The key factor for the MBO was to achieve breakthroughs in existing businesses and to launch new ones. As a result, immediately after the MBO, we did indeed make breakthroughs in existing businesses and put several new ones on track, aided by factors such as the trend toward more robust risk management. With the confidence that we had proven the reproducibility of the Simplex business model in new businesses, we achieved a re-listing in September 2021. In June 2024, we held a long-awaited shareholders' reception after the annual shareholders' meeting, which had previously been postponed due to the pandemic. Although it had been over 11 years since the MBO, some of the shareholders at that time were in attendance, which was quite an emotional experience.Earnings stagnation and MBOHowever, after FY3/2010, Simplex's growth reached a plateau. This was due, in part, to the fact that we had run our course in terms of building systems for major financial institutions in niche fields. But more fundamentally, it was because the scope of our business activities had become limited by the strong brand image of Simplex as a firm that could only deal with complex projects in niche fields that other companies could not. I was acutely aware that we needed to focus on making our capabilities more widely known to our major financial institution clients. In addition, the business environment at that time was such that there was a need to provide major financial institutions with a one-stop platform for trading and risk management, in response to a trend toward enhancing risk management functionality that began after the collapse of Lehman Brothers in 2008.We therefore took the best people in the field off projects and set up a sales force, implementing a proactive consultative sales approach. This was a major shift in strategy as we decided to approach clients not only as a niche player but also as a player handling the entire platform. To that end, we began by targeting capital markets departments in major financial institutions and helping them create an IT roadmap for the next five years free of charge. Based on that roadmap, we intended to take on the construction of an entire platform that would go live in a few years. This measure naturally entailed the risk of stagnation in business performance during this period, since the top professionals on the frontline had to be taken off the client site. At the time, the Nikkei Stock Average was trading around multi-year lows, below 10,000 yen, due to the Great East Japan Earthquake and other factors. Simplex's share price was also on a downward trend. I determined that I could not allow shareholders to bear the risk of a decline in the share price due to stagnating earnings. Finally, in October 2013, we decided we would carry out an MBO.Second founding phase and re-listingIn terms of employee diversity, with the establishment of Xspear in 2021, we have been strengthening our recruitment of mid-career talent on top of hiring new graduates. Our policy of recruiting and training the top 10% of talent in the market, regardless of whether they are new graduates or mid-career hires, remains unchanged. People are the cornerstone of the Simplex Group's entire strategy, and they support us in achieving sustainable growth and high profitability. The Simplex Group is a place where outstanding professionals with different talents can achieve self-fulfillment. I hope that the Simplex Group will continue to play a meaningful role in the life journeys of our employees.Innovation we are trying to achieveSimplex was founded with the strong conviction that we wanted to create innovation that had never existed before and take this from Japan to the rest of the world. However, the kind of innovation we are referring to is fundamentally different from the kind that Steve Jobs brought about when he transformed the world with his smartphone. The innovation achieved by a visionary manager like Steve Jobs requires an ability to see a future that ordinary people cannot imagine. So, what kind of innovation Simplex Group is trying to achieve? There are certain problems in the world that have an ideal solution that everyone can envisage, but too many barriers exist to make it happen. The kind of innovation we are referring to is achieved by solving these kinds of problems in a hands-on and tenacious manner, and before other companies.5DNAs as a code of conductTo realize such innovation, we established the 5DNAs as our code of conduct in 2010. Of these, “No. 1” is the one we emphasize most, namely that we will steadily deal with difficult problems one at a time to reach ideal solutions envisioned by everyone in the fastest possible time. The ability to create the kind of innovation we have in mind should only be possible for a company with the No. 1 competency in its business area. That is why the 5DNAs start with “No. 1.” And for the 27 years since our founding, we have made it our mission to become the No.1 company in the domains we serve.The 5 DNAs, starting with “No. 1,” are central to everything we do within the Group on a daily basis. This is also an important guideline for recruiting talent. The Simplex Group values diversity among our employees, as we require a wide variety of talents to innovate. At the same time, we need a strong culture that we all share in order to continue creating added value. The core of this culture is our 5DNAs.The sustainable management I am striving for is to hire the top 10% of talent in the market who share our 5DNAs and provide an environment where they can maximize their abilities. The success of these individuals will serve as a catalyst for bringing more new people onboard with high aspirations for growth. Once this virtuous cycle has been set in motion, we will be able to respond flexibly to any changes in the times and create a new cycle of innovation down the line.It is important that all our employees share the process to acquire the capabilities required of them at any given time—a requirement that goes hand in hand with “reproducibility.” In this instance, reproducibility refers to the ability to continue producing results with a steep learning curve in a short period of time. This can be achieved by leveraging accumulated know-how through legitimate and sustained efforts in the right direction. This is why we always emphasize reproducibility, not only in consulting and system development, but also in employee training and evaluation.Sustainable management in pursuit of reproducibilityFY3/2024 was a year in which we clearly demonstrated our commitment to sustainability. We identified our materiality issues and set specific goals for each of them, with a focus on human capital management—the most important element in our operations (▶Page 33 Materiality Issues and Major Risks).Toward sustainable development of all of societyOver the past ten years, the Simplex Group has become a leading cultivator of talent. Today, many startups and publicly listed companies have former Simplex employees in CEO or CTO positions. While it is with some sadness that I have seen these talented people leave, I am also personally delighted to see them step up to the next level. Every day I am reminded that the success of ex-Simplex professionals enhances our reputation as a company that cultivates talent. The formation of this “Simplex Ecosystem” is my greatest joy as a manager. I believe that the success of ex-Simplex professionals, who have honed their skills with us, contributes in a variety of industries to sustainable development of the whole society.5
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