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Make People before Making Products

I think it was more than 30 years ago, quite a long time ago, that I told a young employee that whenever he visits
a client and is asked What does Matsushita Electric manufacture?
He should say, Matsushita Electric makes people...and we also manufacture electrical appliances and various
other products.
At that time my motto was business is rooted in human resources, meaning that unless our workers are
educated, unless they can grow and develop as human beings, our business will never be a success.
Therefore, although the manufacture of electrical appliances is very important, in order to do it well, we first have
to develop the people who do the work.
I had come to that conclusion while conducting our day-to-day manufacturing operations.
My concept was well received by all of the people working for me at that time.
I think that most of our employees were inspired by the fact that while Matsushita Electric was manufacturing
electrical appliances, more importantly, it was helping people grow.
Thus, in spite of our weak position in areas such as technology, finances, and brand recognition, that atmosphere
of concern for employees was a great motivating factor in helping us develop faster than other companies.
We may not have had a lot of money, the best technology at that time or a long- standing reputation in the
marketplace, but our clients thought that because we educated our people to be men of integrity, our employees
were the best no matter how young they were.
Clients thus felt they couldnt say no to Matsushita Electrics salesmen.
Young boys just a year or two out of junior high school bested 10-year veteran salesmen from well-known
companies - that was Matsushita Electrics style.
And Im not exaggerating.
Thirty or 40 years ago, when we were just starting to compete with leading wiring equipment manufacturers, wed
send out our young boys.
Our competitors would send out veteran salesman with 10 years or more of experience.
And it was our young boys who won out.
Those young salesmen, and our other young employees, left a lasting impression on our clients.
And the reason for that is that we believed in making people.
Our strong belief that we had to grow and develop as human beings gave us the power to make Matsushita
Electric what it is today.

Making People Before Making Products

While Matsushita is now known by brand names such as Panasonic, Technics,
and Quasar, it is worth noting that Konosuke Matsushita started his career at age
nine as an apprentice because of his family's financial problems. Though his
statement quoted above may sound harsh, his intent was not to be negative. He
meant that we may find ourselves in a very undesirable situation if we do not see
the flaw in treating people as extensions of machinery.
On one occasion, he asked an employee, "What does Matsushita Electric
make?" Answered the employee, "We make TVs, radios, and vacuum cleaners." "No,
no, no!" Konosuke Matsushita pointed out, "We make people! We make people first
before making products. Matsushita Electric is the place to make people. Our
company should be known as such."
As we talk about assuring quality in the product we make, we learn the principles of quality
control. Yet the ultimate process control may be achieved by "making people before making

16th Feb 2004

Two years after Panasonic UK over-hauled its training and development process,
Development Manager Graham Borley says the results have been an
improvement of quality and a 40% reduction in costs. In the second of two
articles, Graham explains the benefits of starting over.
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Around two years ago Panasonic UK undertook an in-depth review of its

staff development processes.
It soon became apparent that whilst the existing training offered was well
received, there was very little tie-in with the overall business strategy and
absolutely no way of measuring the impact of training programmes.
At that time the annual training programme was co-ordinated and
delivered by a third party organisation. The schedule was based largely
upon historical uptake of course places in previous years with some finger
in the air type analysis of future requirements.
A new system was needed to address these issues and also provide
mechanisms to track progress.
Writing a new wish-list
Rather than tinkering with the existing scheme, Panasonic chose to
implement a radically new approach, the criteria of which were decided by
the management and staff of the organisation following a period of

The management wish-list included the need to reduce their workload
during business critical periods, to positively align development to
business strategy and the ability to measure the impact.
Staff wanted to be involved in their development, and for this to be
transparent and impartial.
New system
An electronic system was introduced that facilitates development reviews
on the anniversary of peoples start date, spreading the workload across
the year.

We chose a package called Focus from a company called Business

Decisions International in Chicago as the base for our new review process.
Not only did it effectively support all our current requirements, it also
allowed scope for:
- Job/role profiling
- 360 degree assessment
- Development planning
- Career planning
- Succession planning
- Performance planning
- Training needs analysis
- An integrated learning management system
- Staff survey tools.
Transferring to a new system
The introduction of the new system took almost nine months. The first
stage was to work with everyone in the organisation to create a job profile
and set of competences that properly described their job. This was a
necessary but time consuming process as it served to get all staff familiar
with the new system and understanding where the job profiles had arisen.
We couldnt afford this to be viewed as just another initiative from
personnel; to make it successful the workforce had to have some
ownership and involvement in the development.
The language used in all of this job profile information and the
competence library was standardised and refined to include organisational
strategy and aspirations. Entered into Focus this became the core of the
database system.
360 degree review
The next step was to introduce the notion of 360 degree review to an
organisation. This proved to be a lot easier than anticipated.
We felt that some managers might be nervous about the idea of staff
offering upward review and that some staff might be concerned about the
feedback they could receive from colleagues. However, neither issue has
Now that the systems are in place, the development review process kicks
off one month before the anniversary of the month in which an employee
was appointed with a request to revisit their job profile. This ensures that

if a role has changed since the last review the competence set is
Employees are then sent an email request on the anniversary of their start
date to select a team of colleagues to provide feedback on their
performance. Once selected the list is passed electronically to their
manager, for agreement.
The 360 feedback review is completed by all of the selected assessor
team by making a rating against a scale for all of the competences in the
job profile. A final report is then electronically compiled and an email sent
to the individual and their manager, signalling the need for a meeting to
discuss the results and agree on a development plan.
Development plans
Once development plans are agreed the individual can interrogate the
learning management system to find a suitable learning intervention or
make a request for something that is not shown.
Managers are now confident that any training comes from the individual's
development needs. They have the opportunity to state exactly how this
should impact on future work performance and how the success of this
intervention should be assessed.
This information is recorded in the individual development plan and copied
to the trainer to ensure the learning event is tailored to deliver the desired
Demand-led training
Training events are now only scheduled following a request from someone
with a genuine need.
The training teams aim is to respond to a need with an intervention that
is tailored to the individuals development plan in the timescale that has
been requested.
It has allowed training to be delivered much more cost effectively as
events are never scheduled unless there is a particular need.
Working in this way and establishing a network of high class training
suppliers with whom we contract directly has resulted in a 40% reduction
in training delivery costs.

However, this reactive process does cause some issues. The main concern
is balancing the need to deliver training to an individuals deadline and
having enough delegates to make the programme effective (i.e. both in
terms of cost and educational standard).
To this end we are developing networks with other companies so that we
can stage events with delegates from other firms. This not only generates
great value for money but enhances the learning experience. Any
company interested in talking more about this should contact me directly.*
We are also able to show some measure of return on the investment in
staff development through the ability to track peoples level of
competence prior to and following the intervention.
It is possible to put a financial value on the return on investment through
this by allocating amounts of the salary package to the competence and
tracking improvements.
Panasonic UK is now beginning to see the benefits of the introduction of
this programme. Staff have individual development plans which are linked
to individual success and business achievement. Training programmes can
be evaluated to determine the real impact they are providing.
However, the greatest positive gain so far is less tangible but perhaps
even more important. This is the positive impact it has made upon staff
morale and the massive steps the whole organisation has made towards
creating the culture of a positive learning organisation.