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Olympus removes first non japanese CEO after 6 months (because of cultural differences)

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Back in April 2011 for the first time in Olympus history a non Japanese citizen became Olympus CEO. But after 6 months only the (british) Michael Woodford had been dismissed because of “boardroom and management conflicts“. (Source: Boston.com). The Olympus board appointed Chairman Tsuyoshi Kikukawa as new CEO. It is an unexpected news and Olympus shares plunged more than 14 percent to 2,123 yen ($27.60) on the Tokyo Stock Exchange. The new CEO Kikukawa said that “He (M.Woodford) could not overcome the cultural barrier of Japan and Japanese companies“.

Analysis: What does it mean for Olympus? From what I read on newspapers and from what I know from my sources Michael Woodford is a very competent manager that has been able to improve the Olympus Europa Holding GmBH profits by cost cutting and restructuring. And my guess is that his restructuring plans were to much “advanced” or “revolutionary” for the traditionally very conservative Japanese company mindset. Is that good or bad news? I guess Michael Woodford would have gone rid of  the digital camera business if it keeps to loose money like it did in the last years. And that’s something that will probably go against Olympus history and tradition. What will happen now? That news increases the chance that Olympus will keep the digital camera business alive, but the risk is that the board will not take some serious decisions to increase the profitability of that business.

And here is the official Olympus statement about the recent event (Source Olympus Global):
Michael C. Woodford has largely diverted from the rest of the management team in regard to the management direction and method, and it is now causing problems for decision making by the management team.
Hence, judging that realisation of the 2010 Corporate Strategic Plan with its slogan of “Advancing to the Next Stage of Globalisation” would be difficult to achieve by the management team led by Woodford, all the board directors attending today, except for Woodford himself who could not participate in the voting due to special interest, unanimously resolved the dismissal from his office of the representative director, President and Chief Executive Officer (dismissal from the office of the representative director, President and Chief Executive Officer and stays as director without executing right.) Along with this, it was also resolved that the representative director, Chairman Tsuyoshi Kikukawa double as the representative director, President and Chief Executive Officer.
Global management that Olympus aims is to implement management rules, information management and operation that are common throughout the world in order to establish a business infrastructure that is more efficient and quick to respond while making the most of a Japanese style management that sets a high value on people, technology and pride of monozukuri or manufacturing. To this end, all our employees will head for the same direction as we will urgently start establishing a new structure to go towards the same goal with the entire staff as one.

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  • Pete

    I don’t know what he did, but I think he was no good chief for the stuff if he wanted to go the european way. Fire your stuff, even the best of them is the idiot way of many European companys. And they call it restructuring. OMG. Maybe the Japanese Tradiotional Life can’t deal with this?

    • “Olympus shares plunged more than 14 percent to 2,123 yen ($27.60) on the Tokyo Stock Exchange.”
      probably just due to short selling/automatic computer programmes selling shares, wait a few weeks a see where the share price is then.

  • “He (M.Woodford) could not overcome the cultural barrier of Japan and Japanese companies“.

    Or probably it is other way around and it is the stuck-up Japanese companies which fail to overcome the “cultural barrier” and embrace foreign markets?

    I gather it is the same “cultural barrier” which prevents Oly from releasing a camera which might interest me.

    I’m pretty sure that neither their NanoFourThirds would interest me. But probably the PicoFourThirds…

    P.S. Management shake ups are always for a company. Sad.

    • Anonymous

      What is it specifically about the E-P3 that you find lacking in a camera?
      I could see not being interested at all in the E-P1 or E-P2, but what’s wrong with the E-P3? The only thing it lacks is built in EVF and just less than one stop of noise compared to things like the NEX 7.

      But to make up for it, there’s the 12mm F2.0 and 20mm f1.7, the 45mm f1.8. Less exposure time equals less noise, so if you’re using faster glass, it makes up for the lack of sensor sensitivity.

      • > What is it specifically about the E-P3 that you find lacking in a camera?
        > The only thing it lacks is built in EVF and just less than one stop of noise compared to things like the NEX 7.

