3 ways to reinvent procurement through work culture innovation

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Driving transformation and building resilient business growth through work culture innovation and a people-centric approach

Japan Airlines (JAL) filed for bankruptcy protection in 2010 with the largest debt of any company since the end of WWII, 2.3 trillion yen ($25 billion). Then, it recovered. The size of the debt is not the most interesting part of the story. It is how then-Chairman Kazuo Inamori engineered JAL’s turnaround. Inamori started with the company culture.

The philosophy Inamori built, the JAL Philosophy, reads as much like a manual for personal happiness as it does a guide for business. This focus on employee well-being was the key to success, explained Takehiko Hoshina, VP Procurement of Japan Airlines, at the 2017 Procurement Leaders Forum in Singapore. Hoshina offered three key takeaways from the JAL Philosophy for procurement leaders.

Three ways to reinvent procurement through work culture innovation:

Take a people-centric approach. Focus on the happiness and wellbeing of staff to build work culture innovation.

Maintain strong leadership, active management of teams, and new working rules. For example, avoid emails after 5:30pm asking colleagues to do something, unless there is an imminent issue to resolve.

Host “random selection” meetings. Bring different members of the your team together periodically to share information and ideas, and break down functional silos.

More insights for procurement from the JAL Philosophy

Build accountability and a collaborative spirit. Under the JAL Philosophy, every corporate division is accountable for maximizing profitability ‑ even those not directly generating revenue. Leaders from each division meet regularly to share ideas across functions with a mandate to take immediate action on what they learn.

Have a keen sense of profitability. Profitability can co-exist with well-being according to the JAL Philosophy. Their values statement includes pursuing profit fairly, as well as maximizing revenues and minimizing expenses.

Lead a wonderful life. The entire JAL Philosophy is encapsulated in this one idea; we are still the same person whether we are at work or at home, and that one life should be worthwhile. Inamori recognized the value of our human side, encouraging his employees to “base criteria for decision-making on doing what is right as a human being.”

A people-centric approach means innovation for both talent and technology

Procurement divisions face board-level pressure pivot to more strategic role and provide value in addition to significant cost savings on the goods and services they procure. This transition demands a different skill-set than the traditional role, including knowledge of technology and data insights.

What JAL Philosophy teaches us, however, is not to lose focus on the human side even amidst the rapid pace of technology growth. Procurement leaders must “adapt and adopt.” Growing talent and capabilities within your team at the same pace as technology adoption.