Sir Howard Stringer: Sony's Savior?

<b>Lesley Stahl</b> Profiles Head Of Japanese Electronics Giant

At the Consumer Electronics Show in Las Vegas this week, the CEO of Sony delivered the keynote address. That's no surprise; what is surprising is who that CEO is: Sir Howard Stringer, the first westerner ever to lead this epitome of "Japan Incorporated."
In the ultra-competitive electronics business, Sony has stumbled badly. Once a nimble innovator known for the coolest gadgets, it became a bloated, bureaucratic conglomerate. In 2004, Sony actually lost money for the first time in a decade.

Six months ago, Sir Howard was given the job of turning Sony around, and he's already shaken it up in ways his predecessors never could, precisely because he's not Japanese. But, as Lesley Stahl reports, that is also what makes his job so hard.

Why did he take this job?

"I thought about taking this job for well over a week because I knew that the reason I got the job was because it was in financial difficulties," says Stringer. "And so I knew that I would have to use every personal skill I had to persuade and cajole and convince that for the greater good of the company, we might have to do some tough things."

Some of the tough things include firing thousands of people, something Sony's Japanese executives, so entrenched in the tradition of jobs-for-life, could never do. In Howard Stringer, they saw a guy who would cut like hell, but somehow be nice about it.

Stringer has announced a new restructuring plan which calls for the elimination of 10,000 jobs, and 11 of 65 factories.

Stringer has only named some of the 11 factories slated for closure.

"I mean, we know what they are. We're taking care of the employees before we take care of the press," he says.

"So you know what they are. And you're just not going to tell us?" Stahl asks.

"Yes! I'm not gonna tell you, no," says Stringer. "It doesn't mean I'm not gonna do what I've announced I'm gonna do. But it does mean I'm gonna do it carefully. It's not as easy to be cavalier about people's jobs as one can be in the United States."

But it's also not easy to run a company where you're never quite sure what the heck people are saying.

Sir Howard doesn't speak Japanese and just standing up makes him stand out: he's a foot taller than everyone.

The two weeks a month he spends in Japan are filled with cultural disconnects. Whether it's a shaky interpreter during a speech, or an upside-down business card exchange, or a just-not-done peck on the cheek for a factory worker, it's clear that Sony has never had a leader quite like Howard Stringer.

The company has 150,000 employees, $70 billion in revenue and products ranging from movies to music to all things electronic. Sony long defined the leading edge in gadgetry, transistor radios in the 1950s, Trinitron TVs in the 1960s and, in the 1970s, the revolutionary Walkman.

But if Sony had the market cornered for 25 years, it took Apple just months to steal it away.

Stringer admits that looking at one of Apple's iPods hurts, a major symbol of where Sony went off the tracks.

"There's no question that the iPod was a wakeup call for Sony. And the answer is that Steve Jobs was smarter at software than we are," he says.

Stringer says Steve Jobs came up with the iPod and iTunes, a simple system for people to download music — while Sony, worried about its record company — wasted precious time trying to figure out how to keep people from stealing songs.

"We tried to have a secure device. And that was a myth," says Stringer. "And a mistake. Sad for the music company, mind you."

It's not just the iPod. Samsung hurt them in flat screen TVs and, in videogames, Microsoft's Xbox challenged the PlayStation.