Group CHRO Tatsuo Kinoshita Shares Panasonic’s Approach to Human Capital Management: “Turning Human Potential into Business Strength”

Following the implementation of the Group Management Reform during fiscal 2026¹, the Panasonic Group will be moving into a growth phase from fiscal 2027. The Group Growth Strategy announced on May 12 indicates that the Panasonic Group will contribute to society toward 2032 by pursuing goals such as using energy more efficiently and alleviating frontline labor shortages, and by focusing on businesses that support AI infrastructure and social operations. One of the key management approaches underpinning this vision is human capital management, and Organization Culture Transformation is among the principal initiatives being promoted across the Group.

1 In this article, fiscal years end on March 31 of the stated year.

How do we create an environment where each employee can UNLOCK and maximize their potential, and continue to grow? In today’s world, how do we embed “management that brings out the best in individuals”—a principle long cherished by the Panasonic Group? For these answers, we turned to Tatsuo Kinoshita, Group Chief Human Resources Officer (CHRO), to learn more about his approach to human capital management for realizing the Group Growth Strategy and to hear an update on the progress being made on Organization Culture Transformation.

When advancing human capital management within the Panasonic Group, what are the main priorities?

Kinoshita: The Basic Business Philosophy is our foundation. The Panasonic Group has long believed in “Developing people before products” and that “A business is people,” so we have placed the development and empowerment of our people at the heart of our management. Neither human capital management nor Organization Culture Transformation represent entirely new concepts or approaches. Rather, these initiatives are designed to re-embed the principles we have cherished since our founding while adapting them to today’s business environment and organizational management practices.

After building my career in the HR departments of several non-Japanese companies and serving as CHRO at a Japanese company, I joined the Panasonic Group in July 2024. What struck me most upon joining was how every single employee genuinely wants to contribute to society and serve our customers. The Basic Business Philosophy is not merely a set of stated principles, but is deeply rooted in our daily conversations and decision-making—something I believe is a key strength of the Panasonic Group.

Rules and systems are intended to help each and every employee reach their full potential. However, as an organization expands and its history grows, precedents and rules continue to accumulate, and it becomes more difficult to make agile decisions in response to changes in the environment. I have been having ongoing discussions with Group CEO Yuki Kusumi regarding the need to shift from a rule-based to a principle-based approach. “Why are we doing this?” “Does it contribute to serving customers and society?” The basis for answering questions like these is the Panasonic Group’s Basic Business Philosophy—a set of principles that has guided the organization for more than 100 years. If existing rules and processes are hindering the pace of innovation and decision-making, then it is crucial that we return to our roots and transform the organization into one where each individual is empowered to make decisions independently and seize the initiative.

What are the concepts and initiatives behind “UNLOCK” and how does it fit into Panasonic Group’s approach to human capital management?

“UNLOCK” is an umbrella term for our Organization Culture Transformation initiative—a Group-wide effort to maximize employee capabilities and foster their growth by removing barriers that prevent them from realizing their full potential. Some have interpreted it negatively—“Were they previously ‘LOCKED’?” or “Do they lack the required skills?”—or have misunderstood its purpose—“Doesn’t this force them to take on unreasonable challenges or increase their workloads?” Simply stated, “UNLOCK” is an initiative aimed at unlocking the inherent potential of Panasonic Group employees and creating an environment that supports their efforts to realize that potential, thereby enabling the Group to reach even greater heights.

People are best positioned to maximize their potential when they have both an “appropriate level of challenge” and an environment “free from factors that hinder their ability to perform.” This state is similar to what psychologists call “flow;” it may be easier to understand if you imagine an athlete focused to the absolute limit, delivering their best performance. The concept of the “corporate athlete” has gained traction recently, and I would like to increase the number of people who can experience this state in their work as well. Our founder, Konosuke Matsushita, believed that “to be so immersed in work that time and fatigue are forgotten” and “losing oneself in the task at hand”—that is, providing employees with the flow state of mind—was the “greatest gift” the company could offer. “UNLOCK” is an initiative rooted in this philosophy; it is a return to our roots.

Through these initiatives, we aim to realize our vision for the future, and we have defined as “UNLOCK indicators” the percentage of positive responses to two questions in our employee engagement survey: “Does the company or my supervisor motivate me to take on new challenges?” and “Are there any barriers to taking on new challenges?” By using these indicators to identify challenges, we are driving continuous improvement by pooling the wisdom and awareness of the entire organization. 

Fiscal 2026 was a year of major transformation marked by Group Management Reform. What impacts and changes did you observe among employees and the organization?

Fiscal 2026 was a year in which we tackled large-scale management reforms with fierce determination—but also anxiety and strain. A period of transformation is often marked by a decline in employee motivation and trust in the company. However, upon closer look, we discovered that even in the midst of management reforms, the UNLOCK indicators had improved in about half of the business units (BUs) and Strategic Business Units (SBUs)². Furthermore, in the organizations that showed improvements, over 70% of employees reported finding it “easier to collaborate across organizational boundaries” and that “the structure now makes it easier to achieve results.”

