ENTERPRISE AGILE APPROACH
AND DESIGN-ORIENTEDTHINKING
DIALOGUE 02

NAOFUMI TSUCHIYAHIROSHI AOICorporate Transformation to Allow Employees to Embrace Their Emotions and Unleash Their Creativity
In April 2022, MARUI GROUP embarked on a journey of corporate transformation together with Goodpatch Inc. andMuture Corporation, a joint venture founded with Goodpatch. Naofumi Tsuchiya, CEO of Goodpatch and executive
officer at MARUI GROUP, and President Hiroshi Aoi are united in their commitment to achieve agile management
at a large-scale company like MARUI GROUP. One of the tools they are utilizing in this transformation is designoriented thinking, and this process is being advanced with the goal of allowing employees to embrace their emotions and sensibilities and unleash their creativity in order to generate innovation.
Marriage-Like Relationship
Tsuchiya: You may recall, Mr. Aoi, that it
was in the spring of 2021 when we first
met. After that, I looked into MARUIGROUP and the Company surprised mein a lot of positive ways. From sustainability to human resource development,
you were at the forefront in many areas
where major companies are now pressed
to make substantial changes. Despite
how far ahead you were then, you still felt
there was more you needed to do, right?
Aoi: That is true.
Tsuchiya: I spoke with many employees
at MARUI GROUP over a period of threemonths. These conversations haverevealed issues with hiring at theCompany. Specifically, you did not havethe people or the functions to cultivate
the people needed to advance initiatives
related to digital transformation, agile
management, customer-oriented
approaches, or user experience. As apossible solution to this issue, I proposedthat MARUI GROUP and Goodpatch forma digital technology joint venture company to attract digital technology experts
for you. I remember how quick you wereto accept my proposal.
Aoi: I immediately recognized the important opportunity you were presenting
and knew I had to jump on it.
Tsuchiya: MARUI GROUP has a lot of70

really great people and an inspiring
corporate culture. It was clear that, if
you could get past the bottleneck when
it came to digital technologies, theCompany would become an amazing
example of what can be accomplishedthrough digital transformation at a largecompany.
Aoi: About a year has passed since we
set up that joint venture, Muture, and I
am pleased to see that we have beenable to attract people who are eager tohelp out with the digital transformationof a large company. Our team of digitaltechnology experts only had five members when we established Muture, butthat number had grown to 14 in October
2023. I love taking part in social experiments, and Muture is one of those. If
Muture can become a vessel for achemical reaction between Goodpatchand MARUI GROUP, it will no doubt
become a key element of our successgoing forward.
Tsuchiya: Japan has yet to see an
example of a corporate transformation
being advanced through a joint venturecompany. That is just how revolutionary
this undertaking is.
Aoi: MARUI GROUP’s corporate philosophy calls on us to “continue evolving tobetter aid our customers.” If we are toadhere to this philosophy, we will needto transform management to be more

based on software and digital technologies, which will involve a departure fromour prior business model, which wasprefaced on physical stores and face-toface interactions with customers. This
will be as big a shift as was the transition from the belief that the sun revolved
around the earth to recognizing that theearth revolves around the sun.
Nevertheless, I recognized that successin this shift was imperative to our ability
to orient ourselves toward and serve
customers in the way we desire.
Tsuchiya: What we are trying to accomplish constitutes an enterprise agile
approach. We need to transform MARUIGROUP’s organizational culture andstructure and the flow of decisionmaking processes. The end goal of thisprocess will be to transform an enterprise like MARUI GROUP into a user
experience company. I am overjoyed
to see people who want to make thisundertaking a part of their career cometogether at Muture.
Aoi: It is really exciting. MARUI GROUP
employees, who had previously worked ina vertically stratified organization, havebeen teaming up with people at Muture,and this has been stimulating rapid
growth and change. In fact, an employee
taking part in a project with Muture evenmentioned that their involvement in thisproject had allowed them to break down

Naofumi TsuchiyaRepresentative Director and CEO, Goodpatch Inc.
Executive Officer and CDXO (Non-full time)
Naofumi Tsuchiya founded Goodpatch in 2011 and would go on tolead this company in supporting numerous companies, ranging
from start-ups to major corporations, through the development ofproducts grounded on its strengths in user interface and user
experience design. In 2020, Goodpatch was listed on the Mothers
market of the Tokyo Stock Exchange, becoming the first design
company to be listed on this exchange. Tsuchiya took up a position
as an executive officer at MARUI GROUP in June 2023.

