Centre for Performance-led HR

Lancaster University Management School

Bailrigg
Lancaster
LA1 4YX, UK
Tel: +44 (0)1524 510752
Fax: +44 (0)1524 510760

www.lums.lancs.ac.uk/research/centres/hr/

Lancaster University Management School

Centre for Performance-led HR
Case Study Series
SONY EUROPE - THE LEADERHIP JOURNEY
CASE A: A HISTORY OF CHANGE
CASE B: DELIVERING CHANGE
and TEACHING NOTES

Werner Braun, PA Consulting Group

Mark Wilcox, Sony Europe
Paul Sparrow, Centre for Performance-led HR, Lancaster University

Lancaster University Management School, Centre for Performance-led HR Case

Study No 2007-01
http://www.lums.lancs.ac.uk/research/centres/hr/

Copyright © 2007, Werner Braun, Mark Wilcox and Paul Sparrow. All rights reserved.
Do not quote or cite without permission from the author

Case studies are produced by Lancaster University Management School and are to be
circulated for class discussion purposes only. The case studies may be published in due
course, in a revised form and should not be quoted without the authors’ permission.
 1

SONY EUROPE - THE LEADERHIP JOURNEY

CASE A: A HISTORY OF CHANGE

Werner Braun, PA Consulting Group

Mark Wilcox, Sony Europe
Paul Sparrow, Centre for Performance-led HR, Lancaster University

Keywords: Management of change, Leadership

How to quote or cite this document

Braun, W., Wilcox, M. and Sparrow, P.R. (2007). Sony Europe – The Leadership Journey.
Case A: A History of Change. Lancaster University Management School, Centre for
Performance-led HR Case Study, Number 2007-01,
available: http://www.lums.lancs.ac.uk

Introduction

Mike Tsurumi arrived in Europe in January 2002 in order take up his appointment as president of Sony
Europe in April 2002. Although he was widely experienced within Europe he was the first Japanese to
head this position in Europe, ending the reign of European CEOs. Mike knew that the mandate given to
him by Sony Corporation was a difficult one. Throughout the 1990s Sony Europe had attempted to
consolidate its business operations on a pan-European level with a focus on cost saving and
streamlining its distribution processes. The results had been disappointing. With a rapidly changing
business environment, Sony Corporation knew that it was vital for the company’s long-term survival to
reduce costs dramatically. The company also needed to become more customer focused, reducing its
pure reliance on product leadership. Looking at the way Sony’s operations within Europe had
developed, and how previous attempts to move towards a truly pan-European organisation had under-
performed, Mike Tsurumi was wondering whether he would succeed in communicating to Sony’s
European executives the urgency for change. Would he be able to make the executive ”buy into” the
necessary changes ahead, not only intellectually but also emotionally?

The development of the operations of Sony Europe

Sony Europe is the regional consumer electronics and professional equipment and services
organisation for Sony Corporation of Japan. Sony has operated in Europe since 1960 when it set up a
satellite office in Switzerland to service the whole of the European marketplace. In the 1970s, individual
 2

sales companies were set up in Europe – either by acquiring an existing independent distributor, or by
setting up a new operation, hiring European staff to run it. This was followed by the establishment of
Sony manufacturing operations in various European countries starting from the mid-1970s (Kashani
and Kassarjian, 1998a). The country managers were often the former heads of Sony’s distribution
companies in those countries and they were granted considerable autonomy in launching innovative
products developed in Japan. As a result, country managers viewed their Sony operation as a private
kingdom, in which they would act as “country kings”, a term coined by Jack Schmuckli, former
Chairman and CEO of Sony Europe (Kashani and Kassarjian, 1998a).

In 2002 Sony employed over 13,300 employees in Europe working across 23 countries, concerned with
all sales, marketing, distribution, research and development, logistics and manufacturing. The annual
turnover peaked in Europe in 2000 at approximately €10 billion.

A rapidly changing business environment

Since the 1990s the market for consumer electronics in Europe has been evolving rapidly. Prices and
margins are coming under increasing pressure. By 2004 the electronics industry was faced with double-
digit price drops regarding products such as DVD recorders, digital cameras, flat-panel TVs (Financial
Times, 2005). From a product development perspective, Sony has come under tremendous pressures
to reduce costs worldwide. This is due to both the rapid rate of technological change and the changing
geography of production. Growing commoditisation – the digitalisation of nearly every electronic device
from audio devices, TVs, mobile phones, cameras – has also lead to shorter lead times for replication
of products by competitors. Further pressures to cut costs can be linked to the increase of outsourcing
business models in the electronics industry. On the sales side, large retail chains and cross-border
buying groups in Europe have increased power. Furthermore, we now see greater consumer price
transparency Europe-wide as a result of growing internet-trade. The changes in the sales and
distribution structure increasingly put Sony’s country organisations in direct price competition to one
another. At the same time the autonomous nature of the country level organisations mean that these
organisational entities are fighting over product allocation. Many country organisations were running
their own warehousing and distribution system. This was further aggravated by the fact that until 2003
country managers’ performance was rewarded according to the country organisation’s profit & losses,
country level volume, and country level delivery targets. This led to high inventory levels and lack of
cooperation on product availability.

So, when Mike Tsurumi took office in 2002 he was well aware of the rapidly changing business
environment for Sony Europe and the pressure it would face. There was an urgent need to take action.
He met with the European Executive Committee (EEC), Sony’s most senior management team.

Mike Tsurumi knew that the intellectual argument for change was clear. For decades Sony
differentiated itself from its competition through its product leadership. The company was and is known
 3

for its innovation and engineering excellence. The market leadership proposition is built on the strength
of the product. This has always allowed Sony to command a price premium based on the product being
technologically advanced, containing more features than competitors, being smaller, lighter or just
better designed than those of the competition. Sony does not try to compete by being the lowest cost
supplier or the fastest to deliver or the most integrated into the customers supply system. Nor do they
deliver services that 'wow' the customer in terms of customisation or specific solutions.

Yet, aggressive competition from Korea, China and other manufacturing operations throughout Asia
was becoming a threat to Sony's profitability in many of its established product areas. Not only were
these new entrants competing on price, increasingly they were matching product specifications at lower
cost. In the European business there were increasing demands from customers, both consumer and
business, to develop more sophisticated support and service levels. Mike knew that Sony Europe was
currently not configured to offer customised products and services and therefore to compete effectively
in these areas.

In addition, new technologies were being developed that would replace some of the areas Sony was
traditionally dominant. For some of these new technologies, such as plasma TV, Sony has limited
competencies, and therefore needs to buy the technology on the open market and integrate it into its
products. Unfortunately competitors are also able to buy these technologies in the same market place.
The brand proposition of Sony in these new product areas was not strong enough to command a
premium.

