Ricoh 2008 Annual Report Download - page 17

ANNUAL REPORT 2008 16
16 t h M i d - T e r m M a n a g e m e n t P l a n
Fiscal 2008 HighlightsFiscal 2008 Milestones
Sustainable Environmental
Management
Financial Section Corporate Governance /
CSR To Our Shareholders
and Customers
16th Mid-Term
Management Plan
Q6 What are the key points in implement-
ing reforms under the 16th MTP?
Implementing across-the-board reforms
through matrix management
During the last MTP period, we started transforming our R&D orga-
nization, which was anticipated to take the longest time to complete,
as the initial effort for broader reform processes. By integrating all
R&D functions into the newly established Ricoh Technology Center in
Ebina City in Kanagawa Prefecture, we have been promoting drastic
reform of our R&D process under the theme of “Create Without Mak-
ing.” What we mean by this theme is to conduct the R&D process at
high speed and low cost with the minimal development of physical
prototypes.
In the old days, something that I myself have done in the past,
engineers spent many sleepless nights in creating prototypes, with
many failed attempts. Such “sweat and tears” stories are no longer
appreciated in this day and age because we will not be able to win
the current intense development race without having smart, effi cient
development systems. When developing strategically important
products, we used to assemble project teams consisting of the best
and brightest talent from across the company. However, this method
faces its limitations in today’s environment where multiple main prod-
ucts are being developed simultaneously.
To address this issue, I decided to adopt a matrix management
approach. Although it was a really painful process, the organizational
reform implemented has enabled our R&D to simultaneously develop
several product lines from low- to high-end. In the current 16th MTP,
we are planning additional expansion of the facilities at the Ricoh
Technology Center to bring further innovation into our R&D manage-
ment.
During the 16th MTP period, we intend to extend the drastic
reform by incorporating matrix management across the entire organi-
zation, including manufacturing, marketing, and service departments.
Then we will promptly intensify three-dimensional collaboration
among the three departments. We will also strengthen our solutions
provision capabilities—the key to profi table growth. Each of us in the
Ricoh Group must ourselves practice leading-edge and highly effi-
cient operations, management processes, and workfl ows, and deliver
compelling solutions ideas based on our own experience. By doing
so, the Ricoh Group aspires to become synonymous with the “offi ce
revolution” and make our business processes a showcase for Ricoh
Value. We will be as dedicated to promoting this operational reform
as we would be if reinventing our organization from scratch.
Inviting our shareholders to share the future
with the Ricoh Group
In presenting the fi rst mid-term management plan of my presidency
at Ricoh, I would like to emphasize to our shareholders that the Ricoh
Group is an enterprise with high growth potential. In aiming for our
ROE target during the 16th MTP period of 12.5%, we aim to improve
the profi tability of our business by delivering high added value to cus-
tomers, managing our operations very effi ciently, and thus achieving
an operating margin of 10% during the period. Together with these
efforts, we will also take the necessary steps to improve the total as-
set turnover and increase the asset effi ciency in order to get on track
to reach our ROE target. In line with the targeted growth in profi tabil-
ity, we intend to improve our shareholder return, including dividend
increases. In aiming for a long-term dividend payout ratio target of
30%, we will be working to make steady improvements from the cur-
rent levels. Going forward, we will also intensify communication with
our shareholders and other investors to give them a better under-
standing of the value that the Ricoh Group can deliver to them, which
we believe will increase their affection and loyalty to the Ricoh brand
even more. At the Ricoh Group, we all look forward to sharing the
future with you and receiving your support for many years to come.
Q7 In closing, tell us about your plans for
shareholder returns and enterprise
value.