Blending Culture, Building People: Natalia Mikulich on JTI’s Transformation Journey
October 20, 2025
Natalia Mikulich has evolved since the acquisition of R.J. Reynolds to find herself at the forefront of managing people, rewards, and the digital integration of human resources in a company where Japanese ownership embarks on global expansion: JTI (Japan Tobacco International).
In 1999, Japan Tobacco Inc. acquired the international operations of R.J. Reynolds (excluding its U.S. domestic business) for approximately $8 billion, creating Japan Tobacco International (JTI). Natalia has been there from the outset and moved to its global headquarters in Geneva, Switzerland. The deal gave JTI control outside the United States of key international brands such as Camel, Winston, and Salem, significantly expanding its global presence and, at the time, positioning it as the world’s third-largest tobacco company.
Natalia has a rich history in consumer goods, working on Remuneration Design, Executive Compensation, Global Mobility, and HR Information Systems.
Since JTI’s acquisition of R.J. Reynolds, Natalia has navigated multiple acquisitions. She has had a front-row seat in the development and integration of numerous remuneration programmes. She has also confronted multiple challenges — from being a woman in a male-dominated industry, adjusting to and integrating different cultural norms, and encouraging job applicants to join a controversial, and at the same time highly regulated, industry.
Now, like its larger competitors (Philip-Morris, Altria, and British American Tobacco), JTI is transitioning from “combustibles” to more “risk-safe” electronic products free of tobacco (as well as tobacco products of the new “reduced risk” generation) but not nicotine. At the same time, its stellar financial performance has led to plaudits in the business press, recently described by one as ‘a paragon of disciplined capital allocation’, which sits well with shareholders.
Simon: Tell us your story of how you wound up in total rewards at JTI?
Natalia: At the moment, I’m doing an HR transformation project that involves redesigning HR operations, including rewards, to leverage the modern digital capabilities. That takes me back to my early education. I studied applied mathematics, and one of my first jobs was in software development for what might be called today the first generation of artificial intelligence products. My career progression has been more natural than revolutionary since I started at R.J. Reynolds/JTI.
Simon: What was the most significant change after the sale to JT?
Natalia: From Japan, we enjoy a very long-term perspective on investment decisions, and a shift from quarterly results focus to doing the right thing to grow the business. I remember during the first yearly strategic planning cycle, which was five years — there were constant revisions and re-planning to optimise scenarios for business growth. Japan’s population is declining, so management was looking for ways to expand and grow the business beyond Japan. They gave us space, and we had a smart blend of former R.J. Reynolds executives and newcomers from Japan. It was a learning experience as we tried to take the best of both worlds. The businesses — international tobacco, domestic tobacco, food, and pharma — were separate, and I was part of the integration project. At that time, Japan’s Ministry of Finance was a one-third shareholder.
Simon: That must have been an interesting cultural mix. How long did it take to create your own culture?
Natalia: I would say that we are still on a learning curve and growing into this. First, though, we were given trust and respect. As an acquirer, JT provided resources and allowed us significant space to begin building and integrating business relationships. After the years of continuous international growth, we have performed the fusion of domestic and international tobacco business, where I was part of the People and Culture taskforce. This fusion creates new opportunities to learn from each other and create the unique culture that builds on everyone’s strengths and marries tradition and modernization.
Simon: Our readers would be fascinated by that subject, because I think most people are challenged by differences in culture. Can you give examples of two or three things that are quite different?
Natalia: The approach to business planning in Japan is much more considered and every decision is logged, which takes focus and time. We had been much more impatient as a company and, because of our international footprint, regulatory challenges were constant. Tobacco regulation was changing all the time, often on a quarterly basis in several countries. For us, the competition and our very survival depended on being smart, proactive and agile in whatever we do.
Simon: Internally, how did that affect the organisation?
Natalia: A lot of people were moved around between departments and divisions, as well as geographically, and [management] respected the important decisions which had been made in the past. This geographical and cross-functional mobility has been an important factor in the creation of the unique company culture.
Simon: One of the things you said, which is true, is locking in agreement. I’ve worked in Asian companies, more specifically in Malaysia, and noticed that decisions are made by consensus, which makes decision-making slower but potentially more effective. Is that your experience?
Natalia: Absolutely. We run on consensus. It means that sometimes our meetings involve more people and there are pre-meetings to the meetings.
Simon: Obviously you were part of the integration team. Is that how you wound up in the HR area?
Natalia: I was working in finance. Then the acquisition took place. After the acquisition, I was working in the business strategy department to cascade new company strategies throughout the organisation. That was a cross-functional project and when that it ended, I was looking for a new project. A colleague approached me and said, ‘We have a project in HR. Would you like to come over’? I joined the rewards team then. I was in a privileged position to basically build rewards from scratch for the newly acquired business.
Simon: An excellent experience. How many employees do you focus on now?
Natalia: Nowadays, we have around 44,000 people in the tobacco business. I believe it was 11,000 or 12,000 when we did the Gallaher Group integration in 2007. That was another very interesting merger. JTI was in around 40 countries and Gallaher had around 40 countries as well.
Simon: What does digital transformation mean in the context of what you’re doing?
