Does Caring for Employees Not Improve a Company? — The True Nature of the "Structure" Revealed by Growth Driver Theory —

It is important to care for employees.
But does that alone make a company better?
Many business leaders advocate for "management that values people."
However, in reality, there are many cases where this alone does not lead to success.
Why does this happen?
The reason is that a company cannot function on "caring for people" alone; it requires a foundation to put that care into action.
That is the "structure" of management.
In this article, we will organize "how to proceed with building a good company" using the framework of Growth Driver Theory.

■ A Framework for Grasping the Whole
The characteristic of Growth Driver Theory is that it is a framework that allows for a holistic overview of what has been fragmented within the scope of traditional management studies.
Organization, human resources, management strategy, sales and marketing, finance, and information are inherently integrated to form corporate activities.
However, in the academic world, each has been separated into specialized fields and deepened individually.
As a result, there is an aspect where the perspective of grasping management as a whole has become difficult to see.
Growth Driver Theory seeks to reintegrate these fragmented areas and re-grasp them from a holistic perspective (Peter Senge 1990; David Teece 2011).

■ Theoretical Positioning
Academically, Growth Driver Theory is characterized by viewing an organization as a "dynamic system where individual judgments and actions are linked."
This point shares a common awareness of the issues with the Individualized Corporation theory by Christopher Bartlett and Sumantra Ghoshal (1997).
Furthermore, this theory is unique in that it structures this within the context of Japanese companies, incorporates business models and systemization/standardization, and reconstructs it as a diagnostic and operational framework.
Note that the "structure" referred to in this article is not a fixed framework like an organizational chart or system.
It refers to the pattern of relationships regarding how judgments and actions are linked.

■ Key Points of the Framework
There are two key points to Growth Driver Theory.
First, there are five main drivers and five sub-drivers that drive corporate activities.
Second, there is consistency and the propagation of influence among them.
These drivers do not need to be improved individually.
It is required to raise the level of the whole while being conscious of the consistency and propagation of influence between the drivers.
By thinking about and implementing management actions from this perspective, corporate activities will be carried out in a way that is optimal for the whole.
This can be said to be a state where the basic mechanism of management is running.

■ The Meaning of "Caring for Employees"
When applying this framework to building a good company, the perspective of "caring for employees" is included.
Corporate activity is a collection of employee work.
By caring for employees, their energy increases, and within the basic mechanism of management, it begins to run more smoothly, efficiently, and effectively.
Here, "caring for employees" means:
Being sincere toward employees,
Having a rewarding environment even amidst strictness,
Being able to work energetically,
And having an environment where one can grow as both a person and an employee through work.

■ The Essence of Building a Good Company
To summarize the above,
Building a good company means establishing the basic mechanism of management and running it by caring for employees within that framework.
That is what it comes down to.
Once building a good company gets on track, the company will grow qualitatively.
The management foundation will become solid,
Better products and services will be created,
Customer satisfaction and trust from society will increase,
And along with that, sales and profits will also increase.
And at the same time, the happiness of employees, both material and spiritual, will be realized.

■ The Concept of Company Health (Good Company Degree)
Here, we will confirm the concept of measurement regarding the "Company Health (Good Company Degree)" handled in this article.
Company Health is not the result itself, such as sales or profit, but an indicator that captures the "structural soundness" of management as a prerequisite for producing results.
In other words, it is a comprehensive evaluation of whether the philosophy, business model, work mechanisms, and behavioral environment are consistent and in a state where judgments and actions can easily be linked without strain.

■ The Relationship Shown by Data
This is not a hypothetical story, but has been verified by actual data.
The figure below is a scatter plot created based on statistical data from 120 companies that underwent a "Company Health Check."

It confirms that as the Company Health increases and a company becomes a "good company," the company's results (including employee growth, the creation of work mechanisms, and improved customer satisfaction, as well as primary financial results, etc.) increase.
(However, the results here are for observing these correlations. Since the Company Health includes evaluation scores for 10 points of results, those are subtracted in advance, and then the total score is multiplied by 100/90 to make it out of 100 points.)

This figure shows that a positive relationship is observed between Company Health (Good Company Degree) and results.
What is important here is that this does not claim a simple causality that "if you raise the health level, you will definitely get results."
It suggests that companies with higher health levels are more likely to have a state (structure) that leads to results.
Note that while results are originally included in the calculation of Company Health, they have been excluded here to observe the correlation.
As can be seen from this scatter plot, in corporate management, it can be thought that by proceeding with building a good company as a guideline, the company will grow qualitatively, and as a result, financial performance will also improve.

■ Implementation
So, how do we put this into practice?
Imagine the image of the company when it becomes a good company in the future, and objectively look at the current situation of the company while always being conscious of the Growth Driver Theory framework. In this case, a "Company Health Check" is also useful.
Then, while identifying consistency and the propagation of influence, think of and implement measures so that each driver approaches its ideal state.
Through this accumulation, the basic mechanism of management begins to run, and by caring for employees, that mechanism runs efficiently and effectively, and financial results will naturally follow.

A good company is not created by chance, but as a structure.

References
Ghoshal, S., & Bartlett, C. A. (1997). The individualized corporation: A fundamentally new approach to management. HarperBusiness.
Penrose, E. T. (1959). The theory of the growth of the firm. Oxford University Press.
Senge, P. M. (1990). The fifth discipline: The art and practice of the learning organization. Doubleday.
Teece, D. J. (2011). Dynamic capabilities and strategic management: Organizing for innovation and growth. Oxford University Press.
Sakamoto, Koji (2008). "The Company I Want to Value Most in Japan," Asuka Publishing.
Higashibuchi, Noriyuki (2017). "Approach to Building a Good Company Based on Growth Driver Theory," Matsuyama University Review, Vol. 29, No. 3, 55–100.
Higashibuchi, Noriyuki (2020). "New Horizons in Comprehensive Management Diagnosis Opened by Growth Driver Theory: Its Theory and Practical Report," Japan Association of Management Diagnosis Review 19, 50–56.