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Masahiko Uotani: Global Citizen

Masahiko Uotani is leading Shiseido boldly into the future with a strategic vision that places the Japanese giant at the center of the beauty universe.

 

When Masahiko Uotani was named president and group chief executive officer of Shiseido Company Limited in 2014, he was the first person from outside of the company to ever be named to the role.

Uotani’s mission was very clear: To transform the Japanese cosmetics giant into a truly global enterprise, and he brought with him decades of experience at international companies, most notably Coca-Cola.

Over the last eight years, Uotani has done just that. His achievements include strategically diversifying Shiseido, both in terms of talent and key brands, rejuvenating the corporate culture worldwide and driving growth in key Eastern and Western markets.

His impact is undeniable. Sales increased from about 760 billion yen in 2014 to over 1 trillion yen in 2021; the average annual share price increased from 1,816 yen in 2014 to 6,414 in 2021 and Shiseido’s market capitalization soared from about 720 billion yen to over 2.5 trillion yen.

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As transformational as his tenure has been, Uotani’s appointment also marks a continuation of sorts. Founder Arinobu Fukuhara started Shiseido as a Western-inspired pharmacy 150 years ago, with the intent of marrying the best of East and West. And like Shinzo Fukuhara, the son of Arinobu who took the company into the cosmetics business, Uotani attended Columbia University in New York City, immersing himself in American culture.

Now, as Shiseido grapples with the ongoing effects of the coronavirus pandemic in a home market that has been particularly hard-hit compared to others around the world, Uotani is tapping into the East-West connection and a global perspective to guide the company through one of the most pivotal moments in its history.

“The last two years have been very challenging, with sleepless nights,” said Uotani, during a wide-ranging interview in Shiseido’s Tokyo headquarters. “But facing these issues has strengthened our company’s sense of unity and working together, so that we can go for another 150 years. I feel quite positive today.”

Masahiko Uotani
Masahiko Uotani Irwin Wong/WWD

Over the last two years, Uotani has put his money where his mouth is. A $400 million Global Innovation Center remained open and operational in Yokohama, Japan, and the company invested $1.2 billion in three new state-of-the-art manufacturing facilities in Japan. Planned renovations of the Shiodome headquarters were also completed, while a new Manhattan headquarters for Shiseido Americas opened in 2019, as well as other regional headquarters in Paris, Shanghai and Singapore. For Uotani, such expenditures represent an investment in the future of the company — and its people — far beyond the facilities themselves.

“With ‘People First’ as our fundamental value for our company, I have a strong belief that we as human beings on the same team have to trust each other, irrelevant to your personal background or seniority,” he said. “When trusted and empowered, I believe people proactively think and gain ownership for what they need to deliver. It is much better than being ordered or pushed to implement one’s responsibilities.”

That vision was put to the test during the pandemic, when Shiseido’s very survival was at stake.

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“As a leader, I had two options at the beginning of the pandemic — put my head down and wait until the storm was over. But no one knew how long it was going to last and I had to protect the company and our people.”

The second option for Uotani was transformation 2.0. “For Shiseido to survive the crisis and be vital for the next 150 years, we had to make some tough decisions, together as business leaders,” he said.

“When we faced the significant challenges of the COVID[-19] crisis, our regional CEOs and their teams had a very proactive approach to protect the core value of Shiseido through their transformational efforts,” he continued.

To that end, in February 2021, Shiseido announced the sale of its personal care business in Japan to CVC Capital Partners in a deal valued at $1.5 billion. In April of that year, it announced it was concluding its licensing activities with Dolce & Gabbana (“we knew that it was going to take more time to become profitable, and under that kind of crisis mode, we didn’t have the luxury to wait,” said Uotani) and that August, it sold Laura Mercier, Bare Minerals and Buxom to Advent International for $700 million. In all, about $2 billion in sales exited the portfolio

The company announced a new strategy, one that capitalizes on its core capabilities in research and development and innovation, as well as global market dynamics.

“We are going to be the world’s number-one skin beauty company by 2030 — that’s the vision,” said Uotani. “It doesn’t mean that we are not going to do any makeup or fragrance. But we are going to focus on growth.

“Our mission is ‘Beauty innovations for a better world,’” he continued. “We think that consumers are redefining beauty in a broader way, including health.”

Shiseido DigiskinTester
Shiseido is using technology and R&D to win in skin care, as seen here in Tokyo.

Uotani posited that Shiseido’s Asian roots make it particularly suited to seize this moment. “This is an approach that is more skewed to Eastern thought. How you eat and live your life impacts your skin condition. Japanese and Chinese women truly believe good digestion helps their skin,” he continued, noting that one of the products he launched at Coca-Cola was a lactic drink that aided in digestion.

“Our frame of reference can be expanded with consumers changing, therefore we made the decision to focus on skin beauty — not skin care,” he said. “What you eat, your quality of sleep, your stress levels, mental situation — all impact the skin. Holistic beauty is a more important concept and value for consumers.”

As an example of the new focus, Uotani cited the color category. “Focusing on skin beauty does not mean we will not support makeup or fragrance brands anymore,” he said. “We can apply the skin beauty concept to our makeup and fragrance brands as well. For example, Nars is very important to our portfolio and Nars can grow.”

