2018_4q_omron_e

3/45 VG2020: Key Initiatives For The Past 7 Years

Here we show the key initiatives for the past 7 years. We undertook many measures, but these are the three major initiatives. First, firmly establishing ROIC management. Second, implementing Corporate Principles management. Third, enhancing technology-oriented management. In order to firmly establish ROIC management, we set out management metrics, deconstructing ROIC into its component elements in order to create ROIC-linked objectives for each individual, from senior management on down. This allowed us to tie behaviors to achieving the ROIC targets. We specifically first broke ROIC down into return on sales and invested capital turnover. By then breaking these down further, we were able firmly instill awareness of ROIC throughout the organization. This has been a key ongoing initiative. We refer to this as the Down-Top ROIC Tree; we have been disciplined in applying this throughout the group. However, the single largest contributor to our success in raising ROIC from 4.8% to 12.7% was the strong recovery in IAB. We developed a new concept, innovative-automation, and successfully made corporate acquisitions to support it. This is what allowed us to put IAB back on a growth trajectory. Next, in implementing Corporate Principles management, we focused on 2 initiatives. The first was an effort to reduce the distance between senior management and line employees. We specifically created a role for those individuals that embodied the Corporate Principles, focusing on encouraging other employees to emulate their efforts. We continue to encourage such individuals to act as guiding lights in inspiring their peers. The CEO Roundtables, where I engage with team leaders and the Chairman’s Corporate Philosophy Dialogues are examples of activities to support this effort. In direct dialogues with line employees, senior management share personal experiences that led to deeper understanding of the Corporate Principles. We aim to encourage employees to then work to inspire those around them. Implementing Corporate Principles management is also an ongoing initiative that will remain a focus going forward. The second is to manage the business in a manner that resonates with employees. In 2012 we created The OMRON Global Awards (TOGA), which is designed to encourage employees to embrace the spirit of the OMRON Principles. Employees create teams that work together on a declared theme that aligns with the OMRON Principles throughout the year. The results of each team’s efforts are presented regionally; the top 13 regional teams are then invited to the Kyoto HQ on Founder’s Day, to present to the entire group. Every year, enthusiasm for this activity continues to grow. The number of declared themes now stands at 6,200; the cumulative aggregate number of participating employees to date is 51,000, exceeding the current employee count of 36,000. The reason why the number of participants exceeds the number of employees is because there are employees that participate in multiple teams. This is also another initiative that we will continue. Third is enhancing technology-oriented management. We appointed a CTO in 2015 to ensure we managed our business in a manner that integrates the technological and business imperatives. OMRON’s unique technology-oriented management seeks to solve the social issues facing humanity. We created Near Future Designs that are based on technological innovation. We then identified the strategies necessary to achieve the Near Future Designs and are now executing on those strategies. CTO Miyata will talk about enhancing technology-oriented management in more detail later. Turning now to our FY2017 results. Please see slide 3.