their reflections.

Furthermore, all participants could well reflect on how well they would manage their work and to what degree they would increase the quality of their relationships in the firm. Through the afternoon, what they did was a task to think the real jobs in daily situations. The wisely disguised solution was a target of the feedback from them because it was a place where everybody shares honest feedback. Employees knew each other very well, and it was easy to check what they were doing as a part of the daily routine. In other words, there is no place to hide. Just before the evening party, all participants came to know what was the vision of the firm and who all were to take its responsibility in the firm.

On day 2, in the morning, the members resumed their discussions about the visions and responsibilities. In their presentations, the employees explained their visions and roles at their workplace from the three levels of the view—peer, superior and subordinate. Finally, the CEO summarized all the presentations into a single firm vision. That was the programme the consultants expected. It was apparent that the way the meeting was conducted was hard for the first attendees to accept it as necessary. The senior managers, as the design team, received much biased blames from the frontline employees, who were mostly attending for the first time. Partly, because participants were likely to confuse the feedback with the evaluation from others, the psychological defence system got activated immediately. Their conversations were mostly silent, and defensive communication went on until somebody broke the norm to hunker down.

Besides, all employees in the firm acknowledged themselves as the equal participants who had the right to speak up during the retreat. It was natural that the atmosphere of the conversation turned tense, and that revealing inward-looking communications were exchanged profoundly. Frustrated feelings among them were visible and apparent so that the pent up frustration abruptly blasted in the last presentation given by the senior team and the CEO. Senior managers were seriously overwhelmed by the candid feedback from all employees, and their confidence, as the managers, disappeared. While giving a presentation to all, senior managers were stuck in the middle of their conversations. Hirao’s team assumed that the act of blaming the senior managers by the employees was associated with the profit-sharing system.

Consequently, the employees thought they had the right to receive enough money as a dividend for their dedication. On the contrary, senior managers believed that the most effective and efficient way to increase the profit of the firm originated in the management of the business processes. As a result, the cognitive gap between three organizational ranks became apparent; scepticism driven by an emotional reaction to the promotion of the senior managers emerged from the retreat.

Core Identity

In June 2013, the annual meeting convened. It was a place that everybody from employees to diverse stakeholders could share the firm’s situation. It was the best time to reflect on what they did since the retreat in January. Therefore, Hirao’s team designed the World Café, as the experiential workshops, for a day and a half to see the diverse goals of the individuals, workgroups and business functions, which was necessary to craft a goal of the entire firm.

In the workshop, the task for all participants was to set the goal to achieve within a year. Participatory dialogue like World Café could easily share different viewpoints within the participants, with a sense of belongingness. As the dialogue progressed, the goal clarity started settling in, so participants became more involved in achieving the goal. Such a reframing process through their dialogue was proved to be crucial to look at the facts. Notably, when they observed the process dispassionately and with honesty, they realized that the situation they face was seen by others from the multiple levels at the same time. It had been for two years since the first retreat in 2011; however, senior managers went down to the psychologically frightening situation. Because, the damaging experience stuck in the crossfire was still dragging on in January 2013, they did not yet understand what roles management should play. Nevertheless, in the meeting, the CEO asked them to set a clear target with robust financial figures and devise a plan to achieve it within a year. What is more, they must work cohesively.

After the workshop, in the review meeting, the CEO told Hirao his honest feedback about how he was disappointed with the outcomes of it because a part of the senior managers resisted engaging in every goal promised at the meeting. All he wished was to share a sense of coherence with them, which meant all planning activities were unified into the goal attainment as an organized activity. Seemingly, the meeting was successful in making all participants feel fun and a sense of unity; nevertheless, he thought it was a single event and influence from that evaporated in the air shortly after the meeting. Also, the psychologically victimized mindset was fermented and exploded their frustration towards the CEO. Managers and employees insisted on implementation of their plan. The benefit from the suggested scheme of the consultants should not be negligible. Then, they spoke out loud; it must be unfair for them. As a result, senior managers demanded to design the meeting on their own.

In April 2014, Hirao’s team proposed another retreat for the senior managers and the CEO to identify the core value of the firm. The goal was to construct a whole story of the firm from the past to the present. Following a tool, also known as the future conference, they started searching the core values of the firm, along with the timeline since the father of the current CEO passed away. What they did was to tell their untold personal stories from the beginning, getting through the stumbled situation and flowing to the present situation. Twenty years had already passed since then. Some stories made them surprise because they thought about them differently; some help them in reassuring because they had the same feelings about those. As stories went on, small colourful post-it with personal stories formed a sizeable, unique picture as if a great tapestry on the wall.

The CEO shares his feelings:

One of the critical observations through the activities was to realize how happy I was because things disclosed from those activities said to me that I had received diverse support from quite many people since the beginning. I was always haunted by bad images like a ‘Poor Boy’ because of not having enough experience to run the firm. It was natural that I always dominated the conversations to exaggerate my presence as if I were a dictator.