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Proposed to buy Apple.
Author | Huang Qianlin Editor | Zhao Jinjie
Source: Bento Finance
Among the previous Sony CEOs, Nobuyuki Idei may be the only one who has the labels of “most successful CEO” and “worst CEO”. He once brought the debt-ridden Sony back to its peak, and once again caused Sony’s development slump for more than a decade. With the death of Nobuyuki Idei due to illness, the controversy surrounding him once again attracted outside attention.
On June 7, Sony Corporation of Japan announced that Nobuyuki Idei, the former CEO of Sony, died of liver failure five days ago at the age of 84. The company has held a private funeral with Nobuyuki Idei’s immediate family, and a memorial service will be held for him at the company.
After the news came out, Sony’s current CEO Kenichiro Yoshida wrote: “During his tenure as CEO, Nobuyuki Idei accurately predicted the coming Internet age and actively promoted Sony’s digital transformation, which has benefited me so far. shallow.”
With the fall of Nobuyuki Idei, the power transfer of several generations of Sony CEOs, as well as the magnificent development history of Sony in the past few decades, resurfaced.
In 1995, after 35 years of dormancy, Idei, who had just graduated and started working at Sony, finally ushered in his era. Norio Ohga, who was Sony’s president at the time, told him privately that he would be promoted to be the next Sony president.
At that time, Sony was a hot potato, because the interest-bearing liabilities under the massive mergers and acquisitions were as high as 1.9 trillion yen, accounting for half of the annual sales. Later, when Izui recalled, he said: “Sony’s survival probability was already lower than 50% at that time. On the edge of life and death, what is Sony’s revival talking about? The top priority is to improve the company’s financial structure.”
Idei proposed a DDK (Digital-Dream-Kids) plan, that is, “Digital Dream Tides”. “Mr. Jingsuka is a trend-setter for transistors, Mr. Morita is a trend-setter for Walkman, and Mr. Dahe is a trend-setter for CDs. We must be a trend-setter for digital dreams.” He believes that hardware will not maintain high growth all the time. If Sony wants to survive, it must develop software. and entertainment content.
Nobuyuki IdeiUnder his drastic reforms, Sony’s annual revenue soared from $35 billion when he first took office to $70 billion when he left in 2005. He was also named “Asia’s Most Imposing Operator by Fortune” magazine. “.
It is worth mentioning that Idei is optimistic about the broad prospects for the combination of Apple’s PC technology patents and Sony hardware, and has also proposed to acquire Apple, which is still in trouble and has plummeted in market value. Just because the idea was too avant-garde, coupled with the unstable foundation of the well, the acquisition proposal was quickly rejected.
After Sony missed the MP3 development opportunity and was overtaken by Apple’s iPod, the huge losses brought about by the diversification strategy made Idei selected by “Business Week” as the worst manager.
Even Norio Ohga began to wonder if he had chosen the wrong person, and sent out a soul torture: “Akio Morita launched the Walkman, Kazuo Iwama developed the Trinitron technology for TV sets, I launched the Sony CD, Idei What revolutionary product did you introduce? Nothing.”
Under the doubts, in 2005, Idei left with regret and handed over his diversification dream to a 63-year-old American who was farther from the Sony gene.
In 2014, nine years after leaving Sony, Izui appeared at the Sands Hotel in Singapore. He had a big back and straight gray hair. People came to greet him one after another, and he always responded to requests for clinking glasses and taking photos. There, Idei was interviewed by Sanlian Life Weekly, and he didn’t think Sony was really in decline.
“When you’re young, you can do a lot of things, but when you get older, it’s different. It’s not a simple make-or-break question, it’s a cycle in my opinion, a wavy development curve. , Nokia, Motorola, Microsoft are all facing the same problem as Sony, how to make a fundamental transformation. This is just like people who live in middle age and need to reproduce offspring to continue their lives, so do companies, they also need to find new life. “
Kazuo Hirai, his successor after leaving the well, was able to help Sony slowly get out of the quagmire of losses with the full transformation from the early component and semiconductor business to the game and network service business.
At present, Sony, which has been handed over to Kenichiro Yoshida, in order to avoid the strategic mistake of missing MP3 in the Idei era, announced at the annual business policy briefing meeting in June this year that the Metaverse and mobile travel will be the two key development areas in the future. This time, Sony has sped up the layout.
01
In 1937, Idei was born in Tokyo. His father was Moriyuki Idei, a well-known economics professor at Waseda University in Japan. Influenced by his father, Idei University also studied in Waseda. In 1960, at the age of 23, Idei received an undergraduate degree in political science and economics and joined the international division of Sony Corporation, which was a small company at the time.
“Sony was a very small company at that time, with annual sales of only about 100 million US dollars. The products were also very simple. There were only a few products such as radios, tape recorders, black and white TVs, etc., which could not be compared with today.”
Two years later, due to being sent by the company to study in Geneva, Switzerland, Idei stayed in Europe for many years and worked fluently in English and French, and led the establishment of Sony France. In 1973, Idei was transferred back to the Tokyo headquarters. “I was the head of the audio-visual business department at that time, and the main product in charge was CD. In 1985, I was in charge of the PC business that had just started around the world.”
