Organizations That Can 'Respond' to Change Will Survive: The Future of Management That Leverages the Strengths of Small and Medium-Sized Enterprises
In corporate management, themes such as compliance, employment of people with disabilities, women's empowerment, and health and productivity management are no longer 'issues for large, affluent companies to address.' These have become critical management issues directly linked to sustainability that all organizations, regardless of size, must face. In particular, to overcome an era of rapid change and continue growing into the future, a sincere attitude toward responding to these social demands is essential.
However, for managers and staff at small and medium-sized enterprises (SMEs) who are busy with daily operations, it may often feel like they 'don't know where to start' or that 'full-scale initiatives are difficult.' With limited human and financial resources, it is understandable to view these issues as 'costs' or 'burdens.' But an attitude of 'I know nothing about it' or 'it has nothing to do with us' can unknowingly hinder a company's growth and lead to significant risks.
This is because these themes go beyond the scope of mere Corporate Social Responsibility (CSR) activities and are deeply connected to the core elements of management, such as corporate reputation, talent acquisition and retention, employee productivity, and the creation of innovation. Especially in today's world of diversifying values, young job seekers and employees tend to place greater importance not only on a company's profit-seeking stance but also on its social purpose and ethical standards. For them, a company's commitment to social issues is a key criterion that influences their pride in working there and their level of engagement.
In this article, we will explain the mindset and concrete first steps for SMEs to view these important themes not as 'someone else's problem' but as 'their own,' and to proactively engage with them as an investment in the future. There is no need to aim for a perfect system like a large corporation. By leveraging the flexibility and agility that are the unique strengths of SMEs, you can transform into an 'organization that can respond to changes in the world.' That first step will enhance the company's credibility and lead to building a solid foundation for growth.
Chapter 1: Compliance—From 'Defensive' to 'Offensive' Management Foundations
When people hear the word 'compliance,' many think of 'legal adherence.' Of course, obeying laws and regulations is an absolute prerequisite for corporate activity. However, the concept of compliance in the modern era has evolved into something far broader and deeper. It means responding to a wider range of social demands, including not only laws and regulations but also corporate ethics, social norms, and the expectations of stakeholders. In a sense, the very 'common sense' of a company is being questioned.
Why is compliance considered so important now? The background lies in social changes where corporate information is instantly disseminated due to the spread of the internet and social media. Scandals or ethically questionable behaviors that once remained within an organization can, once exposed, quickly damage a company's brand image and lead to serious situations such as loss of customers or termination of business transactions. In particular, risks such as harassment, information leaks, and inappropriate accounting practices lurk in all organizations, regardless of size. Because we live in an era where 'I didn't know' is no longer an excuse, compliance can be called the cornerstone of 'defensive' management.
However, it is a great waste to view compliance merely as a 'defensive' measure for risk avoidance or as a cost. Rather, by actively engaging with it, you can transform it into an 'offensive' management foundation that enhances corporate competitiveness.
For example, a company with a well-established compliance system and a culture where that awareness permeates all employees is more likely to gain trust from society. A robust compliance system will be a significant source of credibility when obtaining loans from financial institutions or conducting business with large companies. Furthermore, for employees, a fair and transparent workplace environment leads to a sense of satisfaction in being able to work with peace of mind and increases their sense of belonging to the company. As a result, this brings concrete benefits such as lower turnover rates and improved productivity.
The first step for an SME to engage in compliance is for top management to clearly recognize its importance and demonstrate the company's stance both internally and externally. There is no need to immediately create perfect manuals or specialized departments. Start by reconfirming the laws and regulations surrounding your company (e.g., the Labor Standards Act, the Subcontract Act, the Act on the Protection of Personal Information, etc.) and identifying hidden risks.
Then, it is important to regularly bring up compliance topics during morning assemblies or internal meetings to raise the awareness of each and every employee. Even holding a single training session on power harassment or sexual harassment can change the atmosphere of an organization. Fostering a shared understanding that 'our company follows the rules and conducts business with integrity' is the most solid foundation for an SME aiming for sustainable growth.
Chapter 2: Embracing Diversity—Employment of People with Disabilities and Women's Empowerment Strengthen the Organization
Organizations where diverse talent can maximize their abilities are said to have high adaptability to change and are more likely to generate innovation. Among these, promoting the employment of people with disabilities and the empowerment of women are urgent issues for many companies, and at the same time, they hold great opportunities for growth. It is required to rethink these initiatives not merely as legal obligations or social contribution activities, but as important management strategies to boost the organization's strength.
