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2022 Sustainability Dialogue with Experts (Human Capital)

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2022 Dialogue with Experts on Disclosure Proposal

From left: Takeshi Hihara of NRI, Chiharu Takakura, Director and CHRO of Rohto Pharmaceutical Co. Ltd., Kaga Yanagisawa, and Eiko Ibuki of NRI

  • CHRO: Chief Human Resource Officer

Nomura Research Institute, Ltd. (hereinafter "NRI" has been holding dialogue with external experts every year since FY 2010 in order to understand global sustainability trends and reflect those trends in management strategy and risk management.
In our 10th such dialogue, held in FY 2022, we exchanged opinions with experts in various fields related to the environment and human capital.
This article summarizes the dialogue held on December 5, 2022, with Chiharu Takakura, Director and CHRO* of Rohto Pharmaceutical Co. Ltd., who has an extensive professional experience in the fields of human resources and human capital both in Japan and overseas. She is also a member of multiple review committees of the Ministry of Economy, Trade and Industry (METI). In this dialogue, Chiharu Takakura had a discussion with Takeshi Hihara and Kaga Yanagisawa, Senior Managing Directors of NRI, regarding the themes, “Significance of Human Capital Management,” “Relationship between the Growth Story of NRI (including Group) and Human Resource Development,” and “KPI (Key Performance Indicators) and Information Disclosure aligned with the Management Strategy.”


(Affiliation and position as of December 2022)

Ms. Chiharu Takakura

Ms. Chiharu Takakura

CHRO, Rohto Pharmaceutical Co. Ltd.

Chiharu Takakura joined the Ministry of Agriculture, Forestry and Fisheries (MAFF) after graduating from college. She completed her MBA degree from the United States. After completing her studies, she worked at Sanwa Research Institute and Gemini Consulting, where she was engaged in human resource development associated with new business and was appointed HR Department Head at Pfizer in 1999, Becton Dickinson Japan in 2004, and Novartis Pharma Japan in 2006. From 2014, she is leading the establishment of a HR system at Ajinomoto to promote its global strategy. In April 2020, she became Director of Rohto Pharmaceuticals Co. Ltd., and serving as the Director and CHRO since April 2022.
She is also a member of the “Study Group toward Achieving Human Capital Management” of METI and serves as an external director of Niterra Co., Ltd.

Takeshi Hihara

Takeshi Hihara

Senior Managing Director, Chief Sustainability Officer, NRI

Takeshi Hihara joined Nomura Research Institute (NRI) in 1991. In June 1997, he served at the Consulate General of Japan in San Francisco under deployment by the Ministry of Foreign Affairs. He was then appointed as the Head of Business Strategy Office and PAR Support Office in 2015, followed by Managing Director, Deputy Division Manager of Business Strategies, and Business Strategy Division Manager in April 2017. In April 2019, he was appointed as Senior Managing Director and from April 2021, he is serving as Executive Officer of Business Strategies for Corporate Communications, Legal & Intellectual Property, Information Systems, and IR.

Kaga Yanagisawa

Kaga Yanagisawa

Senior Managing Director, Head of Corporate Planning, Human Resource and Human Resource Development, NRI

Kaga Yanagisawa joined Nomura Research Institute (NRI) in 1991. She was appointed as Group Manager of the Management Consulting Department in October 2012, Division Manager of the Management Consulting Department in April 2015, and Financial Consulting Department in April 2017, followed by ICT Media and Service Industry Consulting Department in April 2018. In April 2019, she was appointed as Executive Officer, Deputy Head of Human Resources, and Head of Human Resource Development, followed by becoming Senior Managing Director, Head of Corporate Planning, Human Resources, Human Resources Development in April 2021.

(Other participants from NRI)
Eiko Ibuki
Group Manager, Sustainability & Responsibility Group, NRI

Introduction (Sustainability Management and Human Capital Initiatives by NRI)

NRI: At first, we would like to talk about sustainability management and human capital initiatives by NRI. After that, we would like to have a dialogue regarding the themes “Significance of Human Capital Management,” “Relationship between the Growth Story of NRI and Human Resource Development,” and “KPI (Key Performance Indicators) and Information Disclosure aligned with the Management Strategy.”

