#102 Akio Morita Sony



In "Made in Japan: Akio Morita and Sony," co-authored by Akio Morita, Edwin Reingold, and Mitsuko Shimomura, the story of Sony's rise from the ashes of post-WWII Tokyo to a global technological powerhouse is recounted. Akio Morita, a confident and visionary engineer, co-founded Sony with the goal of producing high-quality, innovative products that would redefine markets. Morita's unique approach, including his rejection of traditional Japanese consensus decision-making in favor of individual responsibility and his move to establish Sony America, set the stage for Sony's success. The Walkman, a product of Morita's confidence in his own judgment despite internal skepticism, became a symbol of Sony's ingenuity and marketing prowess. Throughout the book, Morita reflects on the cultural differences between Japanese and American management, emphasizing long-term investment over short-term profits, and the Japanese philosophy of 'mottainai' – a disdain for wastefulness that drives efficiency. Morita's story is a testament to the power of self-belief, innovation, and the relentless pursuit of excellence.

Summary Notes

Founding of Sony and Post-War Japan

  • Akio Morita was part of the initial group that founded Sony in a devastated post-WWII Tokyo.
  • The goal was to develop technologies to help rebuild Japan's economy.
  • Sony's success is attributed to high-quality products and successful marketing strategies.
  • Akio Morita's individual decision-making led to the success of products like the Sony Walkman.

"40 years ago, a small group gathered in a burned out department store building in the war devastated downtown Tokyo. Their purpose was to found a new company, and their optimistic goal was to develop the technologies that would help rebuild Japan's economy."

The quote highlights the ambitious beginnings of Sony amidst the ruins of post-war Tokyo, aiming to contribute to Japan's economic recovery.

Akio Morita's Early Life and Confidence

  • Akio Morita served in the navy during WWII.
  • He had a strong understanding of physics, which gave him insight into the implications of the atomic bomb.
  • Despite the uncertainty of Japan's future, Akio had confidence in himself and his future.

"I was having lunch with my navy colleagues when the incredible news of the atomic bombing of Hiroshima arrived. I understood what the bomb was and what it meant to Japan."

Akio's knowledge of physics allowed him to comprehend the gravity of the atomic bombing and its impact on Japan's future.

Akio Morita's Family Background and Business Philosophy

  • Akio Morita was born into a sake brewing family with a 300-year history.
  • He learned from his family's business mistakes, particularly the consequences of losing focus on the business.
  • Akio's father had to restore the family business to profitability, emphasizing the importance of personal investment and responsibility in management.

"Unfortunately, the taste of a couple of generations of Merida family heads was so refined and their collecting skills so acute, that the business suffered while they pursued their artistic interests, letting the business take care of itself, or rather, they put it in other people's hands."

This quote explains how previous generations' distraction with personal interests led to the neglect of the family business, a lesson Akio took to heart in his own management style.

Akio Morita's Passion for Electronics

  • Akio developed an early passion for electronics, dedicating his time to learning and experimenting.
  • His interest in electronics was so strong that it affected his school performance.
  • Akio's self-taught knowledge in electronics laid the foundation for Sony's future success.

"Soon I was spending so much time on electronics that was hurting my schoolwork. I was devoting nearly all of my after school hours to my new hobby."

The quote reflects Akio's deep passion for electronics, which eventually led to the creation of innovative Sony products.

Role of Technology in Preserving Mankind's Future

  • Akio Morita saw technology as crucial for the survival and advancement of mankind.
  • His experiences during and after WWII influenced his perspective on the importance of technological superiority.
  • Akio believed that investing in technology was essential for both national security and business success.

"I had built a time clock which was attached to my radio and was set to wake me up at 06:00 every morning. I remember very clearly the morning of December 8, 1941... I was shocked. I remember thinking that this was a dangerous thing. I had grown up believing the west was somewhat superior in technology."

Akio's reflection on the Japanese attack on Pearl Harbor showcases his early recognition of the critical role technology plays in geopolitical power dynamics.

Post-War Conditions in Japan and Founding of Sony

  • Japan faced severe devastation after WWII, with major cities reduced to ruins and a significant loss of population.
  • Akio Morita met his future co-founder, Masaru Ibuka, amidst these challenging conditions.
  • The challenging post-war environment in Japan served as a backdrop for the birth of Sony.

