Sony's Demise: It Can Happen to Any Company
Sony's in the news again. This time, the consumer electronics and media giant announced it expects another $1 billion plus loss and a decline in sales this fiscal year. Also, CEO Howard Stringer has hired IBM executive George Bailey to be his Chief Transformation Officer.
Whatever that is, it's so like Stringer to create a grandiose title for someone to do what he couldn't do in four long years - transform the flailing company.
Still, Bailey spent five years as global managing partner for IBM's electronics industry consulting practice. That means he advised companies on how to run their consumer electronics businesses. Sony could have used a boatload of that experience years ago. But now, well, I'm afraid it's just too much sake under the bridge.
Looking back, there was a time when Sony had a supreme advantage in consumer electronics. It owned so many categories that, had it managed to get all its myriad devices to talk to each other, it might never have been dethroned. Instead, the opposite happened.
While senior management sought grandiose visions of a media empire, Sony's product units became isolated silos. That enabled the likes of Apple, Samsung, Nintendo, and Panasonic to outflank Sony in every product category from game consoles and music players to digital cameras and TVs.
Still, the mainstream financial press paints a glorious picture of Stringer's valiant fight to break down the Japanese behemoth's bureaucracy and bring change to the company. According to Forbes:
His management grip tightening on Sony, CEO Howard Stringer is cutting deeper into the consumer electronic giant's costs in a bid to stem losses.While Business Week says:
"--internal rivalries among engineers [getting] in the way of collaboration and [slowing] innovation [has] been Sony's problem for years--and held back Stringer's reform efforts since he took over in mid-2005."Let's say for the sake of argument that's all true. And that Sir Howard is finally beginning to scratch the surface of Sony's thick bureaucratic wall with his restructuring toothpick. It doesn't matter. Whatever the pundits say, I say that too many years and too much lost market share in too many product categories is too much for a consultant's title to fix, no matter how grandiose.
It does bear mentioning that Stringer didn't get Sony into this mess. That title belongs to former chief Nobuyuki Idei. Unfortunately, Stringer is the CEO who couldn't get Sony out of it. And CEOs don't get to make excuses. The yen stops there.
Will Sony remain a player in consumer electronics? Of course. Will it ever be the exalted leader it once was? Not likely. You know, there's an old Japanese proverb that goes like this: "If you sit by the river long enough, you will see the body of your enemy float by." It can happen to any company, and sooner than you think.
[photo courtesy of Daniel Terdiman, CNET news.com]