Sir Howard Stringer On Recharging Sony

The ex-CBS boss talks about leading a Japanese company, coping with exploding batteries, and PlayStation 3

Getting Sir Howard Stringer to sit down for a conversation is no easy feat. Since becoming chairman and CEO of Sony (SNE ) in 2005, Stringer has been circling the globe nonstop in the most challenging phase of his executive career. As he has worked to reorganize and reenergize Sony, Stringer, 65, has had to cope with two big crises—the recall of Sony batteries used in millions of laptops and delays in the launch of PlayStation 3. Despite these stumbles, the first Westerner to head the iconic Japanese corporation has driven Sony's net profit and stock price substantially higher during his tenure. Stringer spoke at length with BusinessWeek Editor-in-Chief Stephen J. Adler on a range of topics, from being knighted by Queen Elizabeth to the future of the evening news (Stringer was president of CBS (CBS )) and whether it makes sense to break Sony apart. The Nov. 8 conversation was part of the Captains of Industry series at the 92nd Street Y in Manhattan. Edited excerpts follow.

My first question comes from my son. He wants to know which Knight of the Round Table do you identify with most closely.

Well, it isn't Galahad. The Knight of the Kitchen, Sir Kay, is my guy.

How would you evaluate the quality of the network news broadcasts in general in comparison with what you were doing in the early '80s?

They still have the same unity of purpose and editorial responsibilities, I think. The difference is that the business is fragmented so much. [CBS News] was once the mecca for journalists. But today there are cable channels all over the place so the lure of money has diluted the networks, and the share of audience has dropped two-thirds. So once you're dealing with that kind of decline, it doesn't have the same clarion call to young journalists.

You're the CEO of a Japanese company. You lived for many years in New York. I believe you have a home in England, where your wife and two kids currently live. Where do you consider home?

I am beginning to feel stateless because I think the Japanese think I'm British, the British think I'm American, and the Americans have forgotten I used to live here (laughter). So I came back earlier this week to my apartment in New York and the phone didn't ring. I felt quite sorry for myself. Nobody knows where I am. But it's the price, a reasonable price, to pay, I guess.

Do you speak Japanese or are you trying to learn it?

When I became CEO, I tried for a little while, and then I realized I would never be truly conversational. It was, in some ways, more important—a terrible thing to admit—for senior executives at Sony to be talking English.

A major issue that you faced starting out was bringing a very hard-headed Western CEO sensibility to an organization that was very hierarchical, and overloaded. You cut something like 10,000 workers and tried to make a big cultural change. How did you navigate through that transition?

In Japan, the nightmare they have is the American who comes in with a sword and says, "Do this. Do that." But I knew in Japan that wasn't the way to do it. I had to work as hard as I could to get to know people. I said to senior staff and the strategists: Look at the numbers. We have no choice but to restart this engine. We've got to close factories, get rid of some unprofitable businesses, a hard thing to do in Japan, and then lay off people. The impact had the effect and the numbers started getting better.

Did you have any regrets about taking the job after the battery recall crisis? You seemed discouraged at the time.

Yes. I was probably sitting on the batteries (laughter). Actually, the batteries came at the end of my first year. We'd beaten the numbers on four quarters. I did feel a little bit sorry for everybody that this slowed momentum. It was not a public-relations success. I knew we had to apologize, and I was willing to. People kept saying, "You can't bow because it's not really at your level." I desperately wanted to bow anywhere, in the railway station, anywhere.

The last time we talked you said you'd know by Christmas whether [sales] of PlayStation 3 were really picking up.

We're on track. We're hoping to have sold 10 million total by the end of the fiscal year [Mar. 31]. It's still too early to say that this momentum will continue.

Of course, one of the big fights right now is [Sony's] Blu-ray vs. HD DVD for the high-definition video market. The most obvious questions are: Shouldn't there just be one format? Why should people have to choose between the two?

We have a sort of stalemate at the moment. We have four studios, and they have two or three studios [signed on for the format]. It's a difficult fight.

Microsoft (MSFT ) seems to have an interesting role in this. They're selling an add-on HD DVD for the Xbox, and Xbox competes strongly with you. Is Microsoft working in cahoots with Toshiba (TOSBF ) on the HD DVD? Is that a competitive challenge to you?

Only the spirits know (laughter). You never know with Microsoft, do you? Obviously, we care about the software side more than the Toshiba side. It doesn't own a studio. The most significant thing about the Blu-ray—going back to Microsoft—is that the disc has a very high security level. The studios wanted to have protection from instant ripping [copying]. That is probably not in Microsoft's interests.

Would it make sense to separate your entertainment and electronics operations?

Well, you never say never, but, at the moment, I need the power of entertainment and content to drive the digitizing of the whole company.

Is there another professional act for you after Sony?

God, sink giggling into the sea, I think. I have no interest in being a CEO again if I survive this intact, which in itself will be something of a miracle.

    Before it's here, it's on the Bloomberg Terminal.