In May 2020, SoftBank Corp. (TOKYO: 9434) announced it was making the achievement of the United Nations’ Sustainable Development Goals (SDGs) a top managerial priority. To learn more about how SoftBank’s business activities are contributing to the SDGs and how they can help solve issues facing society today, SoftBank News spoke with three key leaders at SoftBank.
Crosstalk Participants
Shintaro Kasai
Vice President
Head of Digital Transformation Division
Kasai has worked in the telecommunications industry extensively as a systems engineer (SE) and in sales. He led SoftBank’s digital transformation (DX) business since the namesake division was established in 2017. The DX division’s mission is to “face Japan’s social issues head on” and to “create businesses that will become SoftBank’s next pillar.” The division has five foundational principles: “Flat, Open, Connected, Share and Collaboration.”
Akira Ichiki
Vice President
Head of Portfolio Management Division
Following a stint at a major bank, Ichiki was involved in planning and executing management strategies for several listed companies in a variety of business fields, as well as managing startup companies. Since 2019 he has led the SoftBank unit that develops new businesses through joint ventures with companies outside Japan. He teaches Venture Management at GLOBIS University’s Graduate School of Management.
Masato Ikeda
Senior Director of SDGs Planning & Management Office
Vice President, Head of CSR Division
Following the Great East Japan Earthquake, Ikeda was transferred from Marketing to CSR to promote ongoing business-based social contribution projects. He promotes social contribution activities through operations that utilize IT, such as the creation of a smartphone-based system that provides ongoing disaster recovery support, a platform service that enables remote learning from sports experts, and IT-based learning assistance for children with disabilities. As head of the SDGs Planning & Management Office from 2020, he plays a central role in strengthening SoftBank’s SDG initiatives.
Solving social issues is the key to achieving SDGs
What is SoftBank doing to promote the SDGs?
At SoftBank, we believe that our businesses in and of themselves contribute to the achievement of the SDGs. In pursuing growth strategies and structural reforms, we consider not only whether our current and planned businesses meet the 17 SDG goals; we also look at the value SoftBank can bring in the context of a sustainable future.
To promote the SDGs, we identified six priority issues (materiality, or key challenges) under the concept of “a world where all things, information and minds are connected” with a view to realizing a sustainable society. The first of these is “Building society and industry through digital transformation (DX).”
At SoftBank, we believe that our businesses in and of themselves contribute to the achievement of the SDGs. In pursuing growth strategies and structural reforms, we consider not only whether our current and planned businesses meet the 17 SDG goals; we also look at the value SoftBank can bring in the context of a sustainable future.
To promote the SDGs, we identified six priority issues (materiality, or key challenges) under the concept of “a world where all things, information and minds are connected” with a view to realizing a sustainable society. The first of these is “Building society and industry through digital transformation (DX).”
In May of this year we announced our SDGs efforts concept together with these six priority issues. I remember it well because DX, which I am currently involved in, was the first action to be established.
These priority issues were set based on their contribution to the SDGs, and their importance to the company and its stakeholders, following discussions among senior management and external experts. The fact that DX was the first among these priority issues was both unsurprising and inevitable. I firmly believe that this is what society expects from SoftBank as we work towards the creation of a new “Society 5.0” that utilizes the latest technology.
So you believe that businesses working to solve social issues are linked to the promotion of the SDGs. What kind of new businesses has SoftBank excelled at so far?
Personally, I think rather than creating something from 0-to-1, SoftBank is good at scaling up businesses from 1-to-100. The power and speed at which it does this is unmatched.
The most recent example of this would be PayPay, which was started together with Yahoo Japan. In the blink of an eye it became a service used all over the country. I find it impressive that you can even use PayPay at small, independently owned shops.
Personally, I think rather than creating something from 0-to-1, SoftBank is good at scaling up businesses from 1-to-100. The power and speed at which it does this is unmatched.
