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Engagement Should Be "Fourth Arrow" in Japan's Economic Plan

Engagement Should Be "Fourth Arrow" in Japan's Economic Plan

Seven percent of Japan's working population is engaged at work, one of the lowest engagement rates in the world. This means that only one in 14 employees enter their workplace every day feeling motivated, enthusiastic, and committed to adding value and innovation to their work -- a concern as leaders in Japan continue their search for growth amid reports of a halved GDP growth rate in Q3 of 2013. With economic policies dubbed "Abenomics" after Japanese Prime Minister Shinzo Abe, the concept of "engaged employees" should enter the national dialogue and be added as the fourth arrow in the leader's proposed "three arrow" attack to boost Japan's economy.

In the past, Japanese businesses have relied heavily on the domestic market to produce profit and growth, but with a declining population (the IMF forecasts Japan's population will shrink by around 30% by 2055) and overseas competitors making inroads into the local market, Japan's businesses have lost ground. Globalization is now many Japanese businesses' only hope to grow.

As government leaders strategize about fiscal policies aimed at promoting innovation, enterprise, and Japanese business overseas, they must leverage the talents and energy of Japan's workforce to achieve a sustainable future. Leaders should enact strategies to:

1. Enhance Japan's workplace well-being: The Financial Times reported that the number of Japanese workers afflicted with mood disorders, including depression, more than doubled from 433,000 in 1996 to more than 1 million in 2008, with 84% of respondents saying mental health problems affected their business performance negatively. Japan's business leaders must make employee well-being an organizational strategy and hold managers accountable for results just as they would for other organizational outcomes. Gallup studies have shown that employers who invest in programs designed to improve employees' overall well-being and boost their engagement gain a distinct competitive advantage -- in East Asia, engaged employees are half as likely as actively disengaged employees to experience stress.

2. Learn from the best -- not just Japan's best: Tadashi Yanai, CEO of Fast Retailing, which owns the global Uniqlo brand, tells McKinsey & Co. that Japanese businesses, "should be willing to learn from companies in [developing] countries if they are better than us. But we lack the willingness to learn because we have been so successful before. That holds true for managers and employees alike."

Toyota and Fast Retailing certainly are two of the best-run and most-admired companies in the world. But as Japan's businesses look to globalize, it is essential to learn how the best companies around the globe engage their workforces to boost growth and innovation.

3. Understand what truly engages women in the workplace: Abe plans to boost female employment, a move that some analysts claim could add 15% to Japan's GDP, through initiatives such as opening as many as 250,000 daycare facilities across the country. However, leaders in Japan must look beyond physical facilities and understand the hearts and minds of Japan's female workforce. The good news is that, although women in Japan are no more likely than men to be engaged at work (7% for both genders), they are somewhat less likely to be actively disengaged (21% vs. 27%, respectively). Organizations in Japan should implement regular research and monitoring to discover the key factors of engagement that drive "Japan's most underutilized asset" to be successful in their roles, and spread this powerful knowledge throughout organizations across the country.

Japan is truly at a crossroads. Once considered one of the most influential and defining economies of the last century, policymakers now express concern over Japan's future. Japan's Economy Minister Akira Amari insists a "good cycle has begun" -- but a good cycle can only continue if leaders across Japan make a conscious effort to engage workers of all ages, and at all levels, for the good of Japan's economy now and the future.

To learn what your company can do to improve employee engagement and performance, read the State of the Global Workplace report.


Larry Emond is Managing Director, Global Leadership Advisory at Gallup.

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