71their preconceptions and reinvent themselves. I think that is a really great way tolook at things.
Tsuchiya: Transforming MARUI GROUP
on a fundamental level will require theemployees who work there to think andfind answers on their own. Muture will
support this process by providing methodologies, ideas, and feedback. In this
support, we will emphasize influencing
the corporate culture over the medium
to long term and updating one’s individual understanding.
Aoi: If our efforts are to become a success story, that will need to be a central
part of the process.
Tsuchiya: A relationship that is purely
based on projects involves producing
short-term results so that we can haveour contract renewed. A joint venture,meanwhile, is more like a marriage.
Aoi: That is a good way to put it.
Tsuchiya: Like a marriage, a joint venture
requires mutual commitment, not tomention a medium- to long-term perspective. This type of relationship thus
allows us to strike more at the heart ofan issue. For example, we have beenworking closely in the development ofMARUI GROUP’s OMEMIE store openingsupport service over the past year, andwe have been prioritizing changes inindividuals and organizations in thisprocess. These efforts have yet totranslate to numerical changes in performance figures, but a change in people
will no doubt have an impact on performance down the line.
Aoi: A change in people is an indicator, asign, of changes to come. When employees are empowered, it gives me hope forour future.
Tsuchiya: I think we have witnessed arise in employee drive. You can seepeople expressing the skills they want tohone and the type of employee theywant to become by committing to acertain business.
Aoi: If we find ourselves not knowing
what to do in existing businesses andnot being able to succeed even if we
adopt new rules or frameworks, it islikely that the underlying cause is issues
with our current ways of thinking or
corporate culture.
Tsuchiya: Updates to structures arenecessary for achieving fundamental
change. If we look at the EPOS app,for example, we will see that it is notenough merely to change the userinterface and make it more visuallyappealing. More structural changes tothings like the flow of decision-making
processes are crucial to making the appthat users want.
Aoi: I cannot help but acknowledge justhow great the difference in culture is
between people who have made theirliving by selling physical items andpeople who utilize digital technologies tosupply intangible services. However,I think that we are finding common
ground by explaining our ways of thinking to one another.
Tsuchiya: The process you describe
is one of the reasons I think the term
“enterprise agile” is so apt.
Process of Hypothesizing,Experimenting, and Creating Results
Aoi: As our material wealth grows, theidea of design is evolving from making
things more visually appealing to giving
rise to a type of design-oriented thinking.
Our efforts going forward will thus
include working together to shape adesign-oriented thinking approach while
incorporating the perspective of customers. Digital technologies will be

I think this endeavor has the potential for us to create somethingthat transcends the traditional value framework through which
improved performance drives increases in a company’s stock price.
Hiroshi Aoi

