FG to take over at Sony?!

[kamome]

Sony Considers Shaking Up Top Management

Sony officials refused to comment on media reports that Nobuyuki Idei, chief executive and chairman, will step down and be replaced by Howard Stringer, the chairman and chief executive of Sony Corp. of America. Stringer also serves as Sony's vice chairman.

...

What was dubbed "Sony shock" happened two years ago, when Sony share prices dropped on worse than expected earnings results. Although Sony's profits have improved since then, they have not made a dramatic revival.

Analysts also say Sony missed the boat with portable music players by delaying a release of products to play MP3 music files, taking a beating from the iPod by Apple Computer Inc.

[Taro Toporific]

Sony Considers Shaking Up Top Management

Actually, the better news is that Ando-shachois being dumped...if ever there was guy with more "flash" and no action it was Pres. Ando.

Kunitake Ando also is expected to step down as Sony president, according to the reports, which cited people familiar with the matter.
....
Stringer, a native of Cardiff, Wales, is a former CBS reporter and served as president of the network from 1986 to 1988. He joined Sony in 1997. He was knighted by Queen Elizabeth in 1999.

[jim katta]

this move, to me, is astounding. I don't think such a big japanese company has ever done this big of a move with a gaijin. sony is like the Ford/General Motors/Coca Cola of Japan, so this is putting one of Japan's crown gems in the hands of a gaijin who, as far as I know, can't even speak japanese. things must really be looking dire in the halls of Sony for them to do this.





btw, welcome back Taro. Watch out for those evil tatami mats, even the furniture in Japan harbors latent animus toward the fucked gaijn creed.

[FG Lurker]

this move, to me, is astounding. I don't think such a big japanese company has ever done this big of a move with a gaijin. sony is like the Ford/General Motors/Coca Cola of Japan, so this is putting one of Japan's crown gems in the hands of a gaijin who, as far as I know, can't even speak japanese. things must really be looking dire in the halls of Sony for them to do this.

Nissan. ]

[GuyJean]

FG to take over at Sony?!

Wow. This is kind of shocking. Doesn't Sony equal Japan? The gaijin are coming! The gaijin are coming!

Funny how I haven't seen much in the Japanese press about this yet.. They're still projecting their shock at the possibility of Lehman 'indirectly' controlling Nippon through Livedoor..

'Hey Japan.. Look! Over there! It's a gaijin jaywalking!!.. Pay no attention to me taking your bank book, pin number, and hanko..

Another reference - NY Times

GJ

[Mulboyne]

Doesn't Sony equal Japan?

I think that would be Toyota or the Mitsubishi group. Sony has always been a bit odd. That's not to say that putting Stringer in the top job was a foregone conclusion.

[GuyJean]

Doesn't Sony equal Japan?

I think that would be Toyota or the Mitsubishi group. Sony has always been a bit odd.

Yeah, you're probably right..

This sounds terrible, but I've always felt the 'Gaijin-exec/Japanese management-and-worker' thing was a perfect match; The day's of leadership through 'wa' has passed.. Japan needs dynamism, not dinomism..

GJ

[Taro Toporific]

That's not to say that putting Stringer in the top job was a foregone conclusion.

Done deal!

Sony Names Head of U.S. Unit as Chairman
Sun Mar 6, 2005 11:07 PM ET
TOKYO (Reuters) - Sony Corp. named the British-born head of its U.S. operations, Howard Stringer, as its new chairman and chief executive on Monday, a rare move for a major Japanese company to give its top post to a foreigner....more...

[kamome]

Certainly the guy who headed Sony Entertainment in the US is qualified to head the global operation, but I was shocked to read this too. To my knowledge, only Ghosn has had such a visible position in a J-corp.

As a consumer, I had a feeling that they were having problems. Their stereos, telephones, and computers have sucked for years. I stopped buying Sony after two of their products I bought (a phone and a stereo) were malfunctioning right out of the box.

Does anyone agree with this analogy:

"The PS2 is to Sony what the iPod is to Mac."

