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Leadership
Blending tradition and change to fuel Hitachi’s global growth
In this exclusive interview, Andrew Barr, President of Hitachi (Europe, Middle East, and Africa) shares insights into how the Japanese conglomerate is navigating its expansion across the world and diversifying the leadership pool while staying true to its roots.
What has been the driving force as Hitachi has sought to grow globally? How has that been orchestrated?
We’ve been really focused on our core mission and values, and the main focus, certainly during the period that I have been with Hitachi, has been an aggressive expansion globally. That’s been successful because of the values we have – sincerity, pioneering spirit, and “wa” (harmony in Japanese).
Our approach is pragmatic – we’ve been more aware and cognizant of local values and conditions. Through that strong cultural input, we’ve been able to transform from being a Japanese domestic supplier across Asia into a truly global player.
A key differentiator of Hitachi is the way that we work alongside our customers to get to know them, to understand what makes them work, and to make sure we fully understand their requirements. Internally, that then means we are all focused in the same direction. When you all work in the same environment then you are more focused on the output rather than positioning yourselves internally within the hierarchy. It’s all about how we can create added value for the people we work with – creating a solution that enables them to fully appreciate the wide range of cross-industry experience and skills that we can bring.
We are now a company that works in a different way – a more distributed structure with more localized management.
How have you adapted to different markets?
It’s important that we retain our heritage – that’s really important for our customers. We will never lose the central headquarters, of course, but we are moving more towards localization. As of last year’s financial end, 61% of our business is now outside of Japan, with 20% in EMEA. At the end of Q2 this year, our business in Europe is half the size of that in Japan, which is a phenomenal growth.
We are now a company that works in a different way – a more distributed structure with more localized management. For example, the European market is much more supply chain reliant, so over time we’ve changed our ethos of making everything ourselves into being a manufacturer that uses suppliers. When you globalize, you have to meet local conditions: for example, the standards and individual country requirements will vary, so you need to be able to work well in that market and that doesn’t mean always making things yourself.
“As a leader, you can be expected to go in front of the board fairly regularly and also you can have outside contact with those directors on general aspects of the business.”
How does the board support this global vision?
The board is an international group of people with a wide range of business backgrounds – this brings a range of different perspectives, which helps us when we are looking at growth. They’ve got so much experience in what does and doesn’t work; they can advise the business strongly on the best direction to take on critical decisions.
As a leader, you can be expected to go in front of the board fairly regularly and also you can have outside contact with those directors on general aspects of the business. That changes the role of a board from being one that’s just a decision-making or approvals group of people to one that supports and advises the company on its growth – that’s a real difference from a traditional Japanese board.
There are short-term targets around financial performance, but really, we are looking at the long-term direction.
How does Hitachi balance short-term and long-term objectives to add value for investors while safeguarding its future legacy?
There are short-term targets around financial performance, but really, we are looking at the long-term direction. That means we need to be equipped with the right businesses in our portfolio so that it strongly matches the direction we’re trying to move in.
Our footprint is all about ensuring that we have the right capabilities and skills to enable us to grow, so the long-term view has been the main focus. Over the last few years, Hitachi has changed its composition; quite a lot of companies have left, and we’ve acquired new companies, and that’s because we are split into three-year management planning cycles – that’s quite different from a lot of other multinationals, with longer cycles in planning. That is so that we can focus on business performance alongside making sure the business is current.
Looking to the next generation of leaders – I believe we need people who have a digital background.
What does it take to succeed as a leader at Hitachi? How is your talent pipeline being cultivated to power an international business?
We’ve gone from a strong hierarchy of purely domestic Japanese senior managers towards one that encourages people across the world to be part of that hierarchy, in line with global companies. The people who are successful in senior management in Hitachi are those who have delivered and worked closely as part of the strategy to make it a success. Typically, people at that level have a significant amount of experience in the business. I joined Hitachi 20 years ago, and I’ve had a journey from junior to middle manager to senior, reporting directly to the company president.
That is all based on skills and capabilities, rather than the right school and the right links. This is important, because people who deliver well should be the leaders that are promoted and focused on within the business. I feel that areas like commercial acumen are important because that is something you don’t learn; you feel it and grow it with your capabilities.
Looking to the next generation of leaders – I believe we need people who have a digital background, with skills in that area, and those who understand the important wider topics like decarbonization and sustainability, and how we can link that to the business we’ve got, also enabling those skills to be utilized for future growth.
We’ve also been targeting diversity in our teams at all levels to be able to play in the global arena. We’ve got targets for women leaders and overseas people in senior leadership positions. Our target by 2030 is for 30% of our executive and corporate officers to be women and for 30% to be non-Japanese.
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