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Dialogue with Society

Toward Making Suntory a Truly Valuable Global Corporate Group

On April 22, 2016, we invited experts to the Suntory World Research Center completed in May 2015 to introduce the activities of the research facility and also to discuss the CSR activities of the Suntory Group, which aims to be a global multi-faceted food and beverage company from Japan.

  • Date: April 22, 2016
  • Location:Suntory World Research Center

Experts

Co-founder of E-Square Inc.
Peter D. Pedersen

President of IntegreX Inc.
One Akiyama

Professor, Hitotsubashi University Graduate School of International Corporate Strategy
Ken Kusunoki

Suntory

Executive Officer, Suntory Holdings Limited
President and Chief Executive Officer, Suntory Global Innovation Center Ltd.
Takayuki Hirashima

Executive Officer, Suntory Holdings Limited
Senior General Manager, Corporate Communications Division
Tomomi Fukumoto

Suntory Holdings Ltd.
Senior General Manager, Environmental Sustainability Strategy Department, Corporate Communications Division
Hiroshi Naito

Suntory Holdings Ltd.
Senior General Manager, CSR Department, Corporate Communications Division
Masaki Tomioka

Necessities for Common Global Platform

Moderator
We toured the Suntory World Research Center before sitting down for this discussion, but I would like to ask first about what is important in advancing the globalization of Suntory in the future and what impressions you had on the tour of the facility.
One
Akiyama
On the tour of the facility, I could feel the Suntory Group's Corporate Mission "In Harmony with People and Nature" and Corporate Tagline "Follow Your Nature" concepts valued at Suntory everywhere in its construction. At the same time, I once again felt the philosophical platform that should be protected as an axis even in the businesses being expanded globally by Suntory.
However, embedding this philosophy in specific activities while expanding to each country and region is not a simple thing to do. For example, Suntory cannot simply execute the broad-range of water initiatives that are growing throughout Japan as is in other countries where water issues differ. Challenges such as diversity are also becoming clear as the number of employees in countries other than Japan increase with the rapid globalization of Suntory in the last several years.
Peter
D. Pedersen
(hereinafter
Peter Pedersen)
I believe a superior organization has brought together three things.
First, anchoring. Anchoring is a company's ability for employees to live by the spirit of the values the organization has defined. Second, alignment. Alignment is a set concept to assess whether the vector of the company is in-line with society. Finally, adaptiveness. Adaptiveness is a firm philosophy for self-reform that points where to aim while being in-line with the vector of society. Adaptiveness relies on whether or not the employees themselves have the ability for intrinsic innovation.
There are several aspects to this adaptiveness. First, the company must have obtained a license to operate for permission to conduct the basic operations. However, a license to grow also needs to be obtained from the stakeholders to remain competitive. Giving as many employees as possible the license to create is crucial to attaining the desired adaptiveness. A system able to drive the creativity and transformation capabilities of each individual is connected to improving the satisfaction of employees. Therefore, it connects to improving output-type production to create value. The license to grow and the license for employees to create are intimately connected.
I think Suntory is ahead of the competition in all of these aspects at least in Japan. However, Suntory has to penetrate these three values from the bottom up in organizations in each country by comprehensively re-evaluating them as they continue to grow globally in the future.
Ken
Kusunoki
How to go about confronting diversity is a challenge common throughout the world. I have worked with diversity each day for ten years. Diversity is prone to being seen as demographics, which looks at the male to female ratio internally as well as nationality, age, religion, and persons with disabilities.
Demographic-type diversity is also being dropped more and more internally at globally expanding companies like Suntory. This is why an inclusion point-of-view will most likely be most important for true diversity. The requirement is not uniformity but should be diversity in what is already a diverse organization. Just as each and every person has their own way of thinking, a culture accepting the different thoughts of each person should be natural in a truly diverse company. What is necessary after inclusion is integration in order to produce results through diversity. The quality of management is demonstrated by whether or not a diverse group of people can all come to an agreement -- or at least whether they are able to come to a level of agreement there is no conflict on the direction -- and whether a work group can be formed.

