WSJ on in-fighting at Sony

[DemoCoder]

Those ppl do believe in their engineers and trust them to make the impossible possible.
Sometime it works, sometime it doesn't..

Yep, but it takes a special kind of manager willing to be passionate enough about something to trust engineers to do something everyone else says is very hard to impossible, and for which bean-counters are saying there is no market or no interest.

If you had seen all of the comments about the iPod when it was introduced, it's obvious it would have probably not gotten made under traditional business management: questionable copyright issues surrounding digital music sales, market flooded with cheap devices with razor thin margins, and you want to sell a bulky device that costs alot more than competitors? The iPhone faced similar criticism, only now analysts have started saying it will be disruptive.

As an engineer, it sucks when you have a great idea, but you can't get management to sign on, to take risks. That's what I disliked about pre-Gerstner IBM when I worked at T.J. Watson Research, tons of absolutely brilliant R&D people there, futuristic ideas, yet at the end of the day, they all got shelved because product management was too focused on corporate enterprise/mainframe, and did not care about innovation since they were making a killing on service contracts.

 

[patsu]

Here's a good article from a couple of days ago that plays into another thread we had going on: http://www.businessweek.com/globalbiz/content/feb2007/gb20070227_116817.htm

Thanks for the link. Nakagawa sounds like the right man for the job.

Despite his record of cutting costs, Nakagawa is no bean-counter. One Sony insider who worked for him years ago in digital imaging says he trained engineers to think more like businessmen. Nakagawa traveled on the cheap so he could take engineers on visits to retailers overseas to see which products were selling and which weren't. "Nakagawa was incredibly stingy: He would buy his plane tickets from discount agencies, fly coach, and stay at budget hotels," says the official, who spoke on condition of anonymity. "But he constantly reminded everyone that profits were a priority."

After the Connect unit was disbanded, the entire business, including hardware, software and services, was moved to Sony's audio devices group under the control of Yutaka Nakagawa, an executive who was openly skeptical of the Connect music service, according to Sony managers. He told colleagues that Sony should concentrate on its strengths in hardware.

Mr. Nakagawa declines to comment, other than to say that Connect "didn't seem quite right."

In electronics, Mr. Stringer moved Mr. Nakagawa, the executive who questioned the role of software, to a unit overseeing batteries, chips and other components.

...which makes me even more curious about Chubachi... as in, what did Stringer see in him.

I think Kutaragi's passover to be CEO of the company will be viewed by Sony historians as a key inflection point for the company, that's how expected his ascent was. And we'll never know how things would have gone if that track was taken. But Idei, and now Stringer, seem commited to hedging his influence. I just can't envision how events could transpire now at Sony to put Kutaragi back on track to the top job... I think he is basically untouchable to an extent in 'Fortress Playstation,' but Kaz has become Shogun within that empire at Stringer's hand.

It depends on Kutaragi. "Come back" does not necessarily mean the same old top job. I have more important things for Ken to do ... like preserving the Sony Engineering culture. Sony/Cell is still missing a lasting software platform/strategy although the picture is constantly changing thanks to PS3. Sony can still use a lot of help from the good side of Kutaragi. Stringer and Nakagawa know that.

Nakagawa is by nature a hardware guy who focus on costs and profits. The Bravia + Grouper integration is but a small experiment. It looks like Playstation is still "the" place for Sony to advance their software moves, and more importantly take on new/updated marketing strategies. For the past year, they are basically at the receiving end of a major online + offline marketing blitz from MS.

Asian companies traditionally put less stock in brand management. Sony was (is ?) different. Without a "home platform", I am not sure how much Nakagawa absorbed from the lesson. It will be interesting to see how the new SCE management team grow. I sincerely hope that Kutaragi is more than a figurehead there.

By the way, it's not that rare for "visionaries" at Japanese companies to do their own thing under the radar when they feel that their superiors simply don't "get it."

...

That sort of thinking goes also to the efforts by Inafune and others on projects such as Lost Planet, to work behind the scenes on something even after it has been shot down by their managerial superiors.

Yeah... that sort of behaviour is not uncommon in US too.

 

[rounin]

Just wondering, of the people who have offered criticisms in this thread, how many people have read the book "Made in Japan" by Morita Akio, which is an autobiography by the Sony cofounder? It seems to me that many people are pointing out this and that about Sony's "vision" and offering critique on how the company should be without the proper background knowledge.

