Sony’s recent stumble caused by its heavy handed and clumsy attempt to control digital rights (see this morning’s post) saddened me. Having spent much of my career in leadership development, and having been born and raised in Japan, Sony was always a positive example to me of good leadership and corporate behavior.

Jim Collins, in his groundbreaking research published in Built to Last, pointed to Sony as one of a handful of enduring and great companies. But now, maybe we are seeing the slide from great to good to gone.

Collins’ research demonstrated that companies of enduring greatness are rooted in a core ideology made of two things, an enduring purpose and enduring values. A company is more than just the people who are present at a given time. It is held together and guided by an enduring purpose that is bigger than the business plan or the current strategy. The purpose answers the questions “Why do we exist?” and “What is the difference we make in this world, beyond our profits, jobs, and products?” What would the world be missing if we, as a company did not exist?

Sony was formed 10 months after the end of WWII with $1600 and 7 employees in a burned out department store building. But this founding group began with a powerful goal and idea, to “become the company most known for changing the worldwide poor-quality image of Japanese products.” Through early product failures, this vision and purpose sustained and guided the team. And as we all know, Sony did achieve this goal.

Note Sony’s Purposes of Incorporation:

1. To establish a place of work where engineers can feel the joy of technological innovation, be aware of their mission to society, and work to their heart’s content.
2. To pursue dynamic activities in technology and production for the reconstruction of Japan and the elevation of the nation’s culture.
3. To apply advanced technology to the life of the general public.

Note Sony’s Management Guidelines:

1. We shall eliminate any unfair profit-seeking, persistently emphasize substantial and essential work, and not merely pursue growth.
2. We shall welcome technical difficulties and focus on highly sophisticated technical products that have great usefulness in society, regardless of the quantity involved.
3. We shall place our main emphasis on ability, performance, and personal character so that each individual can show the best in ability and skill.

And finally note, Akio Morita’s comments about Sony in 1976.

“Sony is a pioneer and never intends to follow others. Through progress, Sony wants to serve the whole world. It shall be always a seeker of the unknown… Sony has a principle of respecting and encouraging one’s ability…and always tries to bring out the best in a person. This is the vital force of Sony.”

It appears that Sony today has lost the compass of its enduring purpose. Having achieved, in Collins’ terms, the Big Hairy Audacious Goal, of being the company most known for elevating Japanese national culture and status after WWII and establishing a worldwide brand of quality, Sony no longer had anything but short term, opportunistic strategies. It no longer acted as a leader or with a noble purpose in mind.

A company needs something bigger than itself to think about and live for, otherwise, the inherent selfishness will lead the company down a path to irrelevance and ruin.

One other note. Collins points out that the leaders of great companies are Level 5 Leaders. These leaders are characterized by two things. The first is a profound personal humility. Leadership was not about them, but about serving the company and enabling it to become what it needed to be. The second is the grim will to do the right thing.

Consider the tone of Thomas Hesse, President of Sony’s Global Digital Business, in an NPR interview. “Most people, I think, don’t even know what a rootkit is, so why should they care about it.” Does this sound like the tone of a leader who is leading his company with the original enduring purpose and values of the customer? Does this sound like the statement of a Level 5 Leader? Does this sound like a leader who is deeply committed to doing the right thing?

Time will tell. But sadly, from where I sit, Sony seems to be making the slide from Great to Good to Gone.

1. What is the enduring purpose of your company? How does it guide you strategically?
2. What are the enduring values of your company? How do they guide you or are they just posters on a wall?
3. Are you humble in relationship to your colleagues and customers? Do you seek to serve or be served? Read II Corinthians 4:5
4. How committed are you and your company to doing the right thing?