Mike Tsurumi's fear was that with competition catching up on product leadership, Sony could drift to a
position where it was not able to command a premium on product alone and additionally might not offer
value in operational effectiveness or customer intimacy. There was a clear fear that Sony might get
‘stuck in the middle’. A change needed to be driven to compete in new areas for Sony.

Mike Tsurumi’s core objectives of the new business vision were then not to re-invent Sony in Europe
but to create a quicker process of evolution. SGA (sales and administration expenses) had to be
reduced drastically. Furthermore, the company needed to become a more responsive organisation and
able to offer higher value services and more flexible solutions, particularly in the business and industrial
areas. If value was falling in the area of product leadership then improvements needed to be made in
the areas of customer intimacy and operational excellence. Sony was not configured to do this and it
would require a major change process to achieve it. However, in contrast to previous senior
management thinking within Sony Europe, Mike Tsurumi was emphasising that “structure was not the
answer”.
 4

A continuous process of change

The problem with change at Sony Europe is that some of the problems have invariably been tackled
before, with more or less success. History cuts across thinking in the present and Mike had to make
sense of this history for people in the current context. There were deeper waves of change taking place
that also reflected the continued internationalisation of the business. Two historical eras had left their
inheritance on the problems Mike Tsurumi faced.

The era of Jack Schmuckli and Ron Sommer (1986 – 1998)

The perceived need for stronger regional coordination for Sony Europe dates back to 1986. By then the
number of sales operations had grown to 12. Additionally there were 6 manufacturing facilities across
Europe. The newly appointed CEO and Chairman of Sony Europe GmbH at the time, Jack Schmuckli
(a Swiss national) initiated the set up of a European headquarters in Cologne, Germany. The German
market represented the largest European market for Sony in Europe. Through the set up of pan –
European committees, managerial decisions were intended to be steered at a European level. One
such committee was the Consumer and Marketing Committee where common distribution strategies for
Sony’s consumer products were developed (Kashani and Kassarjian, 1998a). With the recession in the
early 1990s, the focus of pan-European coordination emphasised consolidation and cost savings.
Faced with declining prices and profit margins, the industry was rationalising its manufacturing
operations. The increasing number of chain stores, country-based and pan-European buying groups in
the market meant that distribution strategies needed to be harmonised on a European level. The huge
majority of Sony’s European accounts were present in more than one country and chain stores and
buying groups were shopping around for “best deals” playing country sales organisations of Sony out
against one another (Kashani and Kassarjian, 1998a). Also, it was felt that Sony Europe should
increase its influence on Sony Japan. It was felt that rather than being represented through individual
country organisations, in order to increase their influence, the European organisations should speak
with “One Voice” to Sony Japan (Kashani and Kassarjian, 1998a).

Under the leadership of Ron Sommer, former president of Sony USA, Sony Europe’s organisation had
been restructured. Jack Schmuckli had brought in Ron Sommer to head the newly created COO
position within Sony Europe. A new structure was formally announced in October 1993 termed the “Big
Bang”. The restructuring efforts were completed by early 1994. Its main focus was the creation of
several new headquarters functions which changed the role of country management significantly:

Consumer Marketing Europe (CME) – Established to consolidate European marketing activities. Five
product group heads would be responsible for line-up decisions, pricing, advertising and promotions,
purchasing and inventory management – all areas previously dealt with my country level management.
 5

Consumer Sales – The region was split into four territories each headed by a Regional Sales Director
responsible for all sales and dealer relationships in their respective territories.

Support Operations – Furthermore, IT, Logistics and Customer Service were put into a newly
established headquarters function.

Two areas were perceived to be crucial in terms of how they were addressed by the reorganisatio: line-
up decisions and logistics, including inventory management. The idea was to replace individual country-
by-country line-up deals with one European line-up decision. Similarly, by centralising logistics Sony
Europe hoped to significantly lower inventory levels (Kashani and Kassarjian, 1998a).

In an interview Ron Sommer had expressed his hope the “Big Bang” restructuring would eventually lead
to cutting SGA (Sales and general administration expenses) from a level of 16% down to 10% of sales
(Sony Europe (A), 1998).

Evidently the new structure curtailed the areas of responsibility and the level of influence of country
management significantly. The product managers of the individual countries were no longer directly
involved with marketing decisions, including line-up decisions with Tokyo. Instead, they were put into a
direct reporting relationship with Consumer Marketing Europe (CME).

Indeed, there was widespread resistance by the “country kings” who uttered doubts of whether the new
organisation was really necessary (Kashani and Kassarjian, 1998a). Furthermore, Tokyo was
concerned that the new bureaucratic layer created by the new structure would distance the product
groups from those closest to the markets. So from its very beginning the “Big bang” project was facing
problems of “buy in” both from the country management level and from Sony Corporation in Tokyo.

Moreover, another problem, emerged. Because of the way Sony Europe had developed, there was
clearly a shortage of qualified managers to take on the more strategic roles created by the
reorganisation. At this point in time, talent management within Sony Europe (as in so many other
organisations at the time) was not yet seen as being strategically important. The McKinsey “War for
Talent” analysis (Michaels, Handfield-Jones and Axelrod, 2001) that brought the issue of talent
management centre stage was still some years away.

In October 1994, the VP of Consumer Marketing Europe (CME) resigned from his post after less than a
year of his appointment (Kashani and Kassarjian, 1998a). In November 1994, Ron Sommer appointed
Shin Takagi, previously the country manager UK, to VP-CME. This decision was taken despite the
knowledge that Takagi had openly criticised the central role of CME and had questioned the feasibility
of a pan-European marketing function. Upon his appointment, Takagi shifted HQ functions back to
country management. This also included inventory management, where CME was to act as a
 6

coordinating force, but country level management assumed total responsibility (Kashani and Kassarjian,
1998b).

In 1995, Ron Sommer resigned to take on an external position. In December 1998, Jack Schmuckli
retired as Chairman & CEO of Sony Europe. In 1999, Otto Zich was appointed Chairman & CEO of
Sony Europe.

The era of Otto Zich (1999 - 2002)

Under the leadership of Otto Zich, there was a renewed effort to re-organise the business and to take
advantage of some of the obvious economies of scale of operations across 23 European countries. A
research project was commissioned using an external consultancy. As a result a comprehensive pan-
European re-engineering programme was started in early 2000, to reduce the many duplicated
activities across each of the sales country operations and across the existing business groups. The
project was resourced using a leading international consultancy firm working alongside Sony internal
managers. After many false starts and frequent changes to the original scope the project was
terminated in late 2001. Much of the value of the re organisation was lost due to the constant
compromises made when local needs and centralised requirements came into conflict.

