How Japan’s Top Executives Are Overcoming Natural Disasters, Economic Turmoil, and Other Surprises

Members of II’s All-Japan Executive Team discuss the biggest challenges and opportunities facing them in 2023.

Illustration by II

Illustration by II

Japanese CEOs are throwing out the rule book in the face of unprecedented challenges, including natural phenomena like typhoons, earthquakes, and extreme snowstorms on their shores.

“In these uncertain times, where conventional wisdom and past experiences no longer apply, we must confront complex issues directly,” said Satoru Komiya, CEO Tokio Marine Holdings, the oldest insurance company in Japan.

Buy-side and sell-side professionals voted Komiya as the No. 1 chief executive in the insurance and non-banking financial sector in Institutional Investor’s All-Japan Executive Team survey. His firm is reimagining traditional insurance to suit renewable energy by acquiring smaller renewables insurers and hiring specialist claims adjusters, who assess the amount of compensation after a claim has been made.

Many Japanese homes still lack sufficient earthquake resistance and thermal insulation, according to Yoshihiro Nakai, the top-ranking chief executive in the construction sector according to buy- and sell-side voters. His firm Sekisui House is working on creating more high-quality housing by improving the resilience of existing homes.

Meanwhile, Osamu Hashimoto, the top-ranking chief executive in the chemicals sector by combined vote, is addressing climate threats by internally transforming his firm, Mitsui Chemicals — as well as teaming up with other companies. “I believe multi-company collaborations will lead to even greater contributions toward the reduction of greenhouse gasses,” he said, pointing to Mitsui Chemicals’ work with the Finnish oil refining company Neste to produce “renewable” plastic.

Alongside climate issues, inflation is putting pressure on budgets across all sectors. Yasuo Takeuchi of Olympus, who was voted best chief executive in the medical technologies and services sector by buy- and sell-side professionals, said it was a time to exercise caution as costs continue to rise. But government efforts to suppress inflation are not always popular.

Takeda CEO Christophe Weber, who was voted No. 1 in the biotechnology and pharmaceuticals sector by sell-side participants, took aim at the U.S. Inflation Reduction Act. He said the act, which President Biden introduced in August, partly to try and lower prescription drug prices, will hit innovation and the development of new drugs: “Even in the U.S., which has long served as an innovation engine for the industry, the Inflation Reduction Act involves an unprecedented government price-setting system for medicines that may put future innovation at risk.”

One area where innovation is expected to flourish: Artificial intelligence. In December, Olympus acquired a London-based startup called Odin Vision to use AI to create a digital endoscopy, a medical test where a camera is passed into the body through an opening. “This goes far beyond the current endoscopy or endoscopic procedures, offering a series of smart, curated solutions,” Takeuchi said.

Meanwhile, Sekisui House CEO Nakai said his firm is working on a digital platform which will collect data on inhabitants’ environment and lifestyle to enhance their health and safety. And Mitsui Chemicals’s Hashimoto says he’s excited by the explosive growth of ChatGPT and the technology’s potential to free up humans for more creative work.

But the growing reach of AI has an impact on demand for semiconductors at a time when they are also in demand for self-driving cars and memory upgrades for computers. Toshiki Kawai, who came first place in the electronics precision instruments category in the combined vote, credits the founders of his firm Tokyo Electron for having the foresight to start a trading company for semiconductors in 1963, when the technology was still relatively small.

“The founders placed importance on the company’s ability to function as a manufacturer and to expand its business globally, and this has become a reality,” Kawai said. “There is a lot of business opportunity and I am excited.”



Taro Fujie, Ajinomoto Co.

Have there been any surprises in your sector this year?

Globally, a lot of industries and companies have found themselves in a situation of extremely rapid change in recent years, as reflected in geopolitical risks and macro-environmental trends. Rising costs, which have advanced remarkably from the latter half of 2021, remain something we need to be vigilant about. Through rapid evolution of our management systems, we have steadily pushed back against such factors in a number of business fields across the globe and will continue taking necessary actions while closely watching conditions.

Tell us about the challenges your business is currently facing.

We have completed a three-year phase of structural reform and will finally enter the stage of full-scale growth. We have also evolved the purpose of the Ajinomoto Group from “unlocking the power of amino acids to resolve the food and health issues” to “contributing to the well-being of all human beings, our society, and our planet with AminoScience.” AminoScience is a collective term for the various materials, functions, technologies, and services derived from research and implementation processes rigorously focused on unlocking the power of amino acids. It also refers to the Ajinomoto Group’s unique scientific approach to connect these to resolving social issues and contributing to well-being.