2 SBU: An organizational unit responsible for a specific business area within a BU

This was one of the key objectives of the Group Management Reform recently implemented. We sought not only to optimize headcount but also to transition to a structure that further enhances the value we provide to customers through our business operations. To that end, we have flattened the organizational structure by reducing hierarchical levels, lowering the burden of internal coordination, and accelerating decision-making by delegating authority, thereby spurring innovation on the front lines. After driving these transformations across the organization, employees are beginning to perceive these changes as positive developments—as the numbers show. This is a significant outcome.

However, some organizations have seen their workforces shrink more than they expected. Which is why we need to fundamentally rethink how we work rather than simply continuing to do things the way we’ve always done them. While remaining aligned with Panasonic Transformation (PX), which is driving the transformation of our management foundation with AI at its core, we will accelerate our efforts to build new processes. We are at a critical juncture in our transformation into an organization capable of delivering results with a small, elite team.

What initiatives will the HR Department be implementing to help realize the Group Growth Strategy?

No matter how outstanding a growth strategy may be, its implementation is in the hands of people. Business results are heavily influenced by the actions of every individual and by the organizational culture. That is why our Group regards human capital management as a critical management agenda directly linked to the execution of our growth strategy. With that in mind, we are working on five transformative actions.

The first is “Human Resource Portfolio Transformation.” While maintaining the profitable business structure strengthened through management reforms, we will proceed with recruitment and development of the talent required for our growth strategy. Furthermore, we will clarify the ideal profiles, skills, and competencies required in the Devices area, Solutions area, and Smart Life area, and systematically implement talent strategies tailored to each area rather than applying a one-size-fits-all approach across the entire Group.

The second initiative is “Development and Appointment of Transformational Leaders to Shape the Future.” Individuals with diverse values and insights and the ability to lead transformation by working backward from the future will be identified early on, and we will systematically develop and promote them. At the same time, we will establish a system in which such talent actively participates in decision-making.

The third is “Organization Culture Transformation.” We will intentionally design and evolve our organization’s culture so that it supports the realization of our business strategy and the delivery of results. The aim is to achieve business growth and contribute to society by unlocking the potential of each employee. At the same time, we will foster a culture tailored to the requirements of each organization so that it can continue to evolve in response to changes in the environment.

The fourth initiative is “Promotion of Diversity, Equity & Inclusion (DEI).” We will create an environment where diverse talent can thrive, regardless of gender, age, nationality, or other factors. Leveraging differences as strengths is the very essence of “participative management drawing on collective wisdom,” a principle the Group has long cherished. Incorporating diverse perspectives into our decision-making will enhance our organizational strength.

The fifth is “Transformation in HR Function.” To evolve our human resources systems and policies, we will transform our HR functions and work styles through the use of technology—including AI—to enhance productivity and promote value creation across the entire organization.

What factors should executives and organizational leaders bear in mind when driving Organization Culture Transformation?

Organization Culture Transformation is not limited to improving the workplace environment—by making it “more comfortable to work in” or fostering “open communication.” The key is connecting it to business strategy and driving results. Even with a sound strategy, results will not materialize unless the organization culture is aligned to that strategy. Therefore, rather than waiting for it to develop naturally, executives and organizational leaders must proactively design and build the culture.

The framework that serves as a guide for this is the Panasonic Group’s “6 Principles of Organization Design.” The six elements are: “Evaluation & Compensation,” “Decision Making,” “Information Sharing & Learning Process,” “Recruitment, Training & Selection of Leaders,” “Design of Work,” and “Organization Structure & Placement.” The key point is not simply changing one element, but ensuring that they are all mutually consistent.

Ultimately, these are simply common “principles” shared across the Group. Just as there are as many ways to design an organization as there are organizations, each entity must tailor the design to its specific strategies and challenges. However, this is not something that can be achieved by a single executive or organizational leader working alone. The critical factor is how effectively BU management teams can engage their teams. Driving progress through co-creation, rather than top-down directives, is crucial. To achieve optimal organization design, the very nature of communication must undergo a significant evolution. In organizations where transformation is successfully underway, leaders are spearheading a variety of initiatives.

What kinds of initiatives are being implemented to drive this transformation?

At Panasonic Corporation’s IH Cooking Heater SBU, a “position reporting directly to the division head” has been established under the division head to accelerate decision-making and execution. Based on the concept that a capable leader is always supported by an outstanding “right hand,” the two work as a unified team to enhance the organization’s overall capacity to execute. By assigning future leadership candidates to this position and granting them meaningful authority, the company is fostering talent capable of proactively driving transformation. The company maintains a system for ensuring that compensation is commensurate with one’s role. Furthermore, by consolidating operations onto a single floor at each location and holding daily mini-management meetings, the company has built a system that allows for the rapid sharing of on-site challenges and on-the-spot decision-making. In addition, by implementing open recruitment for all section chief positions and promoting transparency in management information, the company has created an environment where the efforts of all members are aligned, thereby encouraging each individual to take the initiative in pursuing new challenges.

