How a Japanese drinks group is navigating hybrid work
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Global companies are used to operating and communicating across borders. They were also well-resourced enough to offer remote working to employees long before the pandemic and subsequent lockdowns made it a necessity. They ought, in other words, to be readier than most for a hybrid world of co-ordinated remote and in-person work.
Before coronavirus hit, Suntory, the Japanese drinks conglomerate, already had a global policy of allowing office staff to work one day a week from home. Subsidiary Suntory Beverage & Food GB and Ireland (SBF GB&I), which produces the soft drinks Ribena and Lucozade, also offered “flexi Fridays”. This permitted staff who had finished their week’s work by 1pm on Friday to take the rest of the day off.
The pandemic accelerated moves towards even more flexible working, according to Takeshi Niinami, chief executive of Suntory, whose brands include Jim Beam bourbon whiskey, Courvoisier cognac, the Japanese single malt whiskies Yamazaki and Hakushu, and the fizzy drink Orangina.
But the crisis and its aftermath have also put pressure on the culture of the Y2,108bn global company. This is based, in part, on the Japanese idea of gemba (sometimes transliterated as “genba”). The term is often used in Japan to describe the factory floor.
“‘The real place’ would be a literal translation,” explains Toby McKeever, chief strategy officer for SBF Europe and interim chief operating officer for SBF GB&I for much of last year. “Companies use it to talk about the coalface where the action happens.”
Gemba typically requires workers to be present in person, but Suntory workers across the world had to adapt the concept when the pandemic hit. Now, as workplaces reopen, Suntory executives say it could be the key to effective hybrid working for the 40,000-strong global workforce.
The idea of gemba comes from the same lexicon of Japanese management practices as kaizen, the continuous improvement concept that swept western production lines in the 1980s. To be “in gemba” is to undertake an activity that adds value — whether that is improving manufacturing plant efficiency, visiting stores to see how products are sold, or meeting customers. “It’s the deep learnings you can have when you are at that moment-of-truth point: in the market, in the office [or] where brands are getting made,” says Paula Erickson, chief human resources officer at Beam Suntory, the group’s US spirits arm.
The focus on being physically present meant that when the pandemic struck Japan there was “a huge conflict” between workers’ impulse to be in gemba and the safety-first approach insisted on by head office, according to Niinami. Factory staff felt they had a duty to clock in as usual, but their families were worried about the health risks. Sales staff were cut off from their customers in supermarkets and restaurants. “The morale level was hard to maintain,” says the chief executive, who worked on making sure staff received personal protective equipment, safe transit to the workplace and, in due course, access to vaccines.
Around the world, Suntory’s decentralised culture stood it in reasonable stead. Last year, for instance, SBF in the UK adjusted production schedules to cover labour gaps caused by the “pingdemic”, when government rules obliged staff who might have been exposed to coronavirus to self-isolate by notifying their smartphones. Throughout the crisis, “the approach was: ‘Let’s manage this locally because the situation is quite different in different markets’”, McKeever says.
Even so, it has proved hard to sustain gemba online. In New York, the pandemic grounded Beam Suntory’s brand ambassadors, who usually travel widely to promote the company’s spirit range at trade fairs, hospitality industry dinners and other events.
One such representative, Gardner Dunn, who accumulated 140,000 air miles in a typical pre-pandemic year (“great for status, bad for relationships”, he jokes) had to adapt to an entirely online world. He and fellow ambassador Tim Heuisler staged Zoom cookery and cocktail classes and organised a jogging club for 100 bartenders who could not work. “It was life-changing for a lot of them,” says Heuisler.
The pair also hired unemployed waiters to deliver meals and cocktails for virtual tasting events, in a novel application of the gemba mindset that kept them connected with their customers. Suntory copied the initiative in Japan to support local restaurant and bar owners through the crisis, in an example of how multinationals can apply in-house innovation throughout the group.
The arrival of the Omicron variant has paused the reopening of Suntory offices around the world, but gemba will be at the heart of Suntory’s efforts to bring office staff back to the workplace.
Makiko Ono, chief operating officer of SBF France, wants office staff — 600 of the 1,200-strong workforce — to come to the workplace at least two days out of five. Last June, she invited all its head office team, such as marketing, finance, legal and HR staff, to be in gemba, working with the sales team or in shops, promoting SBF products. As the office reopened last year, Ono organised off-site meetings in small groups, by department, “to get people together [and] change the mindset” to prepare them for a return to the workplace.
In the UK and Ireland, SBF will ultimately ask office staff, who make up about half of the 700 employees, to work a maximum of two days remotely and three in person. This includes “gemba Thursdays”, when staff must set a clear purpose for their workplace activity. Otherwise, McKeever warns, “there’s a danger of ‘fuzzy gemba’, where you go without a firm plan and it ends up being a nice walk around the factory or a store with no real benefit”.
Despite the multinational’s experience with distanced teams, hybrid working continues to challenge staff cohesion. Beam Suntory has hired well over 1,000 employees in the US since the pandemic started who have never met their colleagues in person. “The onus is on the leaders,” says Erickson, who believes office workers will in future spend about two days a week working remotely. “We have to give meaningful reasons to bring teams back together.”
And despite the “gut-wrenching” experience of losing colleagues to Covid, she notes that “we have to take the lessons learnt forward. [The pandemic] probably has advanced workplace practices by at least 10 years.”
When Beam Suntory moves its headquarters from Chicago to New York later this year, for example, office staff will enjoy the latest design and technology features of a post-pandemic office. Work stations will be arranged for privacy and social distancing. Half-moon-shaped conference rooms will use the latest Microsoft Teams software to connect US executives to colleagues at Suntory’s head office in Tokyo or elsewhere. It will be a significant advance on the old videoconferencing technology, Erickson says.
But can a virtual, or even a hybrid, meeting — however technologically advanced — be considered gemba? Niinami is adamant that in-person meetings are critical. “Face-to-face is first and foremost. That’s real gemba, we believe. Communicating through Zoom is not.”
It is essential, he adds, to rebuild the personal bonds that underpin the multinational’s culture: “People have to know each other more — and we lost two years.”