The most recent example of this would be PayPay, which was started together with Yahoo Japan. In the blink of an eye it became a service used all over the country. I find it impressive that you can even use PayPay at small, independently owned shops.
It completely follows the marketing model that SoftBank developed when it started Yahoo! BB*. I don’t think there’s been other companies that set up ‘parasol squads’—booths shaded by large umbrellas to sign up customers—in front of train stations. The ability to take an existing business model that was previously commonplace in the world and transform it into something new by injecting smarts and passion into it is amazing.
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- *A broadband ADSL (Asymmetric Digital Subscriber Line) service launched by SoftBank in September 2001. Customer numbers increased due to advertisements and giveaways of Yahoo! BB modems.
I miss those parasol squads (laughs).
Of course, because of that experience we were able to really step on the gas pedal at PayPay as well. Accumulating experience is a big thing.
The essence of SDGs comes from sustainable reforms
Mr. Kasai, you’re head of the DX Division. What are you currently working on?
The DX Division can also be thought of as an organization that develops new businesses. We don’t take a 0-to-1 approach, where we examine and develop new businesses on our own, but rather a 1-to-100 approach where we jointly develop businesses with our partners. Our goal is to launch businesses to solve social issues through joint development with our partners using a variety of assets, new business models and cutting-edge technology. That way we make our partners’ businesses even bigger and more profitable.
It’s easy to talk about developing businesses, but in practice it’s often a struggle, isn’t it?
Our DX Division was established about 3 years ago, and in the beginning we focused on creating new business models with our co-creation partners to generate sales and profits. But I don’t think that was the right path.
Even if you’re able to increase sales and profits, if you can’t change the underlying business processes and supply chain, then eventually stress is going to build up somewhere. Establishing a new business with a superficial change in a business model or approach is not sustainable. Creating a truly sustainable business is no easy task.
Our DX Division was established about 3 years ago, and in the beginning we focused on creating new business models with our co-creation partners to generate sales and profits. But I don’t think that was the right path.
Even if you’re able to increase sales and profits, if you can’t change the underlying business processes and supply chain, then eventually stress is going to build up somewhere. Establishing a new business with a superficial change in a business model or approach is not sustainable. Creating a truly sustainable business is no easy task.
What is the most impressive new business you’ve been involved in?
One project involved the digitalization of an entire supply chain from manufacturing to customer deliveries. The structure of the supply chain itself was fundamentally altered using technology. The process of redefining and rebuilding businesses to make them more sustainable is extremely worthwhile.
I think SDGs are close to the “rethinking the fundamentals” idea that Mr. Kasai discussed. Rather than focusing on superficial issues such as whether or not something will sell, it’s about looking into the deeper challenges and needs and transforming something into a business. Creating this type of ongoing framework is the essence of the SDGs.
Yes, I think so. I completely agree.
In Japan, people tend to be moving toward this idea of equating SDGs with social contributions. In many cases, social contribution is regarded as something that should be kept separate from business. Mr. Ichiki, I know you often work with overseas companies, so what is your perspective on this?
It’s true that the the link between business and social contribution is viewed differently in Japan compared to other countries. It’s not at all unnatural to have social contribution and business go together hand in hand. I first felt this way about 20 years ago, and even though considerable time has passed, I don’t think that gap has been filled in quite yet.
I believe that structural reform through business is in fact the most energizing component for solving social issues, and the part that contributes the most toward achieving the SDGs. I would like to spread this concept in Japan as well.
Balancing the responsibilities of a listed company with a startup spirit
Given the nature of the SDGs, what kind of new business should SoftBank develop going forward?
The question that comes to mind is “what can be done to make society more vibrant?” Japan and other developed countries have many pressing social issues, including a shrinking workforce due to a rapidly aging population. I would like to confront these issues through new businesses.
There are many outdated ways of doing things in Japan. We’ll create new business by linking arms with both the public and private sectors and breaking down these old ways of doing things.
