MESSAGE FROM THE MANAGER THE HUMAN TALENT & CULTURE DIVISION

Empathy and humanistic creativity

Over the years, KOKUYO has expanded from stationery into office furniture and interior design, but one thing has remained constant ever since the organization was first founded: KOKUYO has always been sensitive to the needs of its customers and created solutions that make customers’ study lives and work lives better. Alongside this tradition, we have a workforce that takes pride in honing their empathy and humanistic creativity. KOKUYO is an organization of people who are driven most of all by the desire to create something that will delight the customer. This body of people is the source of inimitable ideas that help differentiate our business. Our long-cherished corporate culture and unique approach to value creation constitute core competences that we will continue to cherish and hone.

As empathetic and creative as KOKUYO employees are, when I joined in 2022, I got the impression that the employees, individually and collectively, were enclosed in an invisible cage. As is often the case for companies with a long history, the business model was a little too rigid and employees were limiting themselves and their potential to their particular business domains. It was also true, though, that everyone was passionate about delivering new value in whatever business domain they were in. Over the past 20 years, KOKUYO’s consolidated net sales have trended at 300 billion yen. KOKUYO has potential to increase its revenue growth if it deploys its talent in new business domains and global markets. My role is to prepare the organizational structures that will unleash every employee’s potential. To execute this task, KOKUYO needs an injection of fresh ideas. Drawing on my experience working for a growing company, I will channel my cumulative career experience into KOKUYO with a view to empowering employees and unlocking powerful business growth.

The 4th medium-term plan, Unite for Growth 2027, sets out a basic approach of updating the Forest-Like Management Model and expanding the delivery of experience value in Japan and overseas. This approach requires us to venture into new frontiers, and we cannot do so if we remain constrained by past practices. That is why, in our talent development strategy, we will develop actions for maximizing KOKUYO-style creativity.

Uncovering and unleashing every employee’s creativity

Our talent development strategy identifies creativity as the source of KOKUYO’s value creation. It also identifies the need for stronger leadership to further empower this creativity.

Aligned with KOKUYO’s vision of a self-directed, collaborative society, the talent development strategy sets the goal of cultivating a workforce that has a singular passion for building a humanistic world. The first step is to have a workforce that embodies the ideal of everyone acting autonomously but also interdependently with others. To that end, we take a range of actions to spotlight each employee, uncovering their hidden talents and inspiring them to excel. These actions include discussing individual employees’ potential, from multiple perspectives, at the Talent Development Committee. They also include one-on-one consultations between an employee and the employee’s supervisor for discussing the employee’s creative ideas and future career. Such measures link KOKUYO’s growth with employees’ personal growth.

At our company, we conduct the employee engagement survey “wevox” on a monthly basis to monitor changes.

As a result of our ongoing talent strategy measures, the engagement score has risen three points over the past two years. This is an impressive accomplishment. Alongside the improvement in engagement, the organizational culture has become more future-oriented. With the update to the Forest-Like Management Model, managers and other employees have started thinking more about the future of the business, rather than just the present situation or what happened in the past. Alongside this change, KOKUYO has introduced performance-linked stock compensation. The stock compensation plan, initially for just “core employees” (career-track employees of a certain rank upward), will encourage the recipients to take an interest in building KOKUYO’s value over the medium and long term. As with the use of EBITDA as a performance metric in the 4th medium-term plan, this measure is designed to instill confidence in the company’s medium- and long-term growth prospects by linking part of the compensation to KOKUYO’s value over the medium and long term.

The seeds of creativity in employees can only be nourished into mighty trees if KOKUYO has strong leadership. A clearer understanding of the need for leadership is now taking root among employees thanks to the updated Forest-Like Management Model. To drive KOKUYO’s global expansion, we need leaders who can brave the challenges of an uncertain future, who can take decisions at critical junctures, and who can work with a team of diverse cultural backgrounds. KOKUYO’s leadership team increasingly understands that such leadership skills are essential for the company’s strategy of expanding the delivery of experience value.

Further transformation in the organizational culture

Once an employee’s creativity has been uncovered, it needs to be channeled into business activities. One way of doing that is through meaningful redeployments. Purposeful redeployments is a key task for this year. Last year, we attempted a number of redeployments with a view to unleashing employees’ potential. The problem was that our organization had limited experience in redeploying staff for the purpose of upskilling. This year, we will take a more flexible approach and accumulate a body of best practices in redeployment. Meaningful redeployments will be an effective practical measure in disseminating business-level knowledge, as envisaged in the Forest-Like Management Model. By transcending boundaries between business units, and especially with redeployments among the leadership class, leaders will gain opportunities for encountering effective practices in other business units. It will also increase the number of cases where employees, through a redeployment, walk a different path from the path they normally walk and gain successful experiences from such. This will create an appetite within the organization for more redeployments and challenge- taking behavior, which will be crucial in driving further transformation in our organizational culture.

A globally esteemed organization

The actions we have taken in our quest for a self-directed, collaborative society are starting to produce results. As more employees begin to discover their potential and take on challenges, we will start seeing palpable differences in business outcomes. I feel confident and excited about the limitless possibilities that KOKUYO’s humanistic creativity can produce. With a talent strategy that focuses on each employee, I will continue to serve my role in forging a future in which KOKUYO is a globally esteemed organization.

• Leadership’s commitment to sustainability