dentsu Japan CEO Sano Discusses the Front Lines of Business Transformation and BX

"Xplorers," a conference exploring the front lines of business transformation, was held on Tuesday, August 27, 2024.This conference, which brought together 100 leading transformation leaders active on the front lines to present and engage in in-depth discussions on business transformation, new business creation, and DX, was attended by Mr. Suguru Sano, CEO of dentsu Japan and Representative Director, President and Executive Officer of Dentsu Inc., and Mr. Yuichi Toyoda, President of Dentsu Group Global Practices– BX, President of dentsu Japan BX, and Executive Officer of Dentsu Inc.; Yumiko Yasuda, Executive Officer of Dentsu Digital Inc.; Kazuhito Goto of Dentsu Inc.; and Shingo Yamahara took the stage.

CEO Takashi Sano Speaks: What Is the True IGP That Dentsu Japan Aims For?

In the keynote session, the four CEOs discussed the theme “Each Company’s Initiatives and Direction for Transformation and Innovation.”The panelists were Taro Fujie, Representative Executive Officer and President of Ajinomoto; Kei Urushima, Director, Representative Executive Officer, President, and CEO of Mitsubishi Electric; Tatsu Nakajima, Executive Officer, President, and Group CEO of Sumitomo Mitsui Financial Group; and Kei Sano, CEO of dentsu Japan and Representative Director, President, and Executive Officer of Dentsu Inc.

dentsu Japan: Playing a Key Role Globally

Mr. Sano began by introducing the Dentsu Group’s purpose: “an invitation to the never before.” “This is the Dentsu Group’s purpose, encompassing our global operations,” he said. “It serves as a shared message that all members of the Group will combine diverse perspectives to contribute to the development of society and our corporate clients.”


“Some may view Dentsu Inc. as a Japanese company, but the Dentsu Group operates globally across approximately 120 countries. Overseas revenue accounts for about 60% of the Group’s total gross profit.”Amid this business expansion, Sano oversees dentsu Japan, which accounts for about 40% of the Group. It is a business brand comprising approximately 150 domestic companies and 23,000 employees. Specialized companies such as Dentsu Inc., Dentsu Digital Inc., DENTSU SOKEN INC., Septeni, and Carta Holdings collaborate to provide solutions that contribute to solving challenges across various fields.

Dentsu Japan, which is said to be a source of innovation and strength within the group, has declared its expansion beyond the advertising sector and has been broadening its business scope.Currently, its core business areas are “Marketing (advertising and CRM),” “Transformation (business transformation and DX),” and “Contents (entertainment and sports).” Prefacing his remarks by noting, “The boundaries between what is advertising and what is not are becoming increasingly blurred,” he stated that revenue from outside the advertising sector now accounts for 40% of the total.

“The Flowering of Diversity” Is the Key to Dentsu Japan’s Transformation

Regarding the main theme of “driving transformation,” Sano states that a key management perspective is that “people” are the company’s capital. “We have been committed to human capital management long before it became a buzzword in the business world. For Dentsu Japan, which has virtually no factories or products, the principle that ‘people’ are our capital has always been a core value.” To further advance this human capital management, the company is focusing its efforts on “the blossoming of diversity” through a transformation of corporate culture.

“Maximizing the capabilities of our approximately 23,000 employees is the very source of our competitiveness. I believe that by multiplying these capabilities rather than simply adding them together, we can unleash tremendous power. And it is crucial that this multiplication involves diverse capabilities, not uniform ones,” he emphasized. Through the growth of each diverse individual, the unlocking of their potential, and the synergy created by this multiplication, the company aims to become a force that drives the growth of client companies and injects vitality into society.

“That is the vision dentsu Japan strives for: to be a ‘True Integrated Growth Partner,’” said Sano.

