Kaz Nishihata, Representative Director and Senior Executive Vice President of NTT DATA and Executive Advisor for OYSTEC, talks to Gernot Kapteina, Founder of OYSTEC, about visions, leadership, and on how to transform an originally pure Japan domestic firm into a huge global company.
Kaz, thank you very much for accepting this interview! This is a great opportunity getting direct insights from an experienced Executive like you! Let us talk about your leadership in the Japanese Telecom NTT: You are responsible for the globalization of NTT DATA which is the IT services arm of NTT with around 90,000 people assigned to you. How did you make your way there – can you tell us about your NTT career in a nutshell?
Nishihata: It is great to be here – thank you! In fact, NTT is like family for me! I joined NTT around 40 years ago in 1981. At that time, NTT was still a domestic company. Entering the 90s, with the rapid economic growth of Japan, we started opening the door to global market. Since 1997, I have been working on the globalization project of NTT Communications. I was assigned on a few leadership positions over time, including Managing Director of NTT Europe from 2006 to 2009 where I established subsidiaries and managed the overall growth in Europe. It was finally in 2009 when I joined NTT DATA to manage and grow the Global Business. Until now, I have helped NTT DATA continuously expanding it’s global footprint – from initially 30,000 people in Japan with a few global spots to over 120,000 people around the globe in more than 50 countries right now! I am currently responsible for the global business of NTT DATA, covering all regions with a unique set of digital offerings which can change people’s lifestyle and make our societies to be a better place.
How did you do globalization on a firm like NTT DATA? It has been such a large domestic Japanese firm for decades. So, there must be a significant mindset change. What was it and what was your strategy?
Nishihata: What I discussed with my colleagues in NTT DATA led to the definition of three stages of global growth! Firstly, we aimed to increase our global coverage by focusing on M&A in all important regions in Americas, Europe and Asia. Until 2015, our EX-Japan Sales number increased up to 30% by having a coverage of around 50 countries at the end of stage one. Secondly, besides our M&A activities – which still will continue – it is important to promote our global brand even stronger and to highlight the “one” firm concept by undertaking extended actions in Post-Merger activities, for example focusing more on the Global Accounts and multinational clients. By doing so, we were able to increase our Sales to 50% outside Japan until 2018, which was a novelty for us, since we were considered as a very domestic Japanese company not long time ago. As of now, we have entered the third global stage, aiming to become a “Trusted Global Innovator” and a global Top 5 IT firm! Our planned activities to reach this goal will last until 2025, targeting that 30% of our Sales will be achieved in Europe and Latin America, 30% in North America, and the remaining portion will still be in Japan but including overall Asia as well. I believe we accelerated our growth from expanding business with existing clients as well as winning rapidly in the new markets. We continuously anticipate market trends and keep our investments in innovative technologies high, which is one of the key pillars of our success.
Sounds like M&A will remain as an important part of your globalization strategy in stage three. Can I ask, how do you convince good candidate firms you want to acquire to join NTT DATA?
Nishihata: There are three key reasons why NTT DATA is a really good candidate as a buyer! First – even we are a global company now – we still have strong Japanese roots. It means that we value the stability after the acquisition and reluctant to do massive layoffs. Instead, we give our acquisitions more freedom than for example most of American or Indian buyers would do. Second, we are under the large NTT group. We are financially very stable and have proven this since ever. Finally, the third reason is the ecosystem built among our acquired firms. They can share the resources of good talents, innovations and last but not least great customers, however, they are still able to keep the freedom of developing the local business. Under the umbrella of NTT DATA, we can help them standing the competition against the big players in the market like Accenture and Google.
Can you talk about a specific M&A case where you have been driving the activities?
Nishihata: There are truly quite a lot but let me bring the acquisition of “Dell Services” to the table. Historically, Mr. Dell has bought a company which was the forerunner of the former “Dell Services” and fully integrated into “Dell”. When I negotiated with him about the carve-out to NTT DATA, it was quite challenging to divide all Dell’s assets between NTT DATA and Dell Technologies. This even went down to details like how our staff shall register bank information of Dell employees when changing their contract to us one by one. At the end, the deal went well. This merger case was mentioned by several big newspapers as a great success story. It was also a success of promoting the NTT DATA brand to the public.
Let’s then talk now about NTT DATA as a ‘global brand’ – how do you plan to further develop its identity?