 

[NERO]

Just wondering, of the people who have offered criticisms in this thread, how many people have read the book "Made in Japan" by Morita Akio, which is an autobiography by the Sony cofounder? It seems to me that many people are pointing out this and that about Sony's "vision" and offering critique on how the company should be without the proper background knowledge.

I haven't read the book but thanks for the reference, it's sure to be interesting. Please remember that the "vision" is public information, and can be viewed on their website. It is their mid-term strategy and most who have mentioned the strategy are likely implying this information.

 

[patsu]

Those ppl do believe in their engineers and trust them to make the impossible possible.
Sometime it works, sometime it doesn't..

Stolen from Apple:

Here's to the crazy ones

The misfits.

The rebels.

The troublemakers.

The round pegs in the square holes.

The ones who see things differently.


They're not fond of rules.

And they have no respect for the status quo.


You can praise them, disagree with them, quote them,

disbelieve them, glorify or vilify them.

About the only thing you can't do is ignore them.

Because they change things.



They invent. They imagine. They heal.

They explore. They create. They inspire.

They push the human race forward.


Maybe they have to be crazy.

How else can you stare at an empty canvas and see a work of art?
Or sit in silence and hear a song that's never been written?
Or gaze at a red planet and see a laboratory on wheels?

We make tools for these kinds of people.



While some see them as the crazy ones, we see genius.

Because the people who are crazy enough to think they can change the world, are the ones who do.

 

[Carl B]

It depends on Kutaragi. "Come back" does not necessarily mean the same old top job. I have more important things for Ken to do ... like preserving the Sony Engineering culture. Sony/Cell is still missing a lasting software platform/strategy although the picture is constantly changing thanks to PS3. Sony can still use a lot of help from the good side of Kutaragi. Stringer and Nakagawa know that.

Nakagawa is by nature a hardware guy who focus on costs and profits. The Bravia + Grouper integration is but a small experiment. It looks like Playstation is still "the" place for Sony to advance their software moves, and more importantly take on new/updated marketing strategies. For the past year, they are basically at the receiving end of a major online + offline marketing blitz from MS.

Well, I'm not sure how Kutaragi will be the 'Defender of the Faith' from his present isolated position. This will ultimately depend on whether Kaz is ultimately more loyal to Kutaragi's vision or to Stringers. In spite of being removed from CE and Semi, Kutaragi has showed how gaming can still have an outsized effect on the direction the company as a whole is 'forced' to pursue, so by having the day-to-day now supplanted from him, it'll be interesting to see how he can slingshot back into a role of greater influence. I'd hope that he does, but... anyway, I guess we'll see what happens as the years go by.

As far as Nakagawa goes, yes he sounds like a cool guy (I like his personal corporate habits - more could learn from his example), but he's been charged with a task and I think he intends to get the job done. What form that will take we still don't know. I would be more comfortable with Kutaragi still controlling the related divisions just so that the "Cell as platform" thing could go to fruition. Right now, if you read that Newsweek article, although it paints Cell and its potential in a positive light, it sort of leaves hanging whether Nakagawa is commited to whether he'll pursue the platform or not.

 

[NERO]

Eh!? Does Apple still think differently?

 

[patsu]

I would be more comfortable with Kutaragi still controlling the related divisions just so that the "Cell as platform" thing could go to fruition. Right now, if you read that Newsweek article, although it paints Cell and its potential in a positive light, it sort of leaves hanging whether Nakagawa is commited to whether he'll pursue the platform or not.

The rest depends on SCE and its partners to see if Cell is really worth its salt. If there are better solutions out there, embrace it.

Eh!? Does Apple still think differently?

That thinkdifferent page is gone now. You used to be able to get to it even though it's not linked from the main site. Whether they still think differently, well... the backdated stock option scandal should give you some hints

 

[Carl B]

The rest depends on SCE and its partners to see if Cell is really worth its salt. If there are better solutions out there, embrace it.

