Hitachi

Hitachi Solutions, Ltd.

Achieving social innovation by doing business in a socially responsible way
- Accelerating the development of businesses with a social perspective -

For the second consecutive year, Hitachi Solutions invited two experts in corporate social responsibility (CSR) to participate in a stakeholder dialogue meeting with senior management of the company, in front of a small audience of its employees. The meeting, which took place in May 2013, generated active discussions about topics such as social responsibility in global management and leveraging social responsibility to achieve the company's mid-term management plan targets.

Expert

Toshihiko Fujii Visiting Professor
Graduate School of Economic Science Saitama University
Fujitake Sakamoto Specially Appointed Associate Professor
Graduate School of Social Design Studies Field of Study: Business Administration in Network and Social Organization Rikkyo University

Hitachi Solutions

Keiho Akiyama CSR Officer, Vice President and Executive Officer
Mitsuo Yanagida Deputy General Manager
Corporate Planning Group
Eugene Egawa General Manager
Global Business Development Division
Toshiyuki Nomura General Manager
Business Planning Division Platform Solution Business
Kiyoshi Ishigetani General Manager
Business Planning Division Government, Public Sector & Public Utilities Systems Business
Norio Masuda(Facilitator) Department Manager
CSR Promotion Department

1. Global management and social responsibility

CSR in Japan and beyond

Akiyama:

Hitachi Solutions delivers on its social responsibilities under the following corporate principle: "Guided by the Hitachi Spirit, Hitachi Solutions will contribute to the growth of our customers and the global community by supplying dependable technologies and advanced solutions." We consider social responsibility in all of our business activities and pursue initiatives guided by the CSR Policy of the Hitachi Group. As part of the Hitachi Group, we are actively involved in social innovation businesses and aim to develop new business models that help to resolve social issues.

Social responsibility starts with the employees who put it into practice. As a company, we strive to conduct training and develop workplaces that enable employees to fully leverage their talents.

Mr.Fujii

Fujii:

In terms of considering social responsibility, it is not easy to define CSR. In Japan, CSR has typically been associated with things like regulatory compliance, corporate philanthropy, volunteer work, and environmental initiatives. It is also often assumed that simply making products that are good for people or the environment equates to corporate social responsibility, such as making soy milk that is healthy. These are not new concepts.

In Europe, CSR had its origins in the drive to find a solution to unemployment of younger people. Governments had attempted strategies to address the problem, but were unsuccessful, so they turned to corporations and asked for their help with creating jobs as part of their social responsibility. In its truest sense, CSR involves corporations taking the initiative to change how they do business, seeking to address social and environmental issues. Making products that are good for people or the environment is just status quo, and does not involve changing how you do business or creating new value.

Yanagida:

That underscores the intricacy of implementing CSR at the global level.

In fiscal 2013, the Hitachi Group established the Hitachi Group Human Rights Policy in order to further strengthen its policies for human rights and labor practices in business processes including supply chains. At the same time, the Group prepared a CSR questionnaire based on the HITACHI GROUP Supply-Chain CSR Deployment Guidebook and sent it to major customers with the cooperation of Hitachi Group companies.

Fujii:

Compared with other Japanese corporations, the Hitachi Group has established a very ambitious framework for human rights. I hope that the Hitachi Group will continue implementing CSR initiatives at the same ambitious pace.

2. Practicing social responsibility to achieve mid-term management plan targets

Developing businesses that address social issues

Fujii:

Addressing social issues through business is a very complicated topic. Naturally, corporations meet the needs of their customers, but social issues can be remote from the individual needs of customers. This makes it difficult for corporations to address the issues, and they end up neglected. It depends on where you start when developing a business. Some businesses are developed in an attempt to address social issues; others are developed trying to meet the needs of customers. These are normally separate, but we need to combine the two.

In developing businesses that achieve both objectives, social issues have to be understood not only by CSR departments, but every other part of a company. If you want to consider social responsibility in every aspect of business, all employees have to think about what social responsibility means in their work.

Yanagida:

Hitachi Solutions' business is driven mostly by projects that are developed to order, so the choice has to be made by the customer. However, we have to do more than simply look at customers' needs, if we are to get customers to make choices that help address social issues.

Hitachi Solutions provides customers in and outside of Japan with solutions that deliver information security, enhance education, and facilitate diverse work styles. These solutions include Hibun information security solutions and StarBoard interactive whiteboards. However, we must do more to ensure that our employees embrace a social perspective.

In the last two or three years, we have conducted workshops on social innovation business and training to foster social innovators, in an effort to develop human resources who see things from a social perspective.