Panasonic Connect Co., Ltd.’s Avionics Business Unit holds a monthly “All Hands Meeting” as a forum for dialogue, the aim being to communicate strategy in a timely manner that resonates across the team. Rather than having top management deliver one-sided presentations, five or six employees take the stage at each meeting to share, in their own words, the initiatives they are undertaking to bring the strategy to life. Additionally, a channel for the Business Unit Head has been established on the company’s internal communication platform; through daily updates and dialogue, this channel bridges the gap between management and team members and promotes two-way communication. Meanwhile, to foster personal “growth and development,” members are encouraged to take on challenges through a voluntary development program—such as participating in overseas assignments or in management as assistant to the BU Head. At the same time, cross-departmental one-on-one meetings and DEI initiatives led by frontline leaders are cultivating a culture of dialogue and collaboration that transcends organizational boundaries.

In addition to these initiatives, Panasonic Industry Co., Ltd.’s Electromechanical Control Business Division designated approximately 570 positions—including section chief and team leader—for open recruitment without age restrictions, and found that replacing about 20 percent of the incumbents helped revitalize the organization. Elsewhere, Panasonic Electric Works Co., Ltd.’s Wiring System Communication Business Unit, using the Theory of Constraints (TOC)³ as a guide, has been implementing phased initiatives to reform supply chain management, strengthen quality and design, and enhance cross-organization collaboration as part of a three-year plan to eliminate bottlenecks. In this way, examples of organizations enhancing their capacity to contribute to customer value creation through bold reforms—thereby driving organizational growth—are steadily spreading across the Group.

3 TOC: Theory of Constraints. A management approach that maximizes overall performance by identifying the “bottleneck” (constraint)—the point with the lowest processing capacity—within an organization’s processes and focusing efforts on improving it.

Of course, we cannot change everything at once. The Group’s strength lies in having transformational leaders—like those introduced here—act as early adopters to pioneer change, generate success stories, and then scale those successes across the organization. Looking ahead, support for the early majority segment will be strengthened and their participation in organization transformation will be encouraged; doing so will gradually expand the circle of change and generate the momentum needed to mobilize the front lines. Once critical mass within the majority shifts, that change will rapidly ripple across the entire organization. We will focus our efforts on this initiative during the current fiscal year to cross the “chasm”⁴, further accelerate transformation, and ultimately drive business results.

4 The “deep chasm” or “major barrier” encountered as a product or concept gains traction. A phenomenon in which, following uptake by early adopters, penetration into the mainstream stalls, causing adoption to plateau.

What role should HR play, and what key areas it should focus on, to drive transformation during the growth phase?

To UNLOCK the entire Panasonic Group, the Group’s HR domain must first UNLOCK itself. The challenge today is working together with the CHROs of each Group company and leveraging their respective strengths to see how effectively we can elevate the HR functions of the entire Group. HR must not only create systems but also work shoulder-to-shoulder with executives and organizational leaders to drive change on the front lines. The role of HR is to confront challenges, determine which operational approaches will result in behavioral change, and then drive those initiatives through to completion.

We cannot drive the transformation required for the future if we remain bound by conventional rule-based approaches or a defensive mindset. We are advancing the transformation of HR functions through the strategic use of AI, continuously evolving by integrating technology into our HR systems, operational processes, and the platforms used by employees and managers. The use of AI goes beyond simply improving operational efficiency; it has the potential to change the very way we work and transform the organizational culture. Going forward, HR professionals will need not only to improve their AI literacy but also to have the ability to conduct repeated trials within the HR domain and see them through to implementation. Each employee must master the use of AI to improve their own work but also to empower themselves to reexamine business processes. To support these efforts, we have launched the “HR UNLOCK AWARD,” an internal competition that recognizes and honors examples of business transformation initiated by HR staff, including process improvements that solve business challenges and innovative uses of generative AI.

The HR functions embody the principle that “A business is people” and, with a forward-looking approach, strives to balance business success with employee well-being.

As Group CHRO, what is your message to employees?

The Panasonic Group has tremendous potential. Guided by our unwavering Basic Business Philosophy, many employees are driven by a desire to be of service to customers and society. However, changes need to be made if we are to fully harness that potential. In some cases, outdated rules and processes, organizational silos, and a fear of failure hinder our ability to take on new challenges. That is precisely why we are committed to transforming our organizational culture to UNLOCK the potential of our people and our organization, and to create an environment that encourages us to take on challenges and fully realize our capabilities.

Our goal is to become a passionate, high-energy organization where every employee boldly strives for greater heights. For the individual, this means maximizing their potential and finding fulfillment in their work. For the organization, this means growing our business and contributing to society. We are committed to achieving both goals at the highest level to achieve “an ideal society with affluence both in matter and mind.”

I firmly believe that “If Panasonic changes, society will change.” Turning human potential into business strength—and realizing a better society. The entire Panasonic Group will drive this transformation forward.