The project was never completed and the failure to implement it was widely seen as a victory for the
local country operations who had resisted attempts to integrate them into European Business Units.
There was an enduring feeling, acknowledged at the top level within the business, that if the European
management team asked for something to be done, a local manager could and would, play lip service
to the request. Then if the central initiative failed, there would be no consequence or sanction taken
with the local non co-operative manager.

In April 2002, Otto Zich was reassigned to another Sony Europe role.

The era of Mike Tsurumi (2002 – 2004)

Ending an era of European leadership, as of April 1, 2002, Michaiki (Mike) Tsurumi, took over as
president of Sony Europe (this was the first time the title “president” was used within Sony Europe).
Since its origin of operations in Europe the top executive of Sony had always been either European or
American nationals, reflecting Sony Corporation’s belief in the localisation of management.

Under the leadership of Mike Tsurumi, the European Executive Committee (EEC) proposed a new
organisational structure for Sony Europe. The EEC comprises as members the head of corporate
planning; head of HR; head of Engineering, Customer Service and Manufacturing division (EMCS);
head of the professional business; head of sales; head of marketing as well as the President himself.
 7

To these senior executives it was clear that Sony Europe needed to reposition itself against the
stiffening competition. The SGA percentage needed to be reduced, a percentage far higher than other
Sony regions and most of the current competition.

The consistent themes underlying all past change management efforts had been:
 Creating “One Voice” to Japan and the market place;
 Pan – European infrastructure harmonisation;
 Reduction in SGA overall.

In Mike Tsurumi’s time these themes were compounded by the evolving hyper-competition in the
consumer electronics industry. While past change efforts had been addressing exactly these issues,
they had all failed! Mike realised that Sony finally needed to create some synergy across the group,
reduce unnecessary duplication of work and increase the efficiency of the operations by sharing some
centralised resources.

Additionally, Sony Europe needed to become more customer responsive and needed a real increase in
the volume of sales in some new product areas and also needed to phase out products which had
come to the end of their lifecycle (e.g. Cathode Ray Tube TV and computer monitors).

To start the process of organisational renewal, Mike Tsurumi started with an organisational
restructuring to reflect European business. This involved the creation of pan-European platforms in the
functional areas of HR, Finance, Sales, Marketing and infrastructure. An example of this new structure
for European Marketing is given in Figure 1. This in effect was an attempt to reduce complexity of the
old structure, where these functional areas were replicated within each business division.

Figure 1: New structure of European Marketing introduced during the era of Mike Tsurumi
 8

Key:
HAVE= Home Audio Visual Euroep
PAE = Personal Audio Europe
EMCS = Engineering Manufactrure Customer Service, Europe
NACS = Network Applications Content Solutions,
CRM = Customer Relationship Management
BG = Business Group

Until early 2002, there were three main divisions: Consumer electronics sold to the public, business and
professional broadcast equipment and services sold to key professional customers and in addition
original equipment manufacturing products sold into the industrial markets. These products and
services were provided by group businesses, called AV/IT (Audio Visual / Information Technology),
BPE (Broadcast and Professional Europe) and CNCE (Core-Technology Network Company Europe). In
the new organisational structure local sales companies in every country were working under the
guidance of the sales platform (a central office attempting to coordinate sales on a pan-European level).
The new structure had two main focuses of business, Consumers and Business customers. The other
two divisional structures were to cover the supply chain: Engineering, Customer Service and
Manufacturing (EMCS) and Corporate Services. In addition there were a number of corporate functions
based in the new European headquarters in Berlin 1 , as well as business group head offices in
Amsterdam or Basingstoke.

The new structure was announced in June 2002 at the European Management Conference held in
Brussels. It was evident to Mike Tsurumi and the members of the EEC that a change in the
organisational structure was only the beginning and was not the answer to the problems Sony Europe
was facing. True change required a new way of working across the operations within Europe. It
required a new mindset within the management, a change in managers’ thinking and behaviour. Given
the many change management projects the company had gone through over the last years, there were
clear signs of change fatigue.

Two trains of attitude could be observed. These attitudes were embodied by the two statements, not
attributed to any individual but often heard on management meetings:

"We are changing all the time, its nothing new, here its part of the way we work"

and

" If you keep your head down and stay quiet, carry on as normal it will all blow over, we've seen these
European change projects come and go, this will be the same"

1
Years after the German reunification, Sony’s European headquarters was relocated from Cologne to Berlin. In
2000, the Sony Centre – designed by the architect Helmut Jahn – was opened in a high profile ceremony.
 9

Mike Tsurumi knew that he needed to address both the general signs of change fatigue and the
traditional but specific change resistance by country level management. Also, he felt that whilst most
managers understood and accepted the necessity of the new structure, they did not fully understand
the magnitude of the threat Sony was facing in its rapidly changing business environment. For the
change effort under his leadership to be successful it was imperative to create not only an intellectual
but also an emotional “buy in” at all levels of Sony Europe. Rather than the change effort being a top-
down imposed grand masterplan, it was necessary for it to turn into a true hearts and minds campaign.
In order to win hearts and minds an organisation needs its managers to first identify with the goals, then
to actually internalise the requisite changes into their own way of thinking and behaviour, to show
commitment in terms of emotional engagement, and to feel a sense of shared psychological ownership
of the change programme (Sparrow and Cooper, 2003). Of these, what was lacking and needed was an
effective means to communicate the urgency of change and to create emotional “buy in”!

Task

As internal consultants to Mike Tsurumi and Sony’s European Executive Committee (EEC) you have
received a request by Mike Tsurumi to come up with a plan to design and implement a change
management initiative to ensure the success of the newly proposed organisational structure. The
initiative needs to be completed in nine months. Sony Europe is prepared to set aside a significant
amount of resources for your project. You can opt for the help of external consultants and/ or draw on
internal resources. As an initial task to see whether you are really up to the challenge, Mike Tsurumi
has asked you and your team to present to him your plan (including analysis of situation, different
options for action, business case, implementation plan and a clear idea and ways of how success of
your initiative can subsequently be proven). A lot of work needs to be done – Clearly identifying the
external and internal challenges Sony Europe is faced with, addressing these challenges through an
appropriate change management strategy and so on…

You should present your way forward making use of appropriate analytical frameworks. As an initial
guide to solving this task you may focus on the following questions.

1. What are Sony Europe’s key external and internal challenges addressed in the case?

2. What appear to be some of the underlying assumptions and beliefs within Sony in terms managing
senior executives? What possible explanations do you have for these assumptions and beliefs?

3. Why have previous change initiatives failed and what steps does the company need to take to make
the future change programme a success?

4. What possible options do you have in order to address these challenges?

 10

5. What are the crucial steps in the design stage you need to take in order to assess in the future that
your change management initiative was a success?