(At the outset, Hihara explained “Sustainability Management in NRI” and “Role of Human Capital in the Growth Story of NRI Group,” with Yanagisawa explaining “Human Capital Initiatives by NRI”)

Growth Story of NRI and Role of Human Capital

NRI: Please tell us what you thought about the “growth story of NRI and role of human capital” for the year 2030.

Ms. Takakura, Rohto Pharmaceutical Co. Ltd.:

Ms. Takakura

The disclosure materials published by NRI, such as integrated reports and ESG data books, are highly detailed, thoughtful, and full of information. Especially, the way ESG data book covers NRI Group’s information comprehensively is impressive. I think it is necessary that the content of these disclosures should be in a form that is easy to understand, like how they are connected to the company's vision or purpose, and should be conveyed as an easy-to-understand story.
There are two major social trends which are related to the purpose of NRI.
The first one is initiatives related to DX*1, which is required from a social perspective. In the past, when the focus was on DX 1.0, the key to growth and transformation was the digitalization of existing businesses. Today, digitalizing the business processes and infrastructure that form the basis of business through DX 1.0 is becoming a common practice. In addition, DX 2.0, focused on developing platforms that could transform the business models of entire industries. Since, it is becoming essential to consider how to use digital as a tool for transforming society, I believe that DX 3.0 will be required in the future.
The second point is the trend required from the perspective of operating companies. As the term “CX*2” suggests, the most important issue for companies in the future will be to transform themselves. The theme of sustainability is profoundly related to the transformation of companies. Also, it is said that “human resources” are the key to achieving the CX and sustainability. The reason why companies are focusing on new themes such as CX and sustainability is because of their concern that they may not be able to achieve sustainable growth with the existing value standards and values.
Over the past two to three years, there has been a shift in the environment where companies are unable to achieve sustainable financial growth without addressing “non-financial areas,” such as solving social issues and creating value for society. These non-financial initiatives, such as solving social issues, are linked with the value co-creation espoused by NRI. In particular, intellectual companies like NRI believe that society has high expectations from their initiatives in leading their client companies in the direction of creating new values.
The way NRI values the future of society by providing an insight into which direction society is heading and how it will change in the future is a very challenging task. No one really knows what will happen in the future society. Therefore, I believe that NRI's "forum" will become invaluable in the future, as it provides a platform for professionals of diverse talents (skills) to gather, discuss, and study the world's most advanced knowledge from diverse directions.

Hihara (NRI):

Hihara (NRI)

We are currently formulating a new management vision V2030 for the year 2030. Although the corporate philosophy of NRI states “to discern new social paradigms and implement them,” I believe we were not clear about what kind of society we are aiming to create. We had internal discussions for nearly two years to formulate the new vision, including discussions on what kind of society NRI should contribute to in building, which is close to the company’s corporate mission. And through this process, we have continuously honed our corporate terminology and finally concluded what kind of society we should create.
As Ms. Takakura said, human resources are essential for achieving the vision, we have also decided the kind of values to be shared among all employees, including those in the group. We are also planning to convey the values and the society we are aiming to create by incorporating them into our corporate philosophy. The official announcement regarding this will be made in April 2023.
Through this new vision, NRI will place “value creation” under materiality (a key issue for the company) and specify which direction NRI is aiming to pursue through its business, along with how human and other capitals are related to the vision and value creation.

Ms. Takakura:

Once NRI provides a perspective on its purpose in society, it will naturally become clear as to what kind of expertise or diversity of human resources will be required by using backcasting (a method of reflecting on what should be done in the present by looking back from the future).

  • ※1  DX:

    Abbreviation for Digital Transformation. It refers to the use of digital technology to transform business and other areas.

  • ※2  CX:

    Abbreviation for Corporate Transformation. It refers to the process of transforming a company from its foundation.

Link between the Growth Story of NRI and Human Resource Development

NRI: Please tell us your views on NRI's human capital management approach to realize the growth story.

