Business Strategies for Creating Value
The new Medium-term Management Plan sets out two directions for SMBC Group’s digital strategy: “Beyond & Connect” and “Empower Innovation,” and further develops the existing strategy with the aim of “evolving into a global digital solution provider that also creates social value by creating new businesses on the basis of the trust held in SMBC Group.”
Specifically, through digital’s power to transcend and connect beyond boundaries (Beyond & Connect), we will work with a variety of partners to provide solutions that transcend business categories, companies, regions, etc., to further improve customer convenience and create and nurture businesses that will serve as the foundation of SMBC Group in the future.
At the same time, in doing business, it is necessary to look at the state of global digitization, including in emerging economies, in the context of a complex and rapidly changing environment involving a variety of events, such as the advance of technological innovation, demographic change, shifting values, and the rise of geopolitical risk. In order to respond to our customers’ ever-changing needs amid a transforming business environment, we will pivot the direction of our businesses according to the situation, transforming our business models to fit current trends.
In addition, the creation of new businesses requires that we strengthen our framework for accelerating innovation (Empower Innovation). We will also accelerate the creation of systems to generate new seed businesses both within and without the company, by continuing our efforts to transform the company culture through initiatives such as “Producing new CEOs” and internal social networking, together with the development of functions for the speedy creation of new businesses, such as establishing a corporate venture capital (CVC) arm to strengthen open innovation structures on a global basis and invest in startups.
SMBC Group states that “we contribute to a sustainable society by addressing environmental and social issues” in its Mission. In the SMBC Group Statement on Sustainability, we commit to “creating a society in which today’s generation can enjoy economic prosperity and well-being, and passing it on to future generations” so that we can solve social issues and create a better society.
SMBC Group has also formulated the new Medium-Term Management Plan, the “Plan for Fulfilled Growth,” under which the creation of social value is identified as a pillar of management in light of the expansion/worsening of social issues and our impact on society being added as a factor for measuring corporate value. With the formulation of our new Medium-Term Management Plan, we revised the key issues (materiality) of SMBC Group for the first time in about a decade. Of the multitude of social issues facing the world, we have identified five issues to focus on in particular as our new materiality. These issues are the Environment, DE&I/Human rights, Poverty & Inequality, Declining Birthrate & Aging Population, and Japan’s Regrowth. We have also identified 10 goals for solving the five issues.
In order to achieve these goals, it is important to incorporate efforts for solving our new material issues in the daily activities of SMBC Group and steadily execute those efforts. This involves enhancing dialogue within the company via internal social media and town hall meetings, as well as incorporating the creation of social value in the items for evaluating business divisions and units, andi individual employees. Looking ahead, we will formulate detailed action plans for each material issue and endeavor to set and disclose impact-based KPIs that measure our impact on society. If we can visualize a new metric for measuring our impact and our efforts for solving social issues create a flow of money, which in turn will bring value back to us, then our efforts for creating social value will spread throughout society. In order to achieve such a society, it is important for the various constituents of society, such as government, corporations, individuals, and universities, to work together across boundaries. We at SMBC Group will contribute to building the foundation and market for such cooperation as the point of connection between our customers in diverse regions and industries across the world.
SMBC Group aims to create social value in order to solve social issues while achieving economic growth, and make people living in such a society feel happy, or in other words, contribute to growth for happiness. As Group CSuO, I will make my best effort to provide leadership that enables the officers and employees of SMBC Group to work together to solve social issues in accordance with our new Medium-Term Management Plan and newly defined material issues.
The environment surrounding our business is changing faster than ever before, and together with the growing importance of issues such as “sustainability,” “digital,” “global,” and “compliance,” our responsibilities to society as a company are also increasing dramatically.
In order to respond to increasingly complex and serious social issues and to meet increasingly diverse and sophisticated customer needs, SMBC Group has established the basic policies of “creating social value,” “pursuing economic value,” and “further strengthening our management foundations” in its new medium-term management plan beginning from FY2023.
Further diversification and specialization of human resources, the most important driving force behind the execution of the new medium-term management plan, is also essential. To respond to the transformation of our business portfolio, we will make strategic efforts to build a human resources portfolio focusing on specialized personnel in fields such as digital, compliance and human resources able to drive global business.
At the same time, employee values and work perspectives are diversifying alongside the transformation of society, and changes in the relationship between companies and employees are increasing the mobility of human resources and intensifying competition for talent. With a view to SMBC Group’s sustainable growth, we will continue to review our appraisal systems and the way we treat our employees in a timely and appropriate manner to ensure that we are an “employer of choice,” and we will further accelerate our transformation from traditional HR operating styles, including a review of operations that emphasize age-based seniority.
We will further promote DE&I with an emphasis on individuals taking on challenges and growing autonomously to create an environment where diverse professional human resources can demonstrate the best of their abilities. We will also strive to enhance the sophistication of human resource management by establishing a fair evaluation system based on skills and performance.
We aim to achieve a virtuous cycle in which employees repeatedly take on challenges and grow, and contribute to the development of customers and society by providing added value, thereby enhancing the corporate value of SMBC Group.
As Group CHRO, I will personally take the lead in taking on challenges and transformation, and will increase opportunities for dialogue with employees through town hall meetings and seminars, and for internal communication by the Human Resources Department, so that the vision the company and its employees are aiming for can spread throughout the group and our human resource capabilities are maximized.