6. What does the implementation stage of your change management initiative look like? What
resources do you opt for?

7. How would you know that your initiative was a success?

References

Financial Times. 2005. Sony still gloomy on electronics unit. April 28, 2005

Kashani, K. and Kassarjian, J.B.M. 1998a. Sony Europa (A). IMD Working paper, IMD-5-0488

Kashani, K. and Kassarjian, J.B.M. 1998b. Sony Europa (B). IMD Working paper, IMD-5-0489

Kashani, K. and Kassarjian, J.B.M. 1998c. Sony Europa (C). IMD Working paper, IMD-5-0490

Michaels, E., Handfield-Jones, H. and Axelrod, B. 2001. The War For Talent. Boston, MA: Harvard
Business School Press.

Sparrow, P.R. and Cooper, C.L. 2003. The Employment Relationship: Key Challenges for HR. London:
Butterworth Heinemann.
 11

SONY EUROPE - THE LEADERHIP JOURNEY

CASE B: DELIVERING CHANGE

Werner Braun, PA Consulting Group

Mark Wilcox, Sony Europe
Paul Sparrow, Centre for Performance-Led HR, Lancaster University

Keywords: Management of change, Leadership

How to quote or cite this document

Braun, W., Wilcox, M. and Sparrow, P.R. (2007). Sony Europe – The Leadership Journey.
Case B: Delivering Change. Lancaster University Management School Case Study,
Number 2007-01, available:
http://www.lums.lancs.ac.uk

Introduction

After an assessment of the industry challenges Sony Europe was faced with, and an assessment of the
history of change within the company and the internal challenges presented (see Sony Europe – The
Leadership Journey Case A: A History of Change), Mike Tsurumi committed the HR Europe group to
provide a means of building deep understanding and emotional commitment to his change efforts and the
re-organisation of the company. “The Leadership Journey” was the response created out of the analysis
of the current situation and the need to carry employees and senior staff along with the changes and to
make them feel part of the process. Rather than the change effort being a top-down imposed grand
masterplan, it was necessary for it to turn into a true hearts and minds campaign. In order to win hearts
and minds an organisation needs its managers to first identify with the goals, then to actually internalise
the requisite changes into their own way of thinking and behaviour, to show commitment in terms of
emotional engagement, and to feel a sense of shared psychological ownership of the change programme
(Sparrow and Cooper, 2003). Of these, what was lacking and needed was an effective means to
communicate the urgency of change and to create emotional “buy in”!

Analysis of needs

Having received the mandate from Mike Tsurumi, HR Europe started by conducting an analysis of needs
regarding the envisaged change process. This involved in-depth interviews with members of the two top
 12

tiers of executives within Sony Europe. The first tier comprises twenty senior executives; the second level
executives of approximately 30 managers cover major country roles and European business unit heads.
While interviews were conducted with all managers from the first tier, interviews were carried out with a
smaller sample of the second managerial level.

The interviews showed a remarkable range of understanding of the vision regarding the change and a
greater range of views on how this change would be implemented.

It emerged that the major challenge for any initial event with this top executive team would be in aligning
their views with the views of the EEC, building a strong team at the top level and to generate a strong
commitment to the change process. The interviews showed that there was no depth of relationship within
the top management tier. It appeared that the top executive team had not met in one room together ever
before except to hear presentations from Japan. They had only met to make decisions in smaller boards
or for specific single-issue projects. As a European executive group there was no mandate to meet or
discuss strategy.

As a consequence, it was of little surprise to find in the interviews with the second tier of executives a
sense of perceived lack of consistency in behaviour and views of the top team regarding the change
process within the organisation. There was also a perceived mix of levels of commitment to the changes
ahead.

Evidently, this inconsistency of the top team was seen as a major obstacle to achieving commitment to
change from employees further down the hierarchy. With inconsistent messages sent from the top, these
senior managers simply did not act as appropriate role models to commit the next management level to
the change process.

From this analysis, HR Europe proposed that a change management support programme would need to
address the following objectives:

 To build a depth of personal relationships within the top team;

 To develop a deep understanding of the challenges and opportunities the new organisation and new
vision of change presented;
 To explore the behaviours and leadership styles that would create success in the new organisation;
 To create real opportunity for dialogue about the future of Sony Europe and the role of the top team in
driving forward the business.

Furthermore, Mike Tsurumi felt that the change management support programme should aim to
encourage an atmosphere of trust and honesty and to remove the veneer of politeness and acquiescence
that often showed in management meetings. Tsurumi wanted people to "speak the unspeakable" and to
openly and honestly disagree rather than pay lip service to concepts and project plans.
 13

These objectives were used as a starting point for the initial design. Further refinement of the programme
was made after taking into account the input from the participant interviews.

HR Europe proposed that their change management support programme should be based on an Outdoor
Management Development (OMD) programme, applying an experiential learning approach. The objective
was to target at first the 50 most senior executives within Europe, and eventually cascade participation at
the programme down the hierarchy to less senior management levels.

Setting up the OMD design team

In order to ensure the use of cutting edge knowledge, and to ensure a close fit between the OMD
programme and Sony’s corporate culture, HR Europe drew on both internal and external resources when
setting up the OMD design team and when commencing the actual design process (see figure 1).

Internal Sony expertise would shape the format whilst using external consultants and training providers to
test and enhance the design. This process was carried out both in real time meetings and in an online
private project space created on a web collaboration platform owned by Sony but accessible to outside
users. This asynchronous collaboration tool facilitated work within the multi-national team working across
four time zones.

Furthermore, the programme needed to reflect the international nature of the participants and the
organisation. This needed to be considered both in the selection of members for the design team and for
external speakers presented in the actual event. Design team members included Sony Europe’s Director
People & Organisation, an American change management consultant, a consultant from a British OMD
training organisation and a British communications and learning consultancy. In addition the external
management speakers used were from Sweden, Singapore, Britain and for part of the early design a
management guru from the Netherlands.
 14

Figure 1: The OMD design team – Getting the mix right

The design process was iterative. At regular intervals the core team tested the draft design with internal
business managers for relevance. External sources were used to give additional input to the process. The
iterative process allowed for the inclusion of emerging needs into the final design.

Enhancing the effectiveness of the OMD programme

It was evident to HR Europe that if not properly designed, an OMD activity could easily slip into just “a fun
time away from the office” for participants without realising the objectives set by the initial analysis of
needs. On the other hand, if designed appropriately, it could turn into an intensive and memorable
learning event. In order to achieve this, it was understood that the event would need to be tightly
connected to real business issues Sony Europe was in need to address. Furthermore, it needed to be an
intense and challenging, out of the normal experience for managers, encouraging self-facilitation and self-
review based on business critical issues. One of the real benefits of OMD is that the participants are out
of their normal work comfort zone and this has some psychological effects on their openness to learning.
It was further realised that the use of metaphors would aid in enhancing the intensity of the experience as
well as in facilitating the learning process of participants.

