When Sony, Japan Goes Open, Everyone Should Pay Attention
The “not invented here” culture is a problem at Sony. James Surowiecki addressed this in a 2005 article in which he stated that the Betamax video tape recorder failed in part because the company refused to cooperate with other companies.
Sony was also late in making flat-screen TVs and DVD recorders, because its engineers believed that, even though customers loved these devices, the available technologies were not up to Sony’s standards.
And Sony’s digital music players didn’t play MP3s, which is a big reason that the iPod became the Walkman’s true successor. Again and again, Sony’s desire to control everything kept it from controlling anything according to Surowiecki.
Over the years, Sony CEO Howard Stringer has been working hard to crack this staunch “not invented here” culture. As the company bets big on a 3-D revival, it seems as if they starting to get it.
In a Wall Street Journal article, Stringer says that getting to market quickly takes priority over making everything in house. This led to Sony reaching a licensing deal with an outside supplier for an essential component of 3-D televisions. Things are definitely changing at Sony.
Things are also changing for Daiichi Sankyo, one of Japan’s largest pharmaceutical groups. In a Financial Times interview, CEO Takashi Shoda talks about how a growing influence of western practices and the broader need for greater openness in order to innovate impacts his company.
“The era of trying to do everything in-house is gone,” he says. “Innovation means open innovation: partnership, networking, relationship with academics. There used to be an NIH – not invented here – syndrome. If a drug project did not begin in-house, we were not interested. That is changing now. Management is constantly encouraging outsiders,” Shoda says.
What is the message here? The future of innovation is open and global. Companies need to get this or they will lose out. And when even very tradition-driven, Japanese companies get it, everyone needs to pay attention.
Hi Stefan
I have been spending considerable time the last couple of years discussing with and listening to Japanese companies about this open innovation trend in their own language, and I really cannot find concrete evidence that these companies are "getting it". Most is hype and exaggerations. If you find such concrete evidence I would be glad to learn more about it. Actually it seems to me that Japanese companies operated more according to open processes in the early postwar years.
Sam – http://www.millionbrains.com
It also highlights the 'adage' of the pain has to get bad enough for you to do something. The 'pain' at Sony is now bad enough that they have to look at, what is for them, dramatic alternatives to how they've done business in the past. The "what got you here won't get you there". It would be good for the industry to have Sony become a viable, desirable competitor again. And Stringer is the 1st non-Japanese CEO – wonder what part that plays..
I wonder how Sonys experience with the PS3 counts? Though the PS3 is not extremely succesfull, I think that Sony tried to use some standards and collaboration with others. The use of USB-hubs and the inclusion of the Blu-Ray player should count as positive here.
I always understood that the Betamax failure was due to decision of the Los Angeles pornographers to standardise on VHS. The rest is history.
@Sam, I appreciate your comments as I know you have a good understanding of the Japanese market. Sony and Daiichi Sankyo are the only two examples I know of right now. I did a quick check on LinkedIn and this supports your point of view.
I hope the cases of Sony and Daiichi Sankyo will drive the open innovation movement forward. Perhaps you can give us an update on this a year or so from now.
@Deborah, I like your point about the level of pain Sony is in.
And how soon will the innovation ideas of country X be our sourced to country Y ??? I have had good patents go unused because of NIH of other divisions. Yes good ideas are where you find them, but jobs seem to only go to the bottom of the heap.
[...] by having a better network: Stefan Lindegaard revisits the Sony Betamax story today. My thought while reading his post is that Betamax really failed because its value network [...]