“The fundamental mindset of a leader” – An interview
with Sony Executive Vice President and CTO Toru Katsumoto
and employees of Panasonic

Caption:From left to right, Sony Katsumoto, Panasonic Mochizuki, Suzuki, Akyu, Kinugawa, Sony Yoshida
*Kenichiro Yoshida, Chairman, President and CEO, participated in the opening part of the interview.

At Panasonic Corporation (hereafter referred to as “Panasonic”), employees in their 30s who aspire to become among the next generation of leaders are engaged in activities to learn about the important qualities and ways of thinking necessary to be a good leader, and conduct interviews with leaders both inside and outside the company.

In November 2020 they interviewed Toru Katsumoto, Executive Vice President and Chief Technology Officer (CTO) of Sony Corporation (hereafter referred to as “Sony”), who is also the President of Sony’s next-generation management talent program Sony University, in a friendly and casual atmosphere and asked him various questions about the universal mindset of leaders.

Interviewers: Potential next-generation leaders Kento Mochizuki, a developer at Charger Business Unit of Panasonic Corporation Automotive (AM); Terumasa Kinugawa, a technician at Energy Solutions Business Division of Industrial Solutions (IS); Hirotetsu Suzuki, a developer at Energy Technology Center; and Hiroki Akyu, an accountant at Electronic Materials Business Division of Industrial Solutions (IS)

Interviewee: Toru Katsumoto, Executive Deputy President and CTO (Chief Technology Officer), Sony Corporation

Leadership experience at thirty

Mr. Mochizuki from Panasonic:Please tell us about your specific leadership experience when you were in your 30s.

Katsumoto:Starting from when I was in my twenties, when I started at Sony I was assigned to Atsugi (Atsugi City, Kanagawa Prefecture), but instead of researching and developing broadcasting equipment as I had hoped to do, I was put in charge of 8mm video development. After working on the first analog Handycam, which writes the data on tape with a magnetic head, I decided to study digital signal processing in anticipation of the coming age of digitalization, and studied at the California Institute of Technology in the U.S. for one year.
After returning to Japan, I was the electronics leader for the development of Handycam, and worked on a highly compressed version of the original 8mm video format called Hi-8.

The next project I was in charge of in the role of a leader was the development of an ultra-compact Handycam. This was the first commercial Sony product to use lithium-ion batteries, and it was a big undertaking to replace not only the battery but also the lens, the color EVF, and the mounting machine for the small circuit board with one made in-house. I was the oldest member of the team and we were all in our 20s. This was an adventurous company that would not hesitate to entrust such a task to a young man of 30 or so. At that time, Sony had a culture of letting people do things without thinking, "Can you do that?” It took us two years to create the product, travelling all over Japan and getting the support of parts and mounting bracket manufacturers.
However, while I was satisfied that we had made a good product, the factory complained that it was difficult to manufacture. So, I decided to go to the Koda Site (Koda-cho, Nukata-gun, Aichi Prefecture) for three years to study manufacturing. At Koda, I was allowed to work in a relaxed atmosphere, but I was also able to experience the speed of a factory. They produce a large number of Handycams every second, and if there is a defect in any number of products, they perform a rigorous analysis and strive to complete the quota. There were strict requirements in terms of quality and cost, and it was extremely valuable for me to learn from that experience.

Around that time, the digital age finally arrived in earnest, and we launched the digital Handycam in my third year at Koda. For this product, we had digitized the entire process from the mass production line to the production facilities. There were many sub-teams: my team that made the product itself, the team that made the EVF, the team that made the batteries, the team that made the lenses, and the team that made the circuit boards. In addition, within the EVF team, there was a team that made the LCD, a team that made the color filter, a team that made the eyepiece lens, etc. It was an enormous project. Thinking about it now, it is surprising to think that a group of young people all in their 30s would be allowed to take on such a project.
What I learned at the time was that if you don't have the notion that something is impossible, you can make it happen. At Sony, we have a saying: "Difficult is possible." We believe that if we solve difficulties one by one, they will eventually become possible. It was a tough project, but I'm glad we didn't give up.
I think the way that our superiors at that time entrusted us with responsibility, the way they believed in us, and the way they trained us was really amazing. Looking back on it now, I admire that kind of leadership. There are many ways to handle a leadership position, but I think my leaders at that time were really gutsy and wonderful.