Metaphors are powerful ways to communicate complex ideas and can often communicate at deeper
levels than that provided by factual speech. Especially within the context of change the use of a well-
selected metaphor can stimulate more thinking about the core subject than straight narrative or factual
presentation.
 15

The design team opted for metaphors around which a programme design could be built which could
recreate some of the common stages of change: I.e. recognition that change was needed, creating
alternative futures and choices, creating a sense of urgency, communication of need and direction,
mobilising to action, forcing participants to develop implementation plans, measuring success and
learning capture.
The metaphors chosen needed to create powerful images and frameworks of understanding from the
change process within Sony. Two interlinked metaphors chosen were that of a Leadership journey and by
using the James Bond genre, the creation of a mission to save the world from an evil villain.

The metaphor of a journey is easily accessible and cross-culturally valid and conveys strong messages of
endeavour, route planning, terrain changes, meeting new people, a destination, uncertainly, and
excitement. All of these factors are present in the process of organisational re-newel and provide a
framework to view the process.

In order to increase the strength of the metaphor, it was decided that the OMD programme would take
place in the Swiss Alps, and that the participants would go through a real and concrete journey (covering
60 miles of Swiss mountain terrain).

The language of the journey was used extensively in all the communications associated with the
programme and in the continuing change implementation. As can be seen from figure 2, key terms in the
change process were adapted to the journey metaphor. It has since become the de-facto image of
change in Sony Europe.

Figure 2: Adaptation of key terms to the chosen “journey” metaphor

 16

The use of the journey metaphor allowed a great deal of scope for creative design and the opportunity to
make strong links directly back to the change process continuing in the business. The idea of a journey
suggested a starting point and choices, not a final destination or event. This was an important perception
to build and maintain.

The additional metaphorical layer of a “Mission to Save the World” created some context for the journey
to take place and for executives to be moving around the Swiss Alps. This was provided by a secret
agent story line introduced in the early part of the programme. The mission was a vehicle to communicate
the urgency of change, give direction, mobilise action and force implementation plans. Furthermore, it
facilitated the introduction of many external elements such as logistics problems, transport methods,
mountain top searches and external expert speakers. Besides, given the international and cross-cultural
mix of the participants, the James Bond genre was chosen for its wide international recognition. This
allowed for the injection of some memorable locations and challenging team projects as well as place the
whole experience into an enjoyable context. The James Bond characters used were M and Miss
Moneypenny (both were professional actors shot in vignettes and shown as video links to the
participants).

The mission embedded into the content of the programme led the participants to clues and descriptions of
places they needed to visit. In this way the event was unfolding before them rather than going through a
pre-determined plan. The experience was one of taking part in some real live event, changing and
responding to new information and different choices the group could make. The only information
participants would have would be what they discovered on their journey.

Recreating some common stages of change, the story line and scenario created an initial need to change
or take action but in a way that was not so transparent that the participants could immediately as a group
agree on the way forward. Throughout the mission references were built in to the programme to enhance
the metaphor. The evil villain within the mission story line and who wanted to take over the world was
called 'Nino Sapac' - this was an anagram of Panasonic - one of the traditional competitors of Sony.
Everything possible was used to make links to Sony. The successful completion of the mission required
small group work and close co-operation whilst working in separate areas of the local terrain -
isomorphicaly matched to the business situation. Success on the mission and in the event would only
come from the initiative, understanding and co-operation of all the participants. This was again a clear
metaphor for the behaviour that would be required to be successful in the real challenge of change
implementation in Sony. The main stages of change and the linkage in the story line and design of the
workshop are mapped out in table 1.

The design team knew that it was not enough to replicate a change process through the use of
metaphors. The Leadership journey needed to be tightly connected to the real business issues Sony
Europe was facing. Also, it should have a learning impact on each individual and the perception of their
leadership role in the context of change. The entire programme of the Leadership Journey was built on
 17

several threads (namely: the physical journey, the change model, the business change journey and a
personal leadership journey) which needed to be tightly connected in timing and activity through
programme delivery.

Table 1: Change process steps, OMD design and implications for participants
 18

The physical journey through the Swiss Alps and mission combination created lots of opportunity to
engineer activities to highlight some of the most common change model stages (see table 1). The
business change journey issues would be addressed either when external experts gave input to the group
or when there was dialogue sessions amongst the participants. The personal leadership journey was
catered for in the team activities, the dialogue sessions and the learning capture activities that each
person was asked to complete in the evenings of the project. Learning capture activities were designed to
stimulate reflection and learning, they were carried out in the context of the mission but addressed real
issues relevant to the leadership behaviours in Sony. Each participant was asked to complete the
exercises alone in their own time and then “posted” them into a mobile letterbox completely anonymously.
The data was collated after each event, interpreted and printed into a learning map of each event. The
metaphor continuing with the “Map” of their learning process arriving after each event to individuals’
desks. The Map was a bespoke professionally printed and presented AO size account of their learning
and main messages from the external speakers. Furthermore, activities were filmed and together with the
learning capture results collated on a DVD for later use of the participants. Depending on the success of
the programme, it was believed that participants would use this collated material to disseminate the
objectives, experiences and results of the programme to their colleagues within Sony Europe.

The cross over between the individual Leadership journey threads is shown conceptually in figure 3.
Activities bridge the real physical journey into the change model. Each of these trigger some thinking
regarding how this would affect the Sony business change situation. It was hoped that this would lead to
some effect on the individual's perception of their leadership role in the context of change. This also
closed the loop on the experiential learning cycle.

Figure 3: Connecting the Leadership Journey threads

 19

Delivering the programme

The initial programme took place in the Swiss Alps in October 2002 involving 18 of the most senior
executives. As a result of the success of the first programme additional groups of executives were invited
to attend the programme and there were four events in total running from October until early November
2002.

A specialist support team provided by one of the supplier consortium managed the total logistics of the
journey. The transfer of luggage through to the organisation of safety equipment for specialist activities
like rock climbing was their responsibility.

In order to maximise the effect of the programme on the executives, details of the event could not be
revealed. Invitations sent out to the participants were held deliberately vague. The invitation gave only a
short description of the programme methodology, the event location and facilitation support. It did tell the
participants they would go on a journey but gave no details of accommodation or contact numbers etc. A
balance was attempted between giving enough information so people would attend and having so much
that it seemed routine and predictable.

Upon arrival of the evening of the first day, participants attended a presentation of an industry journalist.
This was an expert on technology of the future and future scenarios. By setting the scene for the next few
years of the global economy he made the participants aware of Sony’s future should the company not
adapt to its changing business environment. The second day started off with a presentation by Mike
Tsurumi, presenting the requirements and rationale of the new structure and the change process ahead
of Sony Europe. His presentation was interrupted by a video satellite simulation. A government official of
an external inter governmental organisation (representing the James Bond character M) was requesting
the delegates for emergency help. This request triggered the time-pressured, high-energy programme
across the five days, involving intensive team-based problem solving, self- and group reflection, scenario
building etc, interlinked with external speakers whose objective was to shake people up, confront them
with the rapidly changing business reality and present them with some of the most cutting edge ideas in
current management thinking.

