Back To Basics: Sony Appoints Kazuo Hirai, Ousts Stringer

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If there’s been one complaint my contacts inside large CE companies have had, career-wise, it’s been the inability to rise far in the hierarchy. While there are clear exceptions to this rule, the complaint has always been that succeeding in Asian companies has been contingent on (literally) speaking the language and knowing the rules of the road, as it were, culturally.

When Sir Howard Stringer took the reins at Sony, it looked like this tendency had been bucked. However, with the appointment of Kazuo Hirai, it looks like Sony is going back to the old ways – but why?

First, Stringer’s note “passing the brandy snifter,” as it were:

“Three years ago, I started to work with the Board on succession plans, and in February, 2009 we named a new generation of leaders to be my management team. Among them was Kaz Hirai, who had distinguished himself through his work in the PlayStation and networked entertainment businesses. Kaz is a globally focused executive for whom technology and the cloud are familiar territory, content is highly valued, and digital transformation is second nature. I believe his tough-mindedness and leadership skills will be of great benefit to the company and its customers in the months and years ahead. I look forward to helping Kaz in every way I can so that succession leads inevitably to success. It was my honor to recommend him to the Board for the positions of President and CEO, because he is ready to lead, and the time to make this change is now.”

Sony is no longer in the position they were in when Stringer became CEO. In June 2005, when he was appointed after a long career in Sony’s media divisions, Stringer looked like they guy to lead Sony through the rocky shoals of media distribution. You’ll remember that the iTunes store started selling music two years earlier and streaming video was still a few years off. The way ahead was clear – Blu Ray would carry HD content into homes and streaming would always be the second best solution. HD piracy was difficult because of the huge file sizes and the best solution for digital distribution was to include a nice DRM-ed video file in with the DVD, complete with a with a special Sony player. It was a simpler time and it looked like Stringer could make content work while Japanese engineers could make the TVs and Walkmen work.

Today Howard’s world is completely changed. Sony is no longer the darling of the computing world (Apple owns that limelight) nor is it good at CE (Samsung and Vizio have shown that cheap TVs don’t have to suck) nor can it make phones. Blu Ray is fast becoming irrelevant and distribution channels have curved around Sony like light around a dying star. Stringer’s Sony is a shambles.

So Sony went back to a Japanese CEO who ran the company’s most prosperous product, Playstation. It makes perfect sense: the next decade isn’t solely about hardware or content or mobile – it’s about all of those and more. Gaming consoles take the best of those three worlds and actually sell products to people who want to pay for them. Gaming is a huge business and it’s the one place that Sony can excel in this century.

In the end, Stringer was a CEO for a Sony that wanted to appear more plugged into Hollywood, media, and content. Now Sony needs to look like it cares about gaming and the capital of Sony’s gaming empire is Japan. It was fun to try new things, Sony is saying, but when it comes to turnaround they’ve come back to basics.