No doubt, but that raises a question - does the current head of Semi view IBM and Toshiba as 'partners' the way the old one (Kutaragi) used to? There is no doubt in my mind that there are suitable alternatives to Cell in the CE space, but Cell's appeal was never being better than a given IC in a specific case or micro sense, but from a macro ecosystem sense. I just hope it's not a baby with the bathwater situation over at Semi going forward. That CMOS sensor they've crafted up was exciting to read about at least.

I agree with you though in terms of your post - Cell and its proponents have to prove its worth, and not the other way around.

 

[Geo]

Am I reading the same quoted articles as everyone?

There were comments in this thread to the effect that Stringer supposedly criticised Kutaragi harshly. I think some people had mistaken Kotaku's paragraphs in quotes to be Stringer's own words, when they were really Ehrenberg's voice.

I would bring to your attention that at least one comment from the WSJ article originated from "a person familiar with the situation". Stringer doesn't need to say that, of course. And that was about Kutaragi's dining habits too.

The only substantiation that the WSJ article had for Kutaragi's "tense" relationship with the electronics division is that Kutaragi "blamed" the electronics division for diode shortages. I do not know who else Kutaragi could have "blamed" - it seems to be a necessary and natural description of the situation.

Please, read carefully.

I'll have to go back and look at that. It certainly gave the impression of being from Stringer to me the first time through, but I wasn't trying to parse every phrase either. Tho having said that, if you think "a person familiar with the situation" or "sources" or "high ranking sources" or anything like that can't be Stringer just because he's quoted directly elsewhere in the article, then you need a brush up course on how world-class leaking/message-sending/reporting is done by the big boys.

 

[onanie]

I'll have to go back and look at that. It certainly gave the impression of being from Stringer to me the first time through, but I wasn't trying to parse every phrase either. Tho having said that, if you think "a person familiar with the situation" or "sources" or "high ranking sources" or anything like that can't be Stringer just because he's quoted directly elsewhere in the article, then you need a brush up course on how world-class leaking/message-sending/reporting is done by the big boys.

It would only be natural to interpret "a person familiar with the situation" as anonymous, and a stretch to interpret that person as Stringer specificially.

 

[Geo]

It would only be natural to interpret "a person familiar with the situation" as anonymous, and a stretch to interpret that person as Stringer specificially.

It might not be Stringer, certainly, but not a stretch in the least for Stringer to go on and off the record at different points of an interview. Senior government officials do it all the time, and it would not be a technique that would be a stranger to a corporate head of a major company. Remember that when you think an article has multiple sources because of the way "anonymous" sources are characterized. Maybe yes. Maybe no.

 

[patsu]

No doubt, but that raises a question - does the current head of Semi view IBM and Toshiba as 'partners' the way the old one (Kutaragi) used to ?

There is no emotion investment, so the answer is probably no. I'm not sure if that's a bad thing. At 61 years old, Nakagawa should have the depth to wait and see.

As for Cell's larger purpose, I agree with your macro-ecosystem perspective. Sony may need its own platform to compete well with low cost manufacturers. For the moment, Nakagawa alone does not hold Cell's fate because there are internal (and potentially external) customers.

Kutaragi will have Cellius, using the right structure (more partnerships !), to further the vision. But he is not alone:

Mr. Stringer also put all of Sony's consumer gadgets under Katsumi Ihara. Mr. Ihara played a key role in jump-starting the mobile-phone joint venture between Sony and Telefon AB L.M. Ericsson of Sweden, which has built a reputation for style.

Mr. Ihara has set up a task force, based in the U.S., to develop products that will allow users to download content from the Internet onto Sony products like the Walkman and PlayStation. He also created a center in Tokyo to develop software.

One early effort: a module for TVs that allows users to watch video from the Internet using a remote control. It uses some of the same software as the PlayStation 3 console.

 

[Geo]

This whole affair reminds me of Apple when Steve Jobs resigned.

Ooooh, now there's a shrewd comparison. Not quite the same, as Jobs had "co-founder" aura to go with. . .but, yeah, I can see that.

 

[Geo]

It would only be natural to interpret "a person familiar with the situation" as anonymous, and a stretch to interpret that person as Stringer specificially.

I've looked at the article again, and I'd have to agree that Stringer with quote marks around him is not the big attacker of Kutaragi. He gets one little bit in directly about the number of dinners he's had with Ken, which in context is criticism.