The question that comes to mind is “what can be done to make society more vibrant?” Japan and other developed countries have many pressing social issues, including a shrinking workforce due to a rapidly aging population. I would like to confront these issues through new businesses.
There are many outdated ways of doing things in Japan. We’ll create new business by linking arms with both the public and private sectors and breaking down these old ways of doing things.
I strongly agree that Japan needs to change. Japan is stable in a way, it’s a safe place to live; there are many good points about it. However, sometimes I feel like we’ve been in our comfort zone for too long.
Comfort zone?
If you were to think of it in a negative way, your comfort zone is like lukewarm water. You really can’t stay in there forever.
I think a startup is the kind of thing that gets you out of your comfort zone and ready to take on new challenges. In that sense, “startup” is more a matter of the company’s spirit rather than its scale. I think what Mr. Kasai is doing is bringing this startup spirit into a large company.
If you were to think of it in a negative way, your comfort zone is like lukewarm water. You really can’t stay in there forever.
I think a startup is the kind of thing that gets you out of your comfort zone and ready to take on new challenges. In that sense, “startup” is more a matter of the company’s spirit rather than its scale. I think what Mr. Kasai is doing is bringing this startup spirit into a large company.
As is typically true for startups, it’s difficult for new businesses to turn a profit early on.
However, SoftBank is investing a lot of management resources, including from my own division and Mr. Ichiki’s division, into creating new businesses. Now we might be singing our own praises a bit, but I think there are very few companies that can do this. That’s why I believe it’s my duty to give concrete shape to these new businesses and present them to the world.
As is typically true for startups, it’s difficult for new businesses to turn a profit early on.
However, SoftBank is investing a lot of management resources, including from my own division and Mr. Ichiki’s division, into creating new businesses. Now we might be singing our own praises a bit, but I think there are very few companies that can do this. That’s why I believe it’s my duty to give concrete shape to these new businesses and present them to the world.
As I mentioned at the beginning, SoftBank’s strength is in its 1-to-100 approach. We have to determine whether we can go from 0-to-1 within our own organization or through co-creation with other companies.
I used the term “startup spirit” earlier, but I also think being aware that SoftBank is a listed company is also extremely important. Just because a need exists does not mean we can do whatever we want. The reason for SoftBank’s existence is being questioned, so we need to address these important social issues. It’s about having a balance between being aware of our responsibilities as a listed company and keeping our startup spirit.
As I mentioned at the beginning, SoftBank’s strength is in its 1-to-100 approach. We have to determine whether we can go from 0-to-1 within our own organization or through co-creation with other companies.
I used the term “startup spirit” earlier, but I also think being aware that SoftBank is a listed company is also extremely important. Just because a need exists does not mean we can do whatever we want. The reason for SoftBank’s existence is being questioned, so we need to address these important social issues. It’s about having a balance between being aware of our responsibilities as a listed company and keeping our startup spirit.
I think that’s what the SDGs are all about. It’s about using SoftBank’s strong points to facilitate growth and solve social issues. I really want us to commit to this fully.
To the rest of the world, SoftBank looks like a big company. But listening to the two of you now, I realized again that the difference between a startup and a large corporation lies in the employee mindset. At a startup, each and every employee has the same awareness and enthusiasm to use their work to benefit society as top executives do.
That’s right. Just like the word for work in Japanese also contains the meaning “to serve ,” I always want to be aware of the connection between my work and society.
What I hope each and every employee does from now on is recognize that their work is not just a simple measure of sales; it is also linked to the SDGs. In order to make the world more sustainable and to make SoftBank a more sustainable company, we need to ensure the SDGs are a source of energy for taking positive steps forward. I believe we can become an even more vibrant company if this kind of awareness, which includes the startup spirit mentioned earlier, deeply permeates our ranks.
Related Information
SoftBank’s Sustainability
To help realize a sustainable society where all things, information and minds are connected, SoftBank is working to resolve various social issues through its business and corporate activities.
(Original article posted on October 19, 2020)
By SoftBank News Editors
