Asia Business Consulting

From Information to Strategic Knowledge by Asia Business Consulting ( What kind of jewels can you find in the news. And how great it is to have a company that fully uses those to support its primary research and consult your company strategically to really improve your business. This blog supports your business already. For more, talk to us - Asia Business Consulting. A better way to do business.

Thursday, September 29, 2005

Sony's fantastic turnaround plan

Sony was in deep trouble a while ago, culminating in a shock event - and then I hoped that they would do something right. They did - by getting a new CEO. A method that many, many companies do when they are in trouble for a long time. In Japan, that is something worthwhile to comment about. First, it was the first Western CEO (as if this is something special - well, it is for Japan), then, that they actually replace someone from Senior Management. So it gave hope to a turnaround of this once great company.

Well, Japan is special, since lifelong employment is still something like a guarantee, even after Ghosn of Nissan took hold and turned that company around successfully.

It is good to revamp a company, shake it up, and even retrench employees. For them, it might be bitter, but many times, it gives the opportunity for a new start. Still, I wonder why a CEO always looks at employee numbers first? Stinger announced the turnaround plan with great euphoria, but then, well, he doesn't really deliver. The "biggest part of the plan is a planned cut of 10,000 jobs worldwide, or 6.7% of its current 150,000 global workforce; 4,000 in Japan and 6,000 from overseas by the end of fiscal 2007. " How pathetic is this? Doesn't he know that each time he retrenches, a company experiences a culture shock? That it is easier to get over with it, do a deep cut (if required) and then really work the magic?

Well, let's see the rest: "Stringer said the reductions will eliminate a "significant redundancy" in operations. He will close down 11 manufacturing bases, slash 15 unprofitable business categories and reduce the number of product models by 20%. The 15 categories, which are all from the electronics division, have been decided, but will not be disclosed yet. 20% of existing product models will disappear."

So good bye to products and plants (which is probably summarised in the numbers up there already). I wonder what will follow. May be I just wonder because really, I don't really believe in retrenchments. Just remember, there was a time you wanted to hire that one person that you fire now. Why didn't you, as company, didn't upgrade the person's skill, when you had the time?

(By Asia Business Consulting)