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Talent & Technology

Levent Arabaci, EVP, CHRO, Human Capital Division, Hitachi Ltd.

Levent Arabaci, EVP, CHRO, Human Capital Division, Hitachi Ltd.

Hitachi has an impressive 1,000 plus subsidiaries and over 350,000 employees worldwide and operates across multiple industries around the globe. Having 1,000 plus companies and multiple different systems is like herding cats however, HR transformation during the last 5 years, continues to enable globalization of Hitachi and help us identify top talent across the globe.

Over the past five years, Hitachi has taken steps to improve global capabilities among its subsidiaries to find innovative ways to co-create and improve efficiencies. One of these key steps is a plan to boost revenue outside of Japan: Hitachi’s overseas revenue ratio is on track to reach its target of 55 percent by 2018. In the meantime, Hitachi is focusing and promoting social innovation business as well as improving our digital footprint. Social innovation Business is transforming the way we grow our business and changing the way create solutions. This innovative approach requires a market in perspective that enables co-creation of solutions with our customers. We’re tackling urbanization, transportation, smart cities, and more, to transform the society.

“Business intelligence and predictive analytics give Hitachi the global competitive edge to unleash the full potential of our most important asset: People”

Naturally this transformation and initiatives require a global talent pool ready to deploy the right people for the right position at the right time. This is where Human Capital group comes in the picture and we are transforming many aspects of Human Resources and Talent mining across Hitachi to tap in the best and the brightest across many subsidiaries. Performance management is a key component of this end-to-end talent management suite. We are building systems that help our employees from hire to retire. This end-to-end system includes, on-boarding, performance management, creating key talent pool, assessment of top talent, as well as promotion and development of these talents.

Of course, there are always questions around performance management and its effectiveness. I firmly believe that performance management is a critical tool to achieve accountability as well as desired results and behaviors across the company. It is not the tool itself but the managers that make this tool successful in developing people. If set right, performance management can create an accountability environment that shows what people have achieved and how they got there. Both components are critically important. What employees have achieved is measured through SMART goals or MBOs. The ways that employees got there are measured through key competencies (behaviors). Competencies are important not only to measure someone’s journey (How) on the way to achieving goals, but to also shift company culture toward desired behaviors and core values. Another critical component of performance management system is goal cascading. This enables a line of sight and the ability to align the company across the globe to achieve common goals. We have a long way to go to ensure that performance management is properly set up in every subsidiary and utilized as a developmental tool to unleash peoples’ full potential. Creating an accountability culture is important to deliver results; a development culture is even more important to reward top performers. Performance management plays a critical role in achieving these objectives.

As Heraclitus, a Greek Philosopher figured out centuries ago, "change is the only constant in life." Therefore, I envision that performance management concept will evolve in time and leaders must step up to provide more frequent feedback and development to their employees instead of typical once a year approach. This will require a combination of the right system and right leaders to make performance management a successful business tool. Performance management should be real time, simple and effective for companies that have mastered it. It will take a mind shift around the way we think about performance management and the way we design and deliver it in the future. Just like we move toward a co-creation of solutions with our customers, we will be co-creating best way to unleash people’s potential with our employees. This shift has already started for some companies and I am sure we will be able to see its impact soon.

When implemented correctly, performance management will transform the company culture and help employees unleash their full potential allowing both leaders and employees to be more effective. It will create a more accountable workforce. Companies achieving this culture shift will rejuvenate themselves and continue their successful journey forward. To make performance management effective and scaleable, there must be a strong technology component to all processes. Policies alone cannot scale this globally. Technology will enable the global consistency and execution as well as scalability of the implementation.

Hitachi is rolling out a cloud-based human capital management (HCM) system across its subsidiaries to execute this end-to-end talent management vision and unleash the full potential of every employee, no matter which corner of the world they are located. Hitachi’s new HRIS system will change the way we work, interact and perform as managers as well as employees. Hitachi is looking to utilize this best-in-class technology HiNext (Powered by Workday), to its full capability and building business intelligence as well as predictive analytics across the enterprise. This new business intelligence and predictive analytics will give Hitachi the global competitive edge to unleash the full potential of our most important asset: People.