Dialogue 03

Diversity and Profession Changes for Breaking
Away from Identity Formed by Past Successes

Dialogue 03

Diversity Cultivating Innovation      Many of MARUI GROUP’s employees have experienced various professions.
As these employees undergo successive relocations among Group companies,
MARUI GROUP moves closer to becoming a “multi-career” organization in which diverse work experiences
are made available within a single conglomerate.
This is one of MARUI GROUP’s approaches toward promoting diversity, the aim ofwhich is to bring greater joy to customers. Innovation expert Akie Iriyama was invited to discuss
MARUI GROUP’s view of diversity with External Director Etsuko Okajima and President Hiroshi Aoi.

Etsuko Okajima

Akie Iriyama

Hiroshi Aoi

External Director
MARUI GROUP CO., LTD.

Associate Professor
Graduate School of Business and FinanceWaseda University

President and Representative Director
Representative Executive Officer
MARUI GROUP CO., LTD.

    
Aoi: I would like to explain the background that led to ourdecision to promote diversity and workplace inclusion.
Over the period from the late 1980s to the collapse ofJapan’s bubble economy, MARUI GROUP found its business to be a perfect match for the operating environment, and we were thus able to accrue massive successover a short period of time. After the bubble collapsed,
however, we suffered a period of extreme stagnancy.
Our past successes had solidified the concepts ofyounger generations, fashion, and credit cards asaspects of MARUI GROUP’s identity, and we thus foundourselves unable to break away from this identity tocreate new innovation. We had around 30 stores at thattime. By undertaking a drastic transformation in ourbusiness model, we had been successful in changing thelineups and customer service approach of sundry item
sales floors in areas relatively close to entrances. For
some reason, however, we were unable to make similarchanges to the menswear, children’s clothing, and sporting goods sales floors on upper levels of stores. Upon
examining this inability, we realized that the sales floors
in which we failed to implement changes were also
dealing in items that we saw as areas of strength for
MARUI GROUP, areas to which sales representatives had
devoted themselves for decades. Sundry item sales
floors, meanwhile, were where new employees werepositioned, meaning the staff of these sales floors
changed frequently. We thus had to realize that working
in the same place for a long time can cause one’s past
successes to become a part of their identity. If we were tointroduce a system that allowed employees to move

between all sales floors with the same conditions, theorganization should become a more fertile ground forinnovation. This thought was what led us to introduce theprofession change system, which we see as contributing
to workplace diversity.
Okajima: Five years have passed since the introduction of
the profession change system, and, to date, 34% of theGroup’s employees have taken advantage of this system.
When the system was first introduced, there were those
who expressed concern that relocation to a new division,
where they lacked experience or insight, would result in
lower results on their performance evaluations.
Aoi: Employees were worried at first, some feeling as
though the system was a rejection of their career up tothat point. However, when people got used to the system,
they began to see that their past experience wouldindeed be beneficial at new workplaces. When this realization spread, employees started to feel that they might
be more likely to miss out on opportunities by not undergoing profession changes.
Iriyama: I assume that new workplaces are not chosen at
random. Do you ever assign employees to posts that are
drastically different from their previous position? Can
you think of any examples of employees undergoing suchdrastic position changes?
Aoi: Recently, we reallocated the responsibilities of two
managing executive officers. One was responsible forretailing operations while the other handled finance
operations. These roles were reversed.
Iriyama: That was a very bold decision. A swap in positions between individuals respectively responsible forretailing and credit cards is an intriguing development.
I have no doubt that it will prove beneficial.

New innovations and ideas
are created throughcombinations of knowledge.
Akie Iriyama

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Dialogue 03
The interesting thing about
MARUI GROUP employees is how
they view their position as lessa job and more of a membership.
Etsuko Okajima

Okajima: Even if one’s position or role is reversed,people at MARUI GROUP seem to have no problem
accepting their new role as their mission. I think thisstems from the principle of and desire to serve the customer, which is so entrenched within the organization.

Active Mission Rather Than Passive Business Model
Innovation Created Through Combinationsof Knowledge    Iriyama: A diverse range of employees is vital to innovation as doing something new is the essence of innovation.
New innovations and ideas are created through combinations of knowledge. In other words, fresh combinations ofknowledge that had previously been seen as unrelated
give rise to new ideas. Moreover, there is a limit to a rangeof things that one person can perceive. If one works in thesame industry, or in the same place, decade after decade,they will start to lose sight of things unrelated to theirposition, and no new combinations of knowledge will beborn. Making new combinations requires that individuals
seek out fresh knowledge in areas removed from thefamiliar. The fastest way to facilitate new combinations isto assemble individuals with differing insight, experience,and values within a single organization. Another consideration is the diversity of individual talents, or intrapersonal
diversity. Looking at Ms. Okajima and myself, for example,
we can both, essentially, be seen as contributing to diversity because putting us together will result in new combinations of knowledge. Similarly, if one person has adiverse career background consisting of multiple different
positions, that person can produce new combinations ofknowledge on their own. In this manner, I understand thegoal of promoting diversity as facilitating innovation.
Okajima: In the same vein as what you said, MARUIGROUP’s profession change system is an importantmeans of increasing intrapersonal diversity. This system
has expanded the range of subjects on which theCompany’s employees are versed, which proves beneficial when engaging in co-creation with customers.
Aoi: I thought the same thing four years ago, when we
joined hands with Ms. Okajima and stepped up our efforts
to promote diversity by empowering female employees.
Gender diversity is, of course, important. However, I feltthat there was a need to look further into this subject inorder to help individuals develop varied careers andviewpoints to facilitate innovation. When I explained this32to Ms. Okajima, she stated that what I spoke of was “thediversity of individual talents.” Accordingly, MARUIGROUP is currently promoting diversity in terms ofemployee gender, age, and individual talents.
Iriyama: Intrapersonal diversity brings with it additional
benefits. When a person with a diverse career background becomes receptive toward the diversity of othersin light of their own diverse background, they will
become more inclusive. At the same time, prosocial
motivation makes it easier to adopt other viewpoints,
which in turn contributes to increased creativity.
Aoi: Given the fact that our business operates in theretailing and service industries, a lot of our employees
are very social. Moreover, many of them find motivationin bringing joy to others and are gifted with a strong
sense of empathy and a proficiency in understanding
others. For this reason, they are compelled to place thecustomer’s feelings before their own.
Okajima: The idea of cooperating with and considering
the feelings of customers are common sentiments heldby everyone at MARUI GROUP. Bearing similar sentiments, higher ranked employees are committed to supporting younger employees who are ambitious towardforming their plans and endorsing ideas that are beneficial to customers. This receptiveness and ability to thinkof others that is present in MARUI GROUP employees isa result of customers being positioned as the point oforigin for the Company’s entire business.
Aoi: Utilizing the sensibilities and ideas of younger
employees requires that the Company feature a diverse
range of age groups. If we are to help younger employees
excel at the forefront of operations, the members ofmanagement who used to stand above them and issueorders will have to sit back in a more supporting role forthese employees. I was initially concerned about whether
or not this role reversal would be successful. However, asMs. Okajima said, those of us at MARUI GROUP havealways been devoted to cultivating people and are
therefore happy to play a supportive role. The transition
was smooth as a result.

