IR BOOK 2022

https://www.lmi.ne.jp/english/

Management Strategy

Business Strategy

Organizational Strategy

Sustainability

Corporate Data

Appendix

IR BOOK 2022 - Business Strategy

BusinessStrategy

17Mission
Value Creation Process
Management Strategy
Business Strategy

Link

Organizational Strategy

Sustainability

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Sustainability

Corporate Data

Appendix

18

Group Business Strategy Chronology
We have been innovating our business model based on Motivation Engineering, our core technology, with the aim of carrying out our mission and maximizing value for customers.

Refining our strengths 2000-20092010

Expansion 2010-2019

Organizational
Development
Division

Individual
Development
Division

2020

Linkage 2020 onward

2030

Organizational
Development
Division

Individual
Development
Division

Organizational
Development
Division

Establish our core technology Motivation
Engineering and roll it out in the field oforganizational development

Matching
Division

Matching
Division

Use our core technology Motivation
Engineering to expand business into
other areas

Maximize customer value by using ourcore technology Motivation Engineering
to link all divisions

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2000

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Organizational Strategy

SustainabilityCorporate DataAppendix

19

Business Overview

Support for Matching Organizations
and Individuals

Organizational diagnosis,
transformation and disclosure

Support for finding the best match based onconditions, skills and motivation

Support for Improving Skills
Support for working people in gaining IT skills, acquiringcertifications and learning languages
Support for improving the academic skills of elementary,junior high and high school students

Tech

Cloud-based services for improving
organizational and employee capabilities

Learning platform

Recruiting platform

Individuals

Support for Promotion of Human
Capital Management

DKI ブランドマーク 基本パターン（CMYK）
AVV ブランドマーク

基本パターン（CMYK）

HumanConsulting

Recruiting

IR Support

Training

Personnel
Placement

CorporateCulture

Schools (Online/Brick-and-mortar)

Integrated reports
New
university
graduates

Systems

ALT Placement

Mid-career
employees

Financial results
announcement videos

Motivation Engineering

Organizational Development Division

Matching Division

Individual Development Division

Consulting & Cloud Business

IR Support Business

ALT Placement Business

Personnel Placement Business

Career School Business

Cram School BusinessSupport for Helping Companies
Improve EmployeeEngagement

Support for Helping Companies
Improve Investor Engagement

Support for Matching
Individuals from Overseas
Seeking to Work in Japan withLocal Governments

Support for Matching JobSeekers with Companies

Support for Working People inDeveloping Their Careers

Support for Improving theAcademic Skills of Elementary,Junior High and High SchoolStudents

IR BOOK 2022 - Business Strategy

Organizations

We are currently engaged in the following businesses to provide organizations and individuals with opportunities for transformation. In addition to the power of our people, we also utilize
the power of technology to increase productivity and create high-value-added services.

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Management Strategy

Business Strategy

Organizational Strategy

Sustainability

Corporate Data

20Appendix

Competitive Advantages of Each Division
We conduct a diagnosis of organizations and individuals and then provide opportunities for transformation according to the characteristics and issues we identify. In this way, we
maximize customer value by fully utilizing Motivation Engineering, our one-of-a-kind core technology, in our businesses, services and products.

Organizational Development Division
Visualization of organizational issues

Matching Division
Quantification of job
satisfaction at a company
based on employee reviews

Individual Development Division

Diagnosis in areas fromapplicant skills tomotivation type

Identification of individual issues

Technical skills
Organization

Behavior

Literacy

Portable skills

Work style

Individuals

Organizations

Diagnosis

Motivation
Engineering

Transformation

Organizations

Recruiting

Training

Systems

Individuals

CorporateCulture

Provide one-stop solutions for issues identified

Career schools

ITAchieve the best match for a highretention rate, based on our multifacetedunderstanding of the company

Motivation Engineering

Qualifications Foreign
languages

Cram schools

SkillsMotivation

Provide wide-ranging learning opportunities

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Organizational Strategy

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Corporate Data

Appendix21

Social Changes and Significant Opportunities
Current changes in society are creating the best market for our products and services since our founding. We view these conditions as a major opportunity for substantial business growth.

