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“The company should remove
obstacles to enhance
internal communications among
divisions to create new synergies”

“The company should remove obstacles to enhance internal communications among divisions to create new synergies”

President and Representative Director

Hideo Tanimoto

President and Representative Director

Hideo Tanimoto

Reaching Greater Heights, Growing Toward the Future:

Promoting Robust Future Growth through Large-Scale Organizational Reforms

Kyocera has made what can be described as its most significant organizational reform since its establishment in 1959. By splitting its businesses into three segments, the company has planned aggressive growth strategies, including creating new businesses, digital transformation (DX), and the utilization of human resources, aiming toward a sales target of two trillion yen. Under this new structure, how does the company intend to exert itself in businesses, and what sort of vision does it have of the medium-to-long-term future? We spoke to Kyocera’s President and Representative Director, Hideo Tanimoto.

Aiming for Interdivisional Collaboration and the Creation of New Businesses

Kyocera, whose business covers an extensive range of products and industries, is centered around fine ceramic components, automotive components, electronic components, information and telecommunications equipment, and medical devices. The company conducted unprecedented organizational reforms in April 2021 to consolidate 16 product lines into the three business segments –“Core Components,” “Electronic Components,” and “Solutions,” – and integrated administrative divisions into a single segment, “Corporate.” Through these reforms, Kyocera is seeking a new growth trajectory by boosting interdivisional collaboration, revitalizing the organization, and redistributing management resources.

ー First of all, can you tell us about the aims of Kyocera’s organizational reform?

Tanimoto:By pursuing diversification into many different spheres, we have become aware of issues arising from the distances between divisions caused by vertical organizational structures. I believe the company should remove such obstacles to enhance internal communications among divisions to create new synergies and businesses to achieve further growth. Another aim was to make the organization more horizontal to accelerate the speed of our business development. For that purpose, I am giving considerable discretionary power to the segment leaders to make decisions quickly and develop bold business strategies.

ー Can you tell us about the progress of new business creation at Kyocera?

Tanimoto:The lifespan of products and technologies is becoming shorter by the year, and our company is not likely to grow in the future just by selling commodity products. We have to create products and businesses clearly distinguished from our competitors in order to survive. We are therefore looking for cross-company development projects and business themes, which are driven under my direct control. One of these projects is the acquisition of US-based SLD Laser, a global leader in Gallium Nitride (GaN) laser technology, which joined the Kyocera Group in January 2021. By combining this GaN laser technology with Kyocera’s various unique technologies, we are considering extending its applications into new areas such as car headlights, lighting equipment, wireless power, IT, and telecommunications. In addition, we have developed an AI autonomous collaborative robot system which we expect to commercialize by March 2023. We are also creating several other new businesses, such as a local 5G system and a digital printing machine utilizing ink-jet printer manufacturing technology.
Autonomous collaborative robot system (left) Laser diode based on GaN technology (right)

DX promotion and use of human resources to support growth strategies

ー What about the strengthening of Kyocera’s management foundations towards achieving growth strategies?

Tanimoto:First of all, in order to maximize our comprehensive strengths, we are making efforts towards DX across the company. We have collected members from different divisions to launch the Corporate Digital Business Promotion Division. Also, manufacturing is concentrating on our 2x productivity improvement target, and created an automated production system using AI and IT. The system is being introduced on our newly established storage battery production line at our Yasu Plant in Shiga Prefecture, Japan, and is achieving improvements in both productivity and quality. We plan to gradually introduce the “smart factory” concept to all of our manufacturing divisions. We are also integrating various systems used in administrative divisions and pursuing initiatives towards “admin-led innovation” to unify management.Another area we are focusing our efforts on is utilizing and developing human resources, which we regard as our most important resource. In order to respond quickly to changing times and create new businesses, we are promoting an environment in which employees can be comfortable discussing their opinions with each other, and ideas are generated at every level of the organization. One initiative we have conducted recently is the “Venture Startup Program.” More than 800 applications were submitted for the first year and I was surprised, but very happy, to find that our employees had such high ambitions. We narrowed proposals down to three ideas and are currently making preparations for commercialization. What we place emphasis on is enhancing employees’ experience levels, motivation, and encouraging personal growth. In addition, we are putting energy into developing employees who will bring our company into the future by selecting from among high caliber employees and supporting junior employees who want to work internationally.

ー What is Kyocera’s corporate vision?

Tanimoto:When I was appointed president, I set a sales target of two trillion yen. By steadily expanding each segment over the medium-to-long term and growing new businesses, we are now laying out a vision to reach three trillion yen in sales. In a broader sense, however, we are aiming to achieve our management rationale, “To provide opportunities for the material and intellectual growth of all our employees, and through our joint efforts, contribute to the advancement of society and humankind.” We will try to be “The Company” to, in other words, embody the characteristics of the most excellent company in the world – trusted by society and admired for providing solutions to critical issues facing our world, while simultaneously being a company where our employees feel pride to work and satisfied with a sense of fulfillment.

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Strengthening our management base by pursuing four proactive management improvement measures

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Strengthening our management base by pursuing four proactive management improvement measures

Bolstering the management base for future growth

Kyocera has increased capital and R&D investments for sustained growth focused on proactive management. Through these measures, the company aims to strengthen the management base for future growth. One of these measures is to accelerate M&A, through which the company seeks to bolster existing businesses and create new ones. Kyocera has been particularly aggressive in M&A for industrial tools and document solutions, and is expanding businesses in these areas. From now on, Tanimoto said he hopes to promote post-merger integration (PMI) to better connect M&A outcomes with profit.

The second measure is structural reforms. Tanimoto stressed the company integrated production facilities for the telecommunication equipment and organic package divisions, which had long been an issue, but finally turned positive by focusing on special-feature products and businesses.” Organizational consolidation into the three segments conducted in 2021 was just laid out after taking these measures.

The third measure raises the goal of doubling productivity in manufacturing sectors. Kyocera is concentrating on promoting automation, robotics, and digitization. This leads not only to better profits but also contributes to reforming employees’ working practices.

The fourth and final measure Kyocera took was to strengthen governance. Kyocera is increasing female representation among our directors and has raised the ratio of outside directors. In addition, the company has set targets for Return-on-Equity (ROE) and implemented share buy-backs to improve capital efficiency. Under this robust management foundation and new management structure, Kyocera continues to aim for further growth.

(Information as of the end of February 2022)

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