The facilitation of the business discussions built into the programme was mainly the responsibility of the
executives themselves, with some light interventions by members of the OMD design team.

The external speakers were not formally announced but appeared as specialists brought in as part of the
story line. The content of their presentations and discussions was very clearly targeted at the situation
Sony was currently in or might find itself in soon.

On the evening of the second day, participants attended a presentation by Jonas Ridderstrale, a radical
Swedish Business Professor and author of “Funky Business”. In this presentation he focused on what
 20

business needs to do to grow and retain talent in the new economy and how to energise people to be
innovative inside an organisation. On day three a presentation by Tan Teng Kee focused on Sony’s
competition in the East Asian region. Tan Teng Kee is an entrepreneur who has created business in
China, Singapore, and worked for large US and European business. On day four a presentation was
given by Simon Woodroffe, an English new business entrepreneur. His focus was on achieving the
impossible in business. He runs a chain of businesses in the UK and Europe with lots of innovation. Day
five concluded the programme with final words by Mike Tsurumi.

The journey was designed to be physical as well as mental and needed to contain both team elements
and reliance on individual activity and responsibility. To replicate this the participants took part in activities
along the route that would offer opportunities to work together in small teams and individually. None were
compulsory but the team decided along with each individual who did what and to what degree. The
activities included, sailing small boats, kayaks, climbing, railways transport, mountain bikes, cable cars,
mountain top walks, problem solving on clue trails, map reading, and also the co-ordination of finding their
hotel base for each night.

In one early part of the journey a small sub-team of 6 would need to navigate a lake journey of some 3
kilometres in four kayaks, collecting some clue information from remote parts of the lake, whist making a
rendezvous with the rest of the team via waiting transport in the form of a minibus taxi. Their task was
completely independently organised and self contained, but was part of the success of the whole matrix
of the save the world scenario. In parallel other teams completed other tasks.

The Leadership Journey and beyond

Evaluation of the programme was conducted using a variety of methods. Design evaluation was carried
out with each group at the end of the programme. This took the form of a feedback session in the final
part of the programme on the format of the programme and on specific content issues. The results of this
feedback shaped subsequent iterations of the event.

A second evaluation method was used to survey the total participants of the programme after a
reasonable period of time back in the business. It was decided to wait for the immediate halo and buzz of
the programme to subside and then try to obtain a more meaningful evaluation when people were back in
their day to day roles.

The third method for evaluation of the programme was opportunity interviews with a sample of the
executive groups. This was carried out from the end of the first programme and continued for three
months. In this time a wide sample of first and second level executives were consulted on how they
thought the programme had contributed to the change process.
 21

When Mike Tsurumi looked at the evaluation resulting from the programme he realised that the
programme was overall a success. From the more informal interviews he had heard that a large number
of participants had used the DVD and learning maps to tell their colleagues about the event. Additionally,
the survey had shown that 78% of the surveyed participants thought that the event developed a deep
understanding of the challenges and opportunities for Sony Europe. 70% thought that the event created a
real opportunity for dialogue about the future of Sony Europe and the role of the top team. 57% believed
that they could contribute more to the change process lying ahead of Sony Europe.

On the other hand one figure worried Mike Tsurumi a bit. Only 41% believed that the programme
explored the behaviours and leadership styles sufficiently that will create success in the new organisation.
Did the programme really produce the desired effects of building deeper personal relationships within the
top team? Intellectual “buy in” into the change process had not been the problem. It was more the
emotional “buy in” Mike Tsurumi had been worried about. Had the Leadership Journey really achieved
this? Did the top executive of Sony Europe really change their leadership styles and behaviours which
would result in a truly pan-European organisation which could both reduce its cost-base and additionally
become more responsive, able to offer higher value services and more flexible solutions, particularly in
the business and industrial areas?

Mike Tsurumi had managed to put European structures in place. Overall cost to the business and its back
office had been reduced. E.g. In one project the cost of infrastructure to the business was reduced by 134
€ million in the three years since the Leadership Journey (ahead of schedule and on target with regards
to cost savings). Furthermore, by mid 2004 the SGA figure had been reduced to 17%.

The delivery of change was co-ordinated by a project called Triumphe Europe in four main areas: Growth,
Innovation, Efficiency and Talent. Regular project meetings were set up with Mike Tsurumi and the head
of corporate planning and the six sigma office to track progress on over 200 sub projects under the four
heading areas.

On the other hand, there were no hard measures with regards to changes in executive leadership styles
and behaviours. There was a widespread belief and feeling within Sony Europe that there was a marked
attitude change of people who had participated in the Leadership Journey compared to those that had
just heard about it. What was lacking were quantifiable metrics to back this up. But was it at all possible to
quantify this “softer” side of the Leadership Journey?

The need for metrics on top management’s attitude and leadership behaviour was evident and eventually
this led to drastic changes with regards to how talent management was conducted within Sony Europe
(one of the four areas of Triumphe Europe).

Sony Europe had no history of assessing its senior executives. There was a strong underlying belief and
assumption within Sony Europe that evaluating the leadership quality of senior executives through
 22

rigorous assessment was neither appropriate nor acceptable. It was not politically acceptable to put
executives, some of whom with responsibility in excess of 1 billion €, through similar kinds of assessment
as fresh-out-of-college graduates. The Leadership Journey and the resultant lack of metrics on executive
attitude and leadership behaviour had led to a change in this underlying belief.

As a result, Sony Europe approached Egon Zehnder International (EZI) (a leading search and selection
consultancy with a wealth of expertise in executive assessment) in order to introduce an assessment
process for its senior executives. Bringing in EZI had two major advantages: First, of all the engagement
of a well-known consultancy added credibility of the ensuing assessment process in the eyes of the
assessed executives. Secondly, EZI provided access to external benchmarking data which allowed Sony
to compare their senior executives against top talent in the market.

For each executive the assessment process involved two in-depth interviews with senior consultants from
EZI. The first interview would be conducted by a member of the core team of four partners. The second
interviewer would be from the same cultural background as the executive. Each interview took
approximately 2-3 hours. The second part of the process was to follow up on the executive’s 360-degree
nomination list. This was again conducted by EZI, cross referencing their findings against the reports and
feedback from people the executives had nominated to give feedback. The output was a high-quality
feedback report, delivered verbally and accompanied by a clear written report. The feedback session was
delivered by one of the interviewing consultants and attended by one of the directors of HR for each of
the European business groups.