How is your leadership style evolving?

Since becoming president in April 2022, I have clarified what things we need to carry forward and what things we need to evolve, and have worked to advance our ASV management [an internal initiative to create shared social and economic value with employees]. We formulated a plan for the first 100 days following the launch of our new executive team, and sorted items into those that will produce results within 100 days, those that will create a roadmap, and those that will serve to identify issues. The outcome is that we have steadily changed gears to speed up management, and have embarked upon a growth path after completing structural reform ahead of schedule. I want to continue advancing these initiatives while engaging in repeated dialogues with stakeholders, a matter on which I personally place great importance.

Who do you look up to in business?

Kyocera founder Kazuo Inamori’s idea of making decisions with an “altruistic mind” and Microsoft CEO Satya Nadella’s creation of a “growth mindset” culture are among ideas that I learn a lot from and greatly respect.

What new technology are you excited about?

Since the founding of our company, we have continually engaged in the research and development of amino acids and have established many scientific approaches unique to the Ajinomoto Group. The basic policy of our 2030 roadmap is to leverage the strengths of “AminoScience” and to focus on areas that have high market growth potential and high social value. We have set healthcare, food and wellness, ICT, and green as our four growth areas.



Osamu Hashimoto, Mitsui Chemicals

Have there been any surprises in your sector this year?

For us, 2022 was a year marked by rapid changes in the business environment, which began with price negotiations with our customers amid rising raw material and fuel prices. Subsequently, we have faced sluggish smartphone and semiconductor markets as well as prolonged lockdowns in China and global recessionary risks, creating headwinds in achieving with our sales targets.

Tell us about the challenges your business is currently facing.

Our first priority is to make progress in transforming Mitsui Chemicals’ business portfolio in order to realize our long-term business plan, Vision 2030. We have implemented a series of structural reforms in petrochemicals and basic chemicals since the 2008 global financial crisis, which have enabled us to secure stable earnings in these businesses. Our high-performance materials and products have seen steady growth despite the impact of Covid-19, and we will pursue further business expansion to achieve challenging targets set out in the long-term business plan.

Another major challenge is to accelerate our carbon neutrality efforts. While Mitsui Chemicals has been pursuing its own measures to reduce greenhouse gas emissions, I also believe multi-company collaborations will lead to even greater contributions toward the reduction of greenhouse gasses. As first steps, we will speed up our efforts through projects such as the introduction of bio-based hydrocarbons at our Osaka Works and collaboration with Sumitomo Chemical and Maruzen Petrochemical at an industrial complex in Chiba, Japan.

How is your leadership style evolving?

In an increasingly uncertain economic and business environment, I believe it is crucial to enable each and every one of our employees to fully demonstrate their individual abilities. Since it is practically difficult to take the lead in every aspect of corporate transformation, I believe that my leadership role is to guide and empower the leaders of business and functional departments so that they can take the initiative.

Who do you look up to in business?

I have much respect for Toshiwo Doko, a Japanese business leader who successfully led the turnaround of Ishikawajima-Harima Heavy Industries (later renamed IHI Corporation) and Toshiba Corporation as president of the two companies. His selfless approach to life and work, as exemplified by his devotion to not only revitalizing Japanese industry after World War II but also promoting public sector reforms of the 1980s as chair of a special government commission, has always been an inspiration to me.

What new technology are you excited about?

I am excited about the rapid evolution of AI as seen with ChatGPT, and am amazed at its explosive growth in popularity, with more than 100 million users in just two months. I am also excited at the prospect that, as AI technology continues to evolve and spread rapidly, humans will be able to engage in more creative work.



Toshiki Kawai, Tokyo Electron

Have there been any surprises in your sector this year?

Not a surprise to us, but last year was a year in which people around the world recognized the importance of semiconductors and semiconductor production equipment. Although we are facing a period of market adjustment in the semiconductor industry, our business opportunities will expand in the future due to investments on new data centers and the replacement of old servers for ChatGPT and high-speed CPUs, adoptions of DDR5 [a memory upgrade for computers that can improve speeds in gaming], and autonomous driving, and many other things.

Tell us about the challenges your business is currently facing.