First, let's consider the employment of people with disabilities. While the aspect of achieving the statutory employment rate tends to attract attention, its essence lies in welcoming people with disabilities as important members of the workforce and creating an environment where everyone can work together. Even if we say 'disability' in one word, the characteristics and necessary accommodations differ for each individual. By correctly understanding the abilities and skills they possess and assigning them appropriate tasks, there are many cases where they demonstrate strengths that were previously unnoticed. For example, high concentration on specific tasks or the ability to perform work carefully and accurately can be valuable skills in many workplaces.
The process of accepting people with disabilities is also a great learning opportunity for the existing organization. 'Standardizing operations' by reviewing how work is done and creating instructions or manuals that are easy for everyone to understand leads to improved productivity for the entire organization. Furthermore, the effort to remove not only physical barriers but also psychological barriers in communication can deepen mutual understanding within the workplace and serve as a catalyst for fostering a more open organizational culture. A culture that takes for granted that people with diverse backgrounds work together becomes a soil that broadens the perspectives of existing employees and encourages flexible thinking that is not bound by stereotypes.
Next is the promotion of women's empowerment. This, too, is not just about increasing the ratio of female employees. Regardless of gender, it is important to provide equal opportunities for everyone to build a career according to their motivation and ability, and to participate in decision-making venues such as management positions. In particular, creating an environment where life events such as childbirth and child-rearing can be balanced with career development is essential for preventing the loss of excellent talent and supporting the growth of the organization from a long-term perspective.
In SMEs, there is an advantage that flexible work styles can be easily introduced under the leadership of top management. For example, by implementing shortened working hours, telework, and flextime systems according to individual circumstances, it is possible to create an environment where diverse talent can continue to play an active role, not only women raising children but also employees responsible for nursing care or those who wish to deepen their own learning. Such initiatives become a major attraction for young talent who value ease of work and lead directly to strengthening recruitment competitiveness.
By adding diverse perspectives to management, there is a great possibility that it will lead to the discovery of customer needs that have been overlooked until now and the development of new products and services. Initiatives for Diversity & Inclusion can be said to be one of the most certain investments for opening up the future of a company.
Chapter 3: Health and Productivity Management—Employee Well-being is the Engine of Corporate Growth
'Corporate growth is only possible with the physical and mental health of employees.' Based on this idea, 'Health and Productivity Management,' which views employee health management from a management perspective and practices it strategically, is attracting attention. Consideration for health, which tended to be regarded as part of welfare benefits in the past, is now positioned as an important management strategy for enhancing corporate productivity and creativity and realizing sustainable growth.
What benefits does it bring to a company when employees work in a state of physical and mental health? The most direct effect is an improvement in productivity. When one is not feeling well, concentration and judgment decline, and work efficiency drops significantly. There is data suggesting that losses due to so-called 'presenteeism' (a state where employees are at work but cannot perform at their full potential due to physical or mental health issues) are greater than losses due to absenteeism. Maintaining and promoting employee health is nothing less than maximizing the performance of the entire organization.
In addition, initiatives for health and productivity management can also be expected to have the effect of increasing employee engagement (enthusiasm and willingness to contribute to work). Feeling that the company cares about and values one's health fosters a sense of trust and attachment to the company among employees. If a comfortable working environment is established, job satisfaction will also increase, which will lead to a lower turnover rate as a result. For SMEs where securing and retaining talent is a major management issue, this has extremely important significance. The fact that a company is engaged in health and productivity management will be a strong selling point for job seekers and will contribute to building a positive corporate image as a 'company that values its employees.'
So, where should an SME start to begin health and productivity management? There are many things that can be started without large-scale investment or specialized knowledge. The first step is for top management to issue a 'Health and Productivity Management Declaration' and clearly demonstrate the company's stance of prioritizing employee health. Based on that, the following concrete initiatives can be considered.
Aim for a 100% participation rate in regular health checkups: While this is basic, it is important to be thorough. Also, encourage employees who need re-examinations to get them.
Conduct stress checks: Understand the mental health status of employees and lead to early care, such as recommending consultations with an industrial physician for those with high stress levels.
Correct long working hours: Set 'no-overtime days' and promote work efficiency to create an environment where employees can get sufficient rest.
Vitalize communication: Through company events and lunch meetings, encourage interaction across departments and create a workplace culture where it is easy to consult with others.
Provide health-related information: Simply providing information on diet, exercise, and sleep in internal newsletters or on bulletin boards can raise employees' health awareness.
