Succession
To ensure that CyberAgent will be ready for successions well into the future, the company initiated a presidential succession plan in 2022. This plan is aimed at passing the role of president—which our founder, Susumu Fujita, has held for many years—on to the next generation by 2026. The CyberAgent Board has held discussions from a medium to long-term perspective on the succession plan, as well as the selection strategy and training policies for the next president. Through these discussions, the company has formulated a succession plan designed to fully maximize the potential of future leadership candidates, and is also working to implement the framework for all positions across the company.
Outside Directors Koichi Nakamura and Kozo Takaoka: "Succession Plan for Sustainable Management"
We spoke with Koichi Nakamura and Kozo Takaoka for their insight on the presidential succession plan that has been in progress since 2022, as well as on the theme of creating the kind of company that can be successfully passed on.
Profile
Koichi Nakamura
He was appointed Executive Vice President of Recruit Co., Ltd. (current Recruit Holdings Co., Ltd.) in April 2008. After serving as a director and advisor to the company, he stepped down in 2014. Then he was appointed as an outside director of the company in December 2016.
Kozo Takaoka
He was President and CEO of Nestlé Japan K.K. from 2010 to 2020. After leaving that position, he serves as Representative Director of K & Co. He was appointed as an outside director of the company in December 2020.
Launching the Succession Plan and Fostering the Next Generation of Managerial Talent
When I first became an outside director in 2016, I was surprised to hear from general managers on the ground that “the executives in key positions have not changed in several years,” “It is getting more difficult to quickly promote young people than it used to be,” and “I can't compete with those bosses.” This marked my initial step in considering CyberAgent's succession plan, including aspects such as term limits for various positions. In order to maintain the vitality of an organization, I even believe it's essential to remove the bottom 20% of each level and replace them with young talent to release their energy.
Based on an awareness of these issues, I proposed the "separation of management and execution" around the time the "CA8"* executive rotation system ended in 2018. Decisions regarding overall corporate management would be made by the Board of Directors, while business execution would be delegated to the Executive Office, composed of executive officers who are closer to the front lines. This structure not only establishes a more agile management system but also functions as a system for developing managerial talent.
In terms of a training system, CyberAgent previously had a somewhat passive approach to classroom training, but I emphasized the belief that "people can change" through what they learn. After extensive discussion in the Board of Outside Directors, especially regarding the need for academic management training, we decided to implement a program to systematically teach management, as well as an original program designed to maintain CyberAgent's unique identity through the generations in 2022.
The president training was delivered to 16 internally selected talents. In addition to an executive management program taught by external lecturers, to articulate Susumu Fujita’s decision-making process, which had previously been based on his experience and intuition, Fujita prepared a handover document encapsulating his management philosophy of over 100 points. It was an amazing document that was remarkably easy to understand. I doubt there are many presidents who are so actively involved in the succession process.
The handover document worked well to deepen understanding, but being able to make decisions in the same way once someone actually assumes the president's role is another matter. To address this, we also had a program that covered the history of the company and Fujita, allowing participants to trace past decisions he has made. This experience helped them to grasp the essence of CyberAgent-style management and learn to make hard decisions with conviction.
We also introduced a self-introduction program to develop empathy for each other among the new management team. By getting members to openly share their backgrounds and past setbacks, we aimed to create a self-reliant, collaborative team where they could learn from each other's strengths and weaknesses. While the next president may not be able to match the strengths of Susumu Fujita alone, however, if a strong management team of several members is realized, they have a good chance to collectively rival his abilities.
As I watched the gradual changes in the participants' language and countenance over the course of these programs, and as the common language of the team emerged, I once again felt strongly that "people can change."
The Board of Directors' primary responsibility is how to select the next president. If discussions only start when it’s time to make the transition, it’s too late—meticulous planning leading up to the moment is vital. For this matter, drawing on Mr. Nakamura’s and my experiences from Recruit and Nestlé, we formulated a succession plan through extensive discussions in the Board of Outside Directors.
A crucial aspect of developing talent is the ability to think one or two levels above one’s current position. For instance, a department head should consider the perspective of a division head, and an executive officer should think like a senior executive or even the president. This allows them to mentally prepare for those roles in the future. For this succession planning, the clear indication that the next president will be promoted from within the company has led to more effective training. The program placed participants in Susumu Fujita’s shoes and challenged them to think as he did, and through the course, I could see their eyes lit up. The most positive outcome of the training was the way it maximized each participant’s motivation and drive.
* CA8: CyberAgent's unique system for replacing two directors every two years. Implemented from 2008 to 2018.
Qualities Required of a President
As for the qualities required of a president, I believe that intuition and perceptiveness are particularly important. These traits are largely cultivated through experience. In Susumu Fujita's case, prime examples are being a clutch player through games like shogi and mahjong, along with his ability to see the big picture in situations. Textbook definitions of what it takes to be a president include the ability to integrate contradictory elements, make swift decisions, and a strong commitment to achieving high goals and aspirations. However, what ultimately matters most is intuition. That's why I believe it is important to hone one's intuition and perceptiveness through a variety of experiences.
