As I look back, the news that Sony would axe 20,000 employees as part of a three-year restructuring plan came as no surprise.
2003 had been a horrendous year for the Japanese powerbrand. Poor performance was the recurring theme across its music division, movie studio, audio-visual products and market-leading PlayStation brand, resulting in record losses and an imploding share price.
Sony’s troubles were in direct contrast to many of its rivals. Samsung, LG and Matsushita all had reported increased sales and improved profitability.
So how did an apparently dominant market leader’s fortunes become reversed in such an extreme manner in such a short space of time? And how is it possible that smaller, typically less successful competitors were suddenly able to seize the market initiative? The answer lies in the very strength that made the apparent decline of Sony so surprising. Sony was suffering from a corporate disease formerly known as Levi’s Syndrome, Marks & Spencer’s Condition and the IBM Ailment. The symptoms are always the same: take a ridiculously successful company, flushed with a host of marketing triumphs, a long-established track record of sales growth.
Then add a tiny dash of that fatal ingredient: complacency.
After years of aggressive competitive strategy, intensive customer orientation and advanced product innovation, a company reaches the apex of its success.
And it is at that very moment of triumph that the organization faces its greatest potential disaster. A successful organization often begins to ignore competitors and customers and assume that sales and market success are an inherent organizational trait.
Marketers can play a crucial role by offering an alternate objectivity to the self-satisfied organizational culture that can grow within a super-successful organization. While other departments within the successful firm may start to make arrogant assumptions about the organization and its performance, the marketer remains anchored in the reality check of the market.
As such it is their constant responsibility to point to emerging competitive threats, declining service quality, and changes in consumer perceptions of brand equity. In contrast to their stereotypical image as arrogant, overly optimistic spin-doctors, true marketers are actually quite dour figures. True marketers are worried by strong internal culture because it often exists at the expense of customer orientation. They are scared of sales successes because, aside from delivering increased revenues, they can also result in a corporate ego and an eventual market disaster.
The voice of the customer is not always the herald of exciting opportunities.
It can also be the harbinger of doom. And if as marketers we spread this message quickly enough and widely enough we can often save our organizations from extinction.
I once worked with a marketing director who, on surveying double-digit sales growth, rose from the table with a sigh and said: “Now how am I going to persuade that bastard in product development to listen to us?”
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