These initiatives may seem small individually. However, by continuing them, employees' health literacy will improve, and a 'culture of valuing health' will take root throughout the organization. Health management, which nurtures the irreplaceable capital that is your employees, is the most effective investment to brightly illuminate the future of your company.
Chapter 4: What Only Small and Medium-Sized Enterprises Can Do—Using Flexibility and Speed as Weapons
Themes such as compliance, diversity, and health management are often perceived as being 'for large companies with abundant resources.' However, in reality, the characteristics of being a small or medium-sized enterprise can be a major weapon that gives an advantage in addressing these issues. Letting go of stereotypes and re-recognizing your company's strengths is the key to surviving in an era of change.
The greatest strength of small and medium-sized enterprises is, above all, 'speed of decision-making' and 'flexibility in execution.' In large companies, introducing even one new measure requires approval from numerous departments and complex internal approval processes, which takes a lot of time and energy.
On the other hand, in small and medium-sized enterprises, rapid decision-making is possible under the leadership of top management. Initiatives such as 'Let's try a no-overtime day starting tomorrow' or 'Let's talk about harassment at next month's morning assembly' can be put into action quickly. This agility is a huge advantage when it comes to finding the methods that suit your company through trial and error.
Also, the close distance between top management and employees is a unique advantage of small and medium-sized enterprises. It is an environment where the philosophy and thoughts of the management are easily conveyed directly to each employee, making it easier to foster a sense of unity where the entire organization moves in the same direction.
For example, if the president personally says, 'I truly want to create a company where everyone, including those with disabilities and those raising children, can work easily,' that enthusiasm will resonate with employees' hearts, and a cooperative atmosphere will likely be born. Conversely, voices from employees such as 'It would be easier to work if we had this system' or 'I am having trouble here in the workplace' are more likely to reach management, enabling detailed system design that is tailored to the realities of the workplace.
Initiatives for these themes do not necessarily require large amounts of money. Rather, they have a strong aspect of how to change the 'culture' or 'climate' of the organization.
For example, to accept diverse talent, the awareness of each employee to 'respect and try to understand each other' is far more important than expensive capital investment. In health management as well, a word of concern from a supervisor about a subordinate's physical condition or creating an atmosphere where it is easy to take time off can be more effective than measures like corporate contracts with sports gyms. Fostering such an organizational culture is an area that is easier to tackle precisely because small and medium-sized enterprises have relationships where the faces of management and employees are visible.
Instead of giving up by saying, 'We cannot do full-scale things like large companies,' let's change our thinking to, 'There are things that only small and medium-sized enterprises can do.' Be sensitive and 'respond' to changes in the world and the demands of society, and first take a step within your capabilities. The accumulation of those small steps will eventually lead to major changes in the organization and become a unique strength that large companies do not have. The ability to flexibly respond to change is the greatest competitive advantage for small and medium-sized enterprises in the coming era.
Summary
In this article, I have conveyed that themes such as compliance, employment of people with disabilities, women's empowerment, and health management are important management issues that all organizations, regardless of size, cannot avoid. These are not merely costs or burdens, but 'investments' in the future to support the sustainable growth of the company.
Compliance is an 'offensive' strategy to go beyond the minimum line of legal adherence, gain trust from society, and build a foundation where employees can work with peace of mind. The success of diverse talent brings new perspectives and vitality to the organization and becomes a source of innovation. And health management, which protects the physical and mental health of employees, increases the productivity and engagement of the entire organization and becomes the growth engine of the company itself.
For small and medium-sized enterprises that are busy with daily operations, taking on these issues anew may not be easy. However, what is important is not to try to build a perfect system all at once, but to first show an attitude of 'being interested and responding.' Top management should understand its importance and speak about the policy in their own words. Try holding a small study session within the company. Try consulting with local support organizations. Organizational transformation begins with such small steps.
Small and medium-sized enterprises have great strengths that large companies do not have: 'speed' and 'flexibility.' Management and employees can work together as one, repeating trial and error according to their own circumstances, and build their own unique style. Companies that respond to the demands of society and can flexibly adapt to change will be the ones that survive the coming era and continue to be chosen by society.
The experience and knowledge gained through these initiatives will surely lead to the creation of new value for the company. It may be an improvement in employee satisfaction, or it may be the discovery of new business opportunities. In any case, sincere efforts toward social issues can be said to be the wisest choice to solidify the company's foundation and chart a certain growth trajectory for the future.