The world trend is digitalization and decarbonization. We contribute to technological innovation in semiconductors, which are indispensable for the development of the world, with our best products and best technical services, while simultaneously pursuing profits. Our challenge is to contribute to the world with our leading technology.

How is your leadership style evolving?

The mission of the CEO is to increase profits and corporate value in the short-, medium-, and long-term. Since assuming the position of president, the company‘s performance has significantly outperformed market growth, and last year we achieved its mid-term management plan two years ahead of schedule. Tokyo Electron also announced a new vision for 2030, “a company with dreams and vitality that contributes to technological innovation in semiconductors,” and announced new financial targets. We aim to achieve an operating margin of 35 precent or more and return on equity of 30 percent or more on a scale of 3 trillion yen or more in sales.

Who do you look up to in business?

The founders of Tokyo Electron had the foresight to start the business as a trading company specializing in technology, importing, and selling industrial equipment and exporting consumer products based on the belief that “semiconductors will revolutionize the industry” at a time when semiconductors had not yet taken off in Japan. From the time of the company’s founding, the founders placed importance on the company’s ability to function as a manufacturer and to expand its business globally, and this has become a reality.

What new technology are you excited about?

In addition to bit computing, neuromorphic computing and quantum computing are emerging. TEL has multiple types of manufacturing equipment necessary for the patterning required to form the device elements, and there is a lot of business opportunity and I am excited.



Satoru Komiya, Tokio Marine Holdings

Have there been any surprises in your sector this year?

In these uncertain times, where conventional wisdom and past experiences no longer apply, we must confront complex issues directly. In Japan, we continue to feel the effects of typhoons, extreme snowstorms, earthquakes, and coronavirus. Meanwhile, internationally, geopolitical and geo-economic risks are ever-increasing, including Russia’s invasion of Ukraine and the growing antagonism between the United States and China. These phenomena are all interlinked, bringing with them a cascade of global consequences and matters of national security, including an energy crisis, supply chain disruption, and cost-push inflation. In response, central banks, for instance, are hiking rates and overall market volatility is on the rise. Tokio Marine Holdings has a global footprint, so no matter where in the world events happen, they are likely to impact us. The implication of this is that we must fundamentally base our strategy on global risk diversification and manage and operate our businesses on the assumption that such events will occur. To manage this, the group has built a diversified business portfolio that can stand strong in the face of global risk, and we have been working to curb volatility in profits and capital while continuing to increase our corporate value.

Tell us about the challenges your business is currently facing.

The greatest priority now for all of humankind is to address climate change. In the last few years, there were numerous large-scale natural disasters that can be attributed to the effects of climate change. These disasters have greatly impacted economic activity and the stability of people’s lives. Large-scale disasters affect not only the group’s profit and loss but also have the potential to impact the balance sheet as well. We must continue to strengthen our financial soundness, but more importantly, balance that with our capital efficiency. It is rather easy to improve financial soundness with capital accumulation. However, to be resilient in sustainably delivering value to our stakeholders, we must also improve the quality of our operations through global risk diversification and raise our return on expenditure to enhance capital recovery in times of crisis. As an insurance company, we also need to view climate change as not only a challenge but also an opportunity for growth. Take the example of renewable energy: Renewable energy is one of the best tools we have to achieve decarbonization, and we anticipate significant future developments in the field. Insurance will be indispensable to renewable energy’s widespread adoption, but the risks associated with the renewable energy business are substantially different from those of the conventional power plant and energy business. In May 2020, we acquired GCube, a global leader in renewable energy insurance underwriting. Through this acquisition, we now possess an extensive set of loss data that enables us to conduct definitive insurance premium calculations and risk selections. We have also welcomed claims adjusters specializing in renewable energy to the group and are now able to provide clients with expert advice regarding risk mitigation.

How is your leadership style evolving?

It is essential to spread a sense of purpose that unites our diverse workforce of more than 40,000 employees and also create one team that can be agile in its response to change and solve key issues. To this end, as Tokio Marine Group’s CEO, I also serve as the group chief culture officer, and through this role I take the lead and engage with our employees around the world, both in person and remotely, to build a culture that enables growth.

Employees must think about how their work contributes to our customers and society and what is necessary to solve the issues that they are facing. In addition, by discussing our purpose at meetings attended by key top management from around the world, and through town hall meetings called “Majikira”, we have valuable discussions in a casual atmosphere that go beyond division or position. We aim to become a company second to none in terms of engagement and unity, where our purpose keeps us aligned around the world.

