Chapter 3.
2017 2021
ESG Management and Technological Innovation—Paving the Way for a Sustainable Future

Beyond Craftsmanship

Obayashi Corporation Marks 130 Years since Its Establishment

In January 2021, Obayashi Corporation celebrated the 130th anniversary of its founding. The company, initially founded as the civil engineering and building construction contractor Obayashi Store in Osaka on January 25, 1892, has carried on the spirit of honest craftsmanship throughout the decades, which has been cultivated by sincerely addressing the needs of customers and society.

In commemoration of its 130th anniversary, the company held a Shinto ritual at Osaka’s Ikutama Jinja on October 26, and Buddhist and graveside rituals at Hakuyo Clubhouse and Mikage Cemetery (the Obayashi family gravesite) in the city of Kobe on October 27. Ahead of the events held in 2021, the company also produced a 2021 calendar titled “History of 130 Years.” Also created were a 130-Year History (online), along with a commemorative photo book, tin cups, and other items which were presented to every employee. In addition, the OBAYASHI LIVE SHOWCASE 2021 was held in October as a completely online exhibition in light of the COVID-19 pandemic.

As a further project to commemorate its anniversary, the company established an office reform working group under the 130th Anniversary Project Committee, which implemented office reform at the Shinagawa office.

It had been 20 years since the Shinagawa office was relocated from Kanda in 1999, and the building’s fixtures, fittings, and communication facilities had become worn and outdated. Even the amount of office space was insufficient. Along with a growing number of employees working at the office, the number of documents stored on site also increased, with more and more space being taken up by cabinets and desks. The working group therefore carried out a complete transformation of the office facilities and layout to implement work style reform and increase productivity. Aside from the revision to the desk layout and establishment of a common space to encourage communication between colleagues, the new “smart office” will also go paperless and realize an outstanding environment that pays consideration to comfort, convenience, safety, and energy efficiency. The entire process, including layout changes, is planned for completion by March 2022.

Establishment of the Brand Vision

In October 2020, Obayashi Corporation established the Group’s brand vision, “MAKE BEYOND: Transcending the Art and Science of Making of Things,” revealing it to the world in January 2021.

The company had long been working to deepen and expand its business domains and globalize its operations in order to grow beyond the boundaries of a general contractor. On the other hand, the image held by those outside the company had remained unchanged. To the public, it was just the “same old civil engineering and construction business.” This became an issue when open innovation and securing new talent—both essential for corporate growth—grew difficult. The brand vision “MAKE BEYOND: Transcending the Art and Science of Making of Things” was thereby established as a way of updating this image. It outlined the company’s promises to customers and society regarding the course of action of the Obayashi Group, with the aims of gaining the understanding and support of external parties and building anticipation for the future.

The vision reaffirmed the raison d’être of the Obayashi Group, a company that has consistently met the needs of society and contributed to social development since its founding. The vision also makes clear the Group’s intention to build new horizons through craftsmanship.

Formulation of the Corporate Transformation Program

In October 2020, ahead of its 130th anniversary, Obayashi Corporation formulated the corporate transformation program. Consistent with its five-year Medium-Term Business Plan 2017, the company had been growing steadily and posted record-high profits in FY2019.3.

However, this all changed in FY2021.3 when the company saw a sharp drop in operating income. The spread of COVID-19 had a profound impact not only on society and the economy, but also on the way that individuals work and live their lives. With the economic recession expected to continue long-term, there were concerns about how these conditions would affect future business performance.

Reflecting on its progress in FY2022.3 as the Medium-Term Business Plan 2017 approached its final year, the company found that it was only at the halfway point in terms of initiatives to increase productivity, deploy developed technologies horizontally, and expand into new business domains. Moreover, the same accidents and problems still kept occurring in the areas of safety and quality. The company clearly needed to further accelerate its efforts to address these management issues. In addition, there was an urgent need to swiftly respond to the changes in the business environment brought about by the socioeconomic upheaval triggered by the COVID-19 pandemic and advances in digital transformation.

In light of the circumstances, the company laid down the corporate transformation program to serve as a guideline for handling management issues that needed to be addressed in a particularly focused and cross-sectional manner. It was determined that the program would be implemented immediately.

Under the corporate transformation program, the company will prioritize four issues: 1) redoubling safety and quality management, 2) strengthening earning power and improving cash flow, 3) responding to the revised Labor Standards Act, and 4) pouring efforts into building new co-creation relationships with companies in its supply chain. It will also work on transforming each of its management foundations in areas that will support the next phases of growth: human resources/organization, business processes, digitalization, and technology.

Challenges for the Obayashi Group

The business environment has changed drastically over the years. Society is now living with COVID-19, dealing with climate change, and undergoing a digital transformation. For the Obayashi Group, the coming decade—an era of uncertainty—will be an era in which its social mission will be put to the test.

The company has been able to overcome numerous challenges and remain in business for 130 years thanks to its predecessors who, since the company’s founding, accurately grasped such changes in society and the business environment in their endeavors to answer society’s and customers’ expectations. Taking pride in the Obayashi Group, the company will seize this crisis and turn it into an opportunity to steadily execute reforms without hesitation, beginning with the corporate transformation program.

Solving the issues at hand one by one with an eye to the future is also one of the approaches of the brand vision, MAKE BEYOND.

Positioning the brand vision and corporate transformation program as both its compass and driving force, the Obayashi Group will move to the next level of the art and science of making things, building the future to which we all aspire.