"Many cities looked as though there was nothing more to bomb. Flimsy houses, shops, and factories made of wooden paper had burned like dry tinder under a shower of incendiary bombs."

This quote paints a stark picture of the destruction in Japan, setting the stage for the monumental task of rebuilding that Sony would be a part of.

Introduction to Akio Morita and Masuro Ibuka's Partnership

  • Akio Morita was significantly influenced by Masuro Ibuka, who was older and had already founded his own company.
  • Ibuka's company, Japan Measuring Instrument Company, produced mechanical elements for radar devices and employed innovative hiring practices.
  • Despite professional success, Ibuka was not satisfied and sought to develop electronics, which led to his partnership with Akio.

"And so let me tell you a little bit about this. The company that Abuko ran was called Japan measuring instrument company." "Abuka didn't feel professionally satisfied out there in the countryside, merely producing components in large quantities."

These quotes provide background on Ibuka's company and his lack of satisfaction with his work, setting the stage for his later ventures and partnership with Akio.

The Genesis of Sony

  • Ibuka founded a company in a devastated area of Tokyo, which would eventually become Sony.
  • With limited resources, Ibuka innovated by creating a shortwave adapter for existing radios, demonstrating resourcefulness and market understanding.
  • Akio, seeing Ibuka's success, offered to join and support the new business.

"In this empty and bare old building, set among the rubble and devastation, the burned out homes and shops of the once prosperous downtown area of Tokyo, Ibuka started the is what, that's the original name of Sony right there."

This quote describes the humble beginnings of what would become Sony, highlighting the challenging conditions in which the company was founded.

Akio's Transition to Sony

  • Akio was teaching physics at a university but was fired due to his military service.
  • Due to a clerical oversight, he continued to receive his salary, which he used to support his work at Sony during its financially difficult early days.
  • Sony's initial employees were considered misfits, and the company's conditions were poor, leading to misconceptions about Akio's political leanings.

"I welcomed the subsidy while it lasted because our new company was not setting any records for financial success in those days." "When some of my relatives came to see me, they were so shocked by the shabby conditions that they thought I had become an anarchist."

These quotes illustrate Akio's financial support from a clerical error and the perception of Sony's early environment by outsiders.

Sony's Early Challenges and Successes

  • Sony aimed to be an innovative company, not just a radio manufacturer.
  • Initial attempts to create a wire recorder were thwarted, but this led to the development of a superior product, the tape recorder.
  • Sony won a contract to produce technical equipment for the occupation forces, which established their reputation for quality despite their modest facilities.

"Merely building radios was not our idea of the way to fulfill these ideals." "Everyone marveled at its quality, especially the skeptical officer, who was still puzzled by the fact that a small new company in a makeshift factory could produce such a high technology product."

These quotes reflect Sony's vision to innovate beyond radio manufacturing and the surprise of others at the quality of their products given the company's humble beginnings.

Marketing and Customer Identification

  • Ibuka and Akio lacked experience in consumer sales and initially struggled to sell their tape recorders.
  • A realization that they needed to identify and target customers who saw value in their product led to a successful pivot to selling to the Japanese Supreme Court.
  • The profits from these sales allowed Sony to explore other product ideas, such as a pocket radio.

"We were engineers, and we had a big dream of success. We thought that in making a unique product, we would surely make a fortune." "We were able to demonstrate our machine for the Japan Supreme Court, and we sold 20 machines."

The first quote reveals the initial naivety about the need for targeted marketing, while the second demonstrates the success of identifying a niche market with a real need for the product.

Sony's Innovation and Competition

  • Sony's innovation was exemplified by the development of a pocket radio, reflecting the Japanese aesthetic of miniaturization.
  • A clever marketing strategy involved making shirt pockets larger to fit the new radios.
  • Sony's success contrasted with an American company that failed to capitalize on its early entry into the pocket radio market.

"We could make a very small radio powered by batteries. Miniaturization and compactness have always appealed to the Japanese." "An american company called Regency put out a pocket sized radio a few months before ours, but the company gave up without putting much effort into marketing it."

These quotes highlight Sony's commitment to innovation and the importance of perseverance and marketing in the success of a new product.

Sony's Global Vision and Quality Focus

  • Akio and Ibuka aimed to change the perception of Japanese products from poor to high quality.
  • Sony's strategy involved targeting affluent markets abroad to grow and improve Japan's reputation.
  • Akio emphasized the importance of direct marketing and communication for selling advanced technology products.

