Backing People and Passions to Drive Innovation

“During the harvest season, I spend weekends picking apples with my children, and making and labeling the juice. It’s the kind of life I always wanted.”

Yuki Munakata used to live a short distance from Tokyo in Japan’s busy Saitama Prefecture, but applied to move north to Nagano Prefecture and become an area employee – an employment concept in Japan that enables employees to stay within the region they live in. After transferring, Munakata was given permission to work from her new home, balancing her countryside lifestyle with her job at LIXIL. As a result, she was also able to fulfil her dream of raising her children surrounded by nature.

Yuki Munakata designed the award-winning product Vegeterior Outdoor

Munakata benefited from LIXIL’s commitment to employees’ diverse needs and empowering them to fulfill their full potential. The company supported both her return to work, after having children, and her ability to work remotely. Entering a contest in her division for new business ideas was another turning point for her.

“I seized the opportunity and submitted my idea – and I was lucky to be chosen ahead of 500 other entries to take the grand prize,” she recalls.

The win opened the door to a new role in product development and Munakata is currently working on commercializing her idea – an outdoor unit designed for people to both relax and garden – as well as developing a range of others.

Stories such as Munakata’s reflect a fundamental shift in LIXIL and the broader world of work post-pandemic.
Employees want companies that are more flexible and understanding. Businesses are also adopting more holistic approaches to managing the employee experience, signaling an evolving mutual interest between employer and employee.

Human Capital – A Vital Investment

Investing in human capital offers significant individual and company-wide benefits.

According to the McKinsey Global Institute, companies that excel in talent development, internal mobility, and overall organizational health empower employees to increase the value of their own human capital. As a result, 35% of workers¹ in companies that focus on both performance and people are likely to move into higher earnings brackets – 1.3 times as many as companies that focus on just performance. In turn, these companies also benefit from operational advantages including talent retention and greater organizational resilience.

Creating inclusive and empowering workplaces also drives innovation and delivers financial benefits. According to organizational consultants Korn Ferry, companies that score in the top quartile for engagement see twice the net profit and 2.5 times the revenue growth² of those with lower scores. And almost 60% more of those companies’ employees say their role brings out their most creative ideas.

LIXIL’s People Strategy makes up the heart of its approach to human capital management. In order to transform the company into a more innovative and inclusive community where employees are empowered, it focuses on three core pillars: embedding inclusion in the organization’ s DNA; elevating talent through a culture that facilitates innovation; and enhancing the overall employee experience.

Pursuing Growth Through Innovation

Establishing a framework to foster bottom-up innovation is one defining feature of companies with successful human capital management strategies. Empowering employees to lead the development of ideas they have come up with helps drive talent development and engagement while contributing to the future success of the business.

Julia Deister, the CEO and co-founder of Hydrific

Julia Deister's journey at LIXIL exemplifies the power of this approach. She joined the company on a three-year work program while studying for her bachelor’s degree. Over the next decade, Julia was given the opportunity to take on leadership roles and spearheaded some global initiatives. She now serves as the CEO and co-founder of Hydrific , a LIXIL venture at the forefront of developing innovative solutions to make water conservation easy and enjoyable. Hydrific's flagship product, Droplet, is a smart home sensor that monitors real-time water usage, detects leaks, and discovers new insights.

Hydrific was born after the company’s Tuck-LIXIL program³ identified water sustainability solutions as an area where new business ideas could create positive change. LIXIL CEO Kinya Seto is an alumni of Tuck Business School, and the two organizations collaborated to create a common language and framework around innovation for hundreds of senior executives and leaders across the business. Alongside a range of ideas becoming incubation projects, this has led to increased collaboration and new ways of thinking within LIXIL.

Deister’s route to founding Hydrific took in multiple promotions and milestones including becoming one of LIXIL’s youngest managers. And she shows no signs of slowing down.

“I am on a continuous learning curve, filled with diverse opportunities and challenges that contribute to my professional and personal growth,” she says.

Miho Fujiwara (right) designed Nyanpeki, a modular and magnetic play wall for cats

Miho Fujiwara, meanwhile, joined LIXIL as a fresh-out-of-school engineer and spent a few years building product development and design skills before creating a new business idea – a modular, magnetic play wall for cats . Originally sold in limited quantities, demand soon outstripped targets, and it is now available to the public and supported by its own set of fans⁴.

Fujiwara says that the systems in place to empower everyone to do their best work at LIXIL helped her get to where she is today: “It’s very important to have an environment where you can express your opinions and hear the opinions of others. Through that kind of communication, you grow.”

Diversity, Inclusion and the Employee Experience

Underpinning all of this work is a clear corporate purpose – to make better homes a reality for everyone, everywhere – and three LIXIL Behaviors : Do the Right Thing, Work with Respect, and Experiment & Learn. Together, they form a common foundation to unite diverse employees across the globe and empower them to innovate together.

Rie Chikaishi, a team leader in the Marketing Planning Department

At the same time, the characteristics that make up individuals are just as important. Diverse teams have repeatedly been shown to be more innovative⁵ and make better decisions. But diversity alone cannot thrive without inclusion. To this end, LIXIL is working to make the company “a home for everyone”, where ideas flourish and people can get the value they want from their careers while living the lives they want to.

For some, such as Rie Chikaishi, a former executive assistant who now leads a team in the Marketing Planning Department, being able to work remotely was a big factor in her returning to work full-time after the birth of her third child.

Kenji Kusakawa, product manager of SHIN-ON

For others, like Product Manager and violinist Kenji Kusakawa, it is about taking advantage of flexible working styles. His role has included developing SHIN-ON, a new U-shaped shower head that can envelop the entire upper body in water and help warm one to the core, while being able to work different hours on days when he has to practice or has a concert in the evening.

LIXIL’s own research demonstrates the appetite for this kind of flexibility from today’s workforce. In a survey of its employees in Japan, the overwhelming majority of people across all age groups said they wanted to continue with a “remote-based working style”.

Shape the Future of Living (video):

Building Futures

Building human capital has been described as “the single most effective way of promoting rapid social and economic growth and distributing its benefits more fairly”⁶ by the World Economic Forum.

LIXIL has robust diversity and inclusion targets to support its work in this area, including pushing its 31.3% ratio for female/male board and executive officers to 50:50 by FYE2030, as well as having women in 30% of all managerial positions globally. And it employs a suite of tools alongside, such as a dashboard that helps leaders monitor progress and training for managers to support them in becoming coaches for their teams. During FYE24, approximately 6,000 managers globally have participated in manager-led training to activate D&I in their teams, and in FYE23 the company started to see an uptick in the inclusion score of its female non-managerial employees. Ultimately, through this work, the company is aiming to become more representative of the customers it is serving.

As Julia Deister adds: “At LIXIL, people are given chances based on their merits, not on preconceived notions of who they should be. I know it strengthened my leadership mindset and allowed me to grow quickly.”

Whether it’s through helping employees come up with innovative new ways to live with our pets or to devise new products while harvesting apples with family, investing in human capital is a crucial aspect of ensuring LIXIL is agile and innovative enough to take on future challenges. This way, it believes, it will continue to deliver a strong financial performance while contributing to society and the planet.

¹ McKinsey & Company (link)

² Korn Ferry (link) *PDF

³ Tuck School of Business (link)

⁴ LIXIL (link) *PDF

⁵ McKinsey & Company (link) *PDF

⁶ World Economic Forum (link)

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