He cited two key elements essential to achieving this: “DEI” and “integrity.”Led by Atsuko Kuchiba, Chief Diversity Officer, and Yuko Yoshiha, Chief Branding and Culture Officer—both of whom assumed their roles in January 2024—the initiative is being driven by the entire executive team. “It’s meaningless to proclaim a noble purpose if people don’t act on it. Taking action is more important than merely stating a purpose. Regarding DEI, we are actively implementing various concrete initiatives to encourage employees to take action,” he explained.

dentsu Japan’s DEI Initiatives

Regarding “integrity,” she explained, “I view integrity as the inherent nobility and ethical standards that each individual possesses, and I believe it means demonstrating those values through actions grounded in sound knowledge and imagination. The free and open expression of our capabilities is predicated on the integrity of each individual serving as the foundation. Not only do I personally engage in this, but employees also discuss and reflect on their own integrity with one another.We are promoting the internalization of integrity through the establishment of various guidelines and 17 specific initiatives,” he explained.

dentsu Japan’s Integrity Initiatives

Summary of Cultural Transformation and dentsu Japan’s Vision

During the subsequent discussion, when questions turned to what is necessary for revitalizing the Japanese economy and succeeding in global competition, he noted that while Japanese talent may be outstanding on an individual basis, they sometimes struggle to win as a team when compared to global talent. He explained that to unleash individual capabilities and generate strong team power, it is essential to have leadership and a culture where people with a spirit of challenge look in the same direction and maximize their potential as a team.

The companies within Dentsu Japan are beginning to receive high ratings in various corporate rankings* based on external surveys. “However, we are still only halfway there. One of my favorite sayings is, ‘If you want to go fast, go alone. If you want to go far, go with others.’ Together with the diverse colleagues at Dentsu Japan, I want to continue evolving as a partner for transformation for society and all of you (the audience),” he concluded his remarks with renewed determination.

*OpenWork “Ranking of Companies with a Sense of Purpose 2024” (Dentsu Inc.: 3rd place), OpenWork “Ranking of Companies with Improved Growth Environments as Chosen by People in Their 20s” (Dentsu Inc.: 3rd place), OpenWork “Ranking of Major Japanese Companies with Excellent Teamwork as Evaluated by New Graduates” Dentsu Inc. ranked 4th, OpenWork “Ranking of Companies Recommended by Young Employees Hired as New Graduates ” DENTSU SOKEN INC. ranked 1st, OpenWork “Ranking of Companies Evaluated by Managers” Dentsu Inc. ranked 3rd

What Drives Sustainable Transformation and Generates Passion?

The conference concluded with a presentation by Dentsu Japan on BX. Under the theme “What Drives and Fuels Sustainable Transformation?”, the presentation addressed the current state of challenges in corporate and business transformation, as well as key concepts essential for driving change.

Promoting Transformation Holistically

The presentation was kicked off by Yuichi Toyota, who oversees BX for the Dentsu Group. He discussed the "Holistic Transformation Model," which outlines the overall vision of BX at Dentsu Japan.


The diagram above represents the “Holistic Transformation Model,” which constitutes the scope of dentsu Japan’s BX. With purpose at its core, the company provides transformation support across the entire spectrum—from corporate foundations and organizational HR to business operations, sales, and marketing. These areas are not independent; rather, as the arrows in the diagram indicate, they are closely interrelated.“For example, to drive business transformation, it may be necessary to transform corporate culture and organizational HR as well. In other words, transformation in one area cannot always be achieved by focusing solely on that area. Dentsu Japan approaches corporate and business transformation challenges holistically and provides support accordingly,” he said.

There are three unique aspects of dentsu Japan’s BX that underpin this “Holistic Transformation Model.” The first is “Creativity.” This refers to creativity in the broadest sense, demonstrated throughout the entire transformation process—such as reframing challenges from new perspectives, devising strategies unique to that company, and embedding them throughout the organization. The second is “the power to move people’s hearts and change their behavior.”“People” here refers to all stakeholders, including employees. Ultimately, it is people who drive transformation. The third is “execution capability”—the ability to execute and provide ongoing support until results are achieved. These three elements constitute our strengths.

The final element of the overall picture is a structure that enables holistic support. “For example, Dentsu Digital Inc., which combines creativity with data; DENTSU SOKEN INC., which offers system integration, consulting, and think tank functions; and Ignition Point Inc., which excels in new business creation… Seven companies with specialized expertise in the BXDX domain collaborate to support companies with the optimal team structure tailored to their challenges,” he explained.

