Yuichi KounoRepresentative Director, Group President and Chief Executive Officer
SEPTENI HOLDINGS CO., LTD.

Entering our third entrepreneurial phase, we aim to evolve into a stronger corporate entity through teamwork and cohesion.

Building a collective leadership structure in line with industrial changes. The medium-term theme is “Focus & Synergy.”

I am pleased to announce that I have been appointed as the Representative Director of SEPTENI HOLDINGS CO., LTD. This marks the first change in the Company's representative director in approximately 15 years, and I am the fourth individual to assume this role. In July 2023, our group established a Nomination and Remuneration Advisory Committee as a voluntary committee of the Board of Directors, chaired by an outside director and composed of a majority of outside directors. The Committee discussed the need for a generational change to ensure sustainable growth in the future, and as a result, I was selected as the Representative Director.

The digital marketing market is one that experiences rapid changes, and the organizations and talent within this sector are considerably younger compared to other industries. With the recent change of our management structure, we aim to swiftly respond to changes in the business environment and create opportunities for young talent to thrive as we pursue our vision. Looking at the industry as a whole, there is a noticeable trend of renewing executive systems and passing the baton to the younger generation. Comparing the dawn of the Internet industry with the present, the Internet has evolved to a position that supports various industries. For this reason, I believe that the required management approach is also shifting from a leadership type that leads the way in creating one from zero to an inclusive type that involves collaboration with many people inside and outside a company.

Considering these internal and external changes, it can be said that our company is now entering its third entrepreneurial phase, following the establishment of the company in 1990 and the launch of the Internet Advertising Business in 2000. By building and promoting a collective leadership structure in line with industrial changes, we will work as a group to achieve sustainable growth and increase corporate value. As the first three-year medium-term theme under the new structure, I have adopted the concept “Focus & Synergy.”　

The importance of synergies felt through various new challenges.

I joined Septeni in 2006. At that time, the so-called Galapagos phones (feature phones) were the mainstream, and I was assigned to a team tasked with launching an advertising business for feature phones. The business grew rapidly as the market expanded, and we also established a group company specializing in this business.This experience laid the foundation for my career at Septeni, as it taught me how to expand business into new areas. While we aimed for further business expansion, the advent of smartphones dramatically changed the landscape. We tried to shift to smartphone advertising, but did not succeed. In the end, the Group decided to withdraw from the advertising business for feature phones and dissolve the company I belonged to.

While I was contemplating my future career, the former president, Mr. Sato approached me with an offer to start something new, which led to my return to Septeni. To my surprise, I was tasked with smartphone advertising. Although I thought “why this, right after a failure?,” I was encouraged to grow the business by fully utilizing all the assets and resources of the group companies. Embracing this challenge, I was able to once again launch and succeed in the smartphone advertising business. During this time, I felt a significant broadening of my horizons as I worked passionately with many colleagues. It is also true that there was a strong tailwind of the growing smartphone advertising market, but what I learned by experiencing both failure and success in the same area taught me the importance of “teamwork,” which involves people around me to face challenges, and the importance of utilizing the Group's assets and resources. This has led to the word “synergy” as set out in the medium-term theme.

As we reformed our management structure, we also reviewed our Group Executive Officer structure with an eye towards “generational change.” This time, we have divided our businesses into multiple areas, and Group Executive Officers have been appointed to oversee each area. Going forward, we will shift to “area management,” where we set targets not only for individual companies but also for each area and aim to generate synergies within those areas. This will allow us, for example, to put together a sales structure for each area, sharing each company's strengths and assets, and then be able to efficiently demonstrate our value.

“Focusing” on current business areas and involving the entire Group in new businesses.

Our group has taken on the challenge of venturing into new business areas adjacent to our existing businesses and into entirely new domains, under the theme of “domain expansion.” Going forward, I believe it is crucial to deepen our focus on our current business areas.

Along with the change in our medium-term theme, we will also alter the way our organization operates. Previously, we would promote talented individuals and send them into areas that differ greatly from those that we had been involved in, relying on their “individual strength” to pioneer those areas. This approach could be described as “stand-alone × centrifugal force,” where placing oneself in challenging environments by design generates the energy to create something from zero. However, from now on, I believe the importance of “teamwork × cohesion” in growing our existing domains or in generating new businesses within them. The word “focus” represents this concept.

Until now, there may have been a perception among our employees that only a select few were tasked with the challenge of new business.
However, looking around the company, I feel that there are actually many people who want to try something new. I believe that lowering the barriers to taking on new initiatives, not only by creating entirely new businesses from scratch, but also by changing the approach within our existing businesses, will lead to a “cohesion” that draws people in. Our mission is “To inspire the world with entrepreneurship.” I see the practice of “teamwork × cohesion” as an opportunity for many, not some, employees to recognize and demonstrate their own entrepreneurship.

