Message from the Group CEO (2/2)
New Medium–term Business Plan
From the implications gained from our views of the management environment, we concluded that we would formulate a new medium–term business plan for creating a new business model as a "financial services consulting group" in order for us to effectively respond to possible changes in the business environment, maintaining and continuing the core value of the previous medium–term business plan, the "customer first" principle.
This new plan will further perfect and move our "One MIZUHO Strategy" to the next stage upward, which will lead us to support the sustainable growth of our customers and communities. This is the fundamental idea of the new plan.
Defining our objectives as being "a financial services consulting group – The most trusted partner in solving problems and supporting the sustainable growth of customers and communities," we set five basic policies in the new plan, based on our risk appetite policy for the medium–term and business portfolio analysis. These policies were further specified as 10 basic strategies relating to business strategies, financial strategies and management foundations.
Furthermore, we set "fully implementing the 'customer first' principle" and "pursuing 'operational excellence,'" as the two fundamental requirements for becoming a "financial services consulting group."
Fully Implementing the "Customer First" Principle (Customer–Focused Perspective)
Accompanying changes in the economy and society, customer needs are becoming increasingly diverse and more sophisticated year by year. To respond to these needs, we must forecast future trends in the economy and society from many different perspectives, and, as a partner of our customers in the medium–to–long term, we must always move with them and identify not only the needs and problems that are already apparent but also discover latent needs and problems that customers have not yet noticed. By offering customers appropriate and timely solutions, we will realize our objective of implementing the "customer first" principle. To put this into action, in addition to the three pillars of banking, trust banking and securities functions, we will fully deploy the consulting capabilities of the Group's asset management function as the fourth pillar and research & consulting functions as the fifth pillar. With the top–quality services provided by these five pillars of our business activities, we will be positioned to offer a superior selection of consulting services.
Regarding the fourth pillar, on October 1, 2016, Mizuho plans to consolidate the asset management functions of several existing group entities into a new company, which will be named "Asset Management One." The new company will fulfill its fiduciary duties* and, by strengthening its asset management and product offering capabilities through the merger, it will deliver solutions of the highest level that are in its customers' best interests and aim to become the number one asset management company in Asia.
For the fifth pillar, we have brought together the full complement of our research and consulting functions to form a newly established Research & Consulting Unit as "One Think Tank." By structuring think tank functions that are the best in Japan, we have differentiated our services in this field and will work to become the most trusted partner in solving the various challenges of our customers and communities.
- *Fiduciary duties is a general term for the broad range of various roles and responsibilities that fiduciaries are expected to fulfill when engaging in certain business activities in order to live up to the trust that is placed in them by their customers. The term appears—as a loan word in Japanese—in the Financial Service Agency's Strategic Directions and Priorities.
- Formulation of the Medium–term Business Plan
Pursuit of "Operational Excellence"
The term "operational excellence" in some companies is used to mean primarily cost reduction and improvement in productivity. At Mizuho, however, we use the term to mean simplifying and streamlining daily activities, speeding–up of decision–making, reviewing the cost structure, and other activities to improve overall business efficiency. In addition, we have defined "operational excellence" to mean actively incorporating financial innovation, including Fintech, that will enhance the added value of customer services. To realize these objectives, we have recently formed an Operational Excellence Promotion Committee which I chair, and we are pursuing operational excellence on a group–wide basis.
Introduction of the In–House Company System
To thoroughly strengthen our "customer first" approach (customer– focused approach) and, to realize our goal of becoming a "financial services consulting group," we have introduced a new in–house company system based on customer segments. This organizational reform has three objectives.
The first objective is to ensure consistency of strategy. The new in–house company structure, which will provide integrated banking, trust banking and securities functions seamlessly through the same in–house companies, will allow us to take more–consistent actions according to the attributes of each customer during all processes from the formulation of strategy at head office to its execution on the front lines.
The second objective is to speed up our decision–making processes and enhance the Group's front–line capabilities. To this end, we reorganized our ten existing units into five in–house companies and two units. By making the organization simpler, we will realize streamlining of head office operations and faster decision–making, and by shifting more head office personnel to the front lines, we are aiming to further enhance the front–line capabilities.
The third objective is to clarify responsibility for profits. Having introduced in–house company ROE, we have clearly defined the responsibility of the heads of the in–house companies for profits. At the same time, we have delegated necessary authority to these heads of the companies for formulation of strategy, and allocation of managerial and human resources, etc.
We introduced the in–house company system to accomplish these three objectives, but the ultimate goal is to fully implement the "customer first" principle and effectively respond to the needs of our customers. Under a holding company structure, each in–house company will commit itself to deliver the best possible services to our customers to meet their actual needs in an integrated manner between the head office and front lines, among banking, trust banking and securities functions, and also along with asset management and research & consulting functions.
Embedding a Corporate Culture that Encourages the active participation of our workforce to Support a Stronger Mizuho
One essential element for creating a strong organization that can realize the goal of being a "financial services consulting group" is to take initiatives to embed a corporate culture that encourages active workforce participation.
To promote the active participation of the workforce, we will conduct a fundamental reform of our human resource management in order to motivate all employees to step forward in their own careers and to contribute to our organization, and to have them fully demonstrate their capabilities as much as possible by continuously helping them develop their expertise.
As for our efforts to establish and strengthen our corporate culture that is now putting down its roots as a result of our past initiatives, we will continue to encourage all employees to put the Mizuho Values* into practice, and to further promote internal communication.
- *The values and principles shared by all of Mizuho's internal stakeholders to pursue the "Vision": Customer First, Innovative Spirit, Team Spirit, Speed and Passion.
Group Management Policy in Fiscal 2016
To further pursue the "customer first" principle in fiscal 2016, as we give due attention to the uncertainties arising from changes in the management environment, we will be working to initiate the in–house company system and move it on track. At the same time, by promoting specific measures to attain "operational excellence," we will endeavor to realize our objective of being a "financial services consulting group" as we steadily implement the ten basic strategies set in the new medium–term business plan.
During the three years under the new medium–term business plan, in addition to an uncertain regulatory environment, financial institutions face a number of challenges affecting the management environment. These include an approaching paradigm shift marked by instability in the economic structure under which emerging markets were the drivers of growth, and by prolonged stagnation in natural resource prices, as well as the appearance of game–changing factors such as a new competitive environment in all financial services fields as a result of rapid development of financial innovations.
Amid this environment, Mizuho is determined to fulfill its social responsibilities with a view to its unchanging value as a financial institution. This means that we must contribute to the economic and social development of the world, Asia and Japan, and that we must also proactively respond to the expectations of all our stakeholders, including our shareholders as well as our customers, our communities, our own management, staff and their families.
To rise to this task, we will continue to perfect the "One MIZUHO Strategy" by creating a new business model as a "financial services consulting group." We will be fundamentally committed to maintaining close relationships with our customers through our sophisticated risk taking capability and financial intermediary function and build the future of economies and societies as the most trusted financial partner in providing solutions for our customers and communities. Moreover, we will work to establish a sustainable competitive advantage, increase our corporate value and fulfill even greater social missions than ever before.
President & Group CEO
Member of the Board of Directors
Mizuho Financial Group, Inc.
- Note:The above contains statements that constitute forward–looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. See the disclaimer at the bottom of page 3 of 2016 Integrated Report(PDF/10,751KB) for information regarding factors that could cause actual results to differ from those in the forward–looking statements.