About Resonac's corporate culture

Creating a new culture
Working to instill the Purpose and Values, looking ahead to the day they take root as part of Resonac's corporate culture

Takashi Suzuki
General Manager, Culture Communication Department, Resonac Holdings Corporation

Our corporate philosophy comprises our Purpose (“Change society through the power of chemistry”) and our Values (“Passionate & Results-Driven”, “Agile & Flexible”, “Open Minds & Open Connections”, and “Solid Vision & Solid Integrity”). In December 2021, we began activities designed to instill our corporate philosophy to ensure that by 2030, the target date for our long-term vision, our corporate philosophy will be guiding all of our activities and will have taken root as part of our corporate culture. Takashi Suzuki of our Culture Communication Department discusses our progress and future initiatives.

1. What is the role of the Culture Communication Department?

Resonac set forth the integrated company’s Purpose in its Long-term Vision announced in December 2020, and subsequently disclosed it as part of the company’s Corporate Philosophy alongside the Values. In January 2022, the management structures of the former Showa Denko and the former Showa Denko Materials (Hitachi Chemical) were substantially integrated, and a new Culture and Communication Department was established under the Chief Human Resources Officer (CHRO) to create a corporate culture rooted in the Corporate Philosophy as its most important guiding principles through internal communication. The Culture Communication Department consists of two groups. The first, the Culture Cultivation Group, is responsible for planning and promoting the implementation of the Purpose and the Values, i.e., our Corporate Philosophy, across organizational boundaries. The second, the Diversity, Equity & Inclusion Group, is engaged in creating environments in which all individuals can play active roles, ensuring diversity and transforming diversity into collective knowledge. The Cultural Cultivation Group has ten members and the Diversity, Equity & Inclusion Group four.

2. Please explain why it is important to instill the Corporate Philosophy and describe your sense of the challenges Resonac faces as well as your policies for addressing them.

I believe that the Purpose given in our Corporate Philosophy marks an intersection of whom we are, what value we can deliver, and what society demands. This is what we term our raison d'être. With the world changing so drastically, what is demanded of us is also steadily changing, and yet we will be unable to react with a sense of speed if we have to reset our approaches with each change. It is very important that each and every one of us understands and commits to the Purpose to ensure that no one loses sight of this polestar.
As a co-creation chemical company, we aim to become a world-class functional chemical manufacturer. To achieve this goal, it is essential that we transform diversity into collective knowledge. As we embrace diversity, there will be times when approaches that presume we are all in sync with each other just will not work. Our common values and our common language that substitute for this special attunement are reflected in the Values listed in our Corporate Philosophy. We believe that it is also extremely important to instill these Values. Heretofore, however, the two companies have had few opportunities to think about the relationship between their corporate philosophies and their own work. Additionally, every individual has had his or her own way of perceiving the Purpose and the Values. Putting these ideas into words inevitably results in perception gaps among individuals. We thus launched an initiative to give employees time to reflect on their own purposes and values, and to create opportunities to gain new insights through dialogue with others who have different ways of perceiving things.

3. Please tell us about your medium- and long-term initiatives to help instill the Corporate Philosophy.

Over the long term we are hoping to make the Purpose and the Values the cornerstones of all our corporate activities. Accordingly, we agreed early on with our team members that we would aim to bring about a future in which these are ingrained as part of our corporate culture. In conjunction with our Long-term Vision, we are targeting the year 2030. With this goal in mind, we have set three phases for instilling these concepts over the medium term. The first phase involves promoting awareness and understanding, the second making this a personal matter, and the third making it self-driven and structured.
In terms of a KPI, we are seeking by 2030 to raise the level of empathy with the Corporate Philosophy from the current 60% to 80% or more. Practical implementation of the Corporate Philosophy sits at about 30% now, and we are looking to achieve a level of 50% or higher. I believe that vertical and horizontal communication within the organization is important for employees to have a sense of ownership of the Corporate Philosophy and consequently to raise the levels of empathy and implementation. If this were left to the individual, there would be some would think hard about the matter and others who be more casual about it. We have thus come up with three ways to spread awareness. The first is communication between management and employees, the second cascade-down communication, and the third communication between organizations. Communication could become skewed if these three approaches are not taken simultaneously. In terms of making it personal, it is vital through the second cascade-down approach that we align the ways people at all levels in each organization perceive the Purpose and that they share the same feelings toward the Values. Since organizations are spread out globally, business locations outside Japan would be included in this downward cascade. We have received requests from division heads to prepare communication tools in the local languages used in each region, and we feel that we are making progress overseas as well.