        Not only the built-in VF, but also the swivel LCD – both of which my now discontinued E-620 has.

        Also – better/firmer grip, also lacked by my E-620. Replaceable grip is a step in right direction, but again leaving it to aftermarket to actually deliver the decent grip.

        Also Oly’s m43 lacks bright zooms like 14-45 or 12-60.

        • Jim

          so what your saying is – they were better off before jonny english was around!

      • Esa Tuunanen

        Instead of creating mirrorless system to compete along with big guys of photography Oly has been going the other way in last years and shrinking their act to niche like Thom Hogan has said multiple times.
        None of the Pens are ergonomically match for even some lowly E-420.

        > there’s the 12mm F2.0
        Beaten in optical quality by Noktor which is in reality also propably full stop brighter because its F1.6 rating is based to real light transmission. (theoretical aperture rating comparable to Oly’s F2 is F1.4)

        >using faster glass
        What faster?
        Except for these few limited use primes m4/3 lenses are often dimmer than 4/3 counterparts and also often leaving aberrations uncorrected.
        Except for one or two consumer lenses made for the lowest price point name Zuiko used to stand for high optical performance in 4/3 lenses.

        And more gathered light is what equals lower noise. You wouldn’t want to shorten exposure time when you’ve got weaker sensor needing lower signal amplification aka ISO setting for avoiding higher noise.
        Other normally small noise contributors start to rise up to significant role only when exposure time rises to seconds making camera/target movement exposure time limiting factor nearly always.

      • Nipponbasse

        Im sorry, but that soounds like BS to me. “Stuck-up Japanese companies”? “Failing to embrace foreign markets”? Really? What world have u lived in the last 4-5 decades?

        The American Way or The European Way isnt always The Best Way, although alot of ppl (especially in America, so I figure u must be from there?) thinks so…

        Sony, Panasonic, Olympus, Nikon, Toshiba, Canon, Sharp,Hitachi, Mitsubushi, Toyota, Honda, Nissan, JVC, Tohatsu, Yamaha, Suzuki, Yanmar………. the list is endless ( and sure, some of these companies now have foreign CEO’s, but that hasnt always been the case has it? If so, how did these stuck-up Japanese companies get to be so big in the first place?)…

      • mahler

        The most important attributes of a good camera are lacking: good ergonomics and good grip. This flimsy wheel-4-way-button thing is a joke. If you want to do exposure control, you really have to watch, what your fingers are doing and you need to take the camera out of shooting position (at least when using the EVF). Not so with the GH2: click wheel and turn, very easy, no reason to leave the EVF.

        What else? No build-in EVF, attachable EVF has no eye sensor, no fully tiltable screen, no multi-aspect sensor, only 12 mpx, mediocre high ISO IQ, again: no good grip.

        On the gimmick side: lots of superfluous things (art filters!) but lack of the real “killers” such as auto HDR and sweep panorama.

        The only advantage over the competition is IBIS, but Panasonic’s OIS is more effective in telephoto lenses anyway.

        The only landmark I can see from Olympus are the two new primes, which I immedaiately bought, when they were available.

        So to build up a good m4/3 camerra system, you better go for a Panasonic body, buy your zooms from Panasonic, because they are better, and get two primes from Olympus. Good outlook for Olympus to become the mirrorless market leader …

        • @mahler
          EVF has next to no advantages over using the LCD and many disadvantages, most people don’t use the eye sensor or disable it (Pansonic have removed it from recent models).Tiltable screen and multi aspect sensor in all liklihood will be in some future Pens.
          12 million pixels is good for most printing needs and all screen needs, Olympus ISO performance is pretty similar to Panasonic’s.
          Art filters are a much loved and used feature by Olympus users and have been copied by their competitors.
          Not really sure Panasonic OIS is more effective in telephoto for stills, video yes but not for photo…

          The most important attributes of a good camera are Not lacking:it allows you to realise your creative vision (if you have any).

