Idei’s Struggles in Europe
At Sony, Idei’s first job was to prepare invoices for international customers. After 18 months, however, he left Sony to attend the London School of Economics. There, Idei struggled because of his poor English skills, and he soon left to attend l'Institut des hautes études internationales in Geneva, Switzerland. His French was also not very good, but through determined studying he soon mastered both French and English.
Idei eventually rejoined Sony to work at its Switzerland offices. At that time, the company was striving to make its mark in Europe and become a global corporation. Idei’s ability to improvise helped the 31-year-old to establish Sony’s presence in the European market. He was also instrumental in setting up Sony’s French subsidiary in Paris.
In Europe, Idei learned to work with people from diverse cultures and established his talent for solving problems and creating new ventures.
Idei’s Journey to Sony’s Board
After 10 years in Europe, Idei returned to Tokyo in 1970 as manager of Sony's European operations. In 1979, he was appointed general manager of Sony's Audio Division. His marketing experience in creating new enterprises in Europe proved useful in marketing a then-new Sony gadget, the Walkman.
In 1985, Idei took the high-stakes risk of introducing the Sony eight-millimeter camcorder to the world. He was then made senior general manager of the Home Video Group in 1988, and was instrumental in successfully marketing the company's CD and VCR products. In 1989, Idei was made a member of Sony’s Board of Directors.
Idei’s Rise to the Helm
After reaching Sony’s board, there was no stopping Nobuyuki Idei. In July of 1990, Idei was appointed senior general manager of Sony's Advertising and Marketing Communication Strategy Group. Soon thereafter, the DVD war started when Sony’s rival Toshiba joined hands with Time Warner. At that point, Sony's sales shrunk by 6.5% as the strong yen made Japanese products expensive overseas.
Sony’s then-president Norio Ohga, who was thinking of retiring, reorganized Sony's corporate structure into eight internal companies. Idei was appointed senior general manager of Sony's Creative Communication Division, and in June 1994 was appointed managing director of Sony — fifteenth among Sony's top executives. Ohga had Idei in his mind as his possible successor.
Idei was soon put in charge of promoting Sony's DVD format. At this time, the strong Sony Pictures operation that the company hoped for had not been built. The company’s stock, which had peaked at $63.25 per share in November 1994, fell to the low 40s when the company announced that it was taking a loss of $3.2 billion dollars on its motion picture division.
Idei, who was thought by many to be too far down the management ladder, was appointed president of Sony on March 22, 1995. Ohga reportedly selected Idei because he was cosmopolitan, at ease with foreign businessman, fluent in English, and possessed outstanding marketing skills. In April of that year, Idei was named president and COO of Sony Corporation, while Ohga became CEO and chairman.
Trying to make the company more efficient in a period when Japan's economy was in a recession, Idei introduced sweeping changes to Sony's corporate structure. He was made CEO in 1999, the year when Sony announced that it would cut 20% of its factories and 17,000 jobs by 2003.
Idei became chairman of the board in May, but the scenario hadn’t quite changed in the way some had hoped it would. Though on January 24, 2000, Sony stock was valued at $275 per share (five times what it had been when Idei became president), the company grossed “only” $49 billion, down 5.5% from the previous year.
By August 11, 2003, Sony's worth had shrunk to $61 billion, and Idei received most of the blame for the poor results. In October 2003, Idei announced that Sony would cut 20,000 jobs, including 7,000 in Japan, and would outsource assembly work to countries with lower wages.
Awards and Criticisms
- Idei was designated an Officier dans l'ordre national de la Légion d'honneur by the president of the French Republic in 1998.
- In 2003, Fortune magazine named Idei the second most powerful business leader outside of the United States.
- In January 2004, BusinessWeek online named Idei one of the world's worst managers (considering the losses the company reported at the time).
Nobuyuki Idei played a key role in moving Sony into the digital age and developing Sony's design and brand image around the globe. In 2005, Idei stepped down to be replaced by Howard Stringer, the current Chairman and Chief Executive Officer of Sony Corporation.