What new technology are you excited about?

The groupʼs intellectual capital is our digital technology and proprietary data assembled from and for our insurance business. By leveraging and investing further in these strengths, we will increase our capabilities in our core insurance businesses while simultaneously expanding into new business domains. Collaboration with a range of partners will be essential to further accelerate progress on these fronts. To achieve this, in July 2021, we established Tokio Marine dR with the goal of creating a Center of Excellence with all of our groupʼs digital capabilities in one location. The group is always working to promote R&D and innovation through the aggregation and analysis of our proprietary accident and risk data. In 2020, we established AlgoNaut in collaboration with PKSHA Technology, which has expertise in natural language processing and deep machine learning. In the area of disaster prevention and disaster mitigation, the group launched a cross-disciplinary and multi-industry disaster prevention consortium called CORE. Utilizing natural catastrophe risk data and research results, we will work to unite private-sector and public-sector efforts to build a resilient society while also generating new business opportunities for the group. In mobility, we are involved in accident prediction services. Over the next 10 years, I would like to grow these businesses to be additional strong pillars of earnings with the ability to generate tens of billions of yen in profit, alongside our existing business lines.



Yoshihiro Nakai, Sekisui House

Have there been any surprises in your sector this year?

In the past few years, the Japanese housing industry has faced a challenge in the form of surging material prices. Sekisui House, which mainly focuses on the construction of custom-made houses, has offered high-quality and high-value houses by the integration of technologies, lifestyle design, and services and achieved a record high profit in the year ending 2022 even in such a severe business environment. Furthermore, at the completion of our fifth mid-term management plan in January, we exceeded the initial plan. It is proof of the success of the strategy and we made a good start for the sixth mid-term management plan. On the other hand, we need to pay attention to rising interest rates in the U.S. While keeping eye on the interest rates, we will continue to provide high-quality and high-value houses in the U.S. to pursue sustainable business growth.

Tell us about the challenges your business is currently facing.

In Japan, the majority of housing stock still lacks sufficient earthquake resistance and thermal insulation performance. We develop a high-quality housing stock, manage them appropriately, propose renovation when necessary, and put them back and circulate them in the housing market as our mission. By evolving this integrated business model, we aim to achieve stable growth in Japan. In overseas business, we aim to supply 10,000 houses, the same number of houses we are providing in Japan, by the end of the full year 2025. To achieve this goal, we are holding discussions on various topics including M&A.

How is your leadership style evolving?

I believe my primary role is to instill corporate philosophy, the mid-term management plan, and the short-term important issues to ensure that all the employees are going in the same direction. I also consider it my major role to create a company culture that supports employee autonomy. In Sekisui House, a typical B to C business company, most innovation ideas are born at the point of contact with customers. We refine those ideas through communication and develop them into company strategies and business tactics.

Who do you look up to in business?

Business and management scientists, Professor Ikujiro Nonaka and Professor Hiroyuki Itami.

What new technology are you excited about?

Since [the company was] founded, we have conducted continuous research and tests on the quality of houses, such as earthquake resistance, thermal insulation performance, fire resistance, wind resistance, universal design, and so on. I am excited that this technology for high-quality houses is in high demand globally these days. We will continue expanding our technology overseas. Also, we are trying to realize a new form of housing by digital transformation. One example is the platform house concept. We aim to develop houses to watch over the residents’ health and safety by accumulating environmental and lifestyle data, which can only be obtained at home. We are developing enhanced services for rental housing residents by using blockchain technology to further grow our rental housing management business.



Yasuo Takeuchi, Olympus Corp.

Have there been any surprises in your sector this year?

We have continued to see the impact of shortages of semiconductors and other components, combined with rising materials costs, but the situation is gradually improving. We have considered and implemented all possible countermeasures and mitigation strategies to minimize risks as much as possible.

Tell us about the challenges your business is currently facing.

The healthcare industry has been viewed as resilient to the economic cycle. Having said that, we think it is necessary to pay attention to the economic situation. Also, higher costs due to inflation may have an impact. Given the recent inflationary trend, we believe that we need to exercise caution in planning and execution. Talent attraction and retention is another key issue. By attracting and educating global talents, and by implementing a common global HR and assessment system, we aim to foster a culture in which each individual can perform at their full potential.

How is your leadership style evolving?

