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June 7, 2006

'General Motors to hire non-English speaking CEO'


Above, a fake headline.

Its purpose?

To have you wonder for just a second or three, as I do from time to time, about how it is that Sony — far more Japan-centric than GM will ever be U.S.-focused — last year came to hire Sir Howard Stringer (right, above), a British-educated Welshman who does not speak Japanese (and has absolutely zero intention of learning the language) as its CEO.

Walter Mossberg (left, above) did a live, unrehearsed Q&A (during which the above photo was taken) with Sir Howard at last week's D: All Things Digital conference.

Excerpts appeared in yesterday's Wall Street Journal.

I didn't know whether to laugh or cry as I read, fascinated.

It was like watching an accident happen, except no one gets killed — no one, that is, with the exception of Sony stockholders, who're gonna take a bath as Sir Howard shucks and jives for a while longer before Sony throws him out of the plane, to be sure with a very nice golden parachute so that at least he will have a soft landing.

My favorite line of Stringer's: "We're going to transform Sony quite radically in the next 12 months."

Stringer's just completed his first year, highlights of which include Sony's release of music CDs that surreptitiously installed malware on users' computers; folding its Qualia line of supersophisticated, grossly overpriced electronics with an accompanying loss of who knows how many hundreds of millions of dollars; letting Nintendo seize the bleeding edge in videogame technology with its upcoming, much-lauded Wii console (it just won "Best of Show" at this year's E3 Game Critics Awards — and is priced at half the $500 Sony's planning on charging for its PlayStation 3); producing an iPod competitor (the digital Walkman) so lame the company didn't even bother releasing it in the U.S. because they knew it would flop big-time; creating an online music store nobody uses because a) no one knows it exists, and b) it's too hard to figure out and has limited content; bringing out an E-book reader with great technical promise but priced far too high, with crippling digital rights management software and no WiFi capability, thus precluding its use as a tablet computer.

If past is prologue, the only transformation involving Stringer that will help this floundering, once-great company will be putting Sir Howard on the unemployment rolls.

Here's the entire published debacle.

    Shaking Up Sony

    Sir Howard Stringer Discusses Formidable Rivals, New Products; Soothing Silence in the Office

    After completing his first year as the first non-Japanese chief executive officer of Sony Corp., Sir Howard Stringer appeared last week at The Wall Street Journal's D: All Things Digital conference to answer questions from Journal technology columnist Walt Mossberg.

    During the spirited session, in which he delivered a constant stream of wisecracks and jibes, Mr. Stringer discussed Sony's strengths and weaknesses, its competitors, and his efforts to shake up the giant company, which combines a major electronics business with a movie studio and a record label.

    He touched on Sony's new blockbuster film, "The Da Vinci Code"; its coming PlayStation 3 game console; its efforts to compete with Apple Computer Inc.'s iPod music player; its new Sony Reader electronic-book device; and the experience of leading a Japanese company without speaking Japanese.

    In addition, Mr. Stringer responded to Microsoft Corp. Chairman Bill Gates, who earlier in the conference had criticized the PlayStation 3, which competes with Microsoft's Xbox 360 game console, for being delayed and being too costly. Excerpts:

    Mr. Mossberg: I have to start by congratulating you on the tremendous opening of "The Da Vinci Code" ... So why didn't the reviewers like it?

    Mr. Stringer: Nobody ever built a statue to a critic. We made a deliberate attempt to follow the book as closely as we could because, with 50 million readers, alienating those readers would be a disaster. ... We've sold over $350 million box office in world-wide outside of the United States. There is a school of thought that it's a singularly European movie inasmuch as there are foreign actors and the locations are foreign and the teenage audiences that watch American movies don't like to work really hard at a movie. It also beat Xbox 3 in Europe in its second weekend...

    Mr. Mossberg: You mean "X-Men."

    Mr. Stringer (laughing): There's an obsession! Look, enough of "The Da Vinci Code." It's going to do, we think, some $750 million world-wide, and that's a success.

    Mr. Mossberg: I would say so. Speaking of Xbox ...

    Mr. Stringer: God I walked into that, didn't I ... Look, the skill of Bill Gates is he's so brilliant at his detail that when he slips in the salesmanship, most of us think: oh my God, he must be right. ... He talked on the one hand, and I loved it, he talked about [Windows] Vista [being] delayed as if delay was normal, and then he started mocking me for delaying PS3 [PlayStation 3].

    Mr. Mossberg: PS3 is going to be 500 bucks, right?