Importance of Sharing the Corporate Philosophy Worldwide

Moderator
You have talked about the challenges in furthering the globalization of a Japanese company, but how does Suntory approach these challenges?
Tomomi
Fukumoto
Suntory creates products with new value due to our high quality to bring joy to our customers. The revenue that we earn through these products is not only invested back into our businesses but also returned to society through the spirit of "Sharing the Profit with Society." The driving force pushing us through this cycle is the Yatte Minahare -- Go for It! spirit we have had since our founding. I hope the "Yatte Minahare -- Go for It!" and "Sharing the Profit with Society" founding spirit will be the platform of the Suntory Group even as we expand more globally.
However, the way this founding spirit is received is very different in each country, even if we are all speaking the same language. As One
Akiyama said, the way to expand the global Suntory Group with 42,000 employees who have different values and cultural backgrounds is challenging.
Masaki
Tomioka
Suntory must share common ideas by sharing its philosophy with all of its employees worldwide to grow as a truly global company. First, Suntory started with the management layer of overseas Group companies. Managers were able to grasp the philosophy and target direction by visiting sites such as production sites, cultural facilities, and the natural water sanctuaries which cultivate water resources. We are first making everyone to actual experience "In Harmony with People and Nature" and "Follow Your Nature." It will take time to for everyone to actual experience them but I think it is something that has to be done.
One
Akiyama
The way of communicating this philosophy is important both inside and outside of the company. The ambassador program, which brings employees from oversees to experience the natural water sanctuaries, is a very good way to do this. The next step is the approach for employees who have experienced the philosophy first-hand to fulfill their roll as evangelists once they return to their own country.
The more global the objective, the more the way to fully grow locally needs to be considered. The point is to grow while considering each situation by highlighting challenges from a glocal perspective. At this stage, I think a system to think of the people working in each region and country as candidates is good. Communication and dialogue with employees and people in the local communities are indispensable. It is very important for the headquarters of Japan and the local people to work together to figure out how to specifically take action.
Ken
Kusunoki
There are two things I would like to add to the discussion about sharing the corporate philosophy. Employees sharing common ideals and having an affinity for their company is fantastic, but people loving something goes hand-in-hand with people hating something. This means target employees need to be identified by the company in the same way target customers are defined by marketing departments for example.
The other point I would like to say is that the inherent corporate value can be lost if a broad range of products and services are expanding with the aim of becoming a company loved by everyone. In the case of Suntory, the company is engaged in both food and beverages as well as handling the gambit of the world's top five whiskeys. This in and of itself is a very important thing, but this can lead to a company with everything yet has nothing if done poorly. This is why there is a risk of losing what is important with the globalization of Suntory if roughly the same amount of debate is not given to what won't be done as to the Yatte Minahare -- Go for It! spirit as the other side of the discussion about this Suntory value. If the core is clear, what to throw out is also clear. The question is whether Suntory has a philosophy to bring about action that strong.
Peter
Pedersen
Even in terms of human resources, no matter what approach is taken, people will not become optimistic if the company is not a winning company. This is impossible regardless of how much the Yatte Minahare - Go for It! spirit is stated if the philosophy does not connect to results. I think this is especially important when growing businesses. Bringing together these philosophies is of course important, but, at the same time, not being afraid to give up and whether or not there is a good corporate climate is vital.