"We wanted to change the image of japanese goods as poor in quality." "Marketing is really a form of communication."

The first quote underscores Sony's mission to improve the image of Japanese goods, while the second highlights the role of marketing as essential communication for a company's success.

Education of Customers and Market Entry

  • Akio Morita emphasizes the importance of educating customers about new products.
  • Sony had to establish their own outlets to introduce products to the market.
  • Early market entry gave Sony a competitive advantage, allowing them to profit and reinvest before competitors joined.

"We had to educate our customers to the uses of our products. To do so, we had to set up our own outlets and establish our own way of getting goods into the market."

This quote highlights the strategy Sony used to familiarize consumers with their innovative products by controlling the retail experience.

"In the early days, we would often have the market to ourselves for a year or more before other companies would be convinced that the product could be a success."

This quote illustrates the benefit of being a first mover in the market, which allowed Sony to establish a strong presence and reinvest earnings into further innovation.

Innovation Over Market Research

  • Akio Morita believed in leading the market with new products rather than relying on market research.
  • Sony aimed to create markets for their products through innovation and communication.
  • This approach is likened to the philosophies of other innovators like Henry Ford and Steve Jobs.

"The public doesn't actually know what is possible and that we do, meaning Sony."

This quote encapsulates Sony's philosophy that the company, not consumers, is best positioned to know the potential of new technology and to innovate accordingly.

"Our plan is to lead the public with new products rather than ask them what kind of products they want."

This quote outlines Sony's proactive approach to innovation, focusing on creating new products and educating the market about them, rather than reacting to consumer requests.

The Walkman's Development and Market Success

  • Akio Morita discusses the development of the Walkman, inspired by a desire for a portable and private music listening experience.
  • Despite internal skepticism, Morita believed in the product's potential based on the success of car stereos without recording capabilities.
  • Sony's Walkman became a runaway success, validating Morita's confidence in the product.

"Ibuka's complaint set me into motion. I ordered our engineers to take one of our reliable small cassette tape recorders, strip out the recording circuit and the speaker, and replace them with a stereo amplifier."

This quote describes the origin of the Walkman, which was a response to a need for a lighter, more portable music player.

"Millions of people have bought car stereos without recording capability, and I think millions will buy this machine."

Morita's response to the skepticism about the Walkman's lack of recording function shows his confidence in the product's appeal based on analogous consumer behavior.

Confidence and Entrepreneurship

  • Akio Morita advocates for confidence and risk-taking in entrepreneurship.
  • He believes that a lack of self-belief is a significant barrier to starting new businesses.
  • Morita's own confidence in the Walkman led to its success despite widespread doubt.

"I thought we had produced a terrific item, and I was full of enthusiasm for it, but our marketing people were unenthusiastic."

This quote demonstrates the internal challenges Morita faced in convincing others of the Walkman's potential, highlighting the need for entrepreneurial confidence.

"I was so confident that the product was viable that I said it would take personal responsibility for the project."

Morita's willingness to stake his career on the Walkman's success exemplifies the level of confidence he believes is necessary for successful entrepreneurship.

Brand Integrity and Long-Term Vision

  • Akio Morita turned down a large order from Belova to maintain Sony's brand integrity.
  • He believed in the long-term value of building Sony's brand rather than producing for another company.
  • Morita's decision demonstrated his commitment to Sony's independence and future recognition.

"I had vowed that we would not be an original equipment maker for other companies. We wanted to make a name for our company on the strength of our own products."

This quote explains Morita's decision to reject a lucrative offer in favor of maintaining Sony's brand, reflecting a strategic focus on long-term brand building.

"50 years ago, your brand name must have been just as unknown as our name is today. I am here with a new product, and I am now taking the first step for the next 50 years of my company."

Morita's response to Belova showcases his vision for Sony's future and his belief in the potential for Sony to become a renowned brand.

Physical and Mental Discipline

  • Akio Morita values the discipline he experienced in education and the military.
  • He believes in the importance of maintaining both physical and mental discipline for personal development.
  • Morita encourages engagement with challenging activities to improve mental agility and confidence.

"The knowledge of my own ability gave me confidence in myself that I did not have before."

Morita attributes his self-confidence to the discipline and challenges he faced, suggesting that overcoming adversity builds self-assurance.