    Mr. Stringer: $499, and look it's got more bells and whistles than a 747. ... That Cell processor is extraordinarily powerful and you have nine hours of high definition on the Blu-ray disks alone...The reason it's expensive [is that] instead of concentrating on just the games player, which would have been done in the past, PlayStation 3 is designed to go somewhere else, where it's the center of the living room ... It's part of the new digital strategy to try and create a new software mentality in Tokyo because it's quite clear that we've been an analog company migrating to digital with some difficulty.

    Mr. Mossberg: Let's talk about software. I've come pretty close to writing that Sony stinks at software. I may have written that.

    Mr. Stringer: I think you did. You certainly told me often enough.

    Mr. Mossberg: It's true. [Apple Computer CEO] Steve Jobs thinks ...

    Mr. Stringer (to audience): Things were going so well. ...

    Mr. Mossberg: Consumer electronics in his [Jobs's] mind can be thought of as software in a box, and that has not been your strength. You've been primarily a hardware company. What have you done about this problem?

    Mr. Stringer: I spent a lot of my first year pushing on software. Now, Sony makes 3,000 stand-alone products and 50,000 SKUs, so part of our problem is we're this giant department store, ostensibly an analog department store, cranking out all these things that the world wants but for which we don't always get credit in the stock market. We actually have a lot of brilliant software engineers, but they create embedded software. We have had a great problem with application software. We never did it, as you know, with a digital Walkman, which we didn't even release here because we actually didn't want to give it to you.

    Mr. Mossberg: Oh, thanks.

    Mr. Stringer: We gave it to the rest of the world and retailers were very upset with it. It was a beautiful product, a purple device, wonderful-looking information on it. Very elegant in software and the two doormen in my building think it's absolutely great. But it's limited because we didn't sit down and have a systematic plan to build applications across the software-development program or software platform and furthermore, it's a weakness of Sony's ... Why am I confessing?

    Mr. Mossberg: Good, keep it coming.

    Mr. Stringer: We didn't bring software engineers into the product development at the beginning. The engineers would begin the product and then software would come after the fact. And that's because in a company that has jobs for life, the older people are at the top and the younger software engineers, of which there are many, are on the bottom, pushing up. So there's a kind of a generation gap, which we've worked really hard to eliminate in the last four months. We're going to transform Sony quite radically in the next 12 months.

    Mr. Mossberg: You've hired somebody from Apple to help you with this, right?

    Mr. Stringer: Yes, I did, Tim Schaaff, who was a vice president at Apple and he's rather perfect for Sony. You know the Japanese companies don't like really aggressive, assertive loud people. They like gentle fellows like yourself. Tim is very thoughtful, very self-deprecating, very calm and he's walked right into Sony and been accepted by the engineers which is really hard, because Sony is a very Sony-centric company.

    Mr. Mossberg: Let's talk about the [Apple] iPod for a second. Is it too late to significantly dent their share? Can you bring out a digital Walkman with the kind of end-to-end experience with the software and the service that can really go after them?

    Mr. Stringer: It's a mountain to climb. We're coming out with a device that uses OpenMG [a Sony copyright management technology], which is not everybody's favorite over here, [but] will do well in Japan. It will dent Apple in Japan mostly for nationalistic reasons I suspect ... If you're talking about delivering music, [there's] the Sony walkman phone. We sold three million before Christmas in Europe, but thanks to the confusing cellular system in America, we're only just bringing the Sony walkman phone into the United States. We're bringing out another Sony Ericsson phone that pushes email and that will give BlackBerry a bit of a headache. That's coming out this summer. I'm not suggesting this is going to have Steve Jobs sleepless, but you just have to keep coming at him, and I'm fairly convinced that the next generation of devices will master software.

    Mr. Mossberg: Let's talk about the Sony Reader, which is a new and quite different e-book device. ... This is not just a device. You have to pull off something sort of akin to iPod and iTunes with this, where you have a device people like, at a price they will pay, and very good software on the computer to handle it and then a good service with a lot of content where the DRM [digital rights management] isn't too intrusive.

    Mr. Stringer: You're right, that's a lot of pieces to put [together], that sort of end-to-end model that Gates was saying no one wants, but everyone does, actually. I've put my name on this damn thing. I'm a reader. I know that's an odd phenomenon these days, but I carry books all around the world, so when I saw this I fell in love with this device. The fact that you can store 80 books on this and more on the memory stick, the fact that its battery life is seven-and-a-half thousand pages, which means about 25 books. ... The publishers love this ... Dan Brown [author of "The Da Vinci Code"] endorsed this at the Consumer Electronics Show.

