Turning Social Challenges into the Company’s Strengths: Akebono Brake Industry
September 8, 2014
When you read the integrated business and CSR activities report published by Akebono Brake Industry, you quickly notice something interesting: the large number of employee photos featured on its pages, compared to the reports of other companies. The cover of the 2013 Akebono Report is a good example, and so is that of the 2011 report: All photos are of Akebono employees working around the globe.
There are more employee photos inside. Akebono’s corporate mission is printed on the inside front cover: “Through ‘friction and vibration, their control and analysis,’ we are determined to protect, grow and support every individual life.” Underneath this text is a picture of a group of Akebono employees, who are quoted on what the company’s corporate mission means to them personally. The juxtaposition of universal, crystallized principles and personal messages from employees who daily put the corporate mission into practice gives a clear idea of the kind of company Akebono is and what it means to work there.
Akebono’s company ethos comes through strongly, too, in the report’s three feature stories. The first is on the “New Midterm Business Plan,” the second is on “Product Development toward 2020,” and the third on “Developments since the Great East Japan Earthquake.” The second article details how the company intends to turn its products and production methods into global standards and to become more competitive by adding enhanced product features (which the company calls “topping”) to meet local market needs. The article features 12 young engineers who are responsible for developing Akebono’s unique technology. Through the filter of these employees’ eyes—with specific references to their involvement in daily tasks—they explain what the company’s goals are and describe what needs to be done going forward in an approachable way.
But why are so many employees featured in the report? And why do they explain all this in their own words?
An answer to these questions requires a look back at the company’s history. Akebono manufactures brakes for automobiles and trains. It boasts an impressive share of the global market and is an example of Japanese manufacturing prowess.
“Brake” is the term for a device that stops a car by using friction to convert kinetic energy to heat energy. Brakes have an important role in protecting human lives. We cannot escape the fact, however, that from a consumer’s perspective they are rather uninteresting. People have heard of Japanese automakers like Toyota, Nissan, Honda, Mazda, Mitsubishi, and so forth, but not many could name a brake company.
In fact, Akebono employees are the same. They cannot buy their own company’s products, and neither do they know whether the cars they see on the road are using an Akebono brake or not. A lot of hard work goes into making these products and parts, but when the fruits of such labor are not readily visible, having pride in one’s company and its products can be difficult.
Akebono conducts surveys of its various stakeholders to learn what they think of the company and its products. Through this process, it has discovered that automakers and other business partners highly value the company’s products—even more so than its own employees.
The company’s target for 2020 is to increase its share of the global OEM disc brake pad market to 30%. Its current share is 18%, so this is an ambitious goal. Only an exceptional company could set its sights so high. But even for Akebono, there might be more room in enhancing the pride employees feel about their company.
A CSR Report for Employees to Read
At Akebono, the Corporate Branding Management Office plays a coordinating role in advancing company-wide CSR activities. Branding is something that adds value in the eyes of customers and is considered a central part of business strategy for consumer product companies. But branding management is seldom an important consideration for B2B companies.
At Akebono, though, branding is aimed at fostering pride in employees, and it is toward this goal that the company exerts its branding efforts. Generally speaking, companies direct their CSR and other annual reports at their various stakeholders. But the Akebono Report is created with the idea that employees would be among its most important readers. It is intended as a guide to help employees identify closely with the company and act accordingly.
The following comes from the conclusion of the “Top Message” section of the report, written by Akebono Brake Industry President and CEO Hisataka Nobumoto: “Brakes are not merely car parts; they are indispensable automobile components that ensure safe and smooth driving. We encourage all who work at Akebono Group companies to take great pride in the fact that they deliver safety and security to people throughout society through the production of superior brake products. By recognizing the contribution of the significant contribution they make to society, we hope to stimulate the kind of proactive thinking and response to challenges that provide both personal fulfillment and corporate success. Launched in 2005, corporate brand management is one initiative promoted in line with this aim. Guided by the idea that every associate should be an advocate of the Akebono brand in their day-to-day operations, we will achieve greater recognition for our company among all our stakeholders.”