Within two months of starting the programme, three positions in senior management were reassigned. In
more than one situation it was realised that there was a misalignment of talent, so people with clear ability
and passion were somehow found in roles that did not play to their strengths. As a result Sony became
more sophisticated and more confident with its people succession plans and more willing to act on the
data provided by the assessment (Wilcox and Ensser, 2005).

Looking back at his past years as president of Sony Europe, Mike Tsurumi knew that the Leadership
Journey was considered to be a big success within Sony. The Leadership Journey had backed up the
restructuring process “emotionally”. It had led to far-reaching change projects and it had built commitment
behind these projects. The company was on its way of making a pan-European Sony a reality, SGA
figures were decreasing and the company showed signs of becoming more customer focused.
Furthermore, and perhaps even more importantly, the Leadership Journey had led to changes and
challenges of underlying assumptions and beliefs regarding the management of its senior employees. It
had made these assumptions visible. This was most evident with regards to the issue of talent
management where some of Sony’s culturally embedded taken-for-granted assumptions had been
challenged. Overall, Mike knew that he had taken the right decisions in the last years. However, in
retrospect he was thinking whether the top management engagement programme (the Leadership
Journey) could have been designed and delivered in an even more effective way? Had they overlooked
 23

some of the taken-for-granted assumptions embedded in Sony’s corporate culture? In what way could
these assumptions have been pre-empted, or were their discovery part of the change journey? Would the
Leadership Journey and the entire engagement process have looked different, if Sony Europe had had its
new talent management processes in place before the Leadership Journey? Could they have measured
and tracked changes of the “softer” side of leadership attitude and behaviour in a more effective way?
Had they measured the Return of Investment of the Leadership Journey in the best possible way?

Postscript

In parallel to the events taking place in Sony Europe, fundamental changes were occurring at corporate
level. In June 2005 Sir Howard Stringer was appointed as the new Chief Executive of Sony. Parallels
were drawn to the appointment of Carlos Ghosn at Nissan, where a foreigner was appointed to
successfully revive an ailing Japanese brand. Analysts noted that Sony was searching for the “optimal
corporate structure” and needed to encourage co-operation between its business “silos”. They believed
that by granting independence to operating units the group had sacrificed the benefits of integration and
co-operation (Financial Times, 2005) . Sony also faced a choice as to whether it intended to focus more
closely on the hardware side of the business or pursue an aggressive strategy of hardware-content
convergence. In response to this debate, by September 2005 Sony unveiled its mid-term strategy plan
which outlined a series of restructuring measures over the next three years aimed at bringing the core
electronics business back into profitability, reforming the company’s culture and changing its business
structure (Nakamoto, 2005a). The electronics division comprised more than 60 per cent of Sony’s
revenues, but after three years of losses and high restructuring charges in 2005 this division was
impacting overall profitability, which was reduced from a forecast of Y30 billion ($270 million) in July 2005
to a loss of Y20 billion by September 2005.

The plan was seen as strict but practical. It involved lowering costs and reorganising the group structure,
spinning off or divesting non-core businesses, bringing greater focus to the electronics operations
(Nakamoto, 2005b). 10,000 jobs will be cut by March 2008, split 50:50 between the HQ/ administration
staff and non-administration, and 40:60 Japan to overseas operations. Y200 billion of costs will be cut in
order to establish an operating profit margin of 5% by 2008. The number of product models will be cut by
20% and 15 unprofitable product categories cut. Manufacturing sites will be consolidated with 11
factories closed. The network of Sony companies will be reorganised into five groups, two units and one
division and the loss-making TV unit will continue to be restructured with the closure of product lines for
cathode ray tube sets and the transfer of resources into LCD and rear-projection TVs. Profitability for the
TV unit was set for the second half of 2006.

By January 2006 Sony reported an unexpectedly strong performance in the third quarter, which took
many analysts by surprise. Sales were up 10 per cent and operating income up 47 per cent. It was
concluded that the electronics to entertainment group appeared to be finally on firmer footing and by July
2006, less than 18 months after Sir Howard Stringer's appointment as chairman and chief executive, he
 24

had been able to report improved first quarter profits for the first time in four years (Nakamoto, M. and
Edgecliffe-Johnson, 2006). Other issues were to hit Sony, such as a quality problem with computer
batteries, but with regard to the cultural change process in European operations, it was clear that in the
end, the impetus for radical restructuring came from the corporate changes in the Japanese HQ.
Intellectually, the solution pursued at HQ could have been diagnosed a while back, but the emotional buy-
in to a radical change agenda had already been tackled in the European operations. Did the behavioural
and relational change strategy initiated by Mike Tsurumi at Sony Europe enable successful execution of
the corporate strategy? As Sir Howard Stringer noted when announcing the mid-term strategy: “… it is
imperative that we deliver results, keep our promises, and achieve our targets at each milestone”.

Task

Looking at the Leadership Journey and its resultant outcomes…

1. How do you evaluate the Leadership Journey? Reflecting on it post hoc, what are key lessons learned?
From your perspective today, what could have been possible improvements in the design, implementation
and assessment stage?

2. What are the lessons with regards to culturally embedded, underlying assumptions and beliefs about
senior management at Sony Europe? How has the history of change programmes shaped the Leadership
Journey?

References
nd
Financial Times (2005) The corporate world’s constant midlife crisis. Financial Times, 22 September,
p. 12
Kashani, K. and Kassarjian, J.B.M. (1998a) Sony Europa (A). IMD Working paper, IMD-5-0488
Kashani, K. and Kassarjian, J.B.M. (1998b) Sony Europa (B). IMD Working paper, IMD-5-0489
Kashani, K. and Kassarjian, J.B.M. (1998c) Sony Europa (C). IMD Working paper, IMD-5-0490
nd
Nakamoto, M. (2005a) Investors to keep a close eye on Sony strategy. Financial Times, 22 September,
p. 17.
rd
Nakamoto, M. (2005b) Sony plays safe and sets practical targets. Financial Times, 23 September, p. 18
Nakamoto, M. and Edgecliffe-Johnson, A. (2006) Quality control poser clouds Sony revelry.
th
Financial Times, October 19 .