    Mr. Mossberg: I'm shocked! You made his movie, you're making millions for him, and he was kind enough to endorse it. That's incredible.

    Mr. Stringer: He was in love. ... I have to do a kind of Steve Jobs salesmanship job, which is a fairly intimidating thought. My colleagues in Japan don't believe I can make this work in the United States because they actually don't think Americans read. ... But I think the demand for this [is huge]. I get called every day about it.

    Mr. Mossberg: There has to be a lot of content there.

    Mr. Stringer: There's plenty of content. We've got thousands of books. I'm not worried about that. I'm really worried about -- can I create a business model where the demand is great enough to create the numbers? Part of Sony's problem is, in order to sell almost anything, you're talking about building a demand for millions of things, always millions, not thousands.

    Mr. Mossberg: You own a record company.

    Mr. Stringer: I do.

    Mr. Mossberg: How's that going? How is it to own one of the four big entrants in one of the stupider industries in the world ... ?

    Mr. Stringer: And it's not true that I beat my wife either ... I think you're right about the music companies. They are like all companies that are great and are doing things really well and having a fantastic time. They want the status quo to remain long after the quo has lost any status.

    The record companies, remember, were not enthusiastic about the CD. They loved plastic and when the CD came along, they said, 'whoa, look -- windfall.' They were resistant to the digital world and in a way they forced Sony to try and create a music-download system that was utterly and completely secure, and that turned out to be a dream that customers didn't want. Customers drive everything now, not the product.

    Mr. Mossberg: Well, on that theme, when is your next copy-protected CD coming out that will install, you know, malicious software? How did that happen?

    Mr. Stringer: Actually, it didn't go so far. Computers did not crash. Big Ben did not stop. I'm not trying to blame somebody else, but this was an attempt to do the right thing at a low level. The senior management of BMG or Sony did not know this was going on. We responded very quickly and put out patches. ... We didn't say to ourselves as a company, we're going to screw every computer in town. We made a mistake and Sony paid a terrible price.

    Mr. Mossberg: You're the first non-Japanese CEO of Sony, which is clearly one of the great companies in the world. You don't speak Japanese, is that correct?

    Mr. Stringer: No.

    Mr. Mossberg: So how do you run the company when you don't speak the language that most of the people speak?

    Mr. Stringer: I get plenty of calming silence. Soothing. ... The truth is that Sony is very much a global company. Only one quarter of the revenues come from Japan, 75% come from the rest of the world. English is the common language, and I would say if I give a speech, as I did last week to 1,200 managers, 50% will understand my English. They may not understand what the hell I'm saying, but 50% speak English and another 25% speak it fairly well. Then we have astonishing simultaneous translations. I have the emperor's translator, who speaks better Japanese than I speak English and she tidies my syntax up. She's really quite remarkable. People say, 'God, she was great today.' They don't say I was great.

    Mr. Mossberg: You are in so many businesses that clearly you have a wide variety of competitors. Does Samsung [Electronics Co.] rank as a particularly important competitor?

    Mr. Stringer: Samsung is a first rate company and they have a wealth of revenue coming from other areas. But I think in the high-definition world, which is clearly our strategy for this year, we have still an advantage. Blu-ray is part of the high-definition strategy and then we have the 4K projector [called SXRD], which we're demonstrating in California this week. We have the digital camera, which we make with Panavision. We have high-definition Bravia [TVs], high-definition rear projectors, and we have a high-definition camcorder which is the world's best selling camera. So our strategy is sort of circling the globe with high definition -- we think we're poised for the high-definition miracle.

    Sony is a target for everybody. We have more competitors than you've had hot dinners. ... The truth is, one of the things I did ... was eliminate some of those SKU's because it's exhausting trying to win on every front. Every engineer loves his own product, so if you have an electronic toothbrush with a camera, we would give the same amount of marketing to that as everything else. After awhile the company sinks, exhausted, to its knees. Well, we've changed that.


No wonder Stringer sounds so addled: he spends so much time on planes flying between Sony headquarters in Tokyo, New York and points in between that his biological clock resembles one of those in the movies, where they spin the hands around in a blur to indicate days and weeks passing in a single bound.

My second-favorite line of Stringer's, this in reference to Sony's upcoming mobile electronic devices: "I'm not suggesting this is going to have Steve Jobs sleepless...."

10-to-1 Jobs burst out laughing so hard when he read that, he started crying and hiccupping.

I wonder how many of you would read bookofjoe if I published it in Pashto?

I'm just saying.

June 7, 2006 at 10:01 AM | Permalink


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