Shiseido’s Outgoing CEO Masahiko Uotani Reflects on a Decade of Change

In the last month, Masahiko Uotani has been in Shanghai, Seoul, Taipei, Hong Kong and most recently, New York, where he was scheduled to stay for three days before jumping on a flight to Paris and then heading back home to Tokyo.

Some might call it a farewell tour for the executive, who is retiring from his post as chairman and chief executive officer of Shiseido Co. Ltd., on Dec. 31. But not Uotani. For him, it is a town hall, an opportunity to touch, connect and communicate with the organization’s 36,000 employees.

Uotani is a people person — always has been.

Gregarious and engaging, Uotani, who will hand the reins to his hand-picked successor Kentaro Fujiwara, likes to say that he honed his leadership philosophy in Dale Carnegie classes that he took while earning his MBA at Columbia University in 1983.

When the former Coca-Cola Japan CEO was named president and CEO of Shiseido in 2014, the first outsider in the history of the company to assume the role, Uotani brought his personal style to bear on the strategic mission he set himself: To transform Japan’s largest beauty company from a Japanese firm selling products worldwide into a global enterprise headquartered in Tokyo but reflecting the dynamism and diversity of the markets it does business in.

“My definition of a true global company is not a financial analyst looking at what percent of business is done inside or outside of the home country,” said Uotani, during a wide-ranging interview in early December. “My definition is the people and the culture.

“I’m a big believer that ideas are the source of innovation,” he continued. “When we’re working together, different locations, different backgrounds, that is the source of innovation.”

Uotani will leave behind an organization that looks markedly different from the one he stepped into, one where English is the official language, where the C-suite is globalized and where many of the traditional strictures of a Japanese bureaucratic business culture have been dismantled.

Global chief digital officer Angelica Munson, for example, joined the company in New York as global senior vice president of e-commerce and moved to Tokyo five years later to join the C-suite, where today she oversees a team with Indian, Brazilian and Chinese executives, among others. “We’ve become a true culture of diversity,” said Uotani, noting that another key change has been implementing the practice of mid-career hiring, with Shiseido bringing on 200 or so new people every year from companies inside and outside of beauty.

“It’s built a much more interesting culture, where they can share learnings. What you think is common sense at Shiseido might not be common sense at, say, Google,” he said, “where they might have completely different practices that they bring to us. It creates a hybrid culture.”

Uotani said he is often asked by the Japanese media if it was difficult to enact such drastic organizational change and the answer, he said, is no. For Shiseido, it was an existential question. When Uotani took over, the Japanese beauty market was declining, Shiseido had posted six years of declines and the company didn’t play in key fastest-growing sectors.

In the ensuing decade, Uotani has made Shiseido an important player in China, acquired buzzy brands in underpenetrated areas like clean skin care with Drunk Elephant and incubated next-generation ideas to lay the groundwork for the future.

He harkened back to his Dale Carnegie days to sell his vision to employees. “In order to get there, I had to communicate why I came up with this idea. I spoke to everyone. I went to the front lines, talking to beauty advisors,” he recounted. “You have to be passionate and enthusiastic in life, and at the same time, you have to speak to people in a common language and really connect.

“You can’t just show up and go, ‘Hi, I’m your CEO and can you tell me about the strategic issues we’re facing,’” he said, deepening his voice.

Still, while Shiseido improved its fortunes in the first five years of Uotani’s tenure, the last three years have been challenging, particularly in the wake of COVID-19. While Shiseido’s domestic business rebounded after the pandemic, the slowdown in spending in China sent Shiseido’s operating profit plunging.

Since the pandemic, Uotani sold assets not essential to his core positioning of Shiseido as the preeminent “skin beauty” company in the world.  “When you’re in a tough moment you have to think about your strengths and weaknesses and focus on your strength,” he said. “Clearly skin care is a category where we have the most strength — in terms of R and D, technology, science, our beauty advisers, our consumer connections, our database with almost 100 million people.

“I call it skin beauty, but in today’s terms it can be interpreted as developing the well-being of people,” he continued. “It’s the health condition of your body, your skin’s conditions and a good mental condition. Those three elements are interconnected.”

He believes that the China business will recover in the next two to three years and noted that the luxury business there is still strong, with brands like Clé de Peau Beauté and Nars posting gains in the country.

“Business always has ups and downs,” said Uotani. “Even if we didn’t have COVID we would have had something else. What’s important is when it’s going down, it’s tough, but you have to get prepared for the next stage of growth. That’s about aspirations. You can’t just lead with problems. There is no value if we’re all being very pessimistic and working on squeezing everything.”

As for the CEO’s next stage of growth on a personal level? Characteristically, he’s stepping back but not slowing down. He is chair of the committee on diversity and inclusion of the Japanese business association Keidanren, petitioning the government to change a law that mandates women take the surname of their husband upon marriage. Uotani will also teach courses at Shiseido’s Future University and is the chairman of Shiseido Beauty Academy, which trains hair stylists, makeup artists and beauty associates. He’s already been asked to speak at Dartmouth College and Harvard Business school in February, and has also joined the board of directors of Accenture. And while the times may have changed, his vision stays the same.

“I told my successor to become the facilitator of global expertise,” said Uotani. “I’m very proud of the global organization we’ve built. When people get out of their regional silos and work together as a global team, a lot of new ideas come out. By thinking different, we’ll create new horizons.”