We are the leading construction machinery and lifting equipment company in Europe. We have a wider product range than our Japanese competitors, and also larger cranes going up to 1200 tons. Japan was our third largest export market when we worked with Mr. Nevins in 1993 and 1994. I have been with the company almost 20 years.
I am happy to cooperate with Tom with this testimonial/mini case study letter because he was a big help to me and my people. Tom tells me our first meeting, November 18, 1993, was on the 21st anniversary of his coming to Japan, one year short of spending half his life here. Mr. Nevins was a big help to me in my getting a better handle on the part of running a company in Japan where there were some unknowns for me.
At the time, we were a small group of about 30 employees. We had been a joint venture with NKK and had recently bought them out. The personnel policy and pay side had basically reflected their big, Japanese company culture. Liebherr wanted to develop systems that made more sense for us, rather than follow some practices that came out of the unionized big company corporate culture.
For example, I recall our company had the traditional May Day holiday for labor union rallies as a day off. We stopped that. We also cut back paid vacation from 17 days for the first year of service to 12 days. (There are 15 public holidays in Japan plus all the extras around year end, OBON, Golden Week.) It was an internal equity and fairness issue. Mr. Nevins interviewed our key people. He found out the hard workers who could not take much of their vacation resented the few staff who took all their days. It was interesting to see that employees themselves, including busy female clericals would look at the vacation issue like that.
So more is not necessarily better or wanted. We have to think deeper and differently about some issues. The same thing is true of overtime. Some people hold back and do not register it, while other staff abuse the system. In a case like this a fixed allowance instead of hourly calculated overtime can be preferred by the key, effective, and efficient staff doing the best job for you.
We made many other changes, such as moving from a 3-month, to a 6-month probationary period. Our managers appreciated this, once they realized it could help them handle problem employees before they became a problem. We “carved-out” a larger number of months of bonus. Although monthly pay is accordingly reduced, with 6 months of bonus leverage, and the possibility to pay even no bonus, a company has a powerful tool to move out poor performers. We gained other flexibility, such as making it legal to have certain employees sometimes work on Saturdays without having to pay them an overtime premium.
In the process of working with TMT, you also learn that there can be some practices that are not characteristic of the former big Japanese company parent. For example the number of months of summer and winter bonus paid was stipulated in our Rules of Employment (ROE). I learned that this is only seen in a small number of foreign capital firms or joint ventures. Our sales manager who came out of a major Japanese competitor welcomed TMT’s approach (actually the normal common approach) of using a variable summer and winter bonus to make distinctions between the sales people who did well, and those who were underperforming.
TMT worked with us in improving our retirement benefit scale in terms of months of salary for years of service. However, in redesigning our salary system, we got in line with the market by reducing covered pay, or the weight of pensionable salary.
Mr. Nevins contribution went beyond just working out these policy details and implementing them with us. TMT’s executive search consultants helped us with three difficult placements.
After interviewing key staff, we made some organizational and titling changes. Tom also delivered a couple of motivational seminars to all our employees, and helped set us up on the path of having ongoing mechanizms along the lines of KAIZEN, brainstorming, and quality circles.
He demonstrates to a client that it is possible to implement what many might call “negative changes,” in a very positive way. I think all our staff really appreciated his enthusiasm and contribution, including one of the Japanese people he worked with the closest, who had to be dehired with Tom’s help.
Mr. Tom Nevins is a special consultant with a refreshing perspective, approach, and ability to deliver results for his client.
Liebherr-Japan Co., Ltd.