"Second-Round Challenges" on the Ground

Mr. Yamahara of Dentsu Inc., who is involved in supporting the transformation of various companies and businesses, spoke about the challenges occurring on the front lines of transformation, as revealed through actual dialogues with management and Dentsu Inc.’s proprietary research. In a nutshell, he said, “The ‘second-round challenges’ of transformation are now emerging.”

“It is precisely those companies that have undergone various transformations that are experiencing these ‘second-round challenges,’” said Mr. Yamahara.

“For example, many companies are now entering their ‘second round’ when it comes to business development,” he explains. Until two or three years ago, companies often aimed to develop businesses that were “enclaves” separate from their core operations. Now, in this second round, however, they are increasingly focusing on developing “flagship businesses” in the “adjacent territory” of their core operations—businesses that leverage their fundamental strengths, DNA, and the untapped potential of their R&D.“However, developing robust new businesses in such adjacent areas is no easy task. Naturally, such projects take time, but within companies, the environment often changes after a few years, and it is not uncommon for a strong force to push them back toward their core business,” says Yamahara.

Perceptions of internal transformation are also entering a second phase. Dentsu Inc.’s proprietary survey, “The 2nd Employee Perception Survey on Corporate Transformation (2024),” yielded results that support this challenge. The combined proportion of the “transformation advocates” and “transformation followers”—those who are proactive about transformation—accounts for only about 30% of the total. This figure has decreased compared to the first survey (2021).Instead, the results show an increase in the “Transformation Confused Group,” the “Status Quo Affirmers,” and the “Transformation Indifferent Group.” Those unable to take action cited reasons such as “transformation proposals from management have not taken root” and “a vague sense of anxiety” stemming from the feeling that they are merely being forced to change. These results suggest that, as companies enter this second phase, it is becoming increasingly difficult to drive transformation that engages employees.

It is precisely for companies entering this second round of transformation that it is crucial to define the fundamental aspects: why this transformation is being undertaken, what kind of corporate vision they are aiming for, and what value they will create for society. Furthermore, it is essential to articulate this through a clear and powerful transformation concept—one that resonates with many employees and serves as a rallying cry—along with a simple strategic roadmap.

Next, he introduced the specific approaches being taken at Dentsu Japan.

Supporting Companies’ “Autonomous Transformation”

As a concrete solution, Mr. Yasuda—who leads DX-driven “ambidextrous management” support at Dentsu Digital Inc.—discussed a “proprietary program designed to foster autonomous transformation.”

“While DX is indispensable for corporate and business transformation, there have been many instances where it turned into ‘forced transformation’—where the means (‘How’) of ‘just digitizing everything’ tended to become the end in itself. Now that we’re facing the challenges of the second wave, we need ‘autonomous transformation’ where every single employee understands the ‘Why’ behind it and holds a clear vision of the ‘What’ they should achieve,” says Mr. Yasuda.There are three unique programs designed to foster “autonomous transformation”: “DX ARROW” for formulating transformation strategies; the “Will Being Program” for cultivating the right mindset among employees; and “Business Translator Development,” a talent development initiative that enhances data and business skills.

*Ambidextrous Management: A management theory that advocates the importance of balancing “continuous improvement of core businesses” with “concrete actions toward new ventures.” Proposed by Professor Charles A. O’Reilly of Stanford Graduate School of Business and Professor Emeritus Michael L. Tushman of Harvard Business School.

"DX ARROW" is a framework that consolidates three key elements—key issues, KSFs (Key Success Factors), and use cases—to address the challenges of transformation. It is designed as a companion program that enables companies to develop their own solutions based on these key issues. "Here is an example of our support for a major manufacturing company. Because it was a highly challenging new business development project, there were difficult-to-resolve issues such as scattered key issues, too many decision-makers causing stagnation, and varying levels of enthusiasm for the project.“In response, we started by aligning our beliefs—which precede strategy—to unify our direction and enthusiasm. Only then did we move on to strategy formulation and further discussions on the optimal sequence of services. This process ensures that the resulting strategy is fully internalized by the team,” he explained, noting that it was only after this groundwork that discussions on how to utilize digital technologies and data began.


