Yoshihiro Kitamura: Message from the Head of the Media & Solutions SBU FY2018

Business Segment Interview for Annual Report 2017 (October, 2017)

Delivering New Value through Technology

There is strong public interest today in the implementation of robotics and autonomous driving, as well as AI and IoT. These technological advances are changing the world and being hailed as the Fourth Industrial Revolution. The Internet and web- based services are crucial business foundations, and they continue to evolve as the infrastructure for the transformation of society and business. The speed of this change is as irresistible as gravity. In fact, the Internet and web-based services are accelerating faster than the real world.

Previously, the real world presented issues and business needs to be addressed, and the Internet and web-based services were deployed to tackle them. Now, this order has been reversed. Today, technologies are the starting point, as they reshape existing industries and give birth to new ones.

Yoshihiro Kitamura Managing Corporate Executive Officer, Recruit Holdings Co., Ltd.; Head of Media & Solutions SBU; President and Repre sentative Director, Recruit Technologies Co., Ltd.

Recently, the media has often reported the negative aspects of technology, such as people losing jobs to AI. However, this idea is questionable. Rather, technology will enable people to spend more time on their areas of strength as fields where machines excel become thoroughly automated. That is the true potential of these technologies. In essence, work will be divided between people and technology. I'd like to provide society with the value generated through this process. We are implementing what we refer to as a Ribbon Model, for example where we identify the unease that users have not yet noticed and problems of clients that they have not yet seen, and combine these two negative factors to convert them into a positive, thereby creating various opportunities for society. I'm confident that this methodology will prove even more effective in the age of the Fourth Industrial Revolution.

Approaching Every Industry through Visualization and Optimization

The Japanese market is expected to experience a continuous decline in the labor force. This trend is inevitable. However, our response to the situation will be a key factor in enhancing Japan's competitiveness. To this end, as a business unit, we will strive to increase productivity in every industry by fully leveraging technology.

Recruit Group provides Air REGI, a POS cash register solution for industries such as dining and beauty-care. This solution applies digital technology to previously analogue tasks, thereby eliminating the bothersome task of closing the register at the end of the day and enabling accurate decision-making on purchasing the next day based on automatically tabulated sales data and sales trend data for each product. This allows businesses to maximize revenue and earnings by reducing opportunity losses and food losses. In addition, since the register closeout operation is unnecessary, users have more time for essential tasks such as using social media, leading to increased customer footfall and sales. In other words, the more tasks are rendered unnecessary, the greater the value that is created.

The first thing we did after our business unit was formed was pursue research into what would happen if we expanded the value proposition of eliminating more unnecessary tasks to markets outside the dining and beauty-care service sectors. For example, shift management of part-time workers is a challenging task in almost all the industries. Managers must often cut the shifts of willing part-time workers because their preferred shifts overlap with those of other workers. Also, managers often face labor supply gaps where they can't find enough people to fill shifts. I believe that we can solve these problems through the use of digital technology.

The power of digital technology allows us to visualize things that had previously not been visible. Digital technology also makes it easier to optimize what has been visualized. Visualization and optimization are the key themes in our approach to all industries and business processes.

Building Competitive Advantages by Bringing Together the Strengths of Every Individual

The source of our competitiveness is a strong sense of ownership felt by every employee. However, nobody has this strong sense of ownership at the beginning. When people tackle a task with a strong desire to learn, they naturally tend to work very hard. This is when their sense of ownership only begins to emerge.

Even if new employees who have just joined Recruit were suddenly told to have a desire to learn about the markets and business, it would probably be impossible for them—the scale is too big. First, they should consider the needs of the customers, users, and clients they deal with on an individual level by asking themselves: "What kind of services would make him or her happy?" This approach will foster a desire to learn more about others and a passion to make a contribution, both of which will lead to a strong sense of ownership. Incidentally, I am convinced that my own energy comes from a stronger desire to learn than almost anyone else. I find it exciting to face difficult issues—it is just like solving a puzzling riddle. I believe the desire to learn is so important because it is a powerful motivating force.

Whenever we start something new within Recruit, or try out a method that has never been attempted before, there are always critics who say "That cannot be done". or "That's impossible". These views are often expressed because ambitious goals have been set from the outset. Rather than focus on that, I encourage people to start with the smaller challenge of simply trying to surmount this "wall of opposition". Previously, in the Human Resource Development Committee of our business unit, we used to discuss how to overcome the issues faced by each employee. Now we focus only on discussing how to grow the strengths of each employee. To bring out the best in people, we must identify each individual's unique strengths by stimulating their desire to learn and encouraging them to tackle small challenges first. The competitive advantages of companies are built up by amassing the strengths of every employee in this way. Guided by this policy, we are working to hone our overall competitiveness even further.