Social Changes

Changes Involving
Organizations and Individuals

Industries

Occupations

Individuals

Shrinking and diversifying working
population

Business shift to intangibles
Increasing importance and difficulty forcorporate management to adapt to thelabor marketShrinking and diversifying
working population

Push for reskilling

Productmarket

Labormarket

CapitalmarketPublication of “Ito Report for Human
Capital Management”
Release of Human Capital
Visualization Guidelines
Mandatory disclosure of human capitalin securities reports

Intensifying competition toacquire human resources

IR BOOK 2022 - Business Strategy

Shift to individuals as the core ofcorporate value creation

Significant Opportunities

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Sustainability

Corporate DataAppendix

22

Strategy Overview
We will promote substantial growth of the highly profitable Organizational Development Division, which is enjoying favorable market conditions, as we enhance its synergies withother divisions.

Business Strategy

Organizational Strategy

LinkProductivity

Growing needs for reskilling

Growing momentum forhuman capital management

Intensifying competition to acquire
human resourcesCore Theme 1
1 Organizational
Development
Division2

2

Individual
Development
Division

Achieve Substantial Growth of the Organizational
Development Division

Core Theme 2
Enhance Synergies between the Organizational Development
Division and the Individual Development Division

MatchingDivision

Enhance Synergies between the Organizational Development
Division and the Matching Division

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Significant Opportunities

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Core Theme 1

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Corporate DataAppendix

23

Achieve Substantial Growth of the Organizational Development Division

We will promote human capital management at companies through the cycle of diagnosis, transformation and disclosure, as momentum grows for human capital managementand disclosure of related information.

Motivation Cloud Series* Monthly Fee Revenue(¥ thousand)Aiming to Maximize Customer Value and Increase Sales per Customer
by Promoting a Cycle of Diagnosis, Transformation and Disclosure

430,000

450,000

Diagnosis

300,000

Cloud-based
Services+33.0%
year-on-year

240,545
197,101

200,927

Diagnosis for improvementof disclosed items

Transformation of issues
identified through diagnosis

Disclosure

Transformation

IR Support

Consulting

150,000

0Dec. 31,2019

Dec. 31,2019

Dec. 31,2019

Dec. 31,2019

Dec. 31,2019(Forecast)

Disclosure of information
for the capital market

Disclosure of the resultsof the transformation

Consulting on recruiting,training, systems andcorporate culture* Includes Motivation Company Club membership service for managers

We will work to introduce the Motivation Cloud series at major companies, where there is still ample
room for growth, as well as at Japanese subsidiaries of global companies and local governments.
We also plan to expand sales of Stretch Cloud, which was launched in July 2022, in the ¥500 billion
human resource development market. We consider offering services on a subscription basis to be ahighly effective business model from the perspective of business stability, and we will continue toachieve substantial growth in the Consulting & Cloud Business by acquiring new customers for theMotivation Cloud series.

We anticipate further growth in needs to disclose non-financial information, especially human capital
information, as such disclosure becomes mandatory in securities reports. Through integrated
reports and other materials for shareholders and investors, our IR Support Business will disclose theresults of our customers’ diagnosis and transformation conducted by the Consulting & CloudBusiness. In this way, we will support both corporate human capital management and its disclosure.
At the same time, ramping up disclosure will generate synergies between the two businesses in theform of increased needs for human capital management, thus improving revenues per customer for
the Organizational Development Division.

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Corporate Data

Appendix

24

Enhance Synergies between the Organizational Development Division
and Other Divisions

Core Theme 2

We will create more value by providing the employee reskilling support of the Career School Business in the Individual Development Division and OpenWork Recruitingin the Personnel Placement Business in the Matching Division to the customers of the Organizational Development Division.

Individual Development Division

Organizational Development DivisionMatching Division

Employee Reskilling Support Sales

OpenWork Recruiting Sales(¥ million)

1,450

1,500

900
1,250

753

750

+ 19.5%year-on-year+ 57.8%

Number of corporate customers

567
500

Approx.
352

1,600

companies

year-on-year

1,000

918

750

500

453

250

251

250

7800

2020

2021

2022

2023

(Forecast)

The Organizational Development Division’s corporate customers invest
in organizations and individuals. This includes areas such as employee
engagement to improve corporate value and achieve business growth.
These companies are generally proactive in strengthening their humanresources and increasingly willing to invest in employee reskilling topromote digital transformation (DX), especially nowadays when
improving productivity is imperative. We plan to meet their needs for
conducting human capital management, including reskilling of IT andother skills, with our one-stop services and thus promote substantial
growth of our reskilling services for employees.