I bet Mac enthusiasts will draw a distinction or two.

[GuyJean]

Their stereos, telephones, and computers have sucked for years..

Tell me about it. Aside from my video camera and TV, most my Sony products have been shite:

Lav mic - cut-in and out
MD walkman - skipped when recording
Condenser mic - on off switch doesn't work; always on.
Digital camera - scan line/auto aperture problems(?). Being 'serviced' now.
Old Vaio - keyboard fell apart, crashed all the time.

It's a Sony...

The video products seem to be good.. Although, my TRV-900's mic plug is touchy. I usually don't end up 'wiggling' my Apple pruducts as much as Sonys..

GJ

[Mulboyne]

To my knowledge, only Ghosn has had such a visible position in a J-corp.

Don't forget Mazda. Ford have been naming CEOs for them for some time now. Vodafone Japan (ex-Japan Telecom) and Shinsei (ex-LTCB) also have FG top execs.
Of course, f you include Korean businessmen, the number of FG CEOs of Japanese companies explodes.
Anoteh high profile FG is Taiwan's Steve Chang, founder and former CEO of anti-virus software company Trend Micro. The company is registered in Japan and was first listed on a Japanese stock exchange.
The striking thing about Sony is that there is not a significant foreign investor (like Nissan and Mazda) or founder and they have not become a subsidiary or affiliate (like so many Japanese tech, pharmaceutical and machinery companies) of a foreign company - although it is worth pointing out that non-Japanese shareholders have made up more than half of the register. Nomura Securities did appoint a foreign director, Max C. Chapman to their main board in the mid-90s - he, like Stringer, held the top job in the U.S. for them. He is now chairman of a sports products company.
One thing seems certain, if he fails then no other companies will be in any hurry to repeat the experiment. Much of the initial reaction is to applaud Sony for a brave move - they have also been slimming down their board structure to facilitate more rapid decision-making - while simultaneously wondering whether Stringer is really the right bloke for the job. I think that's called hedging your bets.

[kamome]

Mulboyne, of the Japanese companies with significant foreign investment, how many appoint Western FG's to the top position in the company as opposed to Japanese front men? Have Ford's appointees for Mazda been Japanese or Western?

You're right that Sony is unique--they are not a subsidiary of any foreign corporation, yet they have appointed the chief of their American subsidiary to their top post AND he's a Westerner.

[Mulboyne]

Of the Japanese companies with significant foreign investment, how many appoint Western FG's to the top position in the company as opposed to Japanese front men? Have Ford's appointees for Mazda been Japanese or Western?

Ford have appointed both Japanese and Western senior men. Of course, it is arguable which post is more senior. CEO is usually the top post but a Western chairman often trumps a local CEO. If the chairman is Japanese, that is often an honorary role or else the guy has been booted upstairs.
Last time I looked at Mazda, Imaki had taken over as President and CEO from John Parker who himself took over the job from Mark Fields.

These things go in cycles. At some point the overseas firm gets concerned about costs of a large team of expats, especially where they don't speak Japanese, and decides to recruit senior local talent. A few years later they decide that they don't know what the hell is happening in Tokyo anymore and urgently parachute in some expats to wrest control back. Obviously, as a potential employee, you are best advised to try to catch the right point in the cycle.

Sony derives the larger part of its revenue from overseas sales but there are also big foreign businesses, like American Family (AFLAC), which derive the majority of their revenue from Japan and which have always been run by Westerners.

[Kuang_Grade]

From Monday's New York Times...In the print edition, it was on the front page, above the fold and on the left, which is the spot usually reserved for the 'big/serious' story of the day


http://www.nytimes.com/2005/03/07/business/worldbusiness/07sony.html?pagewanted=print&position=

Kunitake Ando, Sony's president is also set to resign and be replaced by Ryoji Chubachi, 57, the company's executive deputy president who has recently has been in charge of Sony's production operations. Mr. Chubachi will also take charge of the ailing consumer electronics business, which still represents 70 percent of Sony's revenue.