          • mahler

            Then please tell me how to frame reliably with an LCD in bright (sun) light – virtually impossible without any additional effort. Thus, an EVF in a camera is THE key advantage. A camera without it, is lacking its most important tool. You can buy the attachable EVFs, but then you have a more awkward solution at a much higher price point than the competition.

            Olympus users wish for a long time, what should be in their bodies (build-in view finder …), but it does not come. The eye sensor, is THE ergonomic key feature to have EVFs working nicely together with LCDs and especially touch screen. Removing it is a big mistake of Panasonic at the G3.

            Art filters, once you played with them, become quickly tiresome and boring. They should be left to postprocessing and should not have any place in a camera. They are a waste of development effort, which should better be directed to other improvements. Panasonic did not implement them, because they realize, that they are a short pleasure and otherwise useless.

            As far as I know, IBIS does not stabilze the LCD (I may be wrong though). OIS definitely stabilizes the the finder image, and is therefore essential to shoot long focal ranges handheld. (Additionally, if you don’t want to use stabilization, it is much easier to turn it off via the switch at the lens).

            • @Mahler
              thought the bright sun light example would be your only one, if you have a tiltable screen you can tilt it slightly downwards or the new EP3 oled screens are much more viewable in bright sunlight.
              In 5 years of using the LCD only for 2 photos did I have to resort to using the viewfinder (yes it was a very bright sunny day and I was photographing animals that were under the sea and pond’s surface.
              Saying art filters quickly become tiresome is like saying lomo cameras, grainy black and white film, tilt shift lenses, pin hole cameras etc become tiresome, maybe it is your imagination that becomes tiresome???
              The eye sensor was removed because people/users were disabling it, just like Panasonic removed multiple exposure mode.

              IBIS is stablised on the LCD and turn it off/on can be assigned to a function key…

              Vocal internet OLympus users are asking for built in EVF, I’m pretty sure that most NEW Pen users don’t miss it and may well be reflected in poor sales of detachable EVFs…

              • Mr. Reeee

                An add-on EVF may be a nice option, but it’s an expensive and clumsy one that pretty much defeats any size advantage a point and shoot style body may have. Add-on accessories also add another level complexity… Bring it? Juggle, drop, break, lose?

                How many people see an advantage of adding a $250 EVF to a $500 or $600 body? That puts you in GH2 price territory. And if you opt for a G3 ithe difference mostly pays for a 45mm f1.8.

                Yes, the EPL3 TiltyScreen is very nice for a lot of situations. It would be perfect for subtle street shooting at waist level.

          • BS Artiste

            A viewfinder has an advantage over a large LCD when holding the camera near one’s face to brace it for handheld long telephoto shots.  In contrast, holding a camera with outstretched arms to view the large LCD is shakier and less stable, which is particularly a problem on longer telephoto shots.

            I use the viewfinder on my E-30 to compose over 95% of my shots.  I use the E-30’s fully articulating LCD for the other shots where I have to hold the camera in some place or position in which I cannot easily place my head behind the viewfinder.

            The problem is not electronic viewfinder versus optical viewfinder.  I fully expect electronic viewfinders will surpass optical viewfinders as technology improves.  The problem is that a viewfinder is needed when shots are composed with the camera near the photographer’s face, and that happens to be a useful position for steadying a camera on handheld long telephoto shots.

            A removable viewfinder has an advantage of upgradability, but the attachment point can’t eliminate other I/O interfaces such as a hot shoe.  Plus, the attachable viewfinder has to be solidly constructed and stiffly attached in a secure manner such that it does not feel like the viewfinder will break off if the camera is even slightly jostled in the field.  The attachable viewfinder cannot look and feel like a kludge appendage to the camera.

            • @BS Artiste
              you seem to think that cameras with only LCDs can only be held with outstretched arms, if it has a tiltable LCD you can tilt the screen slighty upwards and brace your elbows into your stomach as well as having your legs in a firm position, you can try gripping your camera more firmly…

          • Mr. Reeee

            It’s a shame that Olympus hasn’t released a M4/3 body with a built-in EVF.