"Unless you are forced to use your mind, you become mentally lazy, and you will never fulfill your potential."

This quote emphasizes Morita's belief in the necessity of mental discipline to reach one's full potential, drawing a parallel to the importance of physical fitness.

Encouraging Individuality in Consensus

  • Morita criticizes the suppression of individuality in the name of consensus within Japanese companies.
  • He believes that a good manager should be able to harness individual talents and ideas.
  • Sony's success is partly attributed to its ability to embrace individual contributions while working towards a common goal.

"I say that a manager who talks too much about cooperation is one who is saying he doesn't have the ability to utilize excellent individuals and their ideas and put their ideas in harmony."

This quote criticizes the overemphasis on consensus, suggesting that it can stifle individual contributions and innovation.

"If my company is successful, it is largely because our managers do have this ability."

Morita attributes Sony's success to its management's capacity to balance individual creativity with collective effort, highlighting a key aspect of the company's management philosophy.

Long-Term Investment vs. Short-Term Gains

  • Akio Morita criticizes American management for prioritizing short-term profits over long-term investments.
  • He emphasizes that focusing solely on the bottom line can harm the company's future.
  • Morita believes in leading by example, inspiring employees to contribute to the company's success.
  • He recounts a story where he had to insist on spending more on a product launch, highlighting his commitment to long-term value.

"Managers can look good on the bottom line, but at the same time may be destroying the company by failing to invest in the future."

This quote underscores Morita's view that managers who focus only on immediate financial results may be compromising the company's long-term health and growth.

"If you can do that, the bottom line will take care of itself."

Morita suggests that when managers inspire their employees and focus on the company's overall success, financial performance will naturally follow.

Japanese vs. American Management

  • Morita points out the differences between Japanese and American management styles.
  • He criticizes the American focus on profit as the main goal, rather than investing in the business.
  • He uses the concept of "namawashi," a Japanese gardening technique, to illustrate the importance of preparing customers for new products.
  • Morita believes in taking time to optimize for the long term, as exemplified by Warren Buffett's philosophy.

"The trouble with American management was that profit was the main goal."

This quote reflects Morita's belief that American management often prioritizes immediate profits over the long-term health of the company.

Company Culture and Spending

  • Morita discusses the importance of modesty in the workplace, especially in Japan.
  • He believes that lavish office spaces can be a warning sign of a company's impending decline.
  • Morita argues that investment should be directed towards products and customers rather than management comfort.
  • He praises Japanese industry for focusing on what directly relates to the product.

"We want everybody to have the best facilities in which to work, but we do not believe in posh and impressive private offices."

Morita expresses his preference for functional workspaces over luxurious private offices, aligning with the Japanese approach to investing in the product rather than management luxury.

Resourcefulness and Efficiency

  • Morita criticizes wastefulness and promotes resourcefulness, especially in the context of entrepreneurship.
  • He contrasts Japanese and American attitudes towards resources and conservation.
  • Morita shares his views on the Japanese value of "Montanai," which discourages waste and promotes gratitude for resources.
  • He highlights how Japan's lack of natural resources led to a culture of efficiency and conservation.

"The wasting of anything was considered shameful, virtually a crime."

This quote captures the Japanese cultural perspective on waste, which Morita believes contributes to the country's efficient use of resources.

Japanese Work Philosophy

  • Morita discusses the Japanese work ethic and its emphasis on honor and collective management.
  • He contrasts Japanese and American attitudes towards work, retirement, and hierarchy.
  • Morita stresses the importance of continuous improvement and staying ahead of the market.
  • He encourages innovation and resourcefulness, despite claims that society has reached a technological plateau.

"We have always had to practice conservation for survival."

Morita explains that Japan's historical necessity for conservation has led to a deeply ingrained culture of resourcefulness and efficiency.

Global Business Perspective

  • Morita shares his views on international trade and the evolving role of Japan in the global market.
  • He challenges the notion that Japanese businesses are still learning from the West, asserting that Japan has joined the ranks of global leaders.
  • Morita believes that innovation and progress are possible with efficient resource use.

"What they don't want to face is the fact that we are not only in the same school, but we've joined the faculty."

This quote reflects Morita's confidence in Japan's status as a leader in the global business community, no longer a novice but an equal, if not superior, player in the industry.

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