After returning to the Japanese headquarters, Izui proposed to buy Apple at a critical moment when Jobs was kicked out. When Steve Jobs was young, he admired Sony’s founder Akio Morita, and often visited Sony. Moreover, at that time, Sony was several times larger than Apple, and acquisitions were not impossible. However, the plan was firmly rejected by the then president Dahe.
The rejection of the proposal did not affect Idei’s ascent at Sony. He was appointed Senior General Manager of the Home Video Group in 1988, a Director of Sony Corporation the following year, a Managing Director of the Company in 1994, and the sixth President and Representative Director of Sony the following year. Three years later, he took on the post of CEO of Sony and chairman of Sony after 2000.
There has always been an unwritten rule within Sony that the president of Sony must have a marketing or technical background, and Izui’s airborne broke this rule.
In fact, at that time, apart from Daiga Noir, very few people were optimistic about the well. The reason why Dahe is optimistic about him is because he is full of uncertainty about Sony’s future. He realizes that Sony may not be able to cope with the coming Internet age smoothly, and Idei, as a “person who has the ability to understand software”, brings him a lot of advice. Here comes hope.
Around 1993, Idei submitted three reports on his views on Sony’s future. He mentioned that it is difficult for Sony to maintain high growth in hardware products such as TVs and cameras, and the most feasible way is to enter a new field – content entertainment.
When Idei was sent to Europe for training by Sony in his early years, he was influenced by the French New Wave film director Jean-Luc Godard and was full of enthusiasm for innovation. It is for this reason that he foresaw the arrival of the Internet wave early, using the analogy of “meteorites and the extinction of dinosaurs”, emphasizing that the Internet is the meteorite that smashed to Sony and changed Sony, and must be prepared for hardware growth. According to the current words, that is to find Sony’s second growth curve.
Coincidentally, the technician who was originally scheduled to take over by Oga Noir, had a scandal on the eve of his appointment. This made Dahe even more determined to let Idei take the lead.
02
“When I first became president, Sony’s executives were all Japanese, like a small circle. As soon as I took office, a large part of the executive team was laid off and replaced by a group of foreigners with a very international perspective. Serving as the executive team.” After Idei took office, the first thing he did was to challenge an authority in Japan – the lifetime employment system.
Afterwards, Idei applied the advanced management methods he had learned in Europe to Sony, reorganized the board of directors, and transferred 30 senior directors to draw a clear boundary between decision-making and execution. If someone as good as Qi works for us, we must first set up a board that satisfies him.” In addition, the department presidents he selected are very young, and performance-based pay replaces seniority pay, which is not common in Japanese companies with strict hierarchy. Some outsiders commented that he was “the least Japanese entrepreneur”.
In the face of Sony’s high debt at the time, Ikai could only implement strict performance appraisals to cut costs, and put the battery technology and robotics business with high input costs on the fringes. Engineers with high status in Sony in the past are slowly losing their right to speak, and the cost of trial and error has become high. Sony’s “father of Walkman” Kozo Osone said: Under the oppression of performanceism, everyone at Sony “bends to work”, and the atmosphere of innovation gradually fades.
At the strategic level, Idei anchored Sony’s goal on “diversified development” and began to invest heavily in the development of entertainment content. In fact, as early as 1989, Sony followed this route and acquired Columbia Records and Film and Television at a huge cost. “Newsweek” commented: “This merger is a disaster.”
Under heavy screening, Sony has successively sold some loss-making businesses, focusing on entertainment businesses such as PlayStation games, and expanding its music, film and television, and even financial businesses. At the same time, Idei has not given up the hardware business. On weekends, he often wanders around the electrical stores on the streets of Tokyo, discussing product problems with salespeople and customers, and later launched VAIO computers and PlayStation game consoles.
Source: pexelsDuring Idei’s reign, he also had an opportunity to change Sony’s fortunes. Former Sony President Ando Kuniwei recalled that at the end of 2001, when he was on vacation in Hawaii, he met several Apple executives including Steve Jobs on the golf course, and was persuading Sony executives to implant the Apple system into Sony’s fast-growing VAIO computer. According to Japanese reporter Lin Xinxing, Jobs believed that Sony was the only brand qualified to use OSX. However, since the Sony team was just getting acquainted with the Windows environment, it was “not worth it” to take the risk for the uncertain future of Mac OSX.
In those years, Idei used a series of strategies to take Sony forward. In 1997, Japan’s economic growth was sluggish, and the company was full of grief, but Sony bucked the trend and made a net profit of 1.2 billion US dollars. Among them, a blockbuster movie brought it more than 1 billion US dollars in revenue in the first 9 months. Sony was also rated as the United States. most respected brand.
The following year, Idei became the first recipient of Fortune’s Asian Person of the Year Award. Sony’s net profit also soared to $4.3 billion. By 2000, Sony’s stock price had risen to $275 a share, five times what it was when Idei became president.
03
Over time, Izui’s powerful medicine against Sony began to no longer work, and even more serious side effects appeared.
