Communicating openly and honestly is the best tactic for dealing with potentially damaging rumors. Positive employee engagement in the company’s mission, values and goals can support business success and growth. Measuring organizational culture and employee engagement is a vital, first step in making improvements in these areas.

1. Volume 1, Issue 3, 2006
casestudy
Hitachi: Communication Conquers Rumor Mill
In 2001, Hitachi Computer Products’ production
facility in Norman, Oklahoma was performing
reasonably well, but an employee rumor mill
prevailed, conveying unreliable information through
the facility. This rumor mill was negatively affecting
productivity, quality, customer satisfaction and was
undermining employee morale.
That’s the situation George Wilson faced when he
took over the helm of Hitachi Computer Products
(North America), Inc., as the organization’s first
non-Japanese president. The production facility
in Norman, Oklahoma is a major, manufacturer
of custom electronic products for the computer,
networking, communications, medical and security
industries. the organization’s culture and if left alone, it would
create long-term problems for the organization
“It was amazing how fast false rumors buzzed in terms of bottom-line performance and overall
around the facility, and how information became organizational effectiveness. Hitachi knew that they
skewed and misused,” said Wilson. “The most needed to address these problems, and address
troubling belief held by many employees was them quickly.
that we were planning to shut down, because
we weren’t succeeding competitively but weren’t Seeking Help
disclosing it.” Wilson and Gary Riggs, vice president of Human
Resources and Information Technology for the
Wilson believes that employees were producing facility, sought organizational-development
and relaying their own misinformation about the help from the local vocational training center.
workplace and its business environment because Officials at the Moore Norman Technology Center
the company had historically “under-communicated” encouraged Wilson and Riggs to conduct a cultural
to its employees. Also, other firms in Hitachi’s assessment by surveying employees. The tool they
industry were facing severe business and recommended was the Denison Organizational
competitive challenges. Culture Survey (DOCS).
In reality, however, the plant was winning new As Wilson and Riggs could have predicted,
customers and was poised for sustained growth. their organization’s scores in virtually every area
Nonetheless, Wilson, along with other leaders at measured were significantly lower than other
Hitachi, were concerned about the plant’s rumor organizations in the Denison Organizational Culture
mill and its effects on morale. They were convinced Survey normative database. [Figure 1]
that it reflected some fundamental problems in
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2. The culture results resonated with the things they were seeing day-to-day in the organization. Armed with
data validating their beliefs that the plant’s culture was in need of significant change, the Hitachi leaders
developed and implemented a culture improvement plan.
Baseline Data Spurs Improvement Plan
“The survey gave us real-world information that showed us where we were--a baseline--and provided
us with useful insights about what we needed to do,” said Riggs. “In addition, we were able to track the
effects of our cultural-improvement strategy with a follow-up survey.”
The first order of business was to replace the rumor mill with an effective communications program. Plant
leaders mobilized a communications initiative designed to help employees understand and support the
facility’s mission, values and goals. Another objective of the effort was to share information on a regular
basis about how the plant was performing on key metrics, such as quality, efficiency, waste-reduction,
customer satisfaction and profitability.
Wilson acknowledges that the communications link with employees was weak prior to this initiative. This
was one major reason the rumor mill developed in the first place. “With enhanced communication, we
sought to create a unified work team, and a shared understanding that the responsibility for our success is
borne by everyone,” said Wilson.
Figure 1: DOCS Results 2001-2003
Between 2001 and 2003, Hitachi Computer Products improved an average of 42 percentile points in all
twelve indicies. At the same time, they improved their performance in key business areas such as quality,
productivity, profitability, customer satisfaction and inventory management according to George Wilson,
President of Hitachi Computer Products (North America) Inc.
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3. Communication is Key simple: ‘If Hitachi does well, you will do well.’”
The communications program included quarterly
all-staff meetings and bi-monthly group meetings Culture Improves, Performance Improves
with the president. Daily updates via the company’s In 2003, Hitachi Computer Products conducted
Intranet and regular postings in the employee caf- a follow-up survey. Scores in virtually every area
eteria were also used to improve the link with em- showed dramatic improvements. On average, all
ployees. Wilson says workers quickly embraced 12 indices improved by 42 percentile points. [Figure
the value of improved communication, and a higher 2] In the Mission trait, where Hitachi placed a large
level of trust and understanding between the plant’s part of their emphasis, they averaged a 65 percen-
leadership and its employees began to emerge. tile point improvement. The results of their work
in quelling the rumor mill can be seen in three key
Wilson, Riggs and other members of the leader- indicators on the survey. These survey items rose by
ship team at Hitachi made additional organizational as much as 65 percentile points:
changes as well. “We completely revamped our
bonus, compensation and performance-manage- There is a clear strategy for the future. (Strate-
ment systems,” said Wilson. He says the goal was gic Direction & Intent)
to more closely link pay with performance in order There is widespread agreement about goals.
to reinforce the message that individual results and (Goals & Objectives)
company results are interdependent. We have a shared vision of what the organiza-
tion will be like in the future. (Vision)
“The leaders here have made the expectations for
performance very clear, and have created a system Wilson notes that his company’s organizational
that rewards people for their contributions to our improvement experience supports the notion that
success,” said Riggs. “The message to people is organizational culture has a direct influence on
Figure 2: Gap Chart
The Gap chart
graphically shows
differences between
two sets of data. Color
on the left side of the
chart shows where
an organization’s
scores have gone
down. Color on the
right shows where an
organization’s scores
have improved. This
Gap chart shows
the improvement
experienced at Hitachi
between 2001 and
2003. All of the
12 Indexes show
dramatic improvement.
The most marked
improvement is shown
in the Mission trait.
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4. bottom-line performance and overall organizational Lessons Learned: Culture Change at Hitachi
effectiveness. “We dramatically improved our Computer Products
culture, as reflected in our DOCS results,” he
said. “At the same time, our performance in all In the absence of timely, accurate information
key business areas also jumped significantly - provided by the organization, employees create
including quality, productivity, profitability, customer their own information.
satisfaction, and inventory management.”
Inaccurate, incomplete or wrong information can
undermine employee morale and performance.
This observation is common with many
organization’s that have implemented culture Using various modes of communication is most
change strategies. Developing and communicating helpful in changing employee perspectives and
a vision and strategic direction while executing on beliefs. People rely on different media to gather
goals and objectives allow employees to see how information, including printed material, electronic
messages, billboard postings and employee
their efforts impact the organization in the short meetings.
term as well as in the long run.
Communicating openly and honestly is the best
Through their hard work, Hitachi was able to create tactic for dealing with potentially damaging rumors.
a shared vision for their organization. The survey
tool is not an intervention by itself as we all know. Positive employee engagement in the company’s
mission, values and goals can support business
To move the needle and improve organizational success and growth. Measuring organizational
effectiveness, organizations need to understand culture and employee engagement is a vital, first
the results, create an action plan and then monitor step in making improvements in these areas.
that plan over time. By doing this successfully,
Hitachi was able to close the communication gap
between leadership and the staff, thus creating an
environment where everyone is working toward a
common goal. The results were better performance
all around.
Related Resources
Denison Consulting. (2006). Research Notes: Moore-Norman Technology Center
Overview of the Denison Model. Ann Arbor, MI: 4701 12th Avenue NW
Author. Norman, Oklahoma 73069
http://www.mntechnology.com
Denison Consulting. (2000). Denison Organizational
Culture Survey (DOCS). Ann Arbor, MI: Author.
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