Developing people is crucial for the success of any business. Mayuko Hashida concludes her interview with GLOBIS alumnus Shunsuke Karasawa, covering his transition to Mercari and how he is helping his new colleagues grow.

Hashida: Last time, we talked about your part in MacDonald’s Japan and the turnaround from a ¥25 billion deficit in 2015 to a ¥5 billion profit in 2016. Then in the summer of 2017, you decided to leave. Can you tell us why?

Karasawa: 2016 was a big year. We launched the Pokémon GO project and made our first profit in three years. We continued to do good things and were on our way to record profits, but my own desire to grow became stronger. I felt that the timing was right, so I handed in my notice.

Growth at Mercari

Hashida: So why did you decide on Mercari?

Karasawa: One of my friends from GLOBIS contacted me and said they wanted to introduce me to someone—Fumiaki Koizumi, Mercari’s Chief Operating Officer. Intrigued, I decided to go and have a meeting with him.

As Mr. Koizumi explained the company’s vision and plans, I felt excited about their potential. They were planning an office to support the president, and Mr. Koizumi asked me to do it with him.

One of the biggest reasons I chose Mercari was that it was so different from McDonald’s. I was going from a business with real shops to one that sells purely online. From a foreign company to a Japanese one. From a massive behemoth to a start-up. I wanted a clean slate so I could try new things again and learn from scratch. I simply thought that Mercari would give me the most opportunity to grow.

Hashida: So what kind of work have you been doing at Mercari?

Karasawa: I joined Mercari in September 2017. During my first month with the company, I had one-on-one meetings with all the managers and the board. Then I put together a proposal on key management issues, and the board said, “OK, so if that’s what all the managers said we have to do, we want you to do it.” I thought, “Wow, what a great company! My job is basically to do what I propose, things that I want to do.” So in my role in the president’s office, I was the hub of the organization, sharing management decisions and the reasons for those decisions with those working on the front lines of the company. Just as importantly, I shared issues from the front lines with management.

Since April this year, I have taken on the role of Executive VP of People and Culture. I’m responsible for the people-related aspects of the company, such as personnel, general affairs, and labor. I’m also in charge of the corporate engineering team, supporting the entire corporate body. I’m still head of the president’s office, too, so I also support the board.

Hashida: How is it different from your time at McDonald’s?

Karasawa: Well, the two businesses are in completely different phases, so the challenges they face are also different. At McDonald’s, we were in a turnaround phase. We wanted to keep our strengths as they were and change what had to change. Mercari, on the other hand, is right in the middle of the growth phase. As the scale of the company gets bigger and bigger, the number of employees also increases, so we face problems like training falling behind our needs. It also gets harder for management decisions to reach the front lines. There are many of these sorts of growing pains, and we face them every day.

Mercari’s bold personnel system

Hashida: Do you face a lot of challenges with personnel?

Karasawa: People are central to any company, so problems with people always come out. This year, we’ve just implemented a new member-centered personnel system, which we discussed and planned in-house. Fortunately, we have excellent engineers within the company who helped us build the database in a short period of time.

Mercari has three values: go bold, all for one, and be professional. We take them all very seriously, and we used those values to build the personnel system. We base our evaluation of employees on what we call OKR (objectives and key results), as well as how our people act according to our three values.

The evaluation system itself includes an element of going bold because rather than the more common relative evaluation, it is an absolute evaluation system. Since we decided against setting the source of pay increases, in theory they’re unlimited. If you make evaluations with limited resources, even raising one person’s salary will result in less for someone else. That way, the system is all relative, and you divide out pay increases on a bell curve. You can’t say that’s a fair evaluation. I believe that appropriate compensation should be awarded depending on the person’s most recent evaluation.

Hashida: That sounds tough to manage.

Karasawa: To make a fair evaluation, you need to align the whole organization. The taste of each manager should not influence evaluations. We hold a calibration meeting between the managers of each division and the executives to examine whether the evaluations for the employees in that group are appropriate. It takes some groups two whole days to carry out. Given everyone’s workload and the value of their time, that’s a lot. But because human resources are more important than anything else, we recognize it as a necessary cost. In the end, the management team reviews every employee evaluation.

Aiming to be the global benchmark

Hashida: So what are Mercari’s goals for the future?

Karasawa: We want to be a benchmark company like Google or Facebook. When Google changes its personnel system, many companies follow suit. That’s how much influence they have. We want to be the sort of company where everyone says, “We want to be like Mercari.”

Hashida: What kind of role do you want to play at Mercari?

Karasawa: I want to make Mercari a top Japanese company that can also compete on the global stage. I will do whatever I can to contribute to that. That’s what people are for. It’s not just Mercari, but any company, any organization. They’re all made by the people in them. That’s why the people are more important than anything. I want to create an organization where each individual works proactively and independently with passion and vigor, seeking ways to grow. If the people grow, it also means the organization grows.

Because I am now in charge of the people aspect of our organization, based on our personnel system, I want to accelerate the recruitment of people that fit Mercari and strengthen our human resources. I want this to be a company where people can keep growing and growing.

Culture is also important. We are trying to build an organization based on the intrinsic goodness of human nature. Even though there are no rules, we believe in everyone making the right decisions on their own. Our management believes in the staff, so the staff believes in the management. I think companies with this kind of virtuous cycle are really strong. With Mercari, I feel so much possibility. I’m so lucky to be working with such wonderful people.