If there is one thing you can say about Japanese products, it’s their quality. When I went to Japan in 2003, I bought a nail cutter. I never had to buy another one till 2017 and that was because I lost the Japanese one. I have had the same experience with Sony products, especially the audio equipment. So when I came across this autobiography of Akio Morita, I delved into it to know more about the company.
A disclaimer. The book was published in 1986. The world has changed a lot since then. Sony’s reputation took a dive with the e-mail leak scandal, Akio Morita is no more and I am not sure to what extent Sony still follows the management philosophy that he describes in this book. Ditto for the socialist Japanese society that he describes. So all the statements made relate to the situation in 1986. Nonetheless, the book was an interesting read. Also, it fitted well with my rule of ‘jumping genres’.
It is very instructive to see the journey of a giant company like Sony. Morita used to listen to music as a child on a phonograph and this is where his love for music and sound production started. After the war, instead of going into the family businesses of brewing sake – as he was expected to do as the eldest son – he chose to open a new company with his engineer friend Ibuka. Morita’s background of physics combined well with Ibuka’s engineering talent. Their aim was to always make products that did not exist. They rarely did any market research. Their philosophy was somewhat similar to that of Steve Jobs – people do not know what they want until you make the product for them. It worked most of the time but not for the first product they chose to make – a tape recorder. It was a flop, at least initially, because no one in Japan knew what a tape recorder was.
Just around this time, a breakthrough happened in the field of semiconductor physics. In 1948, John Bardeen, William Shockley and Walter Brattain of the Bell Labs at New Jersey invented the transistor. This would change the world in ways that no one could have imagined at the time.
Sony reinvents the transistor
This section, in green, is a bit technical. Feel free to skip it if it’s not your cup of tea. Sorry about this but it’s such a fascinating tale about semiconductor physics that I cannot not write about it.
I was surprised that I did not know about the R & D efforts that Sony put in to make the transistor work. Both Morita and Ibuka recognized the tremendous potential of the device so when the license to use this technology became available in 1953, they jumped at the chance.
The first problem was that the transistor, as it existed then, could only handle audio frequencies : 20 to 20,000 Hz. In fact, when Morita signed the patent agreement, the scientists at Western Electric told him that the only product that you can make with it was the hearing aid. To get it up to radio frequencies was a herculean task.
For the early transistor, Bell Labs used slab of germanium to which indium was alloyed on each side. Germanium was the negative part and indium was the positive. The Japanese researchers tried to invert the configuration from positive-negative-positive to negative-positive-negative. Indium proved to be a wrong material since it’s melting point is too low. They thought about using gallium and phosphorus until someone pointed out that Bell Labs had already tried and discarded this option. In those days, Morita says, “the voice of Bell Labs was like the voice of God.” Nonetheless, they kept trying with phosphorus and it eventually worked. This means that the mighty Bell Labs had discarded this option prematurely. Finally, Sony had a workable transistor that operated at radio frequencies.
One of the scientists working on this project was physicist Leo Esaki. Esaki was able to produce a new type of diode – the Esaki diode – that has negative resistance due to the quantum mechanical effect of tunnelling. In 1973, Isaki received the Nobel Prize in Physics for this discovery.
Sony’s breakthrough inventions
The first products made by Sony with the transistor had not ever been marketed before because they did not exist. This included transistorised radios and solid-state television sets. Sony also invented world’s first videocassette system and the Walkman – a product that the Sony research team was not sure will sell and Morita staked his reputation on it. Needless to say, he did not regret it.
Sony’s Management philosophy
Second part of the book deals mostly with the Sony management philosophy and the uniqueness of Japanese character and society. The historical roots of this go back to the Tokugawa era (1603 – 1868), when for about 260 years Japan was completely cut off from the world. This was a period of peace with no wars. The rigid class system had scholars at the top and this helped the interest in education grow rapidly. The isolation also taught the people to fight natural disasters without looking for outside help. The society did not have major racial or religious divides and this helped form a cohesive society.
After the WWII, the American occupation overhauled the existing labor laws. Unions were allowed to form and the hegemony of few companies that controlled most of the market was broken. It was very difficult to fire someone. Instead, the company and the employees considered the contract in long terms, possibly for a lifetime.
All these factors gave rise to a management philosophy at Sony that is completely different from the US management systems (and the Indian ones as well since most of them are based on the US systems).
Morita believed that the motivation of the worker cannot be money. You must pay him well of course, but that alone will not guarantee quality work. There has to be job satisfaction. For this to happen, his environment must be comfortable. At Sony, they did not spend any money on decor or furnishings. Instead they had a simple setup that was comfortable and practical. The workers enjoy same comforts such as central air conditioning as the managers and CEO’s. The main aim of company was not profit in next quarter and dividends, it was long term growth.
This was also facilitated by the nature of Japanese society that is highly socialistic. The income gap between management and workers is not astronomical. Japanese CEO’s are comparatively less wealthy because of the high tax rates. In addition, as Morita readily admits, Japanese are used to working long hours.
The workers and management at Sony were treated as one family. The school background of the employee ceased to matter once he joined the company. This removed the advantage of being educated in a prestigious university. The workers were allowed to change jobs within the company. Morita likens the American companies to brick walls and the Japanese companies stone walls. In an American company the employee has to adapt so that he can fill the position. If he does not fit the position, he will be rejected. In a Japanese company, the recruits are treated as unpolished stones, each with a unique shape, square, round, large or small. The training smooths the edges and the management has to find the right place where that stone with his unique shape will fit best. As the business changes, it becomes necessary to refit the stones from time to time.
Each country has a unique culture and Morita’s philosophy may not work for everyone. But it is sobering to realize that a completed new and counter-intuitive approach can also work very well, as the groundbreaking success of Sony in the last century has shown.
