After our We Miss Sony series ran, I got a call from Sony's head of corporate communications. "You made my weekend very busy," he said.
To Sony's credit, they got what we were trying to say. And they even agreed with many of our criticisms. But they wanted to speak to our readers, to talk about the missteps and the plans to come correct. It seemed only fair to me.
SEnter George Bailey, Chief Transformation Officer of Sony Corporation. He was brought in last year to fix Sony, to swing an axe throughout the company and complete the changes that Howard Stringer began five years ago. I spoke with Mr. Bailey last week.
Joel Johnson: I'm really most curious about what Sony's planning on doing to address the consumer confidence issues across the brand in general. I was surprised myself by the negative responses by our commenters about what the Sony brand means now to them.
George Bailey: I do actually read your blog and keep up on it. I do understand that your focus is the consumer perspective.
I have to tell you, I think one of the points you made was that Japanese electronics companies in general, as an industry, seem to have lost focus on the consumer and that we as an industry have tended to value engineering more than consumer delight. And actually, that really stings from a Sony perspective, because we've always prided ourselves on being the guys that really understand what makes consumers happy and delighted and surprising them with great new innovations. That's always been our heritage.
I guess I'd have to admit that over the last several years we did lose a little focus on that. It's clear that some of the things that delighted the engineers in Tokyo were not the things that delighted consumers in San Francisco, New York, or Brisbane.
So I first have to start by acknowledging there's probably more truth then there should be in the idea that Sony—all the Japanese electronics companies, but including Sony—have lost some focus on what makes consumers delighted, happy, and adds value to them. So your point is fair, I think.
Not only do we acknowledge it, but we've been really moving to aggressively attack that problem. I'll give you a little bit of the corporate perspective of how you attack a problem like that. You can't just say, "Okay, starting Monday we're going to be customer-focussed again." That doesn't work.
We've actually been working on it for a year. Last April we complete restructured the company. We've got 170,000 people around the world. This is a big company—$80 billion revenue. You've got to take some really dramatic action to change the course of the ship. So we restructured the entire company and created these things called "horizontal platforms".
Now, you'll see why I'm mentioning this to you. One, for example, is called "R&D, Common Software Platform". That means that all the disparate groups that were doing R&D and software development across all of our different business, digital images, and blu-ray, and Vaio PCs, and bravia tvs, those resources were all brought under a common platform leadership. Now this isn't just corporate speak, right? The reason that's so significant is, yes, we get some cost savings, but what's more important to consumers (although that's important) is that we also start getting the ability to start creating things like a common user interface across the whole family of Sony devices.
Joel Johnson: Obviously one issues is that five years ago when Stringer came on board there was a lot of talk of silos and trying to break down those silos. And it obviously didn't happen completely. So we've heard this from Sony before, although it certainly looks like you've made a lot more sweeping changes than perhaps Stringer was able to do on his own. Or perhaps he cleared the way for you.
I'm curious about the platform focus. Throughout these groups. How much as this been consolodated? Is this really more of a top-down thing where the senior management are making the decisions about where platforms are going, and then it moves out to the different groups that are doing the different products? Or is it a little more organic and "siloed" within each platform?
George Bailey: Well, I would be exaggerating if I said we had crushed all the silos. We still have some silos! But there's actually this guy named Shimada-san who runs the horizontal "R&D, Common Software Platform". And he actually has collected under him all these software developers and designers. They are working in a collaborative way with all the different business groups. But when it comes down to it, the decision comes down to the horizontal platform owner about what a platform will look like and how it will work.
Now we do work in a very collaborative way at Sony. It's a part of our culture that we want to continue. But on the other hand, we now have a clear accountability and focus for change. This takes a while to get done. I think consumers are really going to start seeing the benefits as we get into 2010. And certainly by 2011. We're making a big effort.
