- Tram Ho
Nikkei opens an article about Sony that this corporation is gradually regaining its glory. That’s because Sony just announced that its net profit surpassed 1 trillion yen ($9 billion) for the first time in the fiscal year 2020, which ended in March of this year.
Kazuo Hirai – former senior leader of Sony – who is now a Chief Advisor to the company shared the process of “Sony’s rejuvenation” as soon as the Japanese electronics giant faced competitors from China, Korea…
Less than a decade ago, Sony was in jeopardy. When Hirai assumed the position of Chairman and CEO in April 2012, Sony had experienced four consecutive years of losses, even reaching a record net loss of 456.6 billion yen ($4.1 billion in billion dollars). current price). Hirai faced serious skepticism about his leadership skills from both his subordinates and the company’s major shareholders.
The criticism comes from Harai’s lack of experience in electronics – which is Sony’s key business. He joined CBS/Sony – now known as Sony Music Entertainment – in 1984 and has been with the company for over a decade.
He is able to speak English fluently because he studied in the US and Canada. Hirai first worked in the music industry before embarking on helping rebuild Sony’s US gaming business.
Hirai only became a key player in Sony’s core electronics business when he was appointed Vice President in 2011, just a year before he took over as Chairman.
” I thought I had to. I had no choice but to turn down this offer. It hurt me to realize that Sony’s electronics business was going astray. At that point, we were lagging behind Samsung. and LG. Our entire organization had a serious lack of confidence ,” Hirai recalls the day.
One day, when employees presented to Sony executives about a new model of Sony TV. Hirai was shocked by the whole machine’s lack of morale. From the outset, it seemed that the company was just playing around, launching new TVs without any confidence that it could beat Samsung or others.
When Hirai took over at the head of Sony, their TV business had lost money for eight consecutive years. Gone are the glorious days when Sony launched new products and received acclaim from customers around the world.
Hirai looked at that presentation and noticed that Sony’s spirit was slowly fading. For him, the electronics business is a symbol of “Sony’s downfall”.
However, Hirai didn’t want to accept that fact. He listened carefully to his employees to see what they were thinking. ” The employees, especially young people, joined Sony with pride. Talking to them directly, I realized that the company was simply not listening to them. Although they had ideas, the managers abandoned them. beyond the ear “.
” The situation is very serious. However, from another angle, the employees still have great passion. I think Sony is still valuable .”
Reviving the Sony electronics business is inevitable if the group wants to be rejuvenated. Hirai started by making an unexpected decision: Sell Sony’s US office.
With that, Sony continued to reform. It sold personal computers, batteries and chemistry, spun off the TV business in the US, and laid off 10,000 positions. While outsiders viewed these moves as signals that Sony was reforming, insiders of the company, which prides itself on electronics, were stunned.
When Sony announced that it was selling the Vaio computer business, Hirai began receiving a handwritten letter from Tamotsu Iba – Sony’s first CFO. However, Hirai ignored Iba’s request for a meeting and reconsidered.
” In summary, the letter said that things were better in the past and suggested that the management attach importance to the e-business. In addition, there was also a call for senior leadership to resign, including me ,” Hirai remembers. again.
Hirai also received pleas from retirees that Sony. However, he said that ” such appeals are just nostalgia. We could die if we stick to the idea that Sony made the Walkman “.
During Hirai’s 6 years in office, he reduced Sony’s total staff to 117,300 from 162,700 people, or nearly 30%. Hirai understands that rebuilding “will come with pain”.
Only make products that make customers say “wow”
Ignoring all criticism, Hirai began to draw up a plan for the next step in restructuring Sony. He realized that ” Sony doesn’t have a mission, values and vision for what the company wants to be “. Their electronics, games, movies, music and other fields are all disjointed and go their separate ways. He considered it necessary to define ” why we exist and how to exist “.
Believing that the answer lies within the company, Hirai visited Sony’s factories and their research and development centers around the world, listening to people speak. He said that since its founding, the spirit of Sony has always revolved around the word “kando”, which means “emotional” in Japanese.
” I believe it’s possible to figure out what founders want to achieve, and that’s kando .” Sony was founded with the goal of making products that would make people say “wow” at the mention of it.
Hirai explains that Sony’s mission is to be “a company that creates products imbued with Kando ideology”.
It has been about 20 years since Sony’s consumer electronics products became widely used. During the years of innovation, manufacturers including Sony experienced a wave of massification. However, to make products imbued with the kando mindset will need to set their products apart from the crowd. In the TV business, for example, Sony has scrapped its goal of selling 40 million units a year. They want to pursue quality instead of quantity.
4 years of improvement, Hirai left the position of president and CEO, handed over to Kanichiro Yoshida in April 2018. Like Hirai, Yoshida also has no experience in electronics.
Yoshida told Hirai on his inauguration day, ” I won’t be the type to just nod but say what should be said “.
” That’s what I want, ” replied Hirai.
Hirai’s management philosophy is ” to solicit opinions different from mine. You should find people who have a different point of view and let them have their say “.
Hirai was used to being challenged from a very young age. When he had to follow his father to New York when he was a first grader. He spent his teenage years commuting between Tokyo, Toronto and San Francisco every few years.
Kando is a Japanese word that describes the feeling of both satisfaction and strong excitement when experiencing something of outstanding value.
” It was the 1960s and 1970s, and back then I was called ‘Jap’ by everyone ,” Hirai recalls. When he returned to Japan, he was bewildered when he was scolded by his teachers for asking even very small questions.
” No matter where I go, I have to admit that I’m in the minority ,” Hirai said. That experience shaped Hirai’s view of management, of the need to harness diversity as a source of strength.
After stepping down as CEO, Hirai became the Chairman of Sony. Just a year later, in 2019, he resigned and left the company.
Three years on, his successor continued to follow the path laid out by Hirai. With the goal of creating a “kando value chain” that includes Sony products and services, Yoshida is trying to create a business model that connects electronics, movies, music, games and other Sony businesses together. He even announced an ambitious plan to expand the “community interested in transmitting the spirit of kando” to 1 billion people.
When asked about his current views on Sony’s innovation process, Hira said: ” I have the ability to manage a company effectively when it’s in trouble. There are people who are better at mapping out growth strategies. I have retired from the business world and will never return .”
Source : Genk