But, unless you can make the case that Kane and Dvorak have an axe to grind, I stick by what I said. There are places where "Stringer on the record" is immediately followed or preceded by "anonymous wielding the hatchet" that have a definite aroma to them.

At a board meeting a few weeks later, Mr. Kutaragi sprang another surprise on Mr. Stringer, suggesting he drop the price of the entry-level PlayStation 3 console by 20% to just under 50,000 yen (about $420) to make it more competitive.

"It wasn't financially one of my best moments," Mr. Stringer says. "The budget implications were self-evident. [But] I agreed because I wanted the launch to be successful."

Is Stringer identified as the source of Kutaragi springing it on him at a board meeting unawares? No, he isn't. Is the quote he provided confirmation of that fact? Yeah, looks that way to me. I really don't buy he isn't more skilled than that if he wanted to be.

In developing the PlayStation 3 console, the device's latest iteration, Mr. Kutaragi went over budget on development costs without informing Mr. Stringer, according to a person familiar with the situation. When Mr. Stringer urged Mr. Kutaragi to have dinner with the heads of the electronics division, he did so just once a year, this person said. A spokeswoman for Mr. Kutaragi declined to comment.

Mr. Stringer tried to win Mr. Kutaragi's cooperation with patience. "I've had dinner with [Mr. Kutaragi] more times than I've had dinner with my wife, and that's not really healthy," Mr. Stringer says.

Who would know that Stringer urged Kutaragi to have dinner with the heads of the electronics division? Maybe the guy who was having dinner with Kutaragi so many times himself? And, btw, here's a question for the Stringer defenders (and, btw II, you have no idea how surprised I am to find myself defending Kutaragi in this situation!). . . . why in the world is Stringer, who clearly by virtue of his unquestioned ability to make Ken have dinner with him (by his own testimony) and who wants to have Ken having dinner with the Electronics divison guys. . . .well, why aren't most of those three way dinners? Hmmm? Is that like too obvious for words? If KK won't do it on his own you leverage your own position to do it for him. Unless, of course, you're just out to look for something to bitch about in public. . . .

 

[patsu]

And, btw, here's a question for the Stringer defenders (and, btw II, you have no idea how surprised I am to find myself defending Kutaragi in this situation!). . . . why in the world is Stringer, who clearly by virtue of his unquestioned ability to make Ken have dinner with him (by his own testimony) and who wants to have Ken having dinner with the Electronics divison guys. . . .well, why aren't most of those three way dinners? Hmmm? Is that like too obvious for words? If KK won't do it on his own you leverage your own position to do it for him. Unless, of course, you're just out to look for something to bitch about in public. . . .

There is a management theory, and I believe it's practised by certain IBM execs as well, that...

To build a strong team, the manager should leave his team members to sort out their differences as much as possible. If the manager/head honcho steps in every time, it takes away that opportunity for the team to forge organically.

In reality, these are 50 year old men, so it's more likely that:

Stringer has no time. I often hear MDs and CEOs complained, "They are ******* XX years old. I'm NOT going to babysit them".

In some cases, the people involved do part ways; but not in every case.

 

[Geo]

That theory won't fly when Stringer, by his own testimony, is having dinner with Kutaragi more often than his own (Stringer's) wife. Sorry. . .

 

[patsu]

About different issues/level of importance ?

When he tried to get Kutaragi to meet with his Electronics division counterpart, it's probably about less important issues from Stringer's perspective (e.g., day-to-day ops, inviting each other to launch events *argh*, ..., things that he can't value add much, or he thinks Kutaragi is well capable of addressing himself).

I'm not even sure how long those Kutaragi lunches last. Will not be surprised if some are short (like 10 minutes)... if they are as busy as some of the execs I worked with. However if they are discussing budgets (between Kutaragi and Stringer), then it will be longer, more formal... or even lunches in meeting rooms. Some have developed a habit of "no lunch".

 

[baten]

What do they speak at these dinners? Stringer doesnt know japanese and KK can hardly make himself understand when he speaks english.

And why is this happening NOW, when everything seems to finally get on track at Sony, and with PS3 starting to show some strenght?

 

[Geo]

And why is this happening NOW, when everything seems to finally get on track at Sony, and with PS3 starting to show some strenght?

Now *there's* an interesting question indeed.