Sony is one of the most recognized, and respected, corporate names in the world. How many Sony products do you have at home? But when's the last time you bought a Sony product? The electronics juggernaut struggled to cope with monumental technological changes such as personal computers, the internet, and MP3 players, as well as global economic changes such as the rapid shift to low labor-cost manufacturing. The company whose Walkman once owned the portable music player business watched as Apple's iPod took control. Perhaps even worse, it watched as flat-panel TVs crushed the revered, but suddenly old-fashioned, Trinitron.
To chart its future, and turn around the company, Sony called on Sir Howard Stringer. Forbes Magazine has a fascinating article, aptly titled, It Takes a Crisis, describing Sir Howard's mission to transform Sony. When president of CBS, Stringer famously hired David Letterman away from NBC. Later he spent six years running Sony's U.S. operation. Impressed, three years ago, Sony called upon him to run the entire show. As he says now, "Look, I didn't know what I was doing...."
So far, the road has been rocky. Sony's TV manufacturing business, as well as the PlayStation, confronted by enormous competition, are a drag on earnings. But the progress is impressive. Sony has $10.8 billion in cash, a Blu-ray victory, and a pipeline of new products that will remind consumers why they are willing to pay a premium for the Sony name. For Stringer, it's all about connectivity. He wants every Sony product to talk to every other Sony product, and all of them to talk back to Sony. In his vision, we'll pay Sony for its hardware products, then pay Sony again to download software content for them.
Perhaps the most revealing insight into Stringer's business methodology is the way he handled (and ultimately won) the HD DVD / Blu-ray format war. According to Robert S. Wiesenthal, Sony's U.S. chief financial officer, news of HD DVD's potential success triggered "sheer and utter panic" in Sony's U.S. office. The U.S. market, and the war at large, was up for grabs. Sir Howard confronted the ghost of Betamax and jumped into action. I'll let you read the rest of the tale at Forbes.... -Ken C. Pohlmann