Strongly Demonstrating the Reason to Be

Moderator
I believe Suntory has been highly praised in Japan for operations from research and development to quality assurance and environmental activities. How do you connect to a shared philosophy to expand the strengths of Japan more globally? I would be interested to hear what you think.
Ken
Kusunoki
Diversity will be naturally accepted and there will be no ongoing debate about the philosophy if the company has highly-functional integrated management with a simple business structure. Suntory must build ONE SUNTORY led by management as the company expands the shape and variety of businesses to each country around the world that have different food cultures. For example, because Suntory is aiming to be In Harmony with People and Nature, the company needs to be aware whether this discussion is settling on the right when opinions are split between the left and right.
Passing through a bottleneck in the business philosophy is difficult. ONE SUNTORY needs to be broken down into values and large concepts that should be shared more effectively and practically.
Takayuki
Hirashima
In terms of research and development, we have proposed an OPEN MIND or, in other words, diversity as one important value in the operation of the Suntory World Research Center. In one year, we have uncovered not only our strengths but also our weaknesses. Up until now, we have been trying to resolve everything with the resources that we have. We are particular about the taste and blend of our products. We have released hit products with only our own capabilities, but this may have potentially caused a gap by weakening our sense of speed moving to the next step. We can close this gap with readiness in solutions unavailable to our company up until now by asking those around us in an environment of open innovation that is promoted by the Kansai Science City while also furthering the exchange of knowledge with Group companies growing in each country. This is dramatically expanding the world perspective and possibilities of Suntory.
Peter
Pedersen
I think Suntory is a very unique company in Japan. However, with further globalization, the operating principles totally change when a company becomes a more diverse, more multifaceted, total food and beverage conglomerate.
Aiming for output is natural even when conducting research and development. the reason for output understood from society or, more specifically, an outside-in perspective is indispensable. The full force of the company cannot be exerted as ONE SUNTORY with only inside-out ideas that aim to simply satisfy each customer at a departmental level. So what is the reason for the output of Suntory? I think this depends on whether a company with a multitude of businesses has something in common, regardless of the unique characteristics of each business.
One
Akiyama
I believe the correct thing to have in common is the corporate philosophy. The process for how to go about positioning each job and product is important by aligning it with Suntory's ideal form, ideal company, and ideal future.
Masaki
Tomioka
I think this is related to the discussion about the corporate philosophy, but the sense of belonging is high for at least the employees in Japan. The level of satisfaction is high even in the employee awareness surveys that are conducted. We do hear a lot of criticism surprisingly, but this criticism stems from an affinity for Suntory. This assessment of Suntory is because common values are used in the production and work of every employee.
Tomomi
Fukumoto
Our desire to deliver rich lifestyles and health to people is a common ideal held in the corporate mission "In Harmony with People and Nature" established by Suntory. Businesses such as soft drinks, health foods, and even restaurants and flowers are growing in addition to our alcoholic beverages. This growth has happened around the axis of offering abundance to customers and society.
Ken
Kusunoki
I think you are right. However, health, safety, and reliability are agreeable to everyone. No one can differentiate themselves by only holding positive values. We need to take another step to offer a reason for our existence to differentiate ourselves from our competitors. This is a requirement to have a unique existence that is necessary around the world.

Taking Follow Your Nature Initiatives Unique to Suntory to the World

Moderator
How are initiatives with the objectives of CSR, the environment, and sustainability made global? I would be interested to hear any specific thoughts you might have.
Hiroshi
Naito
When we talk about the environment, the first thing that should be mentioned is water. I hope we can converge on a direction aiming to make things better for water from knowledge about the use and benefits of water for people in each region of the world by fully defining principles for sustainability. Thereafter, we need to have thorough and ongoing debates based on the regional challenges for specific actions to determine priority levels. We are still only at the halfway point at a global level, but I would like us to expand into each region and country with glocal themes that are close to us.
Peter
Pedersen
Today, a generation has come that requires companies to undertake Sustainable Value Innovation (SVI). All of the economic and societal figures had explosive growth exponentially during the second half of the twentieth century. As a result, environmental figures such as CO2, greenhouse gases, and the ozone also increased on the same exponential curve. This situation is unlike anything humanity and civilization have seen before. When we compare 2000 and the near future of 2030, the depletion of resources such as water and food supplies and the difference between the input and output are dramatically growing as the world population increases with the economic growth of developing countries. The keyword for ways to combat this is SVI, which is the future of CSR.
Companies cannot only pursue functionality. Performance excellence and societal excellence are a set, and the challenge is how to communicate this to the world. Even in the case of Suntory, this relies on whether the company really is determined to generate sustainable growth. The increase in the amount of water and CO2 emissions also emerges with the expansion of globalization and scale. Is the company able to find a story of growth unlike any other company within this? Can the story then be shared with everyone to lead it to innovation from within? That is the key.
Ken
Kusunoki
The resolution of societal challenges needs to become the strength of the company. If we consider this from the business region, Created Shared Values (CSV) is pointed to in recent years. Every company tries to fulfill the needs of customers today, which doesn't bring about differentiation. Whoever can solve bigger challenges in this type of environment will obviously prevail. Water is probably the greatest and most core challenge. Regardless of how global we become, it is important to remain a global company that started in Japan. I think the idea of co-existing with water and nature that has long been valued in Japan will be easier to understand if this message is communicated globally.
Tomomi
Fukumoto
Water is not only the physical element of H2O for Japanese but also a rich bounty of nature. Many things come to mind when we think about this co-existence. Follow Your Nature incorporates many of the ideals found in the In Harmony with People and Nature corporate philosophy. I would like to actively promote activities that communicate this as a message from Japan.
Ken
Kusunoki
The idea of co-existing with nature is vital. More specifically, co-existence does not mean conquer or control nature, but rather always creating a harmony with nature even around the axis of sustainability. The ability to fully explain and gain an understanding of this point overseas is important.
One
Akiyama
The point here too is how to align the vectors and communicate this idea. An idea communicated as a message able to bring about understanding and empathy.
Peter
Pedersen
This cannot be approach exclusively with seriousness. There always has to be some fun. I hope the fun is not forgotten the more and more the company grows globally. In fact, there are almost no major companies that I feel are fun. However, Suntory has the ability to be fun.

