ZENJI MIURA, CFO OF RICOH
Interview by Tom Leander

Ricoh, a US$17 billion maker of office and electronic equipment, is a highly regarded Japanese company nettled by a fiercely competitive market. Its chief rivals—Hewlett-Packard and Canon—are much larger and have expanded around the world more rapidly. In contrast, Ricoh still earns about half of its revenues from its home market. Ricoh made a run at the scale problem last year by buying IBM’s printer division for US$725 million. Under the terms, it bought 51 percent of the business unit, and will gain complete ownership in 2010, enough time to learn what amounts to a new business for Ricoh.

Part of the delicate task of post-merger integration has fallen on CFO Zenji Miura. Something of a renaissance man, Miura defies the image of the typical Japanese CFO. He previously served as president of Ricoh France, a job that involved merging a European acquisition into Ricoh. In addition to his financial duties, Miura is CIO, manager of the company’s general business planning office, and a company director. His non-business accomplishments include a black belt in karate.

It is now almost one year since the start of the joint venture with IBM. How are you proceeding with the takeover? Are there challenges in the post-merger integration?

It’s early days yet and there are many challenges ahead. The thing is this: we did not acquire an entire company with all its articulations in place—we acquired a single business unit of IBM. And this carries with it specific challenges. It is analogous to an organ transplant; our task is to successfully transplant the production printing “organ” from IBM into the body of Ricoh. As in the medical case, there are many things to look out for. One example is IT integration. Over the next two years, we absolutely need to smoothly attach the new entity to Ricoh’s integrated IT system, no small task.

Tell me about the negotiation process with IBM. This involved two companies that are each representative of their own national cultures.

On the surface it might seem like you’re looking at two extremely diverse cultures, both from a national and corporate standpoint. The reality is quite different, however. First, IBM and Ricoh have collaborated closely for two decades now on a variety of projects, some hardware-based, some involving software. So we knew each other very well.

This deal was also unusual in that we embarked on a new business that differs markedly from our mainstream work, namely production printing, which is highly specialized and demanding. To do it right, we knew we would need to retain IBM’s expertise while retaining their customer base, of course. This led to a “joint venture” structure. It was essential for us to keep the IBM brand during the initial period. Ricoh is also bringing a lot of technology and know-how of our own to the table. The equation we have in mind goes like this: One + One = Three.

Did any aspect of your post-merger integration work in Europe turn out to be useful in the experience with IBM?

The short answer is yes. My experience in France during that acquisition has certainly served me well in this venture with IBM.

In that case, I noticed an immediate increase in morale among the new Ricoh employees. Buoyed by the full power of the Ricoh name, it was just a small step from there to motivate them to significantly higher sales and market share numbers. They soon realized that, as Ricoh France, they could now attract the attention of major customers whom they would have had difficulty attracting before.

Granted, the IBM case is different, but we believe that our solid investment and all the proprietary technology we are pouring into it should have a positive effect on morale and encourage all employees to grow the business aggressively.

What does the idea of being a global company mean for Ricoh?

You know, we may not be fully “global” yet, but after decades of international marketing, I think we’ve shed a good deal of our exclusive “Japanese-ness”. Rather than thinking in terms of our “Japanese culture,” I would say that the engine that makes us get up in the morning at Ricoh is a concept called “oyakudachi,” which in English translates as “a passion to serve.” This passion toward the customer is our hallmark, and we believe strongly that it is not only relevant here, but can be [transplanted] among all our companies around the world.

How does finance help drive a global initiative?

Now don’t misunderstand this as some kind of shyness or modesty, but I see the CFO job as subservient to business. To the extent that I serve the business, I am doing my job. I am, if you like, the conductor of the financial orchestra, but I don’t write the score.

What does this entail? Well, risk management for a start—I have to keep a vigilant eye on any financial risks. To do this I must stay informed at all times, and local, regional CFOs across the Ricoh Group report to me along a dotted line. They report first and foremost to their local presidents, but one way for me to check that those top executives stay on track is through these CFO reports.

We have a strong culture of accountability. When I coach the finance heads of Ricoh businesses, I say that it is their job to work with their operating boss. But they also must have their own mind and be ready to talk to me if they perceive a problem. Support and independence is the rule. Our philosophy is that no one person has all the answers. That goes for the CEO and the CFO. We have an internal auditor who is in charge of monitoring finance department activities.

What are elements that make the most effective CFO?

The CFO should be interested in all the operations and business activities of the company. I’m not a salesman, but I acted as top [executive] of a sales company [in France], so I can draw on that experience. I know about our products. Even as a finance guy, I think I should have a broader sense of the market and the issues that confront sales. Otherwise you can’t judge if any investment is correct or not.

Has your experience as a black belt influenced your role as CFO?

Maybe. [Laughs]. If I give an order, they never refuse.