            Mahler and BS Artiste make a number of excellent points about EVFs and LCDs. There are many advantages to having BOTH and being able to choose which to use in specific situations. Attempting to negate or wish away the obvious advantages that a built-in EVF provides because your brand doesn’t provide one, or seems to think that point and shoot bodies are good enough, or they want just you to spend another 25% or 30% for a tack-on unit, is pointless… or maybe just sour grapes.

            OIS is more efficient in longer lenses. Nikon and Canon both use forms of it rather than in-body, if for no other reason that it can be fine tuned for the specific lens, rather than relying on a user to make in-camera adjustments, especially for unsupported lenses. No form of stabilization is a replacement for basic handling technique and something that an EVF physically provides. Check the dpreview M4/3 forums for threads about funky IBIS problems or debates about when or when not to actually use it. It’s a big point of confusion even for seasoned users.

            Gimmicky features like “art” filters, in-camera editing, HDR or panoramas may make nice bullet points on PowerPoint presentations and spec sheets, but they certainly don’t make a camera any better. That kind of junk is better handled in Photoshop, not adding more layers of complexity to already overly complex devices. We’ve gone from cameras that allowed for selection and adjustments of few crucial parameters… film speed, lens, aperture, shutter speed and focus… to crazy numbers of choices and adjustments.

        • Mr. Reeee

          +10

    • Gam

      “Or probably it is other way around and it is the stuck-up Japanese companies which fail to overcome the “cultural barrier” and embrace foreign markets?”

      Your name says it all, Dummy.
      The fact that Oly even had the kindness to say that it was a cultural difference, being the polite Japanese that they are, rather than to say that his British way of BUTCHERING everything in his path, tells you everything. You Dummy.

  • napalm

    “Or probably it is other way around and it is the stuck-up Japanese companies which fail to overcome the “cultural barrier” and embrace foreign markets?”

    the way the world works now is these Japanese and Korean products are still dominating the global market? so why should they adjust to the western ways?

    • You could say that same thing about the American auto makers not too long ago. Indeed, everyone did.

      The best ideas and best practices don’t come from a single place. They come from being alert to differences and adopting ideas that are good, no matter where they come from.

      I’m not a fan of the slash-and-burn style of “fixing companies.” Just the opposite, as a matter of fact. You can’t downsize yourself out of a problem. All you do is start the Long Spiral Downward process when you do. You have to grow your way out of problems, and that means you need the people and resources you’ve already built. You might have to retrain or renew those things, and it might require some tough love for those that just want to keep doing what they were doing, but you have to build new and better things, and fast, and the only way to do that is leverage what you’ve got.

      I don’t think the Olympus engineers are lacking any interesting or new ideas. I’ve read several of their internal design and decision documents, and what strikes me is that what they’ve delivered to date isn’t what they were/are prepared to deliver with the support of management. But I also believe that both management and engineering are still out of touch with their users. This is not unusual in the Japanese companies. Even Fujifilm was surprised at the success of the X100. Why the heck did they design it if they didn’t think it was going to be a success?

      In Silicon Valley we used to talk about the “golden gut,” the notion that you can have a leader who has insight into what a customer WILL want and use versus what a customer THINKS they want. Customers aren’t designers or imagineers. When asked what they want, they base their responses on what they’ve got (go ahead, look around here and see how many of the feature requests are “change this to that” or “offer this instead of that”). Customers give you short views of the world. They can see small things they’d like to be different. They don’t see the Next Big Thing. They don’t think about a product that delivers in a very different way. A leader with the golden gut does think about those things and has some unspecified way of successfully ferreting out the winning ideas from the losers. He or she somehow thinks like a future customer that isn’t encumbered by present devices.

  • Your tags

    Admin…did you forget to put a close tag cos all your text are italics.

    • Quoted

      Cause that whole thing was a direct quote.