In Conclusion

Moderator
This will be the last topic. I would like to ask for a summary from each of you.
One
Akiyama
The challenges common to all Japanese organizations entering the international market is breaking language barriers and knowing what and how to communicate their message. The activities of Suntory are definitely founded in an undercurrent of sustainable ideas. Will the message resonate with people in each country when ideas already shared implicitly in Japan are glanced upon by the rest of the world? In other words, how should a message that can be understood and empathized by the audience be communicated? I think this is a good chance to reconfirm the founding spirits once again. This is quite a difficult task, but I am expecting great things.
Ken
Kusunoki
The entry point of CSR is all about clearly indicating what that company and that company alone can do. This is to define what needs to be at the very base of the foundation after considering the significance of its existence. One excellent aspect of Suntory is illustrating this in many forms rather than just one. I hope we can use words and communication to bring empathy and support for nature from people from around the world that surpasses our products.
Peter
Pedersen
As a mission for a leading company, the age where simply putting out a good product is over. This generation demands the creation of new values and standards. Suntory has the spirit to boldly step up to challenges called the "Yatte Minahare - Go for it!" spirit. The corporate climate is also uplifting. Please create a Suntory that we want to encourage by constantly stepping up to challenges. This endeavor will surely connect to the motivation of employees.
Masaki
Tomioka
Suntory started communicating the corporate massege in 2005. I think we have reached a level where this philosophy has been digested internally and can be praised as a message which discusses the unique aspects of CSR at Suntory which we have cultivated over ten years. I think the fun that Peter mentioned is also a unique aspect of Suntory that we have in our corporate climate, which has been incorporated in the DNA inside of our company. I would like us to value "fun" as an indispensable keyword even while we aim to be ONE SUNTORY globally.
Hiroshi
Naito
This dialogue has been very stimulating. First, we have the discussion about the base for the position to stand globally. We have uncovered challenges related to communication words when linking business and the environment. I think the word "glocal" provides a hint to our future activities. We will promote environmental activities unique to Suntory's Follow Your Nature philosophy while taking value sharing and empathy inside the company to the next level.
Takayuki
Hirashima
Up until now, our entire objective has been offering more healthy products to customers safely and reliably. I felt the strong need to thoroughly differentiate the difference between Suntory and other companies upon listening to everyone's opinions. Each and every researcher is proud to be part of Suntory of course. We have gathered together people who want to make some difference for the world and for people. However, I feel we as management also need to build a better environment facilitating a license to create that was talked about by Peter.
Tomomi
Fukumoto
Suntory is currently at the starting line in terms of true globalization. We have been able to reconfirm the importance of placing our philosophy at our core today. The remarks about the elements giving us value even on the world stage due to the "Suntory-ness" that we have cultivated throughout our history are really encouraging. Also, we were able to gain many hints about how to actually advance globalization, which we are currently confronting.
Through the dialogue with everyone, I strongly felt the need to deeply think about what our raison d'etre and core once again. We will continue to promote our CSR management so that customers worldwide can understand and recognize the unique value of Suntory while sharing the ideals ingrained in our mission "In Harmony with People and Nature" as a global multi-faceted food and beverage company that began in Japan. Thank you very much for your time today.

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