Toshiaki Higashihara, the executive chairman of Hitachi, has led a transformative journey for the conglomerate. From addressing deep-rooted cultural issues to implementing strategic changes in governance and operations, Higashihara's leadership has reshaped Hitachi’s trajectory. His insights highlight the importance of understanding corporate culture, restructuring internal frameworks, and embracing digital innovation to achieve long-term global success. This article explores the key strategies and changes that have driven Hitachi's evolution.

Redefining Corporate Culture and Structure

Higashihara's early experiences at Hitachi revealed the challenges of a rigid corporate culture and outdated internal structures. The company had been plagued by inefficiencies, including significant financial losses and a lack of transparency. Upon taking charge, Higashihara focused on understanding the root causes of these issues through extensive conversations with employees. He identified the need for a cultural shift, moving away from traditional practices that stifled innovation and flexibility.

To address these challenges, Higashihara dismantled the monolithic structure of Hitachi's internal companies, breaking them into smaller, more agile units. This reorganization allowed for better communication and responsiveness to market demands. For instance, the Information & Telecommunication Systems Company was divided into specialized business units such as financial services, public sector, and healthcare. Additionally, Higashihara introduced a company-wide digital platform called Lumada, which became instrumental in driving technological advancements across the organization. These structural changes not only improved operational efficiency but also fostered a more dynamic and innovative corporate environment.

Strategic Governance and Talent Development

Higashihara's approach to governance reform was equally pivotal. Recognizing the limitations of an insular board, he increased the number of outside directors, enhancing objectivity and accountability. This new governance structure empowered executives to make bold decisions while ensuring proper oversight. The result was a more transparent and effective decision-making process, which positively impacted the company's performance and investor confidence.

Beyond governance, Higashihara prioritized talent development as a cornerstone of his leadership strategy. He implemented rigorous programs to identify and nurture future leaders, emphasizing the importance of empathy and teamwork. By interviewing hundreds of employees annually and selecting top candidates for specialized training, Higashihara built a robust pipeline of potential executives. Moreover, he underscored the significance of fostering collective strength, drawing inspiration from successful team-based achievements like Japan's victory in the World Baseball Classic. Through these initiatives, Higashihara ensured that Hitachi would be well-prepared to face future challenges with a strong and cohesive leadership team.