Further strengthening the human capital management that we have been promoting.

In discussing the path towards future business growth, I must emphasize that our most important capital is our people, our employees. I believe that creating an environment where employees can feel the impact of their contributions and work with high motivation is essential for them to succeed. To achieve this, in addition to our ongoing efforts in utilizing Artificial Intelligence (AI) for recruitment and training, we have also made investments in human capital in 2023, including a base salary increase. These initiatives have led to the establishment of a solid environment, and in recent years, we have seen a rapid advancement of our younger employees into effective roles. Our personnel evaluation system utilizing 360-degree multi survey has shown that the level of evaluation that used to be attained by employees in their fourth or fifth year after joining as new graduates is now being achieved by those in their second or third year.

To further engage a diverse range of talents, I believe it is necessary to increase the variety of attractive businesses, which are the stages where people can excel, especially from a long-term perspective. Some individuals may wish to continue delivering results in existing businesses, while others may be eager to take on challenges in new fields. By developing businesses that attract excellent talent and increasing the number of people who work with high motivation, we can draw a diverse group of people from both inside and outside the company to launch new ventures. If we can further strengthen our human capital management in this way and combine it with multiple attractive businesses, we can create a cycle that will enable our group to grow into a stronger company. I consider this to be the key element in our third entrepreneurial stage.

Reviewing the business area classifications and building a system that can better respond to client needs.

This time, we reorganized our business areas and divided the Digital Marketing Business into three areas: “Marketing Communication,” “Direct Business,” and “Data & Solutions.” Our mainstay, the internet advertising agency business, falls under the “Marketing Communication Area.” The current Internet advertising market is estimated to be around ¥3.3 trillion as of 2023 and is expected to reach the ¥4 trillion level in the next few years, beginning to enter a mature phase. Looking ahead to the future, we need to not only focus on digital marketing, but also expand the scope in which we can contribute value to our clients. In terms of what kind of "value," it has become increasingly important to support our clients' businesses by combining internet advertising and digital solutions with mass advertising, which we have been advancing through collaboration with the Dentsu Group over the past few years. Today, there are various media, and the points at which users contact with media have diversified. What is needed is to design a total user experience across various media. There is a growing client need for marketing support with a bird's-eye view of the entire business rather than partial optimization, and we have found that integrated proposals that combine online and offline strategies have a higher acceptance rate than online-only proposals.

In this context, the synergy with the assets of the Dentsu Group, particularly mass advertising, are our strength. Leveraging this strength will be one of the important policies in the Marketing Communication Area for the 2020s.

Looking ahead to new challenges and business development in “Direct Business” and “Data & Solutions.”

Moving on to the “Direct Business Area,” since the subsidiary integration of Dentsu Direct in 2022, our company has been supporting the sale of our clients' products with an orientation towards integrated online and offline direct marketing. Based on the “know-how of selling products” gained here, we will now venture into OEM and D2C businesses, where we create and sell our own products. In marketing support, the business structure of purchasing advertising media and selling them with added value has a limit to how much profit margins can be improved. By selling and marketing our own products, we can significantly increase profit margins, deepen our knowledge and know-how, and actively return these benefits to our clients whom we support with marketing. We aim to create a highly profitable business model in this Direct Business Area.

In the “Data & Solutions Area,” we will strengthen the business that supports our clients’ solution development by utilizing the resources of our data engineers. Our group has a few hundreds of engineers both domestically and internationally, who have been involved in solution development both inside and outside the company. I believe that the technical expertise and know-how in talent development and organizational management cultivated there can be leveraged to support our clients' solution development. Expanding this business hinges on increasing our engineering workforce, but acquiring in-demand engineering talent from the market can be costly. Therefore, we are considering expanding our educational business that trains engineers from scratch and our personnel dispatch business that involves dispatching trained personnel to companies seeking engineers. By supporting companies through solution development and talent provision, we aim to produce a large number of engineers.

In addition, in the Media Platform Business, previously we had been promoting business independently within each subsidiary, but by creating synergies that transcend business segments, such as utilizing the knowledge and human resources of the Digital Marketing Business, I believe that we can open up new perspectives, lead to new actions, and accelerate business growth, just as I used to do in the past.

The pivotal three years that lead towards the realization of “10X.”

“10X”—enhancing the value we provide to our multi-stakeholders to ten times the current level—remains our long-term goal, and as we enter our third entrepreneurial phase, we aim to become a company with multiple strong business entities to achieve “10X.” To this end, in the next three years from the fiscal year ending December 2024, we will focus more than ever on our core Digital Marketing Business, leveraging synergies within the Group to grow it into a stronger and larger business. In parallel, we will continue to create new businesses in the Direct Business and Data & Solutions areas by utilizing our existing assets.

Please look forward to the Septeni Group, which is aiming for new growth as one team.