Influential live experiences

Mr. Akyu from Panasonic:In your thirties, you were involved in a number of difficult start-up projects. Can you tell us about some of the specific events that influenced your view of life, management, and work philosophy?

Katsumoto:When I joined the company, I thought I wanted to stay in Atsugi and devote myself to R&D, but that did not happen, and I have gone on to do many things. After turning 60 years old, I was finally put in charge of business equipment and R&D, which was my wish when I joined the company, and now I am enjoying working with younger people. My original wish has finally come true, and in the end, I'm glad that it turned out the way that it did. I have had both failures and successes in my time at Sony so far. I think that finally having my initial dream come true after having various experiences that changed my world view was ultimately better than if I had had my dream come true early and done the same thing all along.

I have moved from place to place and job to job, but there are three that have had a particularly large impact on my outlook on life.
First is my experience at the Koda Site. I realized difference in ideas regarding the speed of manufacturing between a business unit and a factory. In manufacturing, every second counts, so you are on your toes while the production line is running. If even a small part of the product is defective, it is analyzed at a tremendous rate to ensure that the quota can be fulfilled. I realized that there are people who work at such a great speed, and that there is no such thing as poor workability. However, if the production is completed on time and the scheduled quantity is produced within adequate quality, there is no overtime work at all. Unlike design and development, there was a balance between intense work hours and calm after work.
When I was at Koda, the economy went into recession and we were ordered to ban overtime work, including technical staff, and to completely close every building at the designated time at the end of the day. Everyone complained that it was going to be a big problem, but it ended up being totally fine and the company operated just as planned. Now, more and more people are working from home due to COVID-19, and I think we are experiencing the same phenomenon. When I was forced to do work from home, I found out that many things that I had believed to be true were not in fact the case. At that time, I made up my mind to stop unnecessary overtime work, and in fact, I have not done any overtime work at all since making that decision. Instead, I go to various places to meet new people, make more friends, and study. I have also started to look back at my work and say, "I was left to my own devices so much when I was younger," and switch to letting my subordinates handle things more. That was one of the most significant changes in my outlook on life.

The next job to have the largest impact on me was my assignment in the UK. I was very influenced by the people which whom I had the chance to work. There were people of many different nationalities all working together, and at first we didn't agree at all. That is what diversity is all about, isn't it? However, it was impossible to listen to everyone's opinion, so we really struggled in our daily meetings. In Japan, there is a tendency to believe that taking the average of everyone's opinions will make everyone happy, and that's how things are done, but I realized there it was defeating the purpose of having such a diverse group to just go and take the average of all the various opinions.
While thanking each of them for their input, I began to honestly discuss my thoughts with everyone and choose the most extreme yet competitively viable ideas. It was hard work, but at that time, I began to realize that is was management and leadership are all about. If the results are good, we can all be happy. Even though we are all gathered together, if we take the average, the resulting opinion won't change that much each time, and we won't be able to come up with competitive ideas. I believe that the essence of diversity is to accept extreme but competitive ideas, and it was my experience in Europe that made me realize this.

Lastly is my time as President of Sony-Olympus Medical Solutions. This had a great impact on me because I was electrical engineer with a background in electro-physics who was now in charge of medical care.
In addition, I had experience in sales and manufacturing around the world, and as a Sony employee, there was always common business culture and other similarities that existed wherever I went. However, when I worked with people from other business cultures such as Olympus, I felt a greater distance, even if we were both Japanese, than I would have felt with other Sony employees from overseas. After all, each company has its own culture, and because of a decades-long history, it permeates the entire company. I realized this when I went to Olympus.

Now, I try to talk to young people about what I have learned through these three experiences.

Motivation for his leadership style today

Mr. Kinugawa from Panasonic:I read on your website that you have established an R&D center, and I was interested to see that you have done some very innovative things, such as replacing the heads of overseas laboratories. Could you tell us why you are undertaking such reforms, and if you have had a vision that that is what you wanted to achieve since you were young?