To wit, the team took the framework of skin beauty and concepted the launch of Light Reflecting Foundation. Introduced in February, the product is the biggest launch in the history of Nars.

“By making use of our technology and R&D like this — that is the future of Shiseido,” said Uotani, citing the Effectim 3D Beauty Lifting Activator device as another example. It launched in Japan and China earlier this year.

Uotani is a gregarious executive with a ready smile and easy manner. He relishes interacting with people, and while his team might try to keep him on schedule, he will always take the opportunity to engage in conversation, expand upon a point, share his point of view. His leadership style is collaborative, and for Uotani, building back better means working together. “Even though we couldn’t get together physically as an executive team, we were able to strengthen our sense of comradeship,” he said. ”Trust creates strong solidarity and unity in the global organization and community. I personally see this as the real thrill of running the global business together with people who have different backgrounds. When putting priority on trust and empowerment, I only ask everyone to follow the ‘bad news first’ practice to avoid the risks and solve the problems together.”

The same dynamic happened throughout the company, which Uotani believes will be critical to success moving forward. As he talks about Shiseido’s goals in terms of sustainability and digitalization, he always circles back to the human aspect.

“Who is going to make all of this happen,” he asked, as he ticked off the enormous changes in the company’s media strategy, for example,  in a post-COVID-19 world. “The 2030 vision is going to be realized by our people. By going through this pandemic, I am even more confident that we have to really put more focus and investment in our people. People first.”

Today, Shiseido has about 40,000 employees, about half of whom are Japanese. The others hail from over 100 countries.

From the very beginning, Uotani has been as focused on ensuring a transversal flow of ideas across all six of Shiseido’s key regions: Japan, China, APAC, the Americas, EMEA and Travel Retail. While the business and the brands are global, his time spent at Coca-Cola also taught him that to truly appeal to worldwide consumers, you had to develop a deep understanding of their preferences, nuances and cultural habits.

“We are all human beings, but consumers are different based on where they live and where they have been raised — in terms of culture, values, language, behavior,” said Uotani. “We need a consistent global strategy and brand approach, which requires talented people to work together. We came up with matrix organization strategies and we created regions.

“Region is not a sales company,” he continued. “It is a comprehensive organization.”

To that end, Uotani has globalized Shiseido’s executive committee over the last three years, appointing Maria Chiclana to the role of chief legal officer and global general counsel; Angelica Munson to chief digital officer, and Antonios Spiliotopoulos to the position of chief supply network officer. While Chiclana is based out of New York, both Munson and Spiliotopolous have moved to Tokyo. The overarching goal is to continue to inject all levels of the company with diversity in terms of thought leadership and agility when it comes to execution.

Despite the challenges of the last couple of years, Shiseido has still managed to move quickly, in terms of product development as with Nars; globalization, as with the rollout of Drunk Elephant to new markets, and incubating new concepts in key markets. This past June, the company launched Sidekick, a skin care brand targeting Gen Z men in Asia. That followed the April introduction of Ulé, a sustainable skin care brand developed by and for Europe.

The concept came from a conversation Uotani had with Lindsay Azpitarte, a Shiseido brand manager in Paris, about four years ago. He shared his experience in launching myriad drinks while at Coke, and she shared her idea for a conscious skin care brand. Uotani gave her the green light, and it was developed by the local team from scratch.

While Uotani doesn’t rule out acquisition to expand the brand portfolio or company capabilities, such projects perfectly encapsulate what he’s trying to achieve internally with the evolution of the corporate culture. “We are by definition a manufacturer — we have our own R&D, our own manufacturing plants, distribution and store presence, and communication with consumers. If you always go out and buy companies to acquire new brands, you deteriorate your own capabilities of development,” he said. “Instead, marketing people should be strengthening their ways of looking at consumers, coming up with insights and ideas to create new products and brands and services. That is what our value is.”

For now, Ulé has launched in its own store in Paris and in a handful of retailers. Uotani can envision brands that are created in Japan moving westward, and Shiseido will have stronger capabilities to develop more brands catering to specific local needs.

But his global vision is one that extends far beyond business.

Despite Japan’s lockdown — the country is still largely closed to tourism — Uotani has managed to find ways to ensure that Shiseido plays a key role on the global stage. Recently, for example, he spearheaded a concert to benefit Ukrainian refugees in Japan. Even though Shiseido had donated 1 million euros to the UNHCR, the United Nations’s refugee agency, he wanted to do more. He enlisted some of Japan’s biggest companies to join Shiseido, including Suntory, Seiko, Daiwa Securities and Tokyo Marine & Nichido Fire Insurance, to stage a concert in June called Music for Peace. In all, 23 million yen was raised to support people from Ukraine in Japan.

“One day they are going to go back to Ukraine and rebuild their country and we have to support this,” he said.

That ethos is not new to Shiseido — it’s the very foundation on which the company has been built.

“From the beginning of our company, social value is built into our heritage. Arinobu Fukuhara didn’t say he wanted to build a big business to make a lot of money. He wanted to deliver good medicine to society,” said Uotani. “We want to react to consumer changes and social requirements with a seriousness and diligence. Ethics and integrity are the key values this company has always embraced. Even when we are facing big issues, we ask, how can we contribute to the world?”