“As a company embodying the Dentsu Group’s digital transformation, we will continue to apply the lessons we’ve learned to support the fundamental growth of our client companies,” he concluded.

Unique to Dentsu Japan: BX Support Through Creativity

Another solution presented was “BX support through creativity.” Speaking on this topic was Kazuhito Goto of Dentsu Inc., who supports BX through creativity. Goto began by explaining, “This is not creativity as an advertising expression, but rather creativity as a driver that generates the ‘momentum’ and ‘passion’ for business transformation.”

“There are various ways to interpret the concept of creativity. What is its power in business transformation? One aspect is the ‘power to visualize and concretize,’” said Goto.

He explained that this “power to visualize and concretize” becomes the driving force and energy that accelerates business transformation. Modified lignin was introduced as a concrete example.Modified lignin is a new material developed using chemicals extracted from Japanese cedar, a tree native to Japan. It offers excellent workability, heat resistance, and durability. It possesses properties equivalent to petroleum-based plastics and is attracting attention as a bio-based material that can be processed into everything from electronic circuit boards to tennis shoes.

To promote the use of this modified lignin by engaging various stakeholders, the power of creativity played a significant role in visualizing “what kind of society we can realize.”

Before: We considered whether there was a way to convey the benefits more intuitively.

After: We visualized the sustainable society enabled by “modified lignin” in a single image.

“When things are visualized and made concrete like this, and the level of detail increases, people instantly feel a sense of ownership,” says Mr. Goto. “That’s what drives change.”

The case of the “Space Food Industry Co-creation Consortium.” The approach taken in a project involving numerous stakeholders.

By visualizing a vision that everyone could work toward, the project made significant progress all at once.

This is a prime example of how a genuine sense of alignment with the direction led to proactive action among team members and successfully engaged those around them. Finally, Mr. Goto stated, “I believe the driving force of transformation is not a one-sided, top-down process, but rather something that moves forward by cyclonically drawing in the passion of the various stakeholders involved. Creativity contributes to generating that driving force.”

In Conclusion

So, what is truly needed to maintain that passion? As survey results indicating “change fatigue” suggest, it is no easy task. When discussing the most effective approach to boosting enthusiasm at Dentsu Japan, Mr. Goto noted, “A shared dream—a vision that people truly internalize—serves as the ‘core’ of that passion.”(Mr. Goto). Regarding that vision, Mr. Yamahara added, “I believe it’s crucial that the vision—which answers the question ‘Why do we need to change?’—is rooted in the company’s founding principles and DNA. Since the way that vision manifests differs from company to company, I think that by carefully accompanying them through that process, the employees’ passion will gradually rise.”

“In fact, survey results* show that approximately 95% of executives agree that culture and enthusiasm are important, but determining how to measure that enthusiasm is a difficult challenge. We have addressed this by incorporating it into our ‘Culture For Growth ’ solution,” explained Mr. Yamahara.

*Dentsu Inc.’s proprietary survey: “Survey on the Perceptions of Executive Management and Corporate Planning Departments Regarding Corporate Culture Transformation (2024)”

Mr. Yasuda added, “While I believe transformation should certainly involve challenging the status quo, it is also important to identify and preserve the positive aspects that should be retained. Identifying these strengths is something we excel at in advertising and marketing.”

Finally, Mr. Toyota emphasized, “In corporate and business transformation, attention tends to focus on changing system infrastructure and various policies, but in addition to that, it is crucial to move people’s hearts and change their behavior.” He concluded his remarks by stating, “We aim to support clients by combining the power to move people—which we have cultivated as an advertising and marketing company—with the specialized expertise of each company within dentsu Japan.”

It is precisely because we have accompanied numerous corporate and business transformations that we have come to recognize the “challenges of the second round.” To address these increasingly complex issues, we will provide support and guidance by combining the creativity honed in advertising and marketing—which captures people’s hearts—with the expertise of our seven specialized companies. The presentation highlighted the unique BX approach of dentsu Japan, which values people and champions the flourishing of diversity in its management philosophy.

For more information on Xplorers, visit: https://xplorers.jp/
*The 2024 event has concluded.

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