The appointment of Sir Howard appears to be a blow to Ken Kutaragi, the 54 year old executive who built Sony's PlayStation video game unit into the company's most profitable division. A defiant and idiosyncratic engineer, Mr. Kutaragi, who has long been seen as the leading candidate to become Sony's next chief executive, was given responsibility for electronics and semiconductors two years ago. Now he will again just run the game unit. And he gives up his seat on Sony's board.

Several former Sony executives speculated that Mr. Kutaragi is still a likely candidate to ultimately become chief executive. But Mr. Kutaragi has been so outspoken within Sony that it would it would be too radical, even at this point, for Sony to appoint him as the deputy to Mr. Stringer. Mr. Chubachi, who is well regarded inside Sony, would be more acceptable to the engineers who run Sony's powerful internal divisions.

Since last year, Mr. Chubachi has been leading an effort to wring more efficiency from Sony factories by sharing technology and know-how among plants. He is one of the three key executives in charge of carrying out Sony's current revitalization strategy, along with Mr. Kutaragi and Shizuo Takashino, 61, the man who invented the original Walkman and is now in charge of improving product design.

[Taro Toporific]

... they don't know what the hell is happening in Tokyo anymore and urgently parachute in some expats...

CEO Stringer will neither live in Japan nor does he speak Japanese. In other words, CEO Stringer will be illiterate, deaf and absent.
"Parachute Management" bah, whatafarkquingjoke.

Sony CEO, world commuter
CNET News.com: March 7, 2005, 3:19 PM PST
...Stringer, who before being named CEO was in charge of Sony's U.S. business operations, plans to continue working from his New York office while making frequent trips to the company's main headquarters, more than 8,000 miles away in Tokyo, a company representative said. Stringer, who holds both U.S. and British passports, will also continue trips to England, where his wife and children live.
The distance could prove challenging for Stringer. While Sony's products are sold throughout the world, its corporate and subsidiary offices are mostly located in Japan. In addition, the majority of the company's top brass is also located in Tokyo.
"It's probably not the ideal situation," said Peter Felix, president of the Association of Executive Search Consultants. "And I'm sure it will be tough for him. But a lot of executives work in a 24-7 global environment where they are expected to know what's happening all over the world."
Sony's choice to promote Stringer is a bold move for the company that many see as highly unorthodox for a variety reasons, the least of which being that Stringer neither lives in Japan nor speaks Japanese.
...more...

[Mulboyne]

I can't make head or tail of this decision. I wonder whether they really believe that Stringer has the answers to their problems or whether the most important act was to remove Ando and Idei. Stringer in this scenario keeps the seat warm while the next generation of executives try to show they have what it takes to lead the company.
Or maybe they do see him as the best choice. Given that Stringer's experience is in content and Sony has not established a global name in that field while he has been in charge of it, he won't get much of a honeymoon period.
I wonder if Stringer would be prepared to consider a sale of all or part of the business?

[L S]

Given that Stringer's experience is in content and Sony has not established a global name in that field while he has been in charge of it, he won't get much of a honeymoon period.
I wonder if Stringer would be prepared to consider a sale of all or part of the business?

I think the fact that he IS a content person is a key point. Sony or any other traditional Japanese Consumer Electronics company cannot continue just making the hardware and expect to survive. Content and creative use of that content is Sony's saving grace I beleive. He's going to have to take Sony to some uncharted waters and redefine what Sony is...and that will require a better strategy to link content (the razor blade) and CE hardware (the handle). Just making a new hardware with a bunch of stupid new convenience functions will only take them to mediocrity.

Also...on a side note...their previous CEO did do something very good and strategic...he sealed a deal with Samsung on LCD fabs. Sony was VERY weak in this area and risked their whole TV business by NOT being vertically integrated in LCD TVs. That SAVED THEIR ASS.

[Taro Toporific]

I can't make head or tail of this decision. I wonder whether they really believe that Stringer has the answers to their problems or whether the most important act was to remove Ando and Idei...

