Action toward Sustainable Growth

Need to Consider Measures that Look 20 and 30 Years Ahead

Pedersen:

JSR will celebrate its 60th anniversary in December of 2017. What sort of vision or measures come to mind when you look ahead to the next sixty years?

Koshiba:

I believe that, for the corporate body known as the JSR Group to survive and grow over the next twenty or thirty years, we must come to grips with the work-style reforms that I just mentioned and the digital revolution. But there is one more thing. We must also reexamine our manufacturing facilities and IT infrastructure. We will decide on the course we will take here during the three years of our new mid-term business plan. We made the new plan effective until 2019 rather than 2020 because we wanted to send a message that "2020 will mark the start of the next generation." I want the young generation to take the lead in setting our direction for the twenty years, and thirty years, that come after that.

Pedersen:

So it will be the coming young generation that will take charge of so-called creative problem-solving. How do you intend to instill the digital mindset, for example, that will be needed for this?

Koshiba:

We have many employees who are not "digital natives." But I think we can raise their affinity with data by, for example, replacing our old-style core information systems to make better use of data in our operational systems and introducing digital medicine into our employees' health management. I also think that learning not just language but program language will be effective. One thing surprised me recently. A year ago, I was talking to some young research employees when I said, "Instead of always doing things the same way, why don't you try using a neural network (a data processing system modeled on the nervous system)." A year later, they sent me a report. And I discovered that they had progressed so far that I had no idea what their report said. That showed me just how far digital natives can grow if we give them an opportunity. In fact, we have just started selective education with this aim.

Pedersen:

So it's important to have mechanisms that allow those who are motivated to reach high.

Koshiba:

The Japan Synthetic Rubber Company (JSR's former name) of days past was a domestic company. Nowadays the culture is one that if even one foreigner participates in a meeting of mostly young employees, the conversation naturally switches to English. In the same way, I believe digital technologies will naturally become part of the company.

An Organization that Maintains a "Sound Mind"

Pedersen:

I previously mentioned how it is necessary to build organizations that are "future-proof" against an unpredictable future—in other words, to build organizations that do not age and are resilient. I think a company climate into which digital technologies and English are incorporated is exactly in line with this. On top of this, alignment with society in the sense of bringing society and vectors together is essential. What I mean is that there is a need to align the vectors of a company's strategy in "realization of a sustainable society," something demanded by the times and by stakeholders.

Koshiba:

We reorganized our previous Audit Department into a "Corporate Audit Department." This new department does more than just conduct checks to prevent irregularities, such as environmental destruction or accidents and falsification of quality data. It also aims to add the perspective of "sustainability innovation" for the delivery of better products based on the fundamental premise that such irregularities will not occur. In other words, it seeks to enhance psychological and cultural aspects while keeping a "sound mind" for organizational survival.

Pedersen:

I think the "excellent company" of the past pursued so-called "performance excellence." But I think a keyword for today is so-called "double excellence"—double in the sense that pursuit of "social excellence" is added. The addition is significant. This is because I think it demonstrates to stakeholders that JSR is not simply about traditional QCD performance but also a company that firmly addresses social issues.

Koshiba:

I was in sales for many years. In some respects, what brought customers to do business with us was the JSR brand. But the moment-to-moment interaction with "individuals," researchers or sales personnel, for example, was also an important element. Customers feel that they want to do business with us when they trust and like the individual. The best thing is to create a situation in which customers will buy a product even when it is not ready. This really happens not only with long-time customers but also new customers.

Pedersen:

What you're saying is, "you can't go wrong with JSR," right?

Koshiba:

We have consistently remained faithful to the idea of "Innovation One on One" with the customer as part of our Materials Innovation orientation. In other words, we strive to build a system in which innovation is born through a special one-on-one relationship with the customer. One meaning here is that, rather than purchasing completed products, customers are purchasing a relationship with JSR.

Pedersen:

That's the strength of a relationship built on the sharing of "Anchoring" not only within the company but with outside interests and customers, isn't it.

Koshiba:

However, "Innovation One on One" has a weakness in that the fields in which it can be applied are limited. We have stuck to "Innovation One on One" as a pattern for success. However, in the digital revolution, when change takes place rapidly, we will not succeed with it alone. Therefore, I think the question becomes how do we generate completely new business models. Answering it will be a tremendous challenge for us.

Being a Company that is Consistently Trusted

Pedersen:

The United Nations adopted the "Transforming our World: The 2030 Agenda for Sustainable Development," better known as the Sustainable Development Goals (SDGs), in September of 2015. I think the SDGs are vectors for considering how we can change society, and what we should do to execute those changes. It is important to consider what we can do for this through business innovation. We can multiply the strength of existing reliability and sincerity by the strength of creative innovation. I like to say that, from now on, ROI will not mean "return on investment" but rather "return on integrity." If CSR is something fatiguing and painful in which there is a trade-off between business activity and society, then we must eliminate that situation and create a "trade-on" relationship. I think doing so will bring higher brand value and higher return.

Koshiba:

SSBR, which is a JSR product, is helping combat global warming. For example, tires can help resolve issues concerning electric vehicles (EV), which are said to have short travel range. Tires are also a key component of various environmental responses, including engine downsizing. And there are our semiconductor materials, which are energy-saving products. The amount of electric power consumed by equipment used in AI is tremendous. And it is said that data centers account for 2% of the world's electric power consumption. Business opportunities can be found in efforts to solve these social problems. I think "materials" are what will be needed in industrial innovation oriented toward resolving such major issues.
Because there is an element of social "alignment" in a company's existence, it is important that companies continue building even greater trust from their employees, clients, and customers and ensuring that such trust is unshakeable. I think that if we look squarely at the JSR Group place in society, our corporate social responsibilities will come into focus naturally.

 

Peter David Pedersen

Co-founder of E-Square Inc., executive director of TACL – The Academy for Corporate Leadership, and co-founder of the NELIS - Next Leaders' Initiative for Sustainability.
Mr. Pedersen was born in Denmark in 1967. He graduated from Department of Anthropology, Copenhagen University. He has resided in Japan for more than 25 years. In addition to being a consultant on matters concerning corporate management, the environment, and CSR, he is active as a lecturer, training instructor, and author. Among his major works are Resilient Company (Toyo Keizai Inc., 2015) and The Fifth Competitive Axis (Asahi Shimbun Publications Inc., 2009).