Management Strategy/Reformation

Japanese companies must transform to raise their corporate value (PBR) to meet demands that focus on capital cost. Earning power and growth expectations have become pressing management agendas.

To address these agendas and raise PBR, Japanese companies must cover the following four points.

(1) Reflect scale growth indicators and intangible asset value in their business portfolios
(2) Construct on-site PDCA systems to operate through individual KPIs that consider business characteristics
(3) Strengthen intangible assets for growth and appropriate business contribution level evaluations
(4) Ongoing establishment of foundations (including expert organizations for data infrastructure, FP&A, and BICC)

Rather than stopping at stock buybacks, companies must improve real corporate value through business transformation, by creating a story that connects management, on-site, and investors.

ABeam Consulting understands the effect of evolving PBR/ROIC management and its modern significance. We support strategy, medium-term management plan development, and plan execution.

Until now, many Japanese companies have promoted management focused on forecasts and previous year results, assuming linear upward growth.

But a new management approach that focuses on points to scale, backcasting, and inflection points is required to achieve exponential growth in an uncertain digital world.

Portfolio management is also key. It is important to understand investment scenarios by region across businesses and companies. Companies must also pin-point vision realization, manage whether appropriate investments are being made from short- and long-term perspectives, and secure investments through a strategic investment framework.

As businesses shift from products to services, companies cannot simply create new soft services and business model transformations. The source of value creation is shifting to intangible “intellectual capital” assets, such as the technology and knowledge required to achieve those transformations, and to “human capital” such as human resources and external networks.

Unlike fixed-style management based on “results,” it is essential to create structures and systems to manage“processes” in a timely manner in non-continuous transformations.