My fly-on-the-wall at last night's the Mexican dinner blowout of the "Ando-shacho Faction" in Harajuku reports the Ando's people feel it was a purely ceremonial putsch and Stringer won't be around enough to affect any change. Perhaps the jump* in Sony stock price is a bit premature, hee, hee.

*1.7% jump -- up 77 cents on the NYSE

[L S]

I am not as cynical on this one...Sony is fairly progressive in its management compared to prehistoric management style companies like Sanyo, Toshiba, Mitsubishi etc.

Sony board of directors knows this is way to serious a thing to be playing with. If it is BS then they will take a big confidence hit if he resigns soon...and they cannot afford loosing anymore time to get their shit together. Samsung, Philips, Thomson and others are starting to really hurt them.

[L S]

My fly-on-the-wall at last night's the Mexican dinner blowout of the "Ando-shacho Faction" in Harajuku

Hey was that Fonda de la Madrugada? I like that place, but too expensive for an F'G who is used to 6 for 200yen tamales

[cstaylor]

My guess is he's the gaijin hatchet man.

[Charles]

My guess is he's the gaijin hatchet man.

Nah, he's being set up as the eventual scapegoat. That's not quite the right term, it's some crusty old business metaphor that I can't quite remember.

Stringer is going to make changes that will upset everyone. Everyone knows the changes have to be made. But since he's a Fucked Gaijin, he's disposable. He can upset everyone, and everyone will figure they'll go back to business as usual once he's gone. But in the meantime, he'll make the changes that nobody was willing (or able) to make. He'll take the heat, business will go sour for a while, he'll get the axe, and some nihonjin will resume the helm, taking credit for all Stringer's work, by saying HE will make all those horrible changes work as only a nihonjin would.

[FG Lurker]

Sony's British-American Sensei
Forbes, March 8, 2005

In a country like Japan where race, ethnicity and nationality are closely intertwined, it is notable when a non-Japanese takes over running a leading company, even one as atypically Japanese as Sony.

[...]

In one sense Stringer's elevation at Sony (nyse: SNE - news - people ) is a very Japanese internal promotion: He has been running Sony Entertainment, one of the few bright spots amid the general gloom at the consumer electronics giant, since he joined the company in 1997.

[...]

Last year Sony got less than 30% of its revenue from Japan. The U.S. has been as big a market for the company, and Europe's not far behind.

(Full Story)

A lot of the same stuff as other articles, but they make some points that I haven't read elsewhere yet. One thing is for sure: It's going to be interesting to follow how Stringer does over the next months and (maybe?) years.

[Mulboyne]

The British business press has been keen to claim Stringer as one of us even though he has been in the US for forty years and holds a US passport.
A lot of the talk is about a break-up but I don't think Stringer has been brought in just for a sale. No-one can quite work out how much control Idei had over his departure. Did he step aside or was he pushed? I did like his observation that since 2/3 of Sony's employees and customers are non-Japanese, a non-Japanese CEO is not such a strange idea. I heard Pioneer say the same thing ten years ago but their problem was finding quality foreign executives. Not that they were claiming that Japanese were better managers, simply that they needed to find a real quality FG manager if they were going to take such a drastic step.
As FGL says, it certainly livens things up a bit.

[torasan]

And when the Japanese media, which is clueless at the moment, finds out that the Welsh-born Sir Howard, with US passport, and UK/USA dual Citizen Kaneship, is also Jewish........oh, what will the newspapers and conspiracy outlets sy then?

A Jew is head of SONY? That will be the end of the world, for all the Marco Polo Holocaust deniers around town. Maybe he will change the name of JONY (Jew of New York).

I don't mean for this post to be or even sound anti-Sem, as it is not. I am poking funny at how the Japanese media love to see Jews in all kinds of strange places, even on yen bills and controlling the world finance markets via Soros and Bloomberg and Murdoch (mother was Jewish, does that count?).

What I means is: when will the Japanese media uncover that fact that they have let a Jew into their mist? It will be a funny day in Kasumigaseki when the lid blows off this SONY kingmaker deal.