2019

2020

2021

2022

2023

(Forecast)

At OpenWork Recruiting, which uses the OpenWork website, the higher acompany’s employee ratings and evaluation scores on the website—that is,
the higher its employee engagement—the greater its ability to attract
the attention of capable human resources. Furthermore, since the systemallows job seekers to read employee reviews for a better understanding ofcompanies before applying for a job, it reduces mismatches between
companies and job seekers, thus improving the employee retention rate.
We plan to promote substantial growth of OpenWork Recruiting by sharing
the customer base of the Organizational Development Division andproviding this high-quality recruiting service to companies that conduct
human capital management.

IR BOOK 2022 - Business Strategy(¥ million)

1,000IR BOOK 2022

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Management Strategy

Business Strategy

Organizational Strategy

Sustainability

Corporate Data

Appendix

25

Message from the President and Representative Director

Sakashita Hideki
President and Representative Director
Link and Motivation Inc.

IR BOOK 2022 - Business Strategy

Playing a Role as a Driving Forcein Helping to Promote Japan’s
National Strategy

IR BOOK 2022

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Corporate Data

AppendixMedium-Term Strategy

In recent years, it has become commonplace for the sustainability of a company’s
management environment to be called into question. Of course, profiting fromdestroying the natural environment is a situation that cannot continue, and producing
results simply by overworking employees will certainly not last for long. The conceptof human capital entails treating people not as a tangible asset that is used up, but as
an intangible asset that generates more value as you invest in and refine it. That is
why a paradigm shift is occurring right now toward viewing human resources ascapital to be invested in to create new value, rather than an expense to be controlled.
When I talk with managers from leading Japanese companies, I have a strong senseof the growing importance of initiatives for human capital management.

Over the medium term, we plan to achieve substantial growth of the Organizational
Development Division by acquiring more customers for Motivation Cloud, which handles
diagnosis, and improving unit price per customer transaction through cross-selling in
the fields of transformation and disclosure. As the Organizational Development Division
promotes human capital management among its customer companies, the Individual
Development Division will offer those companies support for reskilling their employees
and the Matching Division will provide the services of OpenWork Recruiting. In this way,
we will help to maximize the human capital of customer companies from a broader
perspective and increase our revenues. In particular, we will generate greater synergies
with OpenWork, which reveals the actual conditions of human capital at a company
through online reviews by its current and former employees. We believe this will
accelerate revitalization into a new labor market.

Enhancing Management through a Cycle of Diagnosis,
Transformation and Disclosure
In promoting human capital management, the Link and Motivation Group considers it
important to go through a cycle of diagnosis, transformation and disclosure to lead to anincrease in corporate value. First, diagnosis quantifies the gap between a company’s
current situation and its goal. Next, transformation proposes and implements
improvement measures to bridge this gap. Then disclosure communicates the progressof initiatives and policies inside and outside the company. By continuing this cycle, thecompany can enhance its corporate management and increase its corporate value.
However, the Link and Motivation Group has received numerous requests for
consultation on human capital management and information disclosure fromcompanies unsure about how to develop their human resources, or how to disclose
the results in a way that links the data with the effects of that development. To address
such concerns, the Link and Motivation Group has been the leader in helping
companies visualize and improve employee engagement, which determines anorganization’s ability to perform and to get results in business. At the risk of singing
our own praises, we expect to become even better at meeting needs for resolving
these issues.

Redefining a “Good Company”
Until now, a company has been judged good or bad based on its profits and assets—in otherwords, based on its income statement and balance sheet. However, profits and assets alone by
no means make a company intrinsically good. We think that employee engagement, whichshows the actual state of a company’s human resources and organizations, will be the yardstickthat determines which companies will be considered good going froward.
“Investment in people” is clearly set forth as a tenet of Japan’s plan for a new form ofcapitalism, and I believe the government is trying to lead companies to a new stage. As a company
instrumental in implementing this national strategy, Link and Motivation intends to use its
influence to change the definition of a good company, and as a result achieve dramatic growth.
At the same time, the Link and Motivation Group itself will be sure to act in accordance withits own words by continuing to conduct its own human capital management.

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Ramping Up Human Capital Management26