Ms. Takakura:

Based on our discussion so far, it is necessary to disseminate “the unique human capital management of NRI.” Although various companies are engaged in human capital management, some characteristics are unique to NRI. One of them is the ability to gain insight into the future society from a macro perspective. It is very important for the future society that suggestions and proposals are made from a macro perspective regarding how “prosperous and vibrant society” can be created in the future. The fact that human resources are engaged in a friendly competition to derive the answers to these questions is something unique to NRI. Though various operating companies have a future vision, they tend to focus only on daily activities, such as what they can achieve through their “products.” Surprisingly, due to the nature of their business, it is difficult to have a broader view of society as a whole. However, the business characteristics of NRI are very different from that of manufacturing and other industries. In particular, since NRI is developing business that provide both consulting and solution services to clients, it can consider ways of utilizing these from a macro perspective. In addition, NRI can also suggest how human capital management can be implemented in the world. I understood your explanation of "human capital being the origin of value creation."
However, if the results of future insight differ greatly from the actual business and social conditions, it is of no value. Hence, it is not an easy task to provide future insights from a macro perspective. Having both insights into the future and a perspective that recognizes the underlying trends in people's lives and actual business, although these two are contradictory, will be essential. Moreover, the ability to consider how future insights are linked to actual business trends by switching back and forth between macro and micro perspectives will be necessary. Therefore, I would appreciate it if NRI can value the consumer’s persecptive in real life and business.
For example, in the manufacturing industry, handling the consumer needs is important, with some companies making a conscious effort to incorporate consumer’s perspective creating through working styles reforms, taking on part-time job, dual employment, etc. If NRI engages in human capital management from the consumer’s perspective, which is necessary for real life and business, it can demonstrate its human capital management to society, create value, and provide hints.

Yanagisawa (NRI):

In regard to the experience as a consumer, we saw employees themselves facing challenges to maintain a good work-life balance and reform their working styles. Through consulting and providing solutions to its clients, NRI offers a range of ideas and suggestions based on its experience as a consumer.

Hihara (NRI):

It is important for the employees of the NRI Group to be aware of the consumer’s perceptions, and what is happening around the world in a timely manner. For example, it is necessary to continuously take an interest in various activities, such as reading books, learning about new technological trends, and paying attention to current issues in society (discussion and issue points). In our growth story, we mention “the capability (organizational capacity) for creating business,” and we consider that we must create a work-in-life concept (positioning work in life and daily life), allowing employees to use their working hours with ease, and make the time necessary for business creation.

Ms. Takakura:

It is important to develop creativity beyond work. In addition to this, imagination is also important. After all, a job does not mean that one person can do everything. For example, it is difficult to start farming immediately, even though you have heard about it from a farmer and think it is important to do so. However, it is important to listen to them and have the ability to imagine what they do for a living or what kind of environment they live in. However, it is very difficult to develop such ability. Candidates taking the recruitment examination at NRI have a certain level of excellence and logic, however, what’s important is how much they can think about others and consider it as their personal matter. In other words, the ability to go back and forth between others’ and their own thoughts. Such skills along with problem finding skills will become essential for creating businesses in the future. This is about proactively addressing the issues of others as their own rather than acting when someone asks.

Hihara (NRI):

It is indeed as you said. From now on, we need to be spontaneous and considerate towards others, rather just being passive. Regarding the “capability to create business,” which I mentioned earlier, one of its aspects is “conceptual ability.” This refers to the human capital that allows us to create big concepts through communication and dialogue with experts that might not be possible if done alone. As I mentioned earlier, DX 3.0 is a big concept which aims to transform society as a whole, and if we intend to proceed with this in a realistic manner, we have to incorporate diverse perspectives and develop the capabilities to create a new systems.

NRI: Next, we will discuss the diversity of human resources required to achieve our growth story.

Yanagisawa (NRI):

Yanagisawa (NRI):

I will now talk about the diversity of human resources contributing to our growth story. One of the capabilities contributing to our growth story is “the ability to promote and discuss business with a diverse workforce.” Since we are not directly dealing with the consumers, some circumstances make it difficult for us to recognize that we need to be aware of diversity as a sense of crisis.
Many of NRI's clients are company executives and people from IT departments, with majority of them being male, making it difficult to discuss that, in order to match the diversity of its clients, NRI must increase the diversity of its workforce by including women, foreign nationals, and LGBTQ people.
As an example, in the pharmaceutical field where Rohto Pharmaceuticals is involved, how will these discussions on diversity narrated?