A kid from Wales. Of the so-called persusasion. I think it's cool. Just wonder what the Nikkei will say when it finds out by reading this forum?

[L S]

Good article in Business Week on-line.....confirms my thougts. CE companies simply can't keep good margins by selling hardware and can't grow new revenue. Sony has an opportunity at a critical time to make a big strategy shift. Question is.....Is Stringer the right guy?

New Sony CEO may signal strategy shift
[excerpt]
With the appointment of Howard Stringer as chairman and chief executive, Sony has not only turned to a foreigner but to a strong proponent of the "content" side of the company, a move that could mark a profound shift in its strategy.

Article Here

[Taro Toporific]

Terrie's Take 318 -- Sony follies, ebiz news from Japan
A weekly roundup of news & information from Terrie Lloyd. Sony info quoted in full because it's not online at the moment ([url]http://www.terrie.com) General Edition Sunday, March 12, 2005 Issue No. 318[/url]

The foreign press appears to be crowing to a certain extent about Sony announcing a new foreign CEO. The editorials are flowing thick and fast that since Sony is following in the footsteps of Mazda and Nissan, the Japanese must have learned the error of their ways and are realizing that they need foreigners to break the deadlock in their imploding companies.
While in a few limited cases a foreign touch may be just what the doctor ordered, we think that mostly Japanese companies can work out their own problems. It's a matter of having leaders who can articulate corporate-wide change and refocused vision, not whether foreigners are the only ones with sufficient strength of character.
Talking to our CEO friends, the Japanese view of the Sony change seems to be that it has become a victim of its own corporate governance experimentation. That is to say, when the Sony leaders latched on to the idea of bringing in external directors and exercising corporate self discipline, they didn't count on those external directors having the teeth that they seem to have acquired. Thus, as Sony pulls itself out of a period of business misjudgements, Idei and pals are being made to pay the price with their own heads.
While this is the way of the world for foreign firms, we can only imagine that the Sony spectacle has just turned the corporate governance movement elsewhere in Japan back 20 years, and there will be many more companies putting off the idea of bringing in outsiders to the board. If it can happen to Sony's Idei, it can happen to anyone.
Anyway, now that Sony has decided on Howard Stringer as CEO, what do we think of his chances of turning the company around? Quite simple, if he thinks he is going to do it from London, New York, or an airplane, then we don't think Sony doesn't have much chance, and he probably won't last long. What Carlos Ghosn's experience should be teaching Sony is that any incoming senior manager, foreign or otherwise, has to personally win the trust of his/her key employees -- and most of the ones that matter are based here in Japan. Therefore, this is where Stringer should base himself, and force himself to create a "change tornado" here at homebase.
Our impression is that the problem in Sony, as with Nissan, is more a loss of confidence and high-level decision-making capability than it is a need for slashing and grass-roots reeducation. Sony employees are among Japan's smartest and hardest working -- and with the right leader they will once again respond with great electronic toys like the Walkman. In getting there, we can only hope that Stringer, who is apparently well known for his decisiveness and ability to fire excess employees, at least gets some advice from Ghosn and relocates himself to Japan for at least 2-3 years.

...the rest of Terrie Lloyd's informative newsletter covering non-Sony topics is here....

[L S]

Fron Newsweek......

A Good Knight for Sony
Howard Stringer takes over a struggling Japanese legend
Newsweek
March 21 issue
Howard Stringer was about to embark on a round of Oscar weekend partygoing when he got the call from Japan: Sony's chairman and CEO Nobuyuki Idei was stepping down and vice chairman Stringer, who is based in New York, was the pick as his successor. After checking with his wife, who lives with his two children in England, Stringer accepted. The 63-year-old Welsh-born former head of CBS News (who was knighted in 2000) is now the first gaijin to head the electronics flagship of the Japanese economy—albeit a troubled company that has lost 75 percent of its stock price during the last five years. Stringer, who doesn't speak Japanese, faces the challenge of directing a firm with assets in film and music, a mighty game division and a woefully underperforming electronics division. He spoke with NEWSWEEK's Steven Levy about his plans to restore the luster to one of the world's greatest brands.