Sakamoto:

Those are excellent initiatives. Hitachi Solutions is already doing more than just addressing the issues customers present. Moving forward, though, the company needs to have the courage to suggest needs that the customer is not even aware of yet. It starts by fostering this social perspective and awareness among all employees. It is also very important that senior management puts this into practice.

Fujii:

Business-to-business corporations must not forget to tackle social initiatives with their customers.

Egawa:

Hitachi Solutions' goal is to increase the percentage of its business outside Japan to 15% of total by fiscal 2015. When we look at the various regulations that we face in our operations outside Japan, the accountability for social responsibility has increased. Hitachi Solutions must embrace CSR as a condition of doing business in markets and regions everywhere.

Sakamoto:

We want to always have an idea of where the regulations are heading and propose solutions to customers accordingly. I think we can leverage our solutions for social transformation. In that sense, information systems offer significant possibilities for social change.

Nomura:

I am proud to say that Hitachi Solutions began developing Hibun software long before Japan's Act on the Protection of Personal Information came into the spotlight. We had already released the software before the legislation was enacted, so we were in a position to immediately provide solutions to customers. Information security is not a temporary issue. The IT environment will continue to change, including more pervasive cloud computing and diversifying use of variety of devices. This means that the paths and means by which information breaches can occur will increase. We expect information security challenges to diversify globally. Hitachi Solutions will continue striving to provide sustainable solutions that contribute to safety and security for modern societies.

New partnerships that achieve social innovation

Ishigetani:

The employees in our public sector and public utilities business are more aware of how much their day-to-day work supports society than some in our other business segments. At the same time, we have to deal with many government rules and regulations, so we feel handcuffed in what can achieve as an IT company.

Mr.Sakamoto

Sakamoto:

Hitachi Solutions has outlined a bold and proactive corporate principle that embraces social responsibility. The company has more than 15,000 employees. If all of them can work in concert with customers with the conscious intention to have a positive impact on the global community, it would be a global resource.

However, I should point out that this might be a double bind. You are directing employees to capture major markets by meeting customer needs, and at the same time directing them to achieve social innovation. This sort of double bind is the hardest thing for those who are working on the ground. It is easy to talk about achieving innovation, but management must think about how it can actually achieve innovation, and the corporate culture needs to change in order to achieve innovation.

True innovation requires new kinds of partnerships. There is only so much that an IT company can accomplish on its own. However, by working in partnership with other companies, you can aim for true innovation. There are a broad range of possibilities for new partnerships such as with NGOs, non-profits, and government, beyond conventional partnerships.

Masuda:

We are very positive about open innovation-that is, collaborating with diverse sectors in addition to customers. Hitachi Solutions must take risks and open up a future with partners in diverse sectors.

Ishigetani:

Our system engineers at the ground level talk every day with customers, which must provide hints for achieving social innovation. The majority of our ground-level managers are instructed to foster potential business, but at the same time are held accountable to short-term business results. As you say, it is a double-blind and can be confusing at the ground level. It underscores the fact that successfully doing business in a socially responsible way depends on the actual issues that each manager faces on the front lines.

Sakamoto:

It comes down to your company's vision for the future of society. Changing society means being prepared to change your business models. I hope that Hitachi Solutions will continue pursuing concrete dialogue across the company about the Hitachi Group's commitment to being a leader in social responsibility.

Akiyama:

In the past few years, we have had extensive internal discussions regarding the company's social vision. We have started the process of establishing a vision for the future of society and addressing shortcomings in our products, as well as working to develop new products. We have initiated new partnerships, realizing that we must advance business in partnership with companies outside of Japan to achieve these aims. Instead of continuing to lean on our strengths in systems development, we are laying the groundwork for offering services and expanding into diverse business segments.

The greatest asset we have as a company is our single-minded pursuit to make a particular business segment successful. We will continue striving to help our customers and contribute to the global community by fostering the social commitment of each of our employees, from a position of humility.

3. Thoughts on the Stakeholder Dialogue

Kaichiro Sakuma President and Chief Executive Officer

Professor Fujii and Professor Sakamoto gave us many helpful suggestions at the stakeholder dialogue which will be valuable in accelerating our global development. We greatly appreciate their input. Hitachi Solutions is involved in a broad range of businesses in diverse sectors, and in that sense, it is very important that we engage in dialogue with diverse stakeholders to pursue and enhance our efforts to do business in a socially responsible way.

The discussions underscore the need to conduct our business in a way that pays close attention to issues that face the global community, as we pursue business across the globe. Accordingly, we will endeavor to develop a corporate culture that fosters human resources who have a strong social perspective, while contributing to the growth of the global community in accordance with our corporate principle.