Kenichiro Yoshida now CEO of Sony
Will his path be paved by spreadsheet or instinct?
Kaz Hirai had a difficult task ahead of him — transform an aging company that was losing ground to nearly every competitor out there. Exactly 6 years after he became CEO, a new man is taking the helm of a Sony that’s in much better condition than it was before — but where Hirai was known for his charisma, Yoshida is known for his pragmatic approach.
At Apple, Steve Jobs was the visionary of the company who formulated grandiose plans and products, but it was Tim Cook as COO who helped execute them and bring them to reality. Now Sony finds itself in a similar situation. Kaz Hirai had the ability to maneuver and bring forth his visions because of Kenichiro Yoshida and his deep understanding of the core business and all the moving parts around them. Now like Apple, it’s the ‘numbers guy’ who is going to lead the company. For Apple, it’s worked out quite well, but will the same be true for Sony?
Yuji Nakamura and Yuki Furukawa for Bloomberg:
Investors love him, but managers who worked with him said they worry he isn’t in love with the kind of gadgets that once made Sony a household name.
Sony is making record profits again, but it’s no longer making the world’s coolest stuff. The company that gave us the Walkman and the Trinitron color TV has become a less-inspiring hodgepodge that includes an insurance provider and a semiconductor maker, along with Playstation game consoles and movies. Once ranked the №1 brand by American consumers, Sony and it’s incoming CEO need new hits to keep from falling further behind Apple Inc. and Samsung Electronics Co.
I’ve always wondered — Sony has, until now, tried to compete against Apple, but is that the wrong position for the company to take? What if, instead of trying to create competing devices, they acted as a neutral player (think Sonos) and even went as far as to focus on creating hardware that better supported the Apple ecosystem?
Under Kaz, every market Sony tried to compete with Apple in (phones, tablets, wearables, premium notebooks) became a lost cause. Fortunately, he was able to turn Sony into a financially healthy company once again.
In 2013, when former chief executive officer Kazuo Hirai made Yoshida his CFO and closest lieutenant, Sony was definitely in a deep hole. Losses had totaled more the $6 billion over the previous five years.
Vowing there would be no “sacred cows,’’ Yoshida shed or trimmed one bloated business after another: first laptops, then TVs and smartphones. Humility and quiet seriousness — traits especially prized in Japan — helped Yoshida win support even as he cut 20,000 jobs, according to several Sony managers, who spoke on condition of anonymity. Less showy than Hirai, Yoshida wasn’t afraid to ask questions or admit he didn’t understand something, and he knew the numbers inside out, they said.
Five years on, the results are hard to argue with. Sony is making more money than ever, the stock price has more than tripled and there’s $12 billion in cash on the balance sheet — a war chest that gives Sony plenty of room to maneuver, and may also test Yoshida’s vision.
Now competition is more fierce than ever with much of the world today revolving around ecosystems that began to arise a decade ago and were solidified during Hirai’s time as CEO, when Sony was unable to create such a system itself.
As CEO, Yoshida needs to figure out not only how to make compelling devices, but devices that they’ll control very little of outside of hardware.
Now, as CEO of a $61 billion conglomerate with eight divisions and thousands of products, the canvas is much larger and the stakes are exponentially higher.
Among the challenges: Yoshida will have to figure out how much investment is needed to keep Sony’s lead in image sensors. In the music business, where an important contract is expiring in June, Yoshida will have to make a quick decision on whether to pay an estimated $2 billion for full ownership of an aging but still profitable song catalog, or let it go.
Then there’s the movie business, Columbia Pictures, where a string of flops and a constant churn of top executives has kept the studio far behind Walt Disney Co.
Harder still will be plotting a strategy for what to do after Playstation 5. The machine, expected to be released next year, will probably be the last standalone game console Sony ever makes, so Yoshida will eventually have to take a risk on something new.
Perhaps even further outside of Yoshida’s comfort zone will be trying to solve a problem that has troubled Sony’s top brass for years: getting the creative juices flowing again at a company where the best hits have been the result of serendipity, not calculation.
Even the world of movies is no longer a safe place with giants like Disney dominating at the box office and Netflix on every screen at home. Even Apple has now dedicated over $1 billion in just the next year for creating original content.
When Yoshida was asked what new Sony product got him excited, he said:
My favorite right now is aibo
Perhaps, despite being a numbers guy, Yoshida does have his eye on the future.
While numbers make the company run from day to day, it’s going to take somebody who sees beyond them to ensure the long term viability of the company and sometimes, that means surrounding yourself with the right people.
Tim Cook has publically stated many times that he doesn’t strive to be the next Steve Jobs, nor is he. But what he has done is surround himself with smart lieutenants like Jony Ive, Craig Federighi, and Phil Schiller, who he empowers and, in turn, empower him.
For Kenichiro Yoshida, the same is true. He doesn’t need to be the next Kaz Hirai or Akio Morita. Instead, he needs to ensure the people around him in charge of PlayStation, sensors, and the electronics division are passionate and visionary leaders that he can enable which in turn enable him.
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