Shintaro Yamada, CEO of Mercari.
Mercari CEO Shintaro Yamada talks about “organizational theory.”
The second part covers the 10 topics so far, including how to maintain employee motivation during the process of growing from a startup to a large company, what a diverse organization needs is “equal opportunities, not numerical targets,” and overseas FinTech expansion plans. Looking back on the past year, we asked Mercari what its goals are for the next 10 years.
(Interviewer: Yu Ito, text/composition: Ikuko Takeshita, photography: Toshiharu Takei)
Reference article:Mercari CEO Shintaro Yamada: “I was too timid.” “Successor” began to be considered under the new management system
Motivation only leads to the growth of the company
Speaking of Mercari, it is known for its generous benefits and flexible working styles, such as being one of the first to introduce egg freezing cost subsidies, allowing employees to choose whether to work or work remotely, and providing transportation expenses of up to 150,000 yen per month. .
Mercari conducts an employee survey once every three months.
It is known that companies with higher employee engagement have higher ROE (return on equity), ROIC (return on invested capital), and PBR (price/book value ratio), and motivating employees is a management perspective. This is a big issue, especially in these days when it is important to maintain alignment with shareholders.
—— In Japan, there are people who work in a way that “even if their motivation is low, they cling to being an employee anyway,” and some people use terms like “professional employees.”
As a management, what are you conscious of to keep employee engagement high? I think the larger the organization, the more difficult it becomes.
I believe that a company exists to accomplish a mission, so I think the main premise is to have people empathize with that (mission).Therefore, the management team”Let’s plant the flag first.”That’s what I’m saying.
If people are coming together under our banner, I think that means they are motivated, and we are seeing results as many customers are using our product, and our employees are also motivated. I think that if you can feel a sense of growth, you can naturally create a state of high motivation.
justThe most important thing is for the company to growis.Even if all employees do what they want to do, if the company fails to produce results as an organization, everyone will be unhappy.turn into.
Employee motivation and engagement are important, but producing results is what matters.I am very conscious of this when conveying this. That’s exactly what I say, “A manager’s job is to produce results.”
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Continue to provide opportunities to try new things
Even if the company says, “This is what I’m aiming for right now,” and people join the company thinking, “I want to do this right now,” if they change their mind and want to do something different, they’ll continue working with us. There’s no need.
After all, wouldn’t it be great if you started a business because you sympathized with another company’s mission or came up with such a good idea?
I understand what I want to do as an individual, but if it doesn’t match the direction the company is aiming for, I might not need to stay with them. I feel the same way about myself, but I think the organization as a whole understands this.
— Rather than taking measures to increase employee engagement as an organization, we are creating opportunities to continue doing new things that will make people want to commit to this project at this company, no matter how long it takes. I believe that providing this information will ultimately lead to increased engagement.
Even if it’s not a new business, there are many things that are new to the person. For example, someone who used to be an engineer might be in charge of human resources. I am consciously creating such opportunities.
So, even if it’s not what the person wants, their boss may decide that the project is suitable for them and assign them. The same goes for personnel changes.
I don’t think only the person himself or herself knows what is suitable for him/her.
I’m the same way, but if you just do what you want to do, it’s no fun. There are a lot of things I’ve done that I’ve been invited to do, like barbecues and camping that I thought I wasn’t good at, and ended up having fun.
Can “Japanese men” alone create a service that will win the world?
Mercari’s efforts to promote diversity and inclusion.
Mercari also puts a lot of effort into diversity. When hiring and promoting to managerial positions, we set KPIs to ensure candidates are not biased based on their gender or nationality, published a sustainability report in 2020, and established the D&I Council, an in-house committee under the direct control of the CEO, in 2021.
Currently, women account for 32% of all employees, 22% in management positions, and 25% in executive positions. Employees working in the Tokyo office come from over 50 countries.
Mr. Yamada personally launched the Shintaro Yamada D&I Foundation, which provides financial support to female students aiming to pursue STEM education.
—— Speaking of organizations, how to ensure diversity, such as hiring women and foreigners, is a major issue for Japanese society as a whole.Approximately half of companies have “zero female managers,” and it is large companies that are holding them back.There are also survey results. What should we do to create a diverse organization?
For example, Mercari aims to be a globally successful marketplace. But then I asked, “Can only Japanese men do that?”
The reason we started hiring foreign engineers was because there were too few Japanese engineers to begin with, and if we were going to do business globally, it didn’t really matter if they couldn’t speak Japanese. However, doing so will increase diversity and create many new ideas for services.
There are very few Japanese IT companies that have grown to this size. The ability to manage an organization of this size is something that only a global organization can have. People from big tech such as Google brought in best practices and became more inclusive, such as how to do large-scale development.