Just to give you one little anecdote. I was in Los Angeles two weeks ago with Michael Lynton, the head of Sony Pictures. And I brought with me from Tokyo some people from our consumer products group and our network services group, the people who make VAIOs and PlayStations and all the rest. And this may surprise you, but it was really the first time we had a real work session about How are we going to create some breakthrough service offerings that only Sony could do? You're probably like a lot of people who say, "Well, gee, I understand that this is such a great idea. We've got Sony Pictures and Sony Music and devices all in the same organization, why haven't we seen some real breakthrough stuff? Why haven't we seen the convergence thing really happen?" Well, I now think we have a structure that wants to do it. We have a new leadership team. New guys running the company. It's a new Sony as of April 1st of last year. And they're committed. Michael Lynton and his team. Yoshioka-san who runs our Consumer Products business. Hirai-san who runs our Networked Products group. You know, they're sitting down regularly and working on this. So there's actual substance and meetings and people working on stuff instead of press releases and speeches.
Joel Johnson: I have heard this from a lot of people that I've spoken to at Sony. That there's a lot more communication in a more informal way than they ever felt comfortable doing before, which is great.
So when can we expect Sony to step away from the Sony Ericsson partnership and bring all that phone stuff in house? Because it definitely seems like Sony Ericsson is a lost cause at this point.
George Bailey: Well, we're kind of all about the new Sony Ericsson smartphone. I don't actually know when it's going to be launched in the U.S. It's April 1st here in Japan and I think it's about the same in the U.S. [There's actually no U.S. date for the latest Experia – Ed.] That smartphone is Android-based. I've played with it and I think it's as-good or better as iPhone or Blackberry. And I had been a BlackBerry addict. I was one of the first users of BlackBerry. And I quickly became addicted to it like everybody else. I switched to a Sony Ericsson because I work for Sony, right? So I've got to use a Sony Ericsson. And to be honest it was a bit difficult at first to use [the old] Windows operating system.
Some people like it. It works for some people. But I think a lot of people who are used to the Apple and BlackBerry experience will find this Android-based smartphone to be very, very attractive. So there's not one solution for every person.
We'll get that going. And we have a whole new mobile device platform strategy now with different form factors. And unlike an Apple, we'll actually have the ability to have content available for people from the smallest smartphone screen up to a 55-inch Bravia with all sorts of MotionFlow and 3D and everything else. We're going to have a full range that's going to be pretty darn powerful.
Joel Johnson: There was an announcement about the Google TV initiative that Sony is messing around with that will be Android-based. Are we going to see Sony really take Android and start putting it in a full range of products?
George Bailey: I can't comment on the Google TV discussion because nothing's been released by anybody yet. It's all just rumors. But I will tell you a couple of things: we are completely committed to giving people the internet experience across all screen sizes, including our TVs. I've had my VAIO Media Center PC hooked up to my Bravia XBL for a long time and it's a great experience. We are really committed to find new and different ways to create that user experience on our TVs.
And Android is a very attractive platform in many ways, so you are going to see Android going into a lot of different devices. I'm not saying it's going to be the only platform, but it's certainly a very powerful one. It's going to give consumers some real advantages.
Joel Johnson: Has there been a lot of push-back that you've seen from the software engineering side of Sony to embrace Android instead of internally developed systems? I'm curious if that's a sort of corporate culture thing, where they'd rather work on their own OSes, or if the lack of real Linux options in the PlayStation 3 was just a side-effect of the struggle of the PS3 launch?
George Bailey: We think Sony has the world's best engineers for consumer electronics. Traditionally, that's a good thing. However, it also traditionally meant we didn't have to collaborate or build on other people's platforms or work with outsiders very much. During the analog era that was the case and we were extremely successful doing everything ourselves. In the digital age, the game is different. It has taken a while to get our culture to accept that. That whole "Not invented here" syndrome? Do we have it? Yes. Are we moving to change it? Yes.