Perhaps the most enthusiastic readers of CSR reports in recent years have been students looking for the “right” company to join after graduation. Since they are likely to stay with an employer for many years, they no doubt look at companies from a long-term perspective, and they read the reports to find out about the companies’ engagement with society. This is also the reason that, as soon as they join the company, they are less likely to read their own company’s report, as they become less interested in the long term than with addressing immediate concerns.
As is described in the Top Message, the Akebono Report is intended to stimulate among employees “proactive thinking and response to challenges that provide both personal fulfillment and corporate success.” Already, about 60% of Akebono’s consolidated sales are generated outside Japan, and about 60% of group employees work outside the country. Maintaining a manufacturing base in Japan will not be easy from the viewpoint of maintaining global competitiveness. But if the company can make full use of employees’ latent strengths, it can not only achieve the goal of increasing global market share, as mentioned above, but also create a company that is truly ready to meet the challenges of globalization. That is why it emphasizes the importance of fostering employees’ pride in the company and its products.
The company calls its employees “human assets,” rather than resources, and a training center has been built in Japan to nurture such assets from around the world. Akebono employees are trained to think not just about their own workplace but also about the company’s operations as a whole, how their work is connected to the work of the company, where the company is headed over the long term, and what their role should be in this evolution. The Akebono Report is designed to encourage such thinking.
It is not unusual for companies to think about how their CSR report would be read by their various stakeholders, but in reaching out to too many different readers, they may lose sight of their primary focus. Such companies can draw valuable hints from the single-minded attention Akebono gives to fostering pride among its employees, prompting them to take a broad and long-term view and encouraging them to identify areas for improvement.”
Findings of a Post-Disaster Employee Survey
The emphasis on fostering pride among employees was evident in Akebono’s response to the March 2011 earthquake and tsunami in northeastern Japan. The Akebono Group has four production sites in the areas that were affected. The worst damage was suffered by a subsidiary producing brake linings and other components: Akebono Brake Fukushima Manufacturing, based in the town of Koori, Fukushima Prefecture. Thanks to the hard work of Fukushima Manufacturing’s employees, the company was ready to resume production by March 21, just 10 days after the disaster. Akebono’s corporate culture showed through most clearly, though, in what they did next. The company surveyed its employees on “what they felt” during and “what they learned” from the disaster. By May 27 they received 239 completed surveys in which respondents said they were impressed by “employee cohesion, teamwork, and solidarity,” “the company’s concern for its employees,” and “the gratitude of residents, customers, and business partners in disaster-hit areas.”
The process of recovering from the disaster and Akebono’s experience with the Thailand floods later in 2011 provided an opportunity for the company to rethink its supply chain. It moved to ascertain how many companies worldwide were actually capable of supplying the raw materials and parts it needed and to examine the effectiveness of its risk management policy with regard to sources. Akebono not only reconfirmed the substitutability of its suppliers but, in reexamining its supply chain, has also begun to rethink its entire approach to manufacturing.
This experience also convinced President Nobumoto of the high potential of Akebono’s employees. “If all our employees can do their part working towards a single goal,” he noted, “we can do great things. In fact, there’s nothing we can’t do. What we need to consider, however, is why we typically don’t achieve that potential.” This is a message that Nobumoto often repeats to his employees. So in addition to instilling pride, management is asking employees to set their sights higher and have a broader perspective so they can realize their full potential. This may be said to be the essence of Akebono’s management philosophy.
Fifty Years of Providing Scholarships
One of the biggest factors behind Fukushima Manufacturing’s swift recovery was a group of scholarship students working there, as became evident from the employee survey taken after the disaster. These students are on the Akebono Vocational Scholarship Program and work at Fukushima Manufacturing while attending junior college to complete a three-year occupational course, such as in kindergarten teaching, nursery school work, and nutritional science.