Natalia: Initially, the project was simple — to replace our core HR system to prepare for the more modern world. More recently, JTI developed an ambition to become No. 1. We call it the ‘Vision #1’ strategy. In terms of tobacco strategy, we are riding two horses — the traditional tobacco products where we aim to grow volume and improve margins and the new generational products, which we believe will be ‘reduced risk products’ as we call them. We are on the journey to prove with scientific evidence that our new products are enjoyable for the consumer, and at the same time have significantly less risk than those associated with traditional tobacco products. This requires a huge investment. We are going from a traditional agribusiness to consumer electronics. We needed to make a significant investment to expand our skill sets, etc. Clearly, we needed to rethink how we do business: HR is now People and Culture. We support the business. We deliver people and services. Hence, it’s a golden opportunity to revisit what and how we do.
Simon: Do you see the tobacco industry as analogous to oil & gas — products that some view as ‘bad’, but many enjoy? The people who run the wind farm in the North Sea are fundamentally different from the people who pull oil out of the ground in west Texas, for example. Can you give us a sense of the challenges around trying to find new talent in your industry?
Natalia: I have to say that even when we talk about the traditional tobacco business in terms of talent attraction, we are facing significant headwinds because of the image of the industry. Depending on the country, we can lose up to 70 percent of the potential talent pool because of the industry’s reputation not only in Europe but in Muslim countries as well. We are not the first company to face this journey, but as we enter the consumer electronics space, there are new challenges to face including safety, reimagining customer service, digital marketing, and very different product life cycles. Thus, we need to do better the things we did traditionally and very quickly acquire new skill sets. That’s also what makes my job interesting.
Simon: Do you think in terms of talent there is an opportunity to retrain or re-engineer existing employees into these new areas?
Natalia: There are two routes. To bring speed, we need to buy (or borrow) people that already have the right skills. Our company has a reputation for growing talent so it will be blend of learning, but we want to be fast so we need to deploy two strategies.
Simon: Will how people are paid make a difference and what does that difference look like?
Natalia: Of course. We cannot attract people with the right skill sets without competitive pay. We are open to being flexible and have several hubs in different geographical locations. While we compete for the same hot skill sets as others, our industry image demands a premium due to image. So, the ability to pay is very important. How pay is structured is another story.
Simon: Is performance-based pay part of the package?
Natalia: Indeed. When we first became a Japanese company, the individual performance component was dropped from the Management STI plan. Furthermore, when the world faced the extreme macroeconomic volatility, our company started to make further changes. All senior management was moved to company-wide KPIs (with no business unit KPIs), and we revisited that decision over the following years several times. What we learned is to share resources throughout the company to ensure overall company results. It’s been volatile. The world became increasingly dynamic. Initially, the foreign exchange rates were moving drastically, but then we were realizing that there were other significant challenges like geopolitical disturbances, natural disasters, and abrupt regulations changes. One of our strengths is our ability to learn how to operate in this environment. In terms of performance management, we cascade top-down business KPIs to individual objectives. One element of our STI and LTI designs is to incentivize participants to exceed business plan objectives, and this is built in our plans’ design.
Simon: If a target is missed, does that mean an element of pay goes away?
Natalia: There are some thresholds. And yes, you will get paid less or nothing, if you don’t reach the thresholds. We normally start from the previous year’s objectives and then grow into new ones.
Simon: The concept of having a heavy weighting on the performance of the whole corporate entity of JTI is fascinating because it will presumably define the culture as people must rely on everybody else to get things done.
Natalia: Yes. Teamwork and cross-borders collaboration is essential!
Simon: How would you describe the culture of JTI? Is it a happy place, a hardworking place?
Natalia: Clearly, it’s cooperative. I would say it is hard-working and demanding because though you have your own objectives you also need to help your peer somewhere else because you’re called in for your expertise. We lean in together.
Simon: If somebody has a set of objectives for the year and they fail to meet their objectives, what happens next?
Natalia: It depends on where you are in the organisation. If you are junior, then your line manager will talk to you and put a plan to bring you up to speed. If you are higher up in the organisation, they would prepare a performance improvement plan. Significant failures are not tolerated.
Simon: If you were to pass on two or three lessons that you’ve learned about being in an organisation where you have such different cultures and from those, created a new culture, what would they be?
Natalia: I would say that the first step would be to envision a big picture and then what is needed to shape the environment — the tools, processes, and practices, which will support the direction being taken. Have frequent check-ins: Are we going in the right direction? What is helping us? What is trying to pull us in a different direction? Then reassess and refine. I don’t think that there is ever one way of doing things.
Simon: What have you learned about Japanese versus American culture?
Natalia: Time cycles are different. An American company would be quick turning to action. Japanese companies run numerous strategic scenarios. They carefully plan the timing of the desired steps and moves. That’s very different in terms of planning horizons culturally. The most senior Japanese person speaks the least and speaks last, if at all. When a topic is discussed, silence is not only tolerated, but also considered a good sign that people are reflecting on the conversation. Westerners can seem rude to our Japanese colleagues because we are in a hurry. We tend to speak faster than we listen. What I can say is that our Japanese colleagues are fascinating. They do things differently, but they are incredibly smart and have solid educational backgrounds. They bring a certain versatility and respect to decision-making. It’s amazing when you manage to build a team that is complementary. It’s very strong.
Simon: What’s your view about the value of bringing in outside consultants?
Natalia: There are times in the life of any company when it’s beneficial to have someone fresh who can listen to your story, understand your challenges, and help guide your thinking or structure your approach to a problem or dilemma. To stay innovative, we need to constantly rethink our methods. Technology is powerful and provides the capability to be faster and better. However, it’s ultimately a human being who provides the direction.
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