    
Okajima: The interesting thing about MARUI GROUP
employees is how they view their position as less a job andmore of a membership. What I mean to say is that, rather
than seeing themselves as engaged in the “job” of fashion
or of sales, employees at MARUI GROUP want to work at
the Company and provide value to customers, making
them feel affiliated with MARUI GROUP as members. At themoment, the amount of floor space at Marui stores devoted
to fashion has been reduced to less than 30%. Regardless,we have not seen any employees leave their position
because they were committed to working in fashion.
Aoi: Changing a business model is something that can bedone with a little effort. However, as it is people who
utilize this business model to create value, this change
will be pointless if we cannot get people behind it. At thetime when we were still clinging to a sense of identity
formed by past successes, there were many people whojoined MARUI GROUP out of a love of fashion. Still,
I have heard stories of such people reflecting on why
they joined finding that, while fashion was the initial
reason, their source of motivation later became thememory of a “thank you” received from a certain customer they served or the bouquet they received when
undergoing relocation. These sentiments are fueled by adesire to help customers or to tackle challenges in order
to become more capable at serving. Discussion on thesesubjects brought us to the business model we have today.
Iriyama: In management theory, we speak of the conceptof sensemaking, which is the process of giving meaning
to experiences. One method of sensemaking is formulating a long-term vision to clearly define the purpose of thecompany, crafting a narrative around this vision thatgives meaning to all employees. Without this type ofsensemaking, people will not be motivated to change oract. My understanding is that, when reexamining what
exactly it is that MARUI GROUP offers, the Company
glimpsed a long-term vision. This vision showed that theCompany need not limit itself to fashion. MARUI GROUP
is not defined by retailing or fashion or credit cards, butrather by its ability to bring joy to customers—not by apassive business model but by an active vision. While thebusiness model, represented by retailing or fashion orcredit cards, may change, the mission of bringing joy tocustomers will remain unchanged.
Aoi: I am often asked whether MARUI GROUP is a retailcompany or a finance company. This question is socommon that we chose to answer it on the cover ofCo-Creation Management Report 2017. The answer is“both.” Today, we do not see ourselves as being bound bya business model.
Okajima: The graduates that will join the Company in thefuture will likely only be aware of a limited range of positions. By allowing these individuals to experience various
jobs and positions, they may, for example, discover thatthey have a love of finance.
Iriyama: What you are saying is that MARUI GROUP isa company that seeks to make its customers smile. It
doesn’t matter what industry it operates in or what products it handles. This is why you were able to enter into
the anime business.
Aoi: When viewed from the outside, our profession
change system may seem like it entails relocations thatare tantamount to moving to a completely different company. However, this system is more designed as a program to allow employees to experience various jobs
while remaining in the safety net provided by being aGroup employee. By enabling employees to experience adiverse range of positions while enjoying the changes
this brings, we aim to stimulate growth, in both people
and the Company, so that we can become more proficient at making customers smile.

Akie Iriyama
Associate Professor
Graduate School of Business and FinanceWaseda University

Akie Iriyama graduated from the Faculty of Economics at Keio University and thenwent on to complete a master’s course in the Graduate School of Economics at thesame university. After working as a consultant to automobile manufacturers anddomestic and overseas governance institutions at Mitsubishi Research Institute,Inc., he received a Ph.D. from the graduate business school of the University ofPittsburgh, in the United States, in 2008, which was also the year he began
serving as an assistant professor at the business school of the State University ofNew York at Buffalo. In 2013, Mr. Iriyama became an associate professor at theGraduate School of Business and Finance at Waseda University, specializing instrategic management and international business. Published in 2012 by Eiji Press
Inc., his work Sekai no Keieigakusha wa Ima Nani wo Kangaeteirunoka (“What arethe Manage Theorists of the World Thinking?”) became a best seller. Mr. Iriyama isalso active in other forms of media, including the DIAMOND Harvard Business
Review, which publishes a long-running series of articles entitled Sekai Hyojun noKeiei Riron (“World-Standard Management Theory”).

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