Katsumoto:When creating the shape of the current R&D Center, I was heavily inspired by the admiration I held for the R&D Department 2 when I was younger.
When Sony's head office was located in Gotenyama (Shinagawa-ku, Tokyo), there was a development laboratory within the head office, and the R&D Department 2 in particular produced a series of hit products such as tape recorders, transistor radios, and televisions. The prototype of the Handycam® was also developed there. The atmosphere was very free, with Ibuka-san saying, "Can't we make something like that?" and the younger members saying this and that as they created it, and I never felt a sense of hierarchy between the newcomers and the company president. When I first joined the company, it wasn't that large, but it grew and grew, and by the time I was in my 30s and 40s, the organization had become a pyramid, and people didn't care about what was going on next door. When I arrived at the R&D Center in 2018, I had imagined it would be like the R&D Department 2, but it was a top-down organization with a pyramid structure consisting of business units, divisions, departments, and sections.

Since my arrival, I have made major changes to the organizational structure, eliminating the hierarchy within headquarters and departments, and placing departments, including overseas laboratories, directly under the R&D Center. In addition, we took away the names of the departments. I'm sure there was some confusion at first, but I explained to them, "For example, if you call it the Handycam Division, it can only make Handycams, right?” Technology changes with the times, and if we stick to the name of the department, we will not be able to come up with new ideas. The idea is to come up with ideas and plans according to each project and allow participation from any department, without regard to the name of the department, and allow everyone to work together.
Nowadays, when I walk around the R&D Center, all kinds of people feel free to talk to me, and we all talk about whatever we want, regardless of our position in the company. That's the scene I saw in the distant past in the R&D Department 2. It's changing little by little.

However, it was not was to get to this point. When I arrived at the R&D Center, we had a "Request for Intentions" meeting, but in an organization that is used to a top-down approach, if I say even a single word of my intentions then all the employees will do what I say. As long as they do what the top management tells them to do, they are safe. If they do what Katsumoto-san says, at least he won't get mad at them. Even if they fail, they can say, "Mr. Katsumoto said so.” That was the culture of the pyramid structure.
So, at the first plenary session, I said, "This is the first time I'm going to express my intentions. My intention is to not share my intentions anymore.” I told them to think for themselves. After many discussions with each layer of management, everyone gradually reached the conclusion that things would go better if they looked at the whole picture, not just their own responsibilities.

The thought process of a leader

Mr. Suzuki from Panasonic:What are the differences in leadership requirements with respect to scale, and what are your thoughts on leadership in response to the changes in what is required as the scale of an operation increases?

Katsumoto:When I first became the leader for a product, I was very focused and thought that I had to take charge of everything and lead everyone to the right place, and if my subordinates couldn't solve a problem, I would go and solve it for them, or stay at the office until midnight and do my best. However, I realized that I was hindering my subordinates' growth instead of supporting them, which is connected to the story of the R&D Department 2 I mentioned earlier, and I began to think that I should leave things to them.

In addition, when I stopped working overtime and used the time to go to various places to study, I realized that leadership has been changing with the times, and especially recently, the top-down style with one strong top management is no longer effective. The best part of diversity is that it produces many different opinions, and the strongest measures are hidden in the most extreme ideas. If there is a top-down approach with a strong leader, the work of the people under the leader is determined by the ability of the leader. I believe that this is not the way to go, especially in R&D.
To address this issue, we have formed a "leadership team" of diverse members at the leadership level to share opinions from various perspectives and ultimately go with the most extreme ideas. We live in an age where we need to trust people and let them express their opinions in a way that is not top-down. Change requires patience, but I think this is very important.

Around your age is the time when your career really starts to take off, but I feel that people who have only worked within their company don't experience much growth after that. If people don't get out there on their own, they tend to only engage in internal discussions and lose sight of the world. I think it would be difficult for such people to take on leadership roles. No matter how well you exercise leadership to organize the company internally, it is meaningless if the company does not become stronger. Study the outside world, study the strongest people outside the company well, and make your company strong in its own way. Because of this, I don't think it’s good for people in leadership positions to have only worked within the company.
I want the leaders of the R&D Center to go out more and more, learn about the world, discover various possibilities, explore the possibilities of collaboration and open innovation, and contribute to the Sony Group by conducting various forms of R&D in a way that best suits Sony.

The Panasonic team:Thank you very much for your time today.