Stringer’s mission to reform Sony

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Before walking up the red carpet for Tuesday night’s premiere of the new James Bond film in London, Sir Howard Stringer confessed to some nerves about the Queen’s response to its more graphic scenes. But there was far more at stake than royal approval.

Sony is hoping that the opening of Casino Royale and the launches last week and this of its PlayStation3 games machine in Tokyo and New York will represent a turning point in the perception of a company whose recovery has been dented in recent months by a costly recall of laptop batteries and delays to the crucial new PlayStation.

“I think this movie’s timing is perfect,” Sir Howard told the Financial Times this week. “The combination of this and PlayStation3 in one week is a double-barrelled shot back.”

The importance of Bond is not just the prospect of a blockbuster film for Sony Pictures Entertainment, nor the usual product placement, which has equipped 007 with numerous gadgets from different Sony divisions. The new film and the PlayStation launch have given Sony a showcase for the integration of those divisions which Sir Howard has made a priority.

From interviews with half a dozen of Sony’s most senior executives, it is clear that his team has rallied around him in the wake of the battery crisis, and is eager to get out the message that the problems were localised, rather than symptomatic of a deeper malaise.

Michael Lynton, head of Sony Pictures, said: “I think everybody is deeply sympathetic and concerned with what’s happened with the batteries, but look at the successes we’ve had and SonyEricsson’s had and I think PS3 will have.”

Miles Flint, head of SonyEricsson, adds: “It is inevitable that the headlines get taken by the bad news but there is a lot in Sony that is working,” citing his division’s success with handsets using the Walkman and CyberShot brands.

Sir Howard’s lieutenants echo his explanation that the simultaneous problems with batteries and PlayStation3 components were “just a coincidence”. More importantly, they support his claim that his efforts to break down “silos” within the group is paying off.

“What I detect, particularly at the middle levels of the company, is a real enthusiasm for the sort of change Howard’s talking about,” Mr Flint said. “That does require deeper collaboration and co-ordination between traditionally quite separate companies.”

According to Andy House, chief marketing officer, “collaboration is working better than at any time in my 10 years at Sony. We used to pay lip-service to the idea that content brings our technology to life but hadn’t really demonstrated that to the consumer.”

When PlayStation3 hits US retailers at midnight on Thursday, the first 500,000 buyers will find a copy of Talladega Nights, a Sony Pictures film, in the box. It will be one of the largest releases of the Blu-ray high definition DVD technology Sony is pushing in the face of Toshiba’s competing HD-DVD format. “With the launch of PS3 Howard wanted to demonstrate we were serious about Blu-ray,” Mr Lynton recalls. “He rang me up and said ‘I really want to see Talladega Nights packaged into every box’.”

The proposition may have alarmed some in Sony Pictures retail team, as PlayStation3 is launching a month before the planned release date for Talladega Nights. “Clearly this was unusual for us but we’re happy we did it,” Mr Lynton said.

The anecdote says much about Sir Howard’s approach of breaking down historical divisions by force of personality, Mr Lynton said. “He candidly intervenes at a personal level to make things happen.”

But it also illustrates he is taking a tougher approach than when he first took over a company used to Japanese-style management by consensus. “I worked really hard at building consensus,” Sir Howard said, but he has used the recent crises “to bypass consensus”.

“Consensus is all very well but it’s very time-consuming and a little bit exhausting. I think this has been the positive backlash out of this experience.”

According to Mr House, the Talladega Nights release alongside PS3 was also part of a “pyramid” marketing approach, reaching opinionated early adopters first in the hope of building buzz for the new DVD format. More broadly, he says, content “allows us to differentiate our products in what is now a commoditised business.”

Sony’s ownership of a record label and a movie studio alongside electronics businesses has been criticised in the past, but Mr House argues: “Sony is a company whose time and idea has come.”

Tim Baxter, senior vice- president for strategic marketing, says this is because an increasingly networked world means there are fewer and fewer discrete products being brought to market.

Sony’s attempt to meet multiple objectives with PS3 has been criticised in some quarters, but Phil Harrison, president of Sony Computer Entertainment International’s games development studios, says this is nothing new. “I’d look back at 1994 when we launched PS1, which had the ability to play CD audio. A lot of people questioned our strategy then. They questioned the DVD capability in PS2. There has been repeated but unfounded criticism of our strategy but the 200m PS1s and PS2s we have sold demonstrate our strategy has been largely good.”

“I’ve been in companies where it feels like you’re in a quagmire and companies where it feels like you’re moving forward and this certainly feels like the latter,” Mr Lynton concludes. “In a funny way, crises galvanise you.”

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