However, the number of foreign employees at the VP (executive officer) level and above is still small, and there are challenges.
KPIs for the gender of hiring candidates, the important thing is “equal opportunity”
(On the other hand) when it comes to gender, there is still so much that has not been done.
As for engineers, it’s a structural issue.There is a lack of women in science and computer science in Japan.doing. So I think we have no choice but to hire people from overseas and really take the time to make an impact through education, like I am doing at the foundation.
Of course, there are many challenges for non-engineers as well. Various legacy problems such as unconscious bias are accumulating, and there is no silver bullet that will solve everything by solving this problem, so we need to make efforts in each place to solve them.
The way to do it isInstead of setting numerical targets such as the number of women in managerial positions, which are common, we set KPIs for the process, such as the gender ratio of candidates when hiring.is.”Equality of opportunity, not equality of outcome”This is the concept.
Of course, there are voices within the company that progress is slow, but I don’t think it can be done overnight, and I don’t want to insist that things are progressing well.
We are exchanging information with various companies, wondering what we should do and what we can do.
—— Why do you set KPIs for processes such as recruitment, rather than results?
I am concerned that setting numerical targets may have major negative effects. If we say that we will increase the number of women in management positions to 30%, both the person who has been promoted and those around them may feel that it is just a matter of making numbers for 30%, and it may be difficult to do so.
For the “talent pool” in recruitment, we set highly driven KPIs, and in the end we select based on ability.. By doing so, we aim to create an environment where each employee can continue to work comfortably and demonstrate their abilities.
The training doesn’t end after you receive it; there’s a discussion afterwards.
——For example, what kind of KPIs do you have?
I can’t give you a specific number, but as we discussed what ratio would be best, we came to a consensus within the company that diverse human resources would improve the service and the company, make it easier to work, and produce results. There were some positive changes.
People’s consciousness doesn’t change quickly, does it?
Actually, I was like that too. When I received a presentation from an in-house volunteer regarding diversity measures, I didn’t really understand it, and when Mr. Koizumi (Chairman and President of Kashima Antlers FC) suggested that we issue a sustainability report. I feel like that’s the trend.
Since then, I have updated my awareness.
Some companies are good at setting numbers and running towards them, but Mercari isn’t like that.It is better to make changes little by little while discussing with everyone.I think.
We also carry out unconscious bias training, but it does not end after receiving the training; we provide a place for everyone to discuss it afterward.. Because I believe that talking can change things.
By providing a mechanism for discussion throughout the organization, we hope to change the mindset of individuals and eliminate bias throughout the organization.
Mercari aims for 40 million MAU in Japan
—— Lastly, let’s talk about business. You said that you were too defensive in 2023, but what are your plans for 2024?
Consumer behavior around the world has changed due in part to the economic downturn, and the entire industry is booming, including reuse shops and second-hand goods purchases, making it a good business environment for Mercari.
The situation is different in Japan and overseas, so let’s start with Japan. The domestic MAU (monthly active users) is around 22.6 million, but there is still room for growth. Particularly among young people, second-hand items (editor’s note: second-hand items), not just Mercari, have become commonplace, going beyond sustainability considerations. We believe this trend will continue to spread.I want to aim for MAU of 30 million or 40 million..
We can see that there are transaction categories that have room for growth, and we expect cross-border e-commerce to grow even further, so we would like to steadily advance in these areas.
Continued focus on fintechTo do. There were pros and cons when we started Merpay, but I think it’s because of Merpay that the flea market app has become so big. We will continue to add services that have strong synergies for the marketplace.
Payment business overseas.Achieving negative growth through synergies
Overseas, the United States is experiencing negative growth (US GMV for the fiscal year ending June 2023 (full year) is down 11% compared to last year, and MAU is down 3%), but if you look at it over the next 10 or 20 years, it will be the second largest growth in Europe and the United States. Every survey predicts that the distribution and second-hand industries will grow significantly.
In Europe in particular, I have invested in “Beebs SAS”, which will develop a flea market app exclusively for baby and children’s products in France and Belgium in 2022, and I have been visiting various countries recently, and there is a growing awareness of sustainability. It’s expensive, and business customs are quite different depending on the country, which I’m still learning.
We would like to continue to compete globally while considering all options, such as whether to expand on our own, acquire a local company, or invest in a local company.
In addition, we would like to expand a business model like “Mercari and Merpay” overseas.
Payment and fintech are still important to grow the marketplace. In the US, BNPL (pay later) is handled by a third party, so we will continue to refine this aspect.
Source: BusinessInsider
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