Nishihata: The NTT DATA brand is a key pillar of the global strategy and its public awareness is very important for us. I often say that 2% market share per country is a “magic number” to be ranked as one of the top IT Providers per country. We overachieved this portion already in some key countries like Germany, which is great. But it is also important to achieve worldwide recognition as a “Trusted Global Innovator”. In order to do so, we not only take action in increasing the market shares, but we also join various important marketing opportunities like for example “The Open Golf Tournament” in UK or the “Indy Car Series” and “SAPPHIRE NOW” in North America. We also work closely with Analysts like Gartner and Forrester who help to address the markets about our strong capabilities and make them visible to our customers. At the same time, we work hard to power up these capabilities even beyond. I also do believe that we can further improve our brand awareness through our sustainable activities by increasing both local presence and global synergy.
When talking about increasing the presence, based upon your role, your focus lays on the development of NTT DATA worldwide. How do you see the market potentials, and what are your ideas on managing the operating companies of NTT DATA in the global regions and countries?
Nishihata: The market size of North America is the largest. For example, the global IT market which is a major focus of NTT DATA in United States makes around 50% of the worldwide market. Even we already have big presences in place, in comparison to the rest of USA we still have room to grow. Of course, the market sizes of Europe and Latin America are also large, where we have a lot of growth potential as well. And any key countries which have a high CAGR predicted, we will further grow our businesses there, for example in Asian economic power states which have entered the path to long-term growth. Furthermore, after all of the M&A and Post-Merger activities have been done in the past years, several consolidated key organizations of NTT DATA have been crystallized until now which I like to manage after something I call the “federal model”. Together, we further grow our business. We will do this as One NTT DATA! We will spread our wings and will reach higher goals, flying to new skies as “One Team”!
One of the current challenges is the COVID-19 pandemic. What is your view on this – how will this affect NTT DATA, the clients and the world?
Nishihata: The Corona pandemic has big impact on our societies and many of our clients’ businesses. The most important thing is that humanity develops and scales proven vaccines and medicines against this virus as quickly as possible so that people no longer die from it. Only after that, the global business world can come back to normal. For NTT DATA, the interesting fact is that major sectors of our businesses are not as strongly affected as some other industries, since telecommunications and IT are needed also – or even more – during times of lockdowns, and also now in the restart phase. Therefore, we are focusing on helping our clients’ business and societies’ functionalities running as good as possible, as well as providing them with the necessary preparation for the time after the event. I actually think that this pandemic brings a big opportunity for digitalization – the emergent solutions we provide right now to our clients and applied on ourselves internally will remain in the future. Once the pandemic is over, we will have an even more solid digital foundation than before.
One of the things which help to stand such challenging time is to continuously live our values. We know that our leadership style is driven by such specific values. Can you tell us about yours?
Nishihata: I really believe that I share the same values as NTT DATA: People are very essential, especially in our industry, and we run a variety of related initiatives to emphasize this. For example, we host the “NTT DATA Value Week” where colleagues around the globe can openly discuss what kind of firm NTT DATA is and should be. We also invest in Diversity initiatives like “Women inspire NTT DATA”. It is important to respect the difference of each individual and work together as “One Team”, despite where we come from or which gender we have, as long as we communicate with love. We value our clients in the same way as we value our people. “Clients First” is not only a phrase, it is a mantra for us! While serving our clients, we aim to go above and beyond their expectations, placing their needs first. I want anyone in NTT DATA to share our values globally, and in order to do so, I always tell our people they should view the Earth from the Moon to gain a broader perspective!
It is inspiring to get such deep insights from you about your own leadership style and how you transform a huge organization like NTT DATA into a global Top-5-firm! Now, when it is about OYSTEC, your role is “Executive Advisor” where I am very thankful about your encouragement! What are your thoughts on OYSTEC, what does it do right, where can it improve, and what does OYSTEC and NTT DATA maybe even have in common?
Nishihata: I am very happy to support OYSTEC from my Executive role! Even though OYSTEC started business in only three countries until now and it is therefore quite small; small also means being agile. I would like to support and witness such a relatively new firm to grow. Also, the main offering groups – IT and Management – positively overlap with those from NTT DATA. I think that is why you could even become a vendor of us by covering important niche topics like “Management Methodology Building” or “Program Management”, supporting core sectors of our business, and aiming to scale those into something bigger. What also comes into my mind: When I moderated a “Mission to Mars” in 2018 – which took place in digital format in the “Walt Disney Resort” Florida, United States, we had famous Influencers and Writers there on the same stage. One of them was the author of “Makers” and “The Long Tail”, Mr. Chris Anderson, who talked about the “Five Kinds of Disruptive Innovations”. Having his “Long Tail” definition in mind, this can also be one of the potential opportunities for OYSTEC to consider creating and growing the platform business as one of the strong pillars for digital offerings. I am happy to discuss further with you in near future!
Kaz, thank you very much for this interview!