LEVY: Why did Mr. Idei choose you as the first foreigner to lead Sony?
STRINGER: I think he liked the way I did it here in the United States. We did a lot of tough things. We laid off 9,000 people, did successful integration at Sony BMG [music] and did a lot of breaking down walls at Sony Electronics in this country. I think he thought that, in the end, there was an advantage to being an outsider. Sony is built up on a web of interpersonal relationships that go back to the dawn of history. The old boys never go away. But that also makes it very difficult for the insider who has to attack the problems of too much management, and turning that around.

How will you use that outsider status?
You have to do what's right; you can end up killing a company with kindness. There is a sense inside the company that some of the pride has been singed with concern about the direction of the company, and it's a very proud company. In a meeting I went to a few weeks before, I said, "The business of Sony has become management, not making products." Engineers are stars, like actors in Hollywood. Point them in the right direction, and let them go. But when push comes to shove, if we reach the conclusion that the only way to solve this problem is to do something tough, I'm happy to be the idiot foreigner, and I'm going to take charge of it.

Does that mean layoffs?
I'm not trying to scare an organization when I don't know what I'm talking about yet. But we certainly need to look at the size of the headquarters and the staff and so forth, and make the company responsive to the engineers. Make the engineers the stars and not management.

Part of the shake-up last week was the demotion of PlayStation creator Ken Kutaragi from the board. What's his future?
I have enormous regard for his brain. You don't want to spread that talent really thin. He is very important to the company.

Will you return him to the board?
I have it open. But either way, I don't want to give the impression that he isn't as valuable an executive as any company is ever likely to find.

The success of the iPod is a blow to Sony. Are you determined to prevent a similar lapse?
I still have to ride the balance between the demands of copyright and the demands of hardware. In the end, a hardware device is not worth anything without content. That said, I can't afford to be beaten this way again. It's become a symbol of Sony's stodginess or Sony's lack of innovation.

Are you worried that a weakened Sony might be a takeover target?
I don't think things are precarious at the moment. But [in 2007] the Japanese code makes hostile takeovers easier. If the thought of a hostile takeover a year or two from now is a goad, so much the better. Everybody has to understand that we have a shared responsibility to make sure none of these things happen, and that Sony is once again a cool company and innovative. And I don't think there's any particular obstacle to that.

Why take this on now?
You don't get these opportunities more than once in a lifetime. It's tough on my family; I have young children, and I fear that this will impact them. I've been going back over to England every other weekend, and I just simply go the long way: Friday to England and then on to Tokyo on the Sunday night, and I'll just be doing that. Thank God the CEO of Sony Electronics speaks good English and the CFO speaks good English, and we'll begin and end the day with conversations. You have to have the right people in place, and the right people supporting you. And if you don't you have to make changes.
[/url]

[Taro Toporific]

Even mo' fun...

Koizumi's M&A fudge
FT.com [subscription required]| March 14 2005 02:00
Sir Howard Stringer's appointment to head Sony is seen in some quarters as symbolic of a greater readiness in Japan to open up to foreign influence. Well maybe. But Sony has always been an untypical Japanese company and so far foreigners have been allowed in mainly when companies are in such trouble that no domestic solution can be found. Japanese admiration for Carlos Ghosn's tenure at Nissan Motor is matched by the extreme hostility felt towards foreign investors in Shinsei Bank and others.
As Richard Jerram of Macquarie Bank in Tokyo points out, the latest UNCTAD World Investment Report shows Japan ranking 132nd, between Burkina Faso and Bangladesh, on inward foreign direct investment. It does not seem likely that takeovers into Japan will accelerate any time soon.
...just a few words more of the abstract here...

[cstaylor]

IIRC, Ghosn's first task was laying off a bunch of Japanese employees... the Gaijin axe man