Duan Yongping, the father of Backgammon, once commented in 2013: “I felt that Sony was going to have a problem nearly 10 years ago. At that time, Sony became very profit-oriented, and things of poor quality were also sold. From substandard DVDs The movement, the dance mat that knew it was going to go wrong, the laptop that could burn bubbles and the leaking battery, plus I saw an interview with Nobuyuki Idei Izuku, I think the great Sony seems to be lost.”
Even Sony was dissatisfied with the leadership of Idei. Some employees said: “Mr. Nobuyuki Idei’s ideas are too advanced, and we often can’t keep up with him.” Many senior Sony engineers began to leave one after another.
In addition to the brain drain, a bigger crisis also followed. Due to the protection of copyright, Sony has never approved the development of iPod-type players, but the consequences of underestimating the enemy are quite severe. In Tokyo in 2003, in front of more than 200 managers including Nobuyuki Idei, the CEO of Sony, Andy Lack, the president of Sony Music, took an iPod from his pocket and said, “This is it, the enemy of the Walkman is here.”
iPod Source: pexelsAccording to market research agency iSuppli data, as of 2004, Apple has sold more than 10 million iPods worldwide. “The Walkman made Sony a pioneer in portable players, but this time it’s late, and there’s no comparable product to the iPod,” said Alexander, a Swiss securities manager.
The Sony executive said: “We missed the best market opportunity, and Apple seized it, it’s that simple.” But Idei clearly didn’t want to give up. “We want to turn the shock into something positive.”
Subsequently, Sony launched 9 new Walkman products in one go, the price is lower than that of the iPod, and also released the MP3 mode.
Idei’s follow-through strategy failed to save Sony. In 2000, Sony’s market value was still seven times that of Apple. In 2003, two years after the launch of Apple’s iPod, Sony’s profit plummeted by 98% and its profit margin fell to 1%, which aroused strong unease among investors. The market value of the yen directly led to the emergence of the “Sony Shock” phenomenon. Izui also changed from the “most successful CEO” to the “worst CEO” in the eyes of the outside world.
A series of measures to reduce costs and increase efficiency, such as layoffs, failed to save Sony, and failed to buy more time. In June 2005, Idei left sadly, ceding the title of CEO and chairman to 63-year-old American Howard Stringer, hoping that he could save the crumbling Sony Group.
In fact, since Idei, the previous CEOs of Sony are being divided into two different schools. One is the relationship based on the emotional foundation represented by the founder Akio Morita. Our technicians will use his skills to the fullest to build an ideal factory with freedom and spaciousness.” From the beginning of Dejing, the Sony gene had a fault, and Dejing’s style of pursuing efficiency based on performanceism became a new faction.
“The diversification of Sony’s products played a role in avoiding risks in the past, but with the changes in industrial development in the past decade, the diversified product layout has instead dispersed Sony’s energy and resources.” After taking over, Stringer realized that Sony problem, but did not play a role in fighting the fire.
It wasn’t until 2012 that Kazuo Hirai took over Sony, which was desperately needed to be rescued, from Stringer, and the situation began to ease. After Kazuo Hirai took office, he proposed the “One Sony” strategy, cutting off the unprofitable TV panel business, laying off more than 10,000 employees, and the VAIO business was also sold.
Through resale and spin-off business, compared with the net loss of 1.222 billion US dollars in fiscal year 2014, Sony’s net profit in fiscal year 2015 reached 1.308 billion US dollars, and finally turned losses into profits.
Just a year before Sony achieved a turnaround, Idei told Sanlian Life Weekly: “The Sony leaders after me have done a lot of work. From this point of view, Sony has found a ‘own child’ who can extend the company’s lifespan. .”
By fiscal year 2021, Sony Group’s sales revenue will reach 9,921.5 billion yen, a year-on-year increase of 10%; net profit will reach 882.2 billion yen, a year-on-year increase of 3%.
At present, the new force in the exit is focused on the metaverse and mobility. At the annual business policy briefing meeting in early June, Kenichiro Yoshida set two development priorities for Sony’s future, the Metaverse and Mobility. Games, music, movies and other content related to the metaverse concept are Sony’s strengths, and software-defined smart cars involved in mobility are a hot new trend.
After leaving for 17 years, Sony is now re-enacting the planning strategy that was once pre-set by “to shift from traditional hardware to software and entertainment content”.
references:
1. Nobuyuki Idei, Sony Boss Who Elevated PlayStation, Dies at 84, Bloomberg
2. Sony’s former chief, who pushed content but missed the iPod wave, dies at 84, Reuters
3. How did Nobuyuki Idei push Sony into the abyss of decline? tiger sniff
4. Interview with Nobuyuki Idei, former chairman of Sony: Has Sony really declined? , Sanlian Life Weekly
5. This Sony fan, named Jobs, loves Faner
6. Sony Recession Revelation, Stone Business Review
7. Sony does not give up mobile phones, it is the last stubbornness of Japanese manufacturing, Koi Finance
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9. Taking history as a mirror, Sony almost bought Apple, Japanese and Chinese capital markets
10. Hu Yong: The biggest reason why Sony fell into recession is that it gratefully absorbed the American business model, and the manufacturing industry
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