Sir Stringer as Sony CEO = Downward Spiral

Ran across an interview of Sir Howard Stringer over at the always excellent Barron's and felt compelled to comment on some of Sir Stringer's thoughts, which, in my opinion, does not bode well for the future of Sony.

Stringer comment #1:

"On Management Reform

You can achieve spectacular results if, as we did in the U.S., you attack a management system based on vertical 'silos' and you replace it with horizontal communications. It will be harder to do this in Japan than it was in the U.S., but it can and must be done. What's really important is that Sony now gets the point that it has to change. Executives understand that they must cooperate across those silos, even when the person in charge of the other silo is a personal enemy and in the old days one would rather have died than communicate with him. The walls within Sony are coming down.

This is probably the most simplistic, vague, and irresponsible comment about the current situation that I have come across regarding the management problems / issues facing Sony.  Sir Stringer's insight is that there needs tobe more horizontal communication vs. vertical silos?  And that you may have to work with personal enemies?  Seriously, does he really believe any of this canned BS?

There are a plethora of issues facing Sony - and yes, lack of coordination / communication across its vast array of business interests is one of them.  But it ain't the answer, and Sir Stringer should know better than to intimate that...  How about their insistence on complete veritical integration as pointed out previously at the First Call blog.  How about the fact that their product design cycles are trailing nimble competitors like Samsung and LG?  How about the fact that the incentive / environment for entrepreneurs just aren't there relative to other parts of the world and much of that has to do with the strangle-hold companies like Sony have in Japan?  (This, by the way, is also an issue for Samsung, LG, etc. although you'll find more hungry entrepreneurs, etc. in Korea relative to Japan currently...)

Another comment that ought to be ripped:

"On Moving to Tokyo

I don't have to. I will visit Tokyo a lot, but I will live in England with my family. That shouldn't be a problem. When I was head of Sony's U.S. operations, I didn't direct movies and I didn't write music, but I did direct the movie business and the music business. I didn't live in Hollywood or go there more than a week a month, but I did put strong people in charge of both operations. They knew where the bodies were buried and what choices to make, so I didn't have to. At Sony, I will have strong allies in Tokyo."

Does he really believe that he can be a remote control CEO?  Of a Japanese company, no less?  When all is said and done, this will NOT work.  We're not talking about a PART of the business here - we're talking about the entire company.  How many CEOs do you know that don't even live in the country where their company is domiciled?  I can't think of one...  It's absurd that he even tries to claim that it's workable.  Clearly it won't last...  Imagine if Sir Stringer appointed a Japanese person to head the entertainment business while being domiciled in Japan - would that make any sense?  Would anyone buy that?  Most importantly, what does it say to its workforce? 

Clearly, Sir Stringer is sending a message that Sony is an entertainment company, and no longer really a CE company.  Not sure that this tack will be appreciated by the rank and file at Sony.  I've been wrong many times before (and I'll never say never...) but unless Sir Stringer changes his attitude and approach, he will fail AND Sony will become even more vulnerable... 

It should be only a matter of time before Ken Kutaragi leaves - maybe he ends up at...  Samsung?  LGE?  HP?  Now that would make news...  Sony losing the only guy that's been able to manage a hit product in the last 10 years...

Turning around an entertainment business (and the economics associated with it) is completely different from the manufacturing and product development business (and the economics associated with it). 

With the type of simplistic, rote attitude towards a complex economic, social, and cultural hairball that is Sony today, Sir Stringer will hasten Sony's downward spiral.  Samsung, LGE, Matsushita, Canon, etc. are circling in for the kill...

So is there a way out for Sony?  Well...  I think they need to emulate Samsung to a certain extent - i.e. as a group, they need to figure out what their identity is and push that as hard as possible.  For example, Samsung has been successful because, as a group, their Chairman has focused all of its efforts at making Samsung Electronics, and specifically, the semiconductor business the flagship business for the group. 

How about Sony?  I believe the fundamental problem with them right now is that they are knee-deep into the entertainment business AND the hardware business.  They don't know what their corporate identity is (basically their schizophrenic).  And fundamentally, that is their issue.  They will have to, at some point decide between the 2, and make a concerted, clear, and consistent effort in putting the interests of 1 over the other.  Right now, it looks like they're leaning towards being an entertainment company that also provides hardware / products. 

However, the manner that Sir Stringer is proceeding with almost guarantees that it won't work - he just doesn't have the respect or the authority needed to do something like that.  The only guy that had a chance to do that would have been Ken Kutaragi.  Score -1 for Sony and +2 for all its competitors.

Why isn't anyone out there in the blogosphere talking about this?  Why the deference to Sir Stringer due to the novelty?

Comments

[baz]

Sir Howard challenge will be to reconnect this wonderful brand back to its loyal customers-its a Corporation that lost touch with its customers.

The real opportunity is imaging-its a potential business in the hundreds of billions-they have the hardware-but no retail presence in that sector-the market dynamics are interesting,it took some 50 years for the 35mm camera to reach a market penetration of some 1bn camera's-its going to take with the coming boom with the camera/phone "megapixel" less then 4yrs to reach that level of imaging capability,some countries will leapfrog the analog era-China-with some 3-5m mobile phone connections each mth-swinging to this media-with some 400m customers already connected-and another 3.5bn potential customers in the already zoned/network covered area's in the world.
You have 6m-7m pixels camera/phone handsets coming into the market this year-these are very powerful imaging devices,that almost everybody leaves home with each day.

[barrie harrop]

Sir Howard seems to be doing OK