Akebono has been operating this program since 1964—for exactly half a century. It was launched by the previous president who himself received a government scholarship to attend a university abroad and who wanted to offer a way for young people to support themselves by working while continuing to study. The company provides work and housing to young people who, for financial or other reasons, are otherwise unable to go on to university or vocational school. All the scholarship recipients spend three years living together in a dormitory while working shifts at Akebono plants. The students pay for their education from their wages and earn a degree or other qualification through hard work. To date, more than 3,000 students have benefited from the program, including some who are the second generation in their family to do so. They are called hosensei (nursery school students), since many of them go on to work at nurseries.
The hosensei spend their mornings working and study from afternoon until evening. At Fukushima Manufacturing, they have had a significant impact on company morale. The full-time workers have been heartened by the progress students make during the three years there and how hard they try, and this has prompted the employees to take a fresh look at themselves and to make new discoveries. Seeing the hosensei working so hard, they, too, approach their job with greater seriousness and sense of responsibility. Compared to other Akebono production sites, the level of cooperation among Fukushima Manufacturing workers is quite high, such as when changing shifts.
Indeed, many Akebono employees note that they are not the ones supporting the hosensei ; rather, it is the students who are helping and teaching them. The Vocational Scholarship Program was originally implemented at production sites across Japan, but Fukushima is the only facility where the program currently remains. Successful applicants come from all over northeastern Japan, and most return home after they graduate. These young women work as they study, live together for three years with fellow hosensei , and acquire strong interpersonal skills that are highly valued by employers. They now live all over northeastern Japan, working as nursery school staff, child nutritionists, and kindergarten teachers.
These students also made a huge contribution to the restart of operations following the March 2011 disaster, but the graduation ceremony at their university, which was planned for March 17, had to be cancelled. Akebono thus organized a special ceremony for the graduating hosensei at its Global Head Office in Tokyo on April 10. Thanks to the assistance of a kimono rental company and beauty salon, all students were provided with traditional formal wear and were beautifully coiffured for the ceremony, attended by President Nobumoto and other senior Akebono managers.
At a glance, the scholarship program looks like a one-way street, with the company supporting the students. And because it requires substantial financial resources, some have suggested over its 50-year history that maybe it was time to bring it to a close. But the truth is that the program has had a very positive impact on Akebono’s corporate culture. The company and its employees have gained much from interacting and working with the students on a daily basis. In that regard, the program has created value to both the company and society at large.
President Nobumoto’s message to the 2013 graduates, titled “Setting Out on a Journey of Creation,” offers an idea of how important the students are to Akebono.
Benefitting from Unexpected Connections
There is one special-purpose Akebono subsidiary that promotes employment for people with special needs—Akebono 123. It was established in September 2013, becoming the first such company to be set up by a manufacturer in Saitama Prefecture.
The employment rate of disabled people in the Akebono Group as a whole is 2.28%. This is already higher than the statutory rate in Japan of 1.8%, but the rate at Akebono Brake Industry and Akebono 123 combined is 3.88%. The average employment rate of disabled people in Japan as a whole is 1.76%, and the corresponding rate for companies with more the 1,000 employees is 1.98%. Less than half of all private companies in Japan, at 47.7%, meet the legally mandated employment rate of people with disabilities, so the rate at Akebono Brake and Akebono 123 can be said to be quite high.
The large number of associates with special needs working at Akebono 123 is not the only thing that makes the company special. It has achieved growth by expanding the range of work that these associates can do and training them according to their various disabilities and personalities. It has a quality-focused personnel policy based on carefully allocating work according to each employee’s aptitude.
On its establishment in 2003 the company was initially tasked with providing cleaning services for other firms in the Akebono Group and has since gradually expanded its work. During the next 10 years the company’s staff has grown from 5 to 25.
In 2008, its sixth year of operation, Akebono 123 was awarded a chance to become part of Akebono’s production process for the first time when it began the packaging of repair kits for brake parts. A special production line for Akebono 123 was set up inside an Akebono Brake plant, where employees have been working alongside their Group colleagues. Akebono 123 workers have won many prizes at technical skills competitions, and the company—viewed as a model employer of people with special needs—is now asked to run workshops at schools and other facilities for the disabled.