In 2023, we instituted a new personnel evaluation system. Half of the evaluations will be performance evaluations and the other half behavioral growth evaluations, with the latter evaluating competencies tied to the Values. The system is based on the idea that practicing the Values will inevitably lead to higher evaluations, and behavioral growth assessments are used for all employees.

4. Please tell us what you have done in 2022 and what you will do in 2023 to instill our Corporate Philosophy.

In 2022, we addressed three areas: communication between management and employees, cascade-down communication, and communication between organizations.

Management is the key to achieving 90%+ recognition

As a means of communication between management and employees, town hall meetings with Chief Executive Officers (CXOs) and business unit heads have been held since the beginning of 2022 in almost all domestic and international locations. Awareness of the Purpose and Values has exceeded 90% primarily as an outcome of these meetings, in parallel with which two other means were employed. One was roundtables with CEOs and CHROs; 110 roundtables were held in 2022. The purpose of these roundtables was to bring the participants closer to management by having them speak freely without any restrictions on topics. The second means was communication between employees at manufacturing sites and Chief Manufacturing and Engineering Officers (CMEOs). The CMEOs visited manufacturing sites and held discussion meetings on safety, the environment, quality, production and other topics. These discussion meetings are presently being conducted at ten sites in Japan, and we plan to extend them globally at some point.

Division heads and department/section heads are the key players in improving understanding

In pursuing cascade-down vertical communication, we undertook efforts to instill the Corporate Philosophy through a process of communication from division heads to department/section heads and then from department/section heads to workplaces. In doing so, we asked the division heads to speak in their own words about the Purpose and Values as well as their thoughts on these when communicating to their department/section heads. If a department/section head did not agree or was unconvinced, he or she was asked to provide feedback to the division head to deepen understanding through repeated dialogue. This same pattern was repeated when the department/section heads communicated to their workplaces. Since we were not involved in any way in this communication process, their thoughts on the Purpose and Values in light of each division’s circumstances were conveyed. As a result, I believe that this approach resonated with all employees and that their understanding of the Corporate Philosophy has improved considerably.

Employees begin to talk about the future across departmental boundaries

Finally, let me discuss lateral communication between organizations. We held ten Online Cafés globally with approximately 2,300 participants. The Online Café is an interactive event designed to enhance participants' understanding of the Purpose and Values and promote mutual understanding between former Showa Denko and former Showa Denko Materials members. In fact, when we interviewed participants about their impressions, employees from both companies said that they were glad to have these opportunities to talk because they were unfamiliar with each other. I think it was good that the employees were able to gain a better understanding of each other by talking openly about the past and future of their organizations at the Online Cafés. We will be giving some more thought to the mechanisms of communication between organizations.

In 2023, we will basically continue with these three initiatives.

Strengthening communication through visits to business locations

In 2023, the CEO and CHRO have continued to hold roundtables as a means of communication between management and employees. In contrast to 2022, when employees spoke freely without any particular topic being stipulated, we will be holding “Moyamoya Conferences” in which employees will spell out their work-related problems and concerns and consider solutions together based on the Values. We want them to learn through experience that they can solve problems by practicing the Values. If there is a problem that cannot be solved solely by practicing the Values, the other participants will give advice based on the Values, and the business location head present at the meeting will make decisions in accordance with the Values so that everyone can practice the Values together. As for the discussion meetings with CMEOs, we have been particularly active in rolling these out to Group companies in 2023. These discussion meetings are attended by those in charge of manufacturing sites, and many of those participating in 2022 noted that, while they understood the Purpose and Values, they needed to know how to convey this understanding to their subordinates and what tools to use. More specifically, they requested that we provide them with case studies in which the Purpose and Values were put into practice, and to provide more readily understandable instruction so employees can connect the Values to their daily work. We are thus planning to prepare and develop a collection of case studies in 2023. We are now asking plant heads to recommend case studies from their respective locations that we then intend to share with the entire company.

