November 12, 2017 9:00 am JST

Sony's Kazuo Hirai, an unconventional CEO

There are benefits to a boss who is free from unwieldy traditions

KUNIO SAIJO, Nikkei senior staff writer

Kazuo Hirai

TOKYO -- When it comes to top executives of large corporations, people tend to picture dignified men in three-piece suits. Sony President and CEO Kazuo Hirai defies that stereotype. Not just his usual jeans and sneakers in the office, Hirai has always been an "oddball" -- by Japanese standards -- thanks to some international experience in his early life.

Under Hirai's leadership, Sony announced on Oct. 31 that it expects a record operating profit for the current fiscal year through March. It would be the first time in 20 years for Sony to post record earnings. With Hirai at the helm since 2012, the company has succeeded in restoring a balanced business model that generates income from wide-ranging operations, from electronics to finance.

Tall and handsome, always smiling and friendly, Hirai never raises his voice at work. But behind all that are some tough times he went through as a child and student.

It all started in the spring term of his first year in elementary school in Japan. His father, a banker, got transferred to the U.S. and the whole family moved to Queens, New York. Settled in a housing complex there, Hirai attended a local public school. On his first day of school, after his parents had dropped him off, the little Japanese boy with no understanding of English was left in the classroom by himself -- and in indescribable loneliness, he recalled.

People usually do not believe this, he said, but he kept three cards hanging from a cord around his neck when at school. The cards, written in English and Japanese, told his teachers: "I am sick"; "I want to go to the bathroom"; and "Please call my parents immediately."

Always in the minority

Hirai became friends with two children his age who lived in the same housing complex. Hirai's mother would invite them over and offer them Japanese instant ramen noodles in an effort to help Hirai make friends, he explained. Hirai spent Halloween and Thanksgiving with his friends, and by the time he reached second grade, he was well accepted by his classmates.

As he adapted to the American school, he began to forget how to get along at Japanese schools. So when he returned to Tokyo in fourth grade, he realized he was a bit of a misfit. Returnees like him were not as common as they are today, and perhaps other students were overwhelmed by the tall Americanized student with near-native English skills. He worked hard to fit in. But by the time he had readapted himself, he was again off to a different country.

After spending a childhood of dynamic swings, shunted between Japan and overseas, Hirai finally found his place at International Christian University in Tokyo. He could have chosen to go back to the U.S. for university after graduating from the American School in Tokyo. But he felt that, after all, he was Japanese and wanted to settle in Japan for the time being.

ICU had more returnees than other Japanese universities. Yet they were still in the minority. Students like Hirai, who are Japanese but had spent some of their lives overseas before going to ICU and therefore spoke good English, were called hen-Japa, or "odd Japanese," in contrast to jun-Japa, or "pure Japanese," who came from the ordinary Japanese school system. Hen-Japa and jun-Japa each had their own community on campus and occasionally interacted with each other.

In those days, ICU was one of few places in Japan where diversity was taking hold, and that inclusiveness accepted hen-Japa students. Hirai said he did not go through an identity crisis because he was "dull." But after one or two years at ICU, he was able to make up his mind that he would live his life as a Japanese. That was a turning point in his life, he said.

He had an eventful university life. He made good money, almost double what a new university graduate would earn in Japan at the time, doing translation work and teaching English. He drove around in a used Mazda RX-7 sports car, and at student dances he played DJ along with Jon Kabira, an older friend who is now a TV and radio personality in Japan. Hirai still remembers bragging to his jun-Japa friends about his knowledge of complicated kanji -- Chinese characters used in written Japanese -- that he had learned in special follow-up classes for hen-Japa students.

Being hen-Japa is in a way like being an ethnic minority. There are huge perceived cultural gaps with mainstream society. Though feeling at odds with the majority, they tend not to suppress themselves in order to assimilate. Nor do they merely reject views different from their own. They acknowledge differences and accept diversity. That became Hirai's way of life.

Nontraditional presence

After graduating from ICU, Hirai joined CBS/Sony Records in Tokyo. He worked for various Sony group companies, including Sony Computer Entertainment, and became head of the group in 2012.

Sony may be known as having a free and open culture, but it is actually a multilayered organization. Hirai's music and video game units are relatively new, whereas audiovisual equipment, such as TV and video recorders, has a long history in the group and is considered the "face" of the company.

The two divisions also differ greatly in culture. One time, Hirai visited the office of the group's more "traditional" business in Tokyo's Shinagawa district. The executives who met him all appeared in company suits that looked like a vest in light brown color. Hirai, as usual, was dressed casually. To both parties, the other looked utterly out of place.

Sony was once primarily staffed by jun-Japa employees. But as the company came under increasing pressure to globalize, Hirai took on an even greater role. In the end, he was appointed CEO by then Chairman Howard Stringer. Though many hen-Japa graduates serve key posts at foreign companies, Hirai is probably the first to become head of a major Japanese company that has produced a vice chair of the Japan Business Federation, the major business lobby known as Keidanren.

Free from unwieldy traditions, Hirai took the ax to the TV and laptop PC businesses. Earnings, which were deeply in the red when he became CEO, have improved substantially to near-record levels. He set up an internal business contest to seek new ideas from employees. This led to the introduction of a smartwatch and a portable aroma diffuser. Through all these attempts, Hirai is aiming to revive the Sony spirit, underpinned by people with unconventional ideas.

Since he is only 56, it may be too early for Hirai to think about retirement. Yet, asked about his plans after retirement, Hirai said his mission is probably to get involved in global initiatives, such as the World Economic Forum, to improve Japan's international presence, rather than focus on domestic activities. Unlike Sony co-founder Akio Morita, who worked passionately in Japanese industry after retirement, including serving as Keidanren vice chair, Hirai seems determined to live the life of the hen-Japa to the end.

Sony Corp.

Japan

Market(Ticker): TKS(6758)
Sector:
Industry:
Consumer Durables
Electronics/Appliances
Market cap(USD): 58,605.3M
Shares: 1,264.65M

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