One of the things that's great about it is that there is a sort of distribution of the population on this. I find that when I frequently meet with the younger engineers who are the next-generation kind of guys. They get it. Believe me, they are all over the idea of collaboration and building on platforms that are not necessarily invented by Sony. These are the guys who grew up in the digital age. They're very open to doing this stuff. They don't have that "Not invented here" thing at all.
But if you grew up during the analog era and you remember the glory days of Sony when we could just do everything ourselves, it is a harder switch to make, quite honestly.
Joel Johnson: It definitely seems like pride has been an issue for a lot of people since Sony had been so dominant and so representative of gadgets and electronics in general that it steered them wrong for a couple of decades. So it's very interesting to hear that, but heartening to hear that the guys that will really make the difference here on out know Sony's place in the world.
George Bailey: You can see it in little things. One product I really like is Dash. It's not perfect, but it's a heck of a good solution for a lot of people. To have next to your bedside a device that gives you instant internet that you can configure in different ways. It's a great thing. And it wasn't done with everything Sony. It was a very collaborative thing.
Joel Johnson: I think Dash is also an example of where Sony isn't quite doing things right. Dash is fine, but everything is moving towards convergence devices that do pretty much everything and are software driven. So it seems strange that Sony continues to release a lot of products that are very niche-oriented that aren't going to be a break-out hit when a break-out hit is kind of what Sony needs.
Do you feel like there is some movement toward lessening the product line and tightening it up?
George Bailey: I have to agree with you. I think that in general, to be very honest, we probably have too many SKUs. We probably have too much complexity. It comes from a good place. It comes from our engineers really trying to target consumer needs and try to invent things that will really be great for specific markets. That's good, right? That's a good motivation. Unfortunately, it dilutes our impact.
You know, I look at Apple, which is a company that is incredibly focussed. They create all this hype about iPad and it's like one thing they've launched. And we're going to launch eight things this year, or twelve things. We're going to do a lot. And sometimes I think we should really be more focussed. And I think you're going to see more of that over the next year as we make some of these changes happen—a lot more focus.
By the way, I think having some niche products is a good thing. For one thing you're meeting the needs of a specific client segment. Another thing is that you learn from them. Will we have some breakaway products? I certainly hope so! What I see more, though, is the Sony family of products increasingly adding value because it's a range, an end-to-end supply chain of devices that whether someone is at home or in the car or at work, whether they want to watch a sporting event on a 55-inch TV or on their VAIO, increasingly it's going to be easy to transport content across the whole Sony family. It's going to be easier to enjoy entertainment through these different devices. It's not going to be any one product that's going to be the big breakaway. It probably is going to be the family of Sony products that people say, "I want to buy Sony because it works better and because it fits together better." And of course, we still have a great brand for quality.
Of course we hope for some gigantic breakthrough product! It's exciting.
Joel Johnson: Interoperatibility gets you a long ways, I think. You don't need to build everything around a small set of SKUs. (Although that's a nice business if you can do it.) But I think the problem with Sony has been for a long time you don't know what you're going to get.
George Bailey: About SKUS—we are never going to be as narrow as Apple. We don't want to be that way. We want to offer more choices and a bigger range. But I do think we have erred on the side of being a little bit too diverse and we are going to be focussing more and more as we go forward. Hopefully that will start being obvious to consumers as they see what we're bringing to market.
Joel Johnson: So, last question. And it's actually kind of related: Are we going to see Sony dip back into the robot market? Because I really miss the robots. And I think they were actually kind of important.
George Bailey: You know, if you on your blog could generate enough market interest and enough people who would buy them and pay for them then we'll get back in. Now this is just my personal opinion; this is not the corporate view. But I don't see how we can do it because no one wants to pay for them! We've got to make money! Although I like the robots, too.
We have used the technologies that came from teh robots in other devices. It's kind of a fun thing to do. So get a bunch of people on the blog to express some interest and maybe I'll be able to drum up some robots.