Sony hires a professional fixer

It's not really a secret that Sony is in trouble. But the consumer electronics company is taking some calculated steps to change its fortunes.

On Friday, Sony announced it has hired longtime IBM executive George Bailey as chief transformation officer. He will report to Sony CEO Howard Stringer beginning June 1 as head of the Transformation Management Office and consult with two main company divisions: Consumer Products and Devices and Networked Products and Services.

George Bailey

(Credit: IBM)

Bailey served for five years as the global managing partner of IBM's electronics industry consulting practice. His new title at Sony--though grand--describes exactly what Bailey has been known for in his career: fixing the way consumer electronics makers approach the business and help them make money--he even wrote a book about it.

Someone who can transform or kick-start Sony's global business is something the company desperately needs. Stringer has been saying for years he will reinvigorate Sony and figure out a way to get the many different parts scattered around the world to be more tightly integrated. But the results have been dismal: On Thursday, Sony reported its first annual loss in 14 years, to the tune of $1 billion.

Stringer has reshuffled some executives between its Japanese headquarters and its U.S. electronics division and most recently set out a manifesto of sorts for his company during his keynote speech at the Consumer Electronics Show. In it he said they needed to be focusing on the creation of better networked devices with long-term value and that embrace open standards and green materials.

Bailey has a simpler approach. In his book, "Irresistible! Markets, Models and Meta-Value in Consumer Electronics," he says the key to successful electronics companies involves shepherding innovation and giving customers what they want, from the packaging to advertising.

He has in the past praised Apple's approach to both the computer and consumer electronics markets, and specifically compared it to Sony's. It's a pretty easy bet that Bailey will be pointing out these differences to Sony and trying to steer the Japanese giant toward mimicking some of Cupertino's best practices.

[alflanagan]

When a company gets called "arrogant" as much as Sony does, they don't need a fixer. They need an attitude adjustment.

[-fjtorres-]

Stringer knows what he wants to do.
Problem is, his competitors are already doing it; Apple, Amazon, Microsoft, all have figured out how to integrate hardware and content to create a synergy that distinguishes and boosts their products. And they are doing it *without* content they own outright.
Sony, on the other hand, owns music and movie studios as well as the platforms on which to deliver them and spend significantly more than their competitors with significantly less to show for their efforts. Their music service is history, their ebook format has already been displaced by Adobe's plague, and their last hope, PSN is a work in progress that doesn't seem to progress much. If anything, PSN seems to be moving backwards ,now that in a fit of corporate "wisdom" Sony decided to charge their partners for the privilege of giving away free content (demos, promotional videos, even bug fixes) to their customers.
Good luck to Mr Bailey but I'm thinking the only way to fix Sony is fire every single manager between Stringer and the low-level staff. And maybe not even then...
They are simply fighting too many wars--external *and* internal--against too many opponents and losing all of them.
And, ultimately, both Stringer and Bailey are gaijin...

[Captain Bebops]

I believe we are seeing an end of an era of mega companies. Ones that are too big to fail. Sony should probably spin off many divisions to make smaller manageable companies. I don't know why the heads of these companies wanted to build such big ones in the first place. Must have a lot to do with their egos which are probably very bruised right now and deservedly so.

[MythicalMe]

I have a couple of idea's. Save yourself some cash and remove your support of the IFPI, RIAA, MPAA and worry less about protecting your intellectual property with breakable DRM.

[loose_screw]

I think we all know what needs to be done to fix Sony. They can keep hiring different people, but that's not going to work if the culture doesn't change.

[Hernys]

Bailey's job is pretty simple. Sony knows full well that the PS3 will not make a dime in its lifetime. And that the PS3 already served its purpose, establishing Blu-Ray. Right now, the PS3 doesn't add a dime to PS3 business or strategy. So they should just kill it.
Of course, they can't kill the product and expect not to be burned by existing customers, but an effective strategy would be not to reduce the price of the PS3 any further, stop spending on PS3 marketing and only invest in keeping new games coming to the console. That way console sales would go down (which is good for the bottom line), the loss per console goes down as well, and they can even make a profit from game licenses. It could be expected to recover over a billion by making this move, which has no practical downside, other that some egos crushed.

[BtmnHatesRbn]

The same IBM that fired 300,000 in 2007, 150,000 in 2008? And does anyone buy their cash registers from IBM anymore? I have no faith in a company that's been shrinking since 1984.

[sharmajunior]

Sony makes great products. The only thing they need is a price fixer. Their products are priced too high compared to the same product at the competition.