The qualities necessary for a president cannot be precisely defined, and I believe that finding the perfect candidate who possesses all the required attributes is somewhat unrealistic. The type of president a company needs also varies depending on the circumstances it faces and the prevailing trends. Today, more companies need leaders who can break old models and drive innovation while achieving growth. To accomplish this, the ability to devise winning strategies, execute them, and deliver results is essential. In global companies, it is a given that the president formulates strategies for at least ten years ahead.
As a company grows in size, the demands placed on its management team become increasingly diverse. Among these, governance is especially crucial. To ensure that all stakeholders—employees, business partners, and shareholders—are satisfied with their relationship with the company, it is necessary to pay attention to all areas in order to manage the organization properly. For instance, questions such as whether the company focuses on diversity initiatives and whether the performance of business partners is stable are constantly being asked in global settings. The next president will need to possess the qualities of a leader capable of enhancing governance while evolving the company into a global entity.
Passing on CyberAgent's Competitive Edge
I think the source of CyberAgent’s competitive edge lies in its bold decision-making and strong execution capabilities. For example, in 2011, when smartphones began to gain popularity, the management team decided to switch focus by announcing a "Smartphone Shift" strategy. This involved moving around 200 people from existing business units to new ventures.
Although this move was ambitious and not easy to pull off, what’s even more remarkable is that the existing business, despite expecting revenue losses due to a lack of human resources, ended up increasing both sales and profits. From past to present, many companies have attempted transformation but fell short with half-hearted efforts. CyberAgent has the unique ability to quickly follow through on bold decisions that impact the entire company.
Now, I feel the company is drawing on its accumulated experience and strengths over the past 20 years to map out a solid growth strategy, which it is steadily executing.
This is the most significant change I've seen in my eight years as an outside director. CyberAgent now has a concrete growth strategy aimed at becoming one of the defining companies of the 21st century, with a clear direction for enhancing corporate value sustainably. We are evolving from our roots as a mere internet company into a comprehensive production company.
CyberAgent’s greatest strength is its system for taking risks and trying new things, while also maintaining a large tolerance toward failure. Our mission statement states that "risk takers deserve second chances," I believe this culture has aided the company's growth. Additionally, CyberAgent is a prominent internet company that still maintains a cohesiveness within its organization. I hope that this culture is passed on to the next generation.
Since joining as an outside director in 2020, I’ve witnessed a number of challenges that epitomize the company's uniqueness. Among these, the decision to stream the FIFA World Cup Qatar 2022 on ABEMA was a particularly bold one. The excitement and convenience of watching international matches online could not be fully appreciated until one actually experienced it. In the past, people might have believed that sports had to be broadcast live. However, with ABEMA, I believe that many people have come to appreciate the convenience of enjoying sports on a variety of devices, whenever they want. Positioned as "TV for the future," ABEMA brings value to society by solving problems we once abandoned, and that’s why I'm confident in its success as an innovation in its own right.
What it Takes to Build a Succession-Ready Company
In my opinion, a succession-ready company is one that can grow sustainably over the medium to long-term by maintaining its strengths and "uniqueness." In CyberAgent's case, these are essentially Susumu Fujita’s qualities, which is why it is crutial to consider how the management team will be able to carry them on. For instance, even if implementing the succession ladder progress smoothly while Fujita is in the company, it may be difficult to carry on after his departure. Even managers who have been trained and intellectually know the concept can raise objections when their valued subordinates are selected. To handle this kind of issue, I think it's necessary to work on establishing minimum rules for promotion and transfer.
Likewise, rules regarding investment and business management will also be needed. For example, ABEMA has continued large-scale investments based on the leadership and trust of Susumu Fujita, which has brought credibility with stakeholders. However, if the next president decides to make the same kind of major investment, gaining consent may not be as easy. This will require new management policies to maintain CyberAgent’s flexibility, agility, and competitiveness. I'd like to help developing these rules s to build a succession-ready company.
CyberAgent has a clear vision "to create the 21st century's leading company," and purpose which serves as a guiding principle from which we cannot waver. To reach this goal, the milestone of a presidential transition should not simply end as a "handover of duties"; rather, it should be an opportunity to propel the company forward. Therefore, it is critical for the next president and management team to unite and carefully consider what measures are needed.
Right now, we are carrying out the president's succession, but our future goal is to gradually build what we call a "succession ladder." In globally established companies with a long history, there are rules in place to guarantee that successors are always prepared for every level of the organization to address risks such as sudden illnesses or job changes. How well these successors are trained is even factored into personnel performance reviews. Undertaking the succession ladder will require extensive preparation, but having training programs to cultivate managerial talent throughout the company will raise the level of top management and make promotion paths visible from the outside. Also, having participants consider the company's future together will build a robust organization over time. With the goal of building a succession-ready company, I intend to spare no effort as an outside director in establishing a comprehensive succession plan for the entire organization.
Overview of the Succession Plan
CyberAgent has formed a succession plan spanning approximately 10 years, aimed at developing the next generation of management team and ensuring a smooth transition. After the planned presidential change in 2026, the current president, Susumu Fujita, will serve as chairman and continue to work with the new president. By securing leadership consistency, we are committed to fulfilling our responsibilities to stakeholders and realizing a long-term growth.