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indispensable in fully entrenching thenew concept of design-oriented thinking
into our business, and software will be
the best tool for implementing thisconcept in its purest form. This is especially true considering how the experience offered by products, how theyenrich our lives, is becoming more
important than the physical products
themselves.
Tsuchiya: In today’s era of abundance,
whether an offering can win customer
favor and be desired will be determined bypeople’s emotions. For this reason, it willbe those companies that are tapped intothe emotions of people that will be able tosurvive. The degree to which a producthas been thought out and shaped bypassion is something that people who lovea given product can easily read. It comesout in the design. In this regard, I believethat MARUI GROUP has a culture ofinvesting in emotional value.
Aoi: MARUI GROUP is a company filledwith highly empathetic employees. To
effectively incorporate this empathy into
our business, however, we will needdigital technology expertise and experts
as well as an enterprise agile approachtoward organizational development.
The reason we invited you, Mr. Tsuchiya,
to become an executive officer at
MARUI GROUP while still serving as theCEO of a listed company is because weneeded someone with an intrinsic understanding of the enterprise agile approach.
An abstract understanding is notenough. If we don’t have someone withan entrenched understanding of theseconcepts and who is able to reproduce
them, we cannot hope to succeed intransforming our organization of some
5,000 people.
Tsuchiya: People on the front lines at
Muture are committed. However, thedifference in hierarchical level between
the front lines and management cancreate obstacles toward building amutual understanding. I therefore
thought that I could help smooth thingsout by taking part in management.
Aoi: Rather than our corporate culture,
I think the first target of ourIt will be those companies that are tapped into the emotions ofpeople that will be able to survive. In this regard, I believe thatMARUI GROUP has a culture of investing in emotional value.
Naofumi Tsuchiyatransformation should be our structures.
We lack both expertise and experts inthe field of digital technologies. We alsoneed to reform the flow of decisionmaking processes. Our decision-making
frameworks retain their traditional
structure, which is centered on products.
Meanwhile, our organizations are vertically stratified by function. An enterpriseagile approach will be key to simultaneously resolving all of these issues. I
suspect that the result of our resolving
these issues will be a capacity to continue innovating. My goal is to make
MARUI GROUP such a company. To
accomplish this goal, we must transform our organization while also gaining
expertise on digital technologies andattracting experts in this field.
Tsuchiya: Some employees from MARUIGROUP are working at Muture, and they
let us know about the atmosphere at thiscompany. When delving down into thedetails, Muture uses MARUI GROUP’smethods. When transforming things, itacts like Goodpatch. Flexibly merging twosuch different ways of doing things is anapproach the likes of which we havenever seen before. This is a big deal as,
when external consultants are involved,
there are often cases in which a company
can’t quite get to the end it needs.
Aoi: I have long been puzzled by the factthat our ability to formulate hypotheses
within MARUI GROUP has not been
improving. A hint to solving this puzzle
can be found in the enterprise agile
approach. Under this approach, anindividual is given an annual budget andexpected to use this to develop theirbusiness by thinking on their own. If one
is forced to experiment to create resultsin their work, rather than be handed theright answer by their boss, they will haveto be able to formulate hypotheses
themselves. However, if decision-making

processes are not transformed to reflect
this approach, a person will not be able
to apply hypotheses to their work, even if
they have learned how to become more
adept at formulating them. I understandthat digital transformation is a processthat runs parallel to our goal of developing a business that achieves earnings
growth while also contributing to theresolution of social issues.
Tsuchiya: The quandary faced by MARUIGROUP is one that is felt by quite a few
other companies. However, I think thatmany of these companies have falteredin their attempts to address this quandary either due to a lack of the necessary methodology or a self-defeating
attitude. That is why, when our experiment here succeeds, I want to write abook with you, Mr. Aoi. If we can offer
a concise explanation of our path tosuccess, we can surely contribute to
the happiness of a lot of people.
Aoi: I would love to see Japan becomea country in which even large organizations are able to change and foster
countless successful entrepreneurs.
However, people cannot innovate if theydo not embrace their emotions andsensibilities and unleash their creativity.
This is why digital and agile transformation is so important.
If we can change the Company, we
can create a situation in which people
are able to make a career of having a
positive impact on society based on
their preferences. This would allow
people to contribute to society while
unleashing their creativity in their work,
which I am sure would be a source ofhappiness. I therefore want MARUIGROUP to function as a social experiment to show the world exactly how thiscan be achieved. I think this endeavor
has the potential for us to create something that transcends the traditional
value framework through which
improved performance drives increases
in a company’s stock price. Mr. Tsuchiya,
I am so happy to have you on board as
we chart our course toward this bigdream. We should definitely write a book
together once we get there.

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