Sparrow, P.R. and Cooper, C.L. (2003) The Employment Relationship: Key Challenges for HR. London:
Butterworth Heinemann.
Wilcox, M. and Ensser, M. (2005) Talent Management: Walking the Talk. CriticalEye. June-August 2005:
20-24
 25

LECTURE NOTES
SONY EUROPE CASE A - A HISTORY OF CHANGE
SONY EUROPE CASE B - DELIVERING CHANGE
Werner Braun, PA Consulting Group
Mark Wilcox, Sony Europe
Paul Sparrow, Centre for Performance-Led HR, Lancaster University

The two case studies Sony Europe Case A – A History of Change and Sony Europe Case B – Delivering
Change are written at a time when Sony goes through significant organisational and cultural changes. In
March 2005, the Sony CEO and Chairman Nobuyuki Idei was replaced by the first non-Japanese CEO Sir
Howard Stringer. In response to the massive industry challenge the electronics division of Sony is facing,
Idei had set a goal in 2003 to cut $3.2 billion from Sony’s cost structure by 2007, most of it from
electronics. This involves the loss of 20,000 jobs (13% of the workforce), standardising parts, and cutting
the number of global suppliers from 4,700 to 1,000. Analysts predict Sir Howard Stringer will have to go
even further and estimate a further 10,000 jobs to go (Business Week, 2005). In fiscal year 2004 (ending
March 31, 2005) Sony’s core electronics business, which had recently suffered sharp price drops,
realised an operating loss of 34.3 billion yen ($323.6 million).

In their view on Sony Europe’s most recent restructuring, the two case studies take a longitudinal
approach by drawing on the valuable insights raised by three previous IMD case studies on Sony Europe
published in association with the ECCH (Kashani and Kassarjian, 1998a,b,c).

Both of the CPHR case studies touch on a wide array of subject areas within management teaching.
Sony Europe Case A – A History of Change lends itself to being used as a strategy case.

As a strategy case Sony Europe Case A – A History of Change could be used as a basis for industry and
internal resources analysis. The industry evaluation within the case is in fact based on the Treacy and
Wiersema (1995) model and was used by Sony Europe top management in order to communicate the
industry threats the Electronics division is currently facing to senior management within the firm. In
combination the two cases can be used for core HR courses including Strategic HRM, Strategic
International HRM, Organisational Behaviour and Design as well as for a course introducing change
management.

The history of change initiatives and their failings documented in the Sony Europe case studies,
furthermore, emphasise the evolution in management thinking over the last decades: From a Chandlerian
view of “structure follows strategy” (Chandler, 1962) towards a stronger emphasis on the resource-based
perspective of the firm (e.g. Hall and Saias, 1980).
 26

The past change initiatives in the Schmuckli era clearly neglect an analysis of internal resources and their
necessary development in order to create a successful outcome of the restructuring process. This is most
evident with regards to talent management. Furthermore, there is a clear lack of leadership capability
assessment. Evidence for this is also presented in the case study by Kashani and Kassarjian (1998a)
who state that while some of the country managers within Sony Europe had been given positions in the
new “Big bang” structure, by mid 1994, of the nearly 50 different positions, 10 were still vacant. Ron
Sommer reacted by staffing these positions with young and eager managers from within the organisation,
selling them as an opportunity for managers to develop (Kashani and Kassarjian (1998a). On a cultural
note, it seems that the issue of “nemawashi” was neglected or underestimated during the restructuring of
the Schmuckli era, with the result that prior to the beginning of the MBS cases, the firm faces change
resistance both on a country management level as well as a corporate HQ level. As background
information, Ron Sommer resigned from his position as COO of Sony Europe in 1995 and took up the
position of CEO of the newly privatised Deutsche Telekom AG.

The task description at the end of Sony Europe Case A – A History of Change is designed to put students
into the role that HR Europe found itself in, designing and implementing a change management initiative
to support the restructuring process proposed by Mike Tsurumi. The student proposals can then be linked
with Sony Europe Case B – Delivering Change, which contains a detailed description of the Leadership
Journey (a major and very sophisticated management engagement programme). Sony Europe Case B –
Delivering Change is an ideal case to introduce key material on change management e.g. the framework
developed by Kotter (1995) etc.

One of the important outcomes of the Leadership Journey at Sony Europe was a revamping of the talent
management processes, including the management calibration of senior management. Talent
management and senior management assessment could be made a key discussion point in the case,
especially since it can be assumed that an appropriate management assessment at Sony Europe would
have significantly influenced the design of the Leadership Journey, had such processes already been in
place before. The case could, therefore, serve very well as a discussion ground for such literature as the
“War for Talent” (Michaels et al., 2001).

The case could also be used for a discussion on how the “softer” side of change management initiatives
i.e. attitudinal changes in senior managements’ behaviour could possibly be measured. Looking at recent
developments in the HR literature (Becker et al., 2001; Huselid et al., 2005) and recent empirical studies
with regards to HR metrics (e.g. Weiss and Finn, 2005), it becomes increasingly clear that HR functions
need to establish a measurement system capturing leadership capability and competency development.
Not only could such measures be used in order to evaluate the usefulness of management engagement
programmes such as the Leadership Journey for particular managers, but it would also be a cornerstone
in order to establish the Return on Investment of such programmes. This is exactly the area where
 27

students/ lecturers could propose the biggest improvement steps for a programme such as the
Leadership Journey, taking a post hoc perspective.

The key protagonist of the two case studies, Mike Tsurumi retired effective April 1, 2004 as CEO of Sony
Europe. His successor was Chris Deering. Prior to his new role Chris Deering was President & CEO of
Sony Computer Entertainment Europe Ltd. (SCEE). Mike Tsurumi currently holds a retained consulting
role for Sony Corporation and still resides within Europe. He acts as a mentor for new business
development and remains highly respected within Sony Corporation and Sony Europe in particular.

References
Becker, B.E.; Huselid, M. A. and Ulrich, D. 2001. The HR scorecard. Boston, MA: HBS Press
Business Week. 2005. Sony’s Sudden Samurai. March 21, 2005
Chandler, A.D. 1962. Strategy and Structure: Chapters in the History of the Industrial Enterprise.
Cambridge, MA: MIT Press
Hall, D. and Saias, M. 1980. Strategy follows Structure. Strategic Management Journal, 1 (2): 149-163
Huselid, M. A.; Becker, B. E. and Beatty, R.W. 2005. The Workforce Scorecard. Boston, MA: HBS Press
Kashani, K. and Kassarjian, J.B.M. 1998. Sony Europa (A). IMD Working paper, IMD-5-0488
Kashani, K. and Kassarjian, J.B.M. 1998. Sony Europa (B). IMD Working paper, IMD-5-0489
Kashani, K. and Kassarjian, J.B.M. 1998. Sony Europa (C). IMD Working paper, IMD-5-0490
Kotter J.P. 1995. Leading Change: Why transformation efforts fail, Harvard Business Review, March April
1995.
Michaels, E., Handfield-Jones, H. and Axelrod, B. 2001. The War For Talent. Boston, MA: Harvard
Business School Press.
Treacy M. and Wiersema F. 1995. The Discipline of Market Leaders, Cambridge: Perseus
Weiss, D.S. and Finn, R. 2005. HR metrics that count: Aligning Human Capital Management to Business
Results. Human Resource Planning, 28 (1): 33-39