OCTOBER 18, 1999 VOL. 154 NO. 15

Made in Japan
A new telling of Sony's success story is a timely reminder of Akio Morita's marketing genius
By FRANK GIBNEY JR.

When Sony opened its first showroom in New York City in 1962, the fledgling electronics company barely had any products to show. "Made in Japan" still meant rinky-dink gadgets that didn't deserve a tony Manhattan address. But in an early stroke of marketing wizardry, Akio Morita hung a large Japanese flag above the entrance: the first rising sun New York had seen since Pearl Harbor. And the buzz was on. After the reporters came hundreds of potential customers to gawk at Sony's new 13 cm micro-TV, and before long the little gadgets were flying out the door and into American living rooms. That's pretty much the way it has been with Sony products ever since. The Trinitron, the Walkman, the Discman and now the Playstation have changed our lives. And they have made Sony--not Coke or GE--the best-recognized brand in America.

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Morita the master showman and marketing genius died of pneumonia on Oct. 3 at age 78, but few men in business can claim a bigger legacy. Although Sony's engineering triumphs owe more to co-founder Masaru Ibuka, it was Morita who redefined "Made in Japan." His passing, six years after being felled by a stroke during his morning tennis game, marks a symbolic end to a remarkable era, not just for Sony, but also for Japan.

The company that Morita and Ibuka established in postwar Tokyo has become a $50 billion-plus global giant in consumer electronics and media entertainment. However, as John Nathan points out in Sony: The Private Life (Houghton Mifflin; 347 pages), the company's stunning rise--like that of Japan--does not guarantee its future. True, Sony's success was due to technological vision, innovative engineering and brilliant marketing. But this book, which offers an unprecedented glimpse into the human triumphs and poignant failings of Japan's preeminent business miracle, also shows that Sony was often driven not by business sense but its founders' whims and personal relationships.

For the most part, that style of leadership worked just fine. As Nathan documents, Ibuka's technical instincts were practically infallible and Morita had a golden gut for hit products. In 1979, for instance, practically nobody within Sony believed in the marketability of a tape player that couldn't record. Moreover, headphones in Japan signaled impaired hearing, and deafness was an unacceptable sign of weakness. Morita countered that Sony would establish a new "headphone culture"--and the Walkman was born.

Yet the founders' occasional impetuousness nearly derailed Sony more than once. Ibuka's pursuit of the perfect color television almost bankrupted the company before a smart engineer at the last minute discovered the basis for the Trinitron technology. Sony would have saved millions in the 1970s if the company hadn't persisted with its Betamax videotape format when the rest of the world preferred the dominant VHS. And then there is the oft-told tale of the disastrous $5 billion acquisition of Columbia Pictures Entertainment in 1989. Nathan freshens this with the revealing nugget that Sony's risk-averse top executives had decided against buying the Hollywood studio--only to reverse themselves the next morning after Morita said: "It's really too bad. I've always dreamed of owning a Hollywood film studio."

The Private Life offers rich personal detail while debunking various myths about Sony. For instance, Morita was not merely an internationalist, but a Japanese who struggled with the conflicts between his cultural roots and the demands of a tough, often unfamiliar business world. "Chairman Akio" was also a mercurial leader and an insensitive father. Indeed, for Morita, Ibuka and their cohorts, Sony was the only family that mattered. Nathan's book is the family history--from Ibuka's tears of joy when a product worked to the poignant description of the two founders, Ibuka recovering from a heart attack and Morita, a stroke, being wheeled in and out of each other's hospital rooms, where they sat together, hands clasped, in silence (Ibuka died in 1997).

One reason the book includes so much telling detail is that Nathan, a professor of Japanese culture at the University of California, Santa Barbara, was granted extraordinary access to Sony executives. Norio Ohga, the musician, jet pilot and car lover who guided Sony through most of the tumultuous last decade, admits that Nobuyuki Idei, the current CEO, was an unlikely successor. On the other hand, Idei contends that Morita and Ohga were not hard-nosed enough to run a company in the digital age. Now Sony's executives need to be guided by shareholders and market imperatives, an objective still so elusive in Japan that Idei labels his quest to change the company "mission impossible."

If there's a problem with this book, it is that the drama all but stops right there, just when it ought to come alive again. Aside from a juicy account of the firing of Sony America president Mickey Schulhof, Nathan doesn't offer the kind of rich reporting on the early Idei years that we get on the founders. The new Sony is clearly a work in progress, but tomorrow's challenges, such as Sony's "networked" strategy, are not presented in context (for instance, who are the company's competitors in the global, wired world?). The development of critical new products, like the Playstation, is given short shrift. But ultimately, this is not a business book. It is a well-textured cultural history that explains much about why Sony--and Japan--face unimaginable change. As Idei tells Nathan: "The Sony we know today may have to disappear."