Ms. Takakura:

Actually, after Rohto started its cosmetics business, there have been a change in the composition, and now the number of women employees in the company has increased. The number of female scientists and pharmacists working in research laboratories has increased because they are developing products from the perspective of female users. This is perhaps an area different from NRI's business environment.
The phrase “expansion of human capital through challenges and growth of diverse professionals,” mentioned in the growth story of NRI, could be replaced by “challenges and growth of human resources with diverse perspectives.” This suggests that diverse human capital is necessary because business creation and global business promotion require diverse perspectives. In fact, one person to have diverse perspectives is similarly important.
In order to have “diverse perspectives,” one must be in an unfamiliar environment, for example, through a part-time job, dual employment, or cross-border learning. For instance, the clients with whom NRI consultants deal on a daily basis are mostly senior executives of Japanese companies, resulting in a high percentage of male consultants, as mentioned by Ms. Yanagisawa. Thus, an unfamiliar environment might actually be a place away from work and the core business.
When a person is in an unfamiliar environment, a conflict arises that their conventional approach will not work. For example, if you are doing business in a male-dominated society, you will experience success in a stereotypical way, but what if a man who has experienced such success works in a team that has a lot of women. There, he will feel the conflict that his previous values do not work at all, and through such experiences, he will acquire diverse perspectives. I believe that increasing the number of human resources with such diverse perspectives will have “human resources with diverse perspectives” that will lead to business creation achieving the growth story.

Yanagisawa (NRI):

At present, there are many resources with diverse perspectives at NRI, but I also think that a style of promoting lean business in a very streamlined process has been developed. We tend to experience success if we follow the same framework, procedure, and process.
In doing so, we are not creating enough opportunities to utilize or voice diverse perspectives in our work. Perhaps we should give more space and extra time to waste (in a positive sense).

Ms. Takakura:

You are absolutely right. The recent trend toward sustainability is contrary to the business, which prioritizes efficiency, and it has become a movement that seeks to break this negative cycle. In this context, the significance of giving the business more space and extra time to “waste” in a positive sense can be understood.
For example, in the case of global environmental issues, it has been the trend to restore negative impacts to zero. However, in Europe once these impacts restored to zero, the question of what to do next is addressed as “Regeneration.” This refers to the discussion on the next step in value co-creation, promoted by the younger generation in the future.
Currently, NRI's client projects are mainly focused on promoting sustainability while meeting their individual needs. However, next to that might be projects focusing on how to create new businesses and social innovations from the perspective of regeneration. For this reason, issues such as what professionalism is, may also need to be integrated into human capital.

  •   Regeneration:

    This refers to the concept of creating the “renewal power” from the sustainability stage.

NRI: We would like to discuss how we should combine the top-down and bottom-up approaches for expanding human capital.

Yanagisawa (NRI):

NRI is basically a company with a strong culture of business divisions, with a cycle of training human resources within the divisions, considering transfers/opportunities, and evaluating them. Based on the current trends in sustainability and human capital management, the head office is also changing its approach and encouraging business divisions to develop various initiatives. For example, promoting “value co-creation” in the current mid-term management plan. Over the past few years, we continuously engaged in the value co-creation activities while exchanging several dialogues on the new vision and the new medium-term management plan, including asking the members of the business divisions to consider how the work is connected to each of the three social values described at the beginning. Furthermore, from the perspective of “value co-creation,” discussions based on formulating the new vision for the next mid-term management plan were held with the business divisions.
In this way, NRI is successfully maintaining its culture of utilizing the power of the workplace through the bottom-up approach and by the top-down approach communicating the thoughts of management and the company through discussions. In the future as well, NRI will continue its activities of value co-creation by creating the opportunities to communicate the thoughts of top management and, at the same time, promoting both top-down and bottom-up approaches by gathering various opinions and thoughts from the workplace and utilizing them in management.

