I’m a long-time fan of Sony products, but the company hasn’t always made decisions I thought were particularly bright. Their line of portable music players, for example, only just recently started supporting the MP3 format. Sony refused to support MP3 because they felt it was the format of pirates so they developed a proprietary format called ATRAC that never really caught on with the public or the other content providers because Sony’s products were the only ones that supported it. In the past with Betamax the problem was with Sony hoping to control the standard for VCRs, but this time out the problem was Sony’s content division demanding that their technology division not support a format that was seen as promoting piracy.
As a result of a number of decisions like that and infighting between the different corporate divisions, Sony has been struggling over the past few years instead of leading the market with innovative products. Apparently the board of directors at Sony decided it was time to shake things up a bit as they just appointed Welsh-born American Howard Stringer to the position of CEO.
“The fact that Sony now has a Westerner at the top, that’s very surprising,” said Michael Goodman, an analyst for research firm The Yankee Group. “It comes down to a recognition by the board that they need to do something differently…They’re facing competition they haven’t seen before, whether it’s low-cost products from China or new technologies where they really haven’t developed a presence. So far, Sony is failing the test as a company.”
After initially being brought on at Sony as a diplomat with no authority over any operating companies, Stringer is now running the entire show.
The board of directors for the electronics and entertainment conglomerate unanimously approved Stringer’s appointment as chief executive and chairman in a surprise move Sunday. The final approval is expected to come from shareholders in a June 22 meeting.
This is good news indeed as Stringer seems to understand the inherent conflicts that come when a formerly technology-only company gobbles up content producing companies and finds itself trying to run divisions that have conflicting issues.
“The interesting thing is that technology companies and pure content companies sometimes have contradictory impulses,” Stringer said in a recent interview. However, “in the last year and a half, building a relationship between content and devices has taken on a new urgency as a part of Sony’s convergence strategy.”
Stringer can help overcome divisional politics partly because he’s not inextricably tied to one arm of Sony, Goodman said.
“Hopefully, Howard Stringer can inject a more market-driven viewpoint, because his entire life has not been Sony,” he said. “He’s been there long enough to make his mark at Sony, but not so long he’s identified with one particular division. I would hope he’s acquired this viewpoint that Sony is part of bigger ecosystem.”
My fandom of Sony products aside, I think the fact that they’re putting a Westerner in charge is a pretty big deal given the strong traditionalism that exists in many Japanese companies that leads to a lot of bad decision making. With any luck, Stringer will be very successful and prompt other Japanese companies to break the mold and try shaking up how they do business a bit.