Tsumuraya It has been a year and a half since INFRONEER Holdings was established. Can you please reiterate what your aim was in transitioning to this structure?
Kibe Our vision is to realize “a world where the freedom of infrastructure services can extend everywhere.” Let me explain a little more. During the operation of infrastructure, we noticed that existing various norms and rules were preventing construction companies from improving efficiency and increasing corporate values. We are trying to transform to be a “Comprehensive Infrastructure Service Company” with free ideas not being limited by the boundaries of conventional approaches of “building” and “constructing”.The “Comprehensive Infrastructure Service Company” is a new business model that combines our engineering capabilities which we have cultivated in the contracting business and new infrastructure services which we have recently developed in the de-contracting business.Our aim is to establish a solid revenue foundation and contribute to solving social issues through corporate activities, leveraging synergies throughout the entire INFRONEER Group.Furthermore, we are strengthening our ability to respond to changes in society. The reinforcement of our governance structure is one area on which we have particularly focused.We have deepened the discussion on institutional design through a thorough process at the Provisional Nominating Committee prior to the establishment of INFRONEER Holdings.By adopting a company with a Nominating committee, etc. structure, we have established a Nominating Committee, a Compensation Committee, and an Audit Committee within the Board of Directors, in which outside directors comprise the majority, to ensure that the Board of Directors has a management supervisory function. By doing so, we aim to enhance the unifying power of the holding company and independence of the operating companies.
Tsumuraya How do you think the actual progress of management integration has been compared to the initial plan at the time of the new company established?
Kibe The major achievements of management integration include various aspects such as governance, business, corporate culture, and communication, etc.We were eager to seek achievements as soon as possible, but at the same time, we knew it would not be that easy, so in that sense, we are within our expectations, and I can say that we are on the right track.One notable achievement is the increase in our relative share price compared to TOPIX.Investor engagement has also been increasing and we feel the expectations from investors very keenly.Another major achievement is lower financing cost.I believe that the reduced total cost of capital reflects good figures in the company’s P/L and B/S, which in turn are ultimately passed on the employee’s wages and bonuses.
Tsumuraya How do you see the progress as an outside director?
Takagi We have made significant progress in the evolution of governance.A year and a half have passed since the company was established as a company with a Nominating Committee, etc., and the delegation of authority to the executives has been proceeding smoothly.Since authority was transferred to the executives earlier than we expected, I think this made decision making on investment and other matters faster as well as day-to-day business operations smoother.Another area where progress is evident is in our business operations due to the integration efforts. Three companies’ collaboration (Maeda Corporation, Maeda Road Construction Co., Ltd and Maeda Seisakusho Co., Ltd) has increased in order taking activities, construction activities, and other initiatives. I have a distinctly different impression from the past.For example, in the area strategy, which is designed to support de-contracting business, information on infrastructure projects of municipalities across the country is centralized to share among three companies. Sales representatives of each company efficiently share that information using a common business platform for strategy planning and implementation.I have noticed a strengthened collaboration, further enhanced by the new joint project.
Tsumuraya I see, so you are also seeing various positive effects of integration on the business side.
Tsumuraya Are there any other effects?
Takagi Personally, I feel a change in the organizational culture and improvement of communication.Although there are employees from Maeda Road, Maeda Seisakusho, and Maeda Corporation in the Holdings, it looks like no one can tell who is from which company. They work together harmoniously, transcending the boundaries of their respective companies.For example, a mixed team from the three companies prepared the integrated report. I think they enjoyed working by inspiring each other.This open communication has fostered a greater sense of collaboration, in my opinion.
Kibe I dare not care which company they are from.When I said earlier that integration is not easy, I was thinking of "mentality”.I knew that even if the company physically came together, things like the employees' silo mentality, cross functional mentality, and hierarchy, could not be easily integrated.From the establishment of the company to the present, I have always told my employees to eliminate silo and cross functional mentality, and to respect each other without being nervous over where they are from, male or female, or even hierarchy.I think that many executives and outside directors, as well as myself, are aware that this is the biggest bottleneck and probably the most important aspect of the integration process.
Tsumuraya Perhaps the sense of silo and cross-functional thinking among employees will gradually dissipate over the next two, three, or four years.Please share any challenges that need to be overcome and any initiatives to improve and handle issues toward further integration.
Kibe Maeda Corporation, Maeda Road, and Maeda Seisakusho have a long history of manufacturing products. As is commonly seen in the business world, there is a big disconnect, both good and bad, between those who are "on the manufacturing site" and those who are "in other departments."Until now, there have been no clear answers to the question of resolution from other companies across the industry, but I would like to work on resolving the disconnect by valuing the unity of the entire group and the sense of ownership of employees who work on their own initiative. As part of efforts to resolve this issue, minutes of the Board of Directors and Executive Board meetings are made available to all Group officers and employees, even new hires.
Tsumuraya To all employees?There are quite a few companies where even the staff in the IR department is not allowed to see it. Can you tell us why you go that far, what your reasons and goals are, and what specific actions you are taking?
Kibe This is because we believe that it is very important how quickly management information is delivered to those on the front lines. Even if it is difficult for everyone to have a sense of management, I believe it is possible to make them aware of the corporate vision, culture, and sense of task that the company is aiming for. We want to eliminate inequality of information sharing and make our employees aware that we are all in the same boat and the company values a sense of unity.
Takagi You provide numerous opportunities for communication and exchange of opinions with employees, don't you? While you are frequently on business trips, you also hold town meetings twice a year at 13 locations throughout Japan to directly communicate with employees nationwide.I was able to participate in part of the meeting and I was surprised that the president did not speak with a one-way talk and the employees actively asked questions and engaged in a vibrant two-way dialogue. The secretariat told me how difficult it always is to coordinate your time (laughs).
Tsumuraya That is amazing. In many Japanese companies, there are many things that seem "great" to people outside the company, but it is often not disclosed outside the company because it is seen as "normal" in the eyes of those within the company.Don’t you think you should make this initiative public?This is very valuable.
Kibe Certainly, such as from an investor's perspective, those who try to look at this company objectively may be interested in what is taken for granted within the company. From that viewpoint, it would be an important communication to have people see more of the business and the workers in our company, leading to mutual understanding.For example, how excited and fun the people at Maeda Seisakusho are while making cranes, or how the people at Maeda Road have such a zest for life in paving roads.Recently, we held a site tour for investors and analysts and let them interact with staff members at toll road operations and the construction site of an arena in Aichi Prefecture, which everyone found very informative and interesting.
Tsumuraya I would like to see you prepare this year's integrated report with such a fresh sense of communication not with the idea that "it's nothing special to show you, it's just normal".
Kibe We must continue to think about how to communicate with people outside the company through integrated reports and other means so that they can understand how we are striving for the future of our infrastructure.