Ms. Takakura:

Although it is difficult to determine the top-down or bottom-up approaches because they are related to the unique business characteristics of individual companies, when business divisions are strong, people within them are rotated internally to complete the rotation process. As Mr. Hihara also mentioned, it will be a matter of discussion in the future whether such rotation of people within the business divisions is the best approach for the company. Though it is important to train human resources with certain specialties, it is also possible that they cannot provide new value unless they gain experience in a variety of divisions and have a broad perspective.
In addition, how NRI's business portfolio will change in the future is also an important perspective. Currently, under 10% of revenue is generated from consulting and the rest from IT solutions, but how will it change the business portfolio in the future? Furthermore, the contents of IT solution services will also change according to social trends and customer needs. However, when consultation and full-fledged advising will be required in new IT solution services, there will be a challenge of training the human resources who can do it. I acknowledge that it is important to discuss that people can be trained in specific areas only, similar to past, is it possible to train them to provide services in an ever-changing environment?
In the “Ito Report for Human Resources” I have stated that “every company must look at its people in a holistic and optimal manner. Else the people in management will face more difficulties in the future, because the higher the position is, it will become more important to handle the highly specialized human resources. If the game is how people with diverse expertise can demonstrate their value, then it will be impossible to manage them without the knowledge of diverse areas. It is equally important to consider training the management team who will lead NRI in the future and decide whether to deepen or broaden their expertise for the future growth of NRI's business. And, I believe it can be achieved through a “combination of the top-down and bottom-up approach.”

Ito Report for Human Resources:
A Ministry of Economy, Trade and Industry (METI) report chaired by Professor Kunio Ito of Hitotsubashi University. The “Ito Report for Human Resources 2.0” ( published in May 2022) recognizes the importance of “human capital” and presents useful ideas on how to implement human capital management.

Ways to Communicate Human Capital Management to Investors

NRI: What do you think is the best way to tell investors about the quality of human capital and the excellence of NRI's human resources?

Ms. Takakura:

There are two main requirements from the investors. The first one is that they want to see comparable indicators.
For example, if any company needs diverse perspectives, a diverse workforce, highly skilled employees, etc., it is important to know what KPI should be presented. It will be a good approach for NRI to form a team of specialties with different talents (skills), women, and mid-career employees. It is also essential to consider what kind of investment is made in developing human resources. In my personal opinion, it is necessary to circulate learning (i.e., input) and experience rather than showing the time and cost of education or training. The investors are interested in hearing whether such measures are actually being implemented.
The other one is to show the story of the company. Firstly, the corporate philosophy and then the three social values for creation. Lastly, human and intellectual capital which are important to implement these. The CHRO tells whether such measures are implemented in human capital and are properly connected to the overall story. And so, the investors want the CHRO, rather than the president, to be part of the management and tell the story of where NRI is heading in terms of sustainability.

NRI: At the end please give us some feedback on the whole process.

Ms. Takakura:

Thank you so much for a great time. It was clear that you are very serious about what you are doing and also very sincere perspective on the improvement areas. I believe that these two perspectives will always be necessary, and even though things are completed to a certain degree, in the uncertain times ahead, it will become even more important not to think that things are perfect or 100%. In today's discussion, I realized that it is very important for management to maintain a humble perspective of retrospect while making sincere efforts, and that this is the foundation of human resource development and continuous learning.

Yanagisawa (NRI):

Thank you so much for today. I learned many important keywords that amazed me. I felt that diverse viewpoints and the imagination power that comes during the discussion are important, including the importance of creating an environment where people can speak freely. Overall it was a very insightful discussion, where I realized that we need extra energy to achieve goals.

Hihara (NRI):

Thank you so much for your valuable time today. Although we are now considering incorporating human capital into our growth story and trying to reflect it in our vision and mid-term management plan, I felt that we must prepare to convey the story clearly to people beyond our company. I believe that by understanding this story, our stakeholders will understand the role of human capital, and thus our corporate value will also increase. Thank you very much.

(Published in Mar. 29, 2023)

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