In addition to elevating the standard of care in targeted disease states, I am now focusing on ensuring the next generations of talent and leadership. More specifically, I believe it is important for members to understand that the company’s mission is to always maximize the value of the company, not just continue what they have been doing, and to have the ability to convey it to those around them. As we have transitioned from a domestic-focused company to a global one, there are still many challenges to overcome such as culture, language, and management style. Moving forward, I would like to play a role in contributing to that exciting transition.

What new technology are you excited about? 

AI, digital, and endoluminal technologies are important aspects of our aspiration to shape the future of healthcare and elevate the standard of care in the long run. We envision this in our “digital endosuite” concept. This goes far beyond the current endoscopy or endoscopic procedures, offering a series of smart, curated solutions that could extend the reach of endotherapies with improved patient experience by leveraging AI and other digital tools and technologies. We look to incorporate AI into many of our clinical workflows and procedures in the near future, and endoscopy is no exception.



Christophe Weber, Takeda

Have there been any surprises in your sector this year?

Although it’s not a surprise, I continue to be impressed by the pace of advances in artificial intelligence and machine learning and the potential applications in health care to enhance not only the drug development process and patient outcomes, but also how we work and collaborate. This is an area where we continue to make significant investments and we’re seeing the positive impact across the organization.

Tell us about the challenges your business is currently facing.

Geopolitical risks have intensified, creating an uncertain outlook for the global economy. Inflation and interest rates worldwide remain high, bringing an increased risk of a global recession. Takeda has built resiliency in this environment with financial discipline, strong free cash flow, and 100 percent of our debt at fixed interest rates averaging 2 percent. Nevertheless, fiscal year 2023 presents challenges with significant loss-of-exclusivity headwinds, for which we have been preparing for a while now. Despite the challenges, we will manage the impact in part this year by delivering strong performance by our growth and launch products, coupled with sharpening our focus on operating expenses, leveraging further the productivity we can gain through data, digital and technology. Continued tensions between China and the west further amplify geopolitical and economic instability and pose a risk for global companies. We remain committed to investing in China to provide patients with innovative medicines and treatments while actively managing any potential risk that may impact our value chain, such as clinical trials and production, etc. We are confident that we have taken the proactive steps needed to minimize our exposure to this risk.

How is your leadership style evolving?

Something I have embraced is the concept of caring leadership. Caring leaders create an environment where they can focus on delivering results while prioritizing the well-being and development of their teams. They can make the difficult decisions sometimes required, while still fostering greater trust, engagement, productivity, and commitment among their team members.

There are elements of my leadership style that have not changed: Being guided by our values, which are fundamental to our strategy, our identity, and our culture. Takeda’s core values of integrity, fairness, honesty and perseverance are a fundamental element of my leadership style.

Who do you look up to in business?

I find inspiration most often from those around me — I am always looking to learn from others and through these interactions, it brings me new and innovative ideas. For instance, our organization has come together to understand how data, digital, and technology will transform Takeda into one of the most trusted, digital biopharmaceutical companies. In working toward this reimagined future, I’ve spent a lot of time learning from peers and colleagues and listening to their diverse perspectives and views on how we will move ahead on this journey.

What new technology are you excited about?

Artificial intelligence and machine learning have continued to accelerate this past year and have received mainstream attention through generative AI innovations, such as ChatGPT and GPT-4. While there are still important conversations to be had about how these technologies are regulated, their potential to have a positive impact on people’s lives is clear. For Takeda, we strive to harness the full potential of data and digital, like a tech company, while staying true to our core values. We leverage these technologies in almost everything we do, from accelerating the pipeline to automating processes in the manufacturing value chain to drive quality and efficiency, to re-imaging interactions with healthcare providers and patients. In addition, data, digital, and technology is radically transforming the workplace and the way we work. For example, using AI and digital capabilities, we will create more personalized experiences for all employees — enhancing the onboarding experience for new colleagues and fostering inclusion, collaboration and innovation.

Life science technology has the potential to treat a wide range of diseases and is another exciting area for us. We are pursuing multiple cell therapy platforms and engineering strategies, including those derived from natural killer cells, gamma-delta T cells and induced pluripotent stem cells, among others. These approaches are intended to build upon the first generation of cell therapies in cancer treatment with the potential to improve safety, efficacy, and patient convenience. We take a data and science-based approach in our pursuit to accelerate life-transforming science from discovery through commercialization.

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