I take it that Howard Stringer and Ryoji Chubachi will not be taking any more baths together.
Sir Howard’s decision to shift Mr Chubachi aside from being his second-in-command at Sony and head of the company’s powerful electronics division, and take the post himself (in addition to being chairman and chief executive) reminded me of a piece in Fortune in 2006.
It started:
One day last July, two naked men lowered themselves into a hot spring in Hakone, a Japanese tourist town known for its beautiful lake and views of Mount Fuji. One was a pallid, curly-haired 63- year-old Welsh-born American citizen who carries a few extra kilos on his 6-foot-3 frame. The other was a slight, balding, dark-haired 58-year-old Japanese engineer.
The two men had scarcely met, but they needed to get to know each other in a hurry, so they had arranged a weekend in the country, enjoying a walk in the woods, a boat ride, and a piano concert. A big job awaited them – the task of overhauling Sony, the troubled electronics giant that had once symbolized the rise of postwar Japan.
Since then, the unlikely duo of Sir Howard Stringer and Dr Ryoji Chubachi has rattled Sony to its foundations – cutting costs, selling assets, upending old ways.
It now seems that Sir Howard did not think his hot springs companion was rattling Sony sufficiently. His decision not to concede defeat to the entrenched powers and impenetrable corporate culture of Sony in Japan, but to try to seize control personally, is bold. For Sony’s sake, I hope it works.
It is, however, a reminder that being given the job title “chief executive” does not guarantee that everyone falls into line with what you say – or even listens, if they can help it.
The latest Fortune has an interesting piece looking back at the tenure of Lee Scott, who has just stepped down at chief executive of Wal-Mart. It argues that one of Mr Scott’s biggest achievements was to assert control over a company that was bitterly divided.
As Scott rose through the ranks, he developed a reputation for being reserved, strategic, and sarcastic . . . His main rival, Thomas Coughlin, was ebullient and tactical . . . Management was soon split between Scott and Coughlin, who had been named president of Wal-Mart’s domestic stores. There were “friends of Tom’s,” called FOTs, and “friends of Lee’s,” or FOLs.
Mr Coughlin eventually stepped down amid in-fighting and pleaded guilty to wire fraud and tax evasion after being accused by the company of having filed false expense claims. That gave Mr Scott the latitude to eject others associated with Mr Coughlin.
Similarly, Sony’s poor financial results have given Sir Howard an opening to assert a degree of control over Sony that he hitherto had in theory but not in practice. That may account for his mood on Friday, as the FT reported:
“This is the most fun I’ve had in six months,” said an ebullient Sir Howard, as he announced the management changes.