Study groups to encourage practical support and mutual stimulation

Among the opinions expressed in 2022 through cascade-down vertical communication was the complaint from relatively young employees that their supervisors do not support them when they want to do something. Conversely, those who are division heads and department/section heads stated that they want to support their subordinates in putting their ideas into practice but do not know how to do so, indicating that both sides have the same concerns from different angles. To resolve this issue, we are conducting Purpose and Values Implementation Support Study Group meetings for division heads to support the implementation of the Purpose and Values. Eligible to attend these meetings are a total of about 100 division heads from business and corporate divisions. In addition to telling them what we actually want them to do to support their subordinates, we also hope they will listen to what other participants have to say and gain insight into what else they can do.

Utilizing Global Awards and Resonac Blue Creators (REBLUC)

We have taken two approaches to lateral communication between organizations. One entails visualizing what is being done at each of our locations. I am wondering if we could utilize "Global Awards" for that, which I will talk about later. We want to make sure not only that the top-of-the-top people are lauded but also that everyone who participates is happy to have taken part in the activities. The other approach is REBLUC. The measures we have taken so far have mostly been Values-oriented initiatives. REBLUC is a community that focuses on the Purpose and undertakes to determine what can be done to realize the Purpose. Its activities promote concrete actions to "change society through the power of chemistry" via lateral connections among members who want to change or contribute to society in a particular way and themselves create Resonac’s culture and values. In the first phase, 36 employees offered to participate, and the program started in the second half of 2022. These first-phase employees will remain with the program through April 2023, after which second and third phases are planned.

5. What is the "Global Awards" initiative that Resonac is working on to accelerate implementation of its Corporate Philosophy?

The Global Awards are a typical inter-organizational communication initiative that we are pursuing to provide a forum for accelerating the implementation of the Purpose and Values. At the same time, the Global Awards are one of the mechanisms designed to help Resonac evolve as a co-creative chemical company. The underlying concepts are empathy and co-creation. This approach differs from the personnel evaluations mentioned earlier, and we want to encourage and praise those who are putting the Values into practice. We also want to share our various initiatives with all employees. We set this up with the idea that this would lead to mutual stimulation and empathy, which in turn would lead to co-creation. In the Global Awards program, teams that transcend organizational boundaries as well as teams representing individual workplaces formulate declarations of action that accord with the Purpose and Values, set out goals and specific initiatives based on those declarations, enter the contest and begin their activities. Later, when all the submissions are being screened, the teams will talk with other about their experiences with the Values they put into practice in the course of their challenges and, by "empathizing" with each other, they will be positively stimulated to pursue co-creation that transcends the bounds of any single organization. We expect that these steps will build on one another over time to foster Resonac’s culture.

6. Please tell us about your vision for instilling the Corporate Philosophy.

We say that the birth of Resonac marks the second founding of our company. Of course, Resonac is based on what we have cultivated up to now but, if this is indeed a new beginning, I believe the actions of each and every one of us from here on will constitute Resonac’s culture. At the very base of that culture will be our Corporate Philosophy comprising the Purpose and Values. I would like to lean into this idea and pursue it enthusiastically. Nevertheless, just because we are giving it our all today does not mean that we will come up with a corporate culture tomorrow, and I regard it as something that we need to build on every day. Some people think that our activities to instill the Corporate Philosophy are events tied to the present moment, but they are not. They need to understand that it will be the accumulation of day-to-day efforts to put the Purpose and Values into practice that will produce our corporate culture. We did not establish our Corporate Philosophy in order to create a corporate culture, and I want people to realize that our culture will naturally arise from persistently taking action based on our Corporate Philosophy. We will continue working to instill our Corporate Philosophy and share our progress with our stakeholders.