Bob's Gutsy Leadership Blog

Sony – Death by Excellence!

Recently the stock price of Sony has been flirting with $10 per share.  For perspective, that is a mind-blowing 32 year low!  Many of us remember that in the 1980’s, Sony was truly the king of consumer electronics.   Sony’s Trinitron TV’s, the PlayStation, and the Walkman dominated their respective segments.  Today, it is Samsung and LG in TV’s,  iPhones and Samsung Galaxy S III’s in smartphones, iPads in tablets, Canon and Nikon in digital cameras,  Microsoft and Nintendo in motion-driven games, and portable music has been incorporated into the smartphones.

Most experts in the field of consumer electronics are quick to point out that Sony’s problem is that they still focus primarily on hardware.  Unfortunately, what it takes today is not only great hardware, but also great software and relationships with entirely different industries like telco operators, the music and film industries, internet tool developers, etc.

In a nutshell, Sony was seduced by their excellence in hardware.  So were Sharp and Panasonic, who are struggling severely.   It is not much different than other similar examples over the decade: Kodak was seduced by their film expertise, Blackberry by their superior-security e-mail, and Nokia by their basic cellphone dominance.

So how can a leader avoid falling into the same trap of being seduced by their excellence?  Here are a few tips:

1.) Talent – Hire some folks who are up-to-date on the latest technologies that relate to your industry.  You want talented technologists who are creative.

2.) Environment – Have those fresh wizards, and their management, set up shop in a geographical area that is the hot-bed of the latest thinking in your industry or in related industries.  The Sony consumer electronics organization has always had its brain trust in Japan, close to the home base.

3.) Bosses – Put this new organization under a management chain that is known for openness and nurturing fresh ideas, while also having a streak of stubborn independence.

Success and excellence can be absolutely debilitating if the resulting pride causes new thinking and new skill sets to be viewed as low-priority distractions.

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