This has been achieved thanks to the attention given to each employee’s needs by Akebono 123 President Koji Saito and the instructors hired to guide workers’ activities. They carefully consider each worker’s characteristics, how best their skills can be developed, what tasks they should be assigned, what support they may need, and how their long-term career prospects may be improved. The management staff is dedicated to helping each and every employee find job satisfaction and a role to play in society.
One remarkable thing about this personnel management policy is that all instructors are graduates of Akebono’s Vocational Scholarship Program. These alumni returned to their hometowns to work at a kindergarten or nursery, and many have married and have children of their own. A number of them whose children have grown up learned of an opportunity to give something back to Akebono—a company that enabled them to continue their education despite difficult personal circumstances—and their former colleagues, and so they accepted an offer to work at Akebono 123 as instructors, making use of the skills they acquired while raising their children.
The Way Forward
In many ways, the scholarship students and Akebono 123 instructors represent the company’s ideal “human assets.” They are proud of their work, their colleagues, and their company. They are skilled at spotting areas for improvement and work daily to solve them. They are the kind of workers about whom President Nobumoto spoke in his Top Message.
The scholarship program launched 50 years ago and the special-purpose subsidiary for people with disabilities set up 10 years ago were aimed at fulfilling Akebono’s responsibilities to society. Little did the company’s senior managers know at the time that these two projects would eventually wind up setting an example for the rest of the company to follow.
In offering a helping hand to students in financial difficulties and in creating job opportunities for people with special needs over the years, Akebono has unexpectedly acquired valuable know-how on a key management issue: the effective development of human “assets.”
CSR is not just about addressing social issues. Donations to charitable organizations alone will have little positive impact on a company’s operations. And encouraging employees to engage in volunteer activities will not necessarily prompt them to think deeply about how their work is linked to society at large. CSR activities that have little relevance to a company’s main line of work will be considered a luxury and are unlikely to be sustained over the long term.
What we learn from Akebono’s example is the importance of a company’s awareness of its role in society and its relationship with its employees. Rather than overreach and attempt something unsustainable, it has chosen to engage with society over the long term. This is one approach to more fully integrating CSR into the core aspects of a company’s business.
“Setting Out on a Journey of Creation”
President and CEO, Akebono Brake Industry Co., Ltd.
For three years you have devoted yourself to study and work, forming friendships in the midst of difficult times. Now you have received your graduation certificate. I offer you my sincere congratulations.
Around the time you joined the Akebono Group, we were expanding into the North American and Asian markets and doubling the size of our operations. We were engaged in a growth-focused restructuring of our Group operations at home and abroad, prompted by issues that became apparent after our sudden expansion. And right after you joined Akebono, the Great East Japan Earthquake struck, hurling not only our company but the whole of Japan into turmoil. In the midst of that, as the Akebono Group pulled together toward recovery and reconstruction, you devoted yourselves wholeheartedly to restarting production, even at the risk of your personal safety.
I am deeply moved by memories of how much strength you gave the entire Group.
LET’Z* was held soon after the initial period of recovery and when we were beginning to regain some calm. The Fukushima taiko drumming group moved us afresh with its wonderful teamwork and exuberance. I received these comments from those attending the meeting: “The audience and drummers became one,” “I had a taste of what it really means to work together,” “The audience listened attentively to both the drumming and the reports on our business situation.”
Through the drummers’ powerful performance and the awareness of their role in the group, they showed us the importance of working together in harmony as a team. You gave us fresh energy and vitality.
No one could have predicted that so many difficulties would occur during such a short period. And of course, no one would have wished these things to happen. Nevertheless, this experience has given us strength and helped us grow as human beings.
Please be grateful to your parents, friends, and all who have helped you so far. Take the confidence you have gained from overcoming these hardships and use it in the new life you create for yourself in new surroundings. Work hard, and I wish you the best of luck in your future endeavors.
*LET’Z is an employee general meeting to discuss the company’s future that is voluntarily attended. It is planned by a cross-company project team with 10 or so members and often opens with a performance by a Fukushima taiko drumming team made up mainly of hosensei . The 2013 event was held on November 19 and was attended by approximately 800 workers.