Word: nonaka
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...turned out the old world wasn't ready for Nonaka's vision. Sanyo's losses continued to mount. Nonaka lost the CEO title last year when the position was eliminated; on March 19, she resigned as chairwoman shortly after the company reported it might have to restate earnings for the four years through March 2004 amid a government investigation of possible accounting irregularities. While Sanyo was beset by problems before Nonaka arrived, including cutthroat price competition from South Korea and China, her attempt to radically change the corporate mind-set had become a distraction from urgent problems, analysts said...
...Nonaka's failed turnaround effort is a cautionary tale showing that, while going green may save the world, it may not save your business. With climate change and high oil prices in the headlines, corporations everywhere are rushing to show off their green credentials. But doing your bit to reduce carbon emissions is not the same as basing profits heavily on the sale of environmentally friendly products, a field that-niche-market successes such as the Toyota Prius hybrid car notwithstanding-has yet to reach critical mass...
...Nonaka, however, chose to take a long-term approach, anticipating that environmental concerns in coming years would become an increasingly important factor in consumer buying decisions. She reorganized Sanyo's 300 subsidiaries into three divisions: environment, energy and lifestyle. The company began marketing new products such as a battery that could be recharged with a solar panel and a washing machine that recycled water. These moves were a hard sell at a proud manufacturing company like Sanyo, which started by making bicycle lamps in 1947. "What Sanyo does best is make batteries and industrial air systems and refrigerators," says Hideyo...
...Sachs and Daiwa Securities, which had sunk billions of dollars into a Sanyo turnaround, to be patient. The reality is that Sanyo, saddled with $14.7 billion in debt on Sept. 30, according to the company's most recent financial reports, only had the resources to restructure, not revolutionize. With Nonaka gone, analysts expect Sanyo will sell losing divisions while focusing on its best product: rechargeable batteries. That strategy could return Sanyo to profitability, but it won't make the company one that "solves the problems that the world is suffering," as Nonaka once...
...Even her critics say that Nonaka may simply have been ahead of her time. Other, better-financed companies are redefining their images by moving aggressively into environmentally friendly products. For example, Archer Daniels Midland, the U.S. food-processing giant, has become a hot stock-market play because it is America's largest producer of ethanol, an alternative fuel seen as a way to reduce U.S. dependence on oil imports. "The direction towards environmental issues is the right one," says Tatsuya Mizuno, an analyst with Fitch Ratings. But it's too soon for CEOs to bet their jobs on the expectation...