Four years have passed since Shiseido embarked on reinventing brand innovation. When I was appointed as the head of research and development (R&D), I couldn't help but feel that we were not fully leveraging our extensive research capabilities to drive brand growth and consumer value as research outputs were small-scale and short-term in perspective.

We have dedicated the last four years from 2021 to transformation, focusing our efforts on the establishment of our R&D philosophy "DYNAMIC HARMONY" which derived our unique approach that cannot be defined by just one quality. At the same time, we are reorganizing and integrating our R&D activities emphasizing basic research over the medium to long term that captures the insights of consumers. By creating a one-stop system that links R&D to our brands, we have accelerated innovation with steady results, creating an array of best-selling items or hero products for SHISEIDO, Clé de Peau Beauté, NARS, ELIXIR, and more.

Strategically, we have launched the 2030 R&D VISION, built upon the three pillars of innovation; “Skin Beauty”, "Sustainability" and "Future Beauty" along with our "de-monoculture" approach, which embraces change while preserving traditions. Based on this strategy, as a result of our efforts to select and focus on research areas, we have doubled the efficiency and boldness of our research themes, and are making progress in creating the Science / Technology (S/T) that will support our hit products.

Stemming from Shiseido's philosophy, we have also fostered a culture of beauty to accelerate new market creation and strengthen our "big fish in a small pond" strategy, laying the groundwork to meet evolving consumer needs.

Structurally, we are strengthening partnerships with academic and research institutions under our "de-monoculture" approach. We have collaborated with Hirosaki University, the Cutaneous Biology Research Center (CBRC) at Massachusetts General Hospital, and industry leaders such as Accenture, Nippon Telegraph and Telephone Corporation (NTT), and Toray Research Center, Inc., as well as biotech ventures, delivering tangible results from research findings. Additionally, we are redefining the roles and decentralizing decision-making process in our five Regional Innovation Centers (RIC) worldwide. In January 2025, we have relaunched part of the Global Innovation Center (GIC) in Japan to enhance collaboration with consumers and external partners, accelerating innovation by strengthening researcher-driven value creation.

To track our strategic progress, we established a comprehensive set of KPIs in 2023, aligned with the 2030 R&D VISION. Among these, outcome indicators play a critical role in measuring return on investment (ROI). These KPIs encompass three key elements: research achievements and its business impact, environmental and social considerations, and intellectual property, laying the groundwork for future innovation. We will also disclose our progress externally.

These KPIs allow us to execute a PDCA (Plan-Do-Check-Act) cycle in line with our strategic vision. In 2024, we made consistent progress across all key areas. Our commitment to producing at least two major breakthroughs in bold S/T each year has resulted in significant successes and enhanced the visibility of our intellectual property—marking major advancement.

Having made significant progress over the past four years, we now consider this phase of our reforms to be completed. Moving forward, we are entering the execution phase, focusing on agile and effective implementation. Our strategy is focused on the following four key priorities.

To foster innovation and maximize outcome in the next phase, we are prioritizing excellence in execution. To achieve this, we are rebuilding governance and implementing systems that prioritize three key elements: creativity, expertise, and diversity. Moreover, we will strengthen execution by leveraging KPIs to visualize ROI, accelerating AI adoption, and shift from defense to offence in regulatory compliance.

Under our 2030 R&D VISION, we aspire to be a global leader in beauty innovation, exceeding consumer expectations through high-value-added products.

To establish ourselves as a world-class company representing Japan, we will focus on understanding consumer insights and conducting basic research. By integrating bold S/T with art to showcase our unique value, we aim to drive the company’s progress. We will continue to evolve as the engine behind this vision.