  • napalm

    “From what I read on newspapers and from what I know from my sources Michael Woodford is a very competent manager that has been able to improve the Olympus Europa Holding GmBH profits by cost cutting and restructuring. And my guess is that his restructuring plans were to much “advanced” or “revolutionary” for the traditionally very conservative Japanese company mindset.”

    that might be it. conservative Japan may not be too open for cost cutting and restructuring. I see this as a good thing as his plans might be going for a merger or selloff like what other European companies have already done.

  • bright wide angle

    I just wanna know when (if ever) we see mZD 100mm f/2.0-2.8 macro, masterpiece optics, premium price.

  • Michael

    At a guess, the European restructuring was the low hanging fruit that was easy to do, and maybe Woodward felt restructuring a region like this was a way to demonstrate to shareholders that he could make necessary improvements there before moving on to problems in Japan. Financially it seems to have worked, so I suspect he simply became too confident of his power in the company and ended up treading on too many toes. A shame really.

  • Chris

    Hmm, if Western business pages say that a business leader’s defining characteristic is ‘very competent’ then I get visions of someone determinedly executing the economic orthodoxy that’s got us all into this mess. That may well just be a reflection of my lack of faith in Very Serious business people though.:-) Japan’s got problems of its own, but “Japanese-style management” has a lot going for it, I think.

    • Read Krugman much?

      • Chris

        Ha, I read him fairly often. I think that on many topics he talks a lot of good sense, by which I mean, of course, that those views chime with my own:-)

  • Due to the highly hierarchical structure at Olympus, the recent bumps at top management level should not have an immediate effect on the camera division plans for the near to mid-term future. The best way for the camera division to insure a healthy cash flow is to keep developing small, fast, high quality primes for m4/3. The 45/1.8 must be a serious cash cow.

  • JMF

    CEO in Japanese company usually does nothing, so I guess his colleges were surprised that he actually wanted to talk to something. Anyway…working for Japanese company would probably break him sooner or later anyway…

  • Nathan

    Japanese are not going to take to being commanded by a westerner any time soon anyway. Japan has a tremendous national superiority complex.
    He probably suggested something very rational but stepped on the wrong toes.

  • Canned for failure to be Japanese…

  • Ross

    It looks like he’s been demoted from CEO to Director & not removed.

  • Anonymous

    Glad to see Olympus Board of Directors finally realized they had another Chainsaw Al in their hands, why pay someone to chop up your business and sell it? He tried to cut off one of the arms of Olympus. A good CEO should have a strategy to grow your business, not eliminate it.

    • lnqe-M.

      +100

    • Jim

      + totaly agree – if you cant improve the buisness then your not doing it right!

  • Frederic Hew

    This announcement is extremely unusual in its directness and bluntness. Normally when a company decides to let a CEO go it issues a message thanking him for his contribution to the company, as well as suggesting what is expected of his replacement.

    I think the board of directors was very upset and vengeful to release such a message. Woodford probably really upset some guys there.

    I am of the opinion Olympus has lost its way and needed someone to kick some butt and hopefully help it make sense again. Either Woodford is not the right man for the job or Olympus is not willing to go through with this – I would guess it is the latter. Too bad Olympus.

    • EddyKilowatt

      “This announcement is extremely unusual in its directness and bluntness. ”

      Agree… literally jaw-dropping, coming from Japan.

      I thought the recent Yahoo/Carol Bartz dust-up was kind of unseemly, but what the heck… the English-speaking world has got the likes of Jerry Springer to blame for over-sharing in public what ought to be private. I’ve never seen anything even close to that statement come out of Japan.

      • cL

        That’s exactly what I was thinking also. Yahoo’s Bartz. She deserved to be kicked out. All she did was bragging her contribution, and bad mouthing ex-CEO (very bad form). So what’s her contribution? Killing jobs and break the company apart to be sold off, so she could earn millions? If you are living in the U.S., you know there is a nation-wide protect going on that’s specifically trying to stop the likes of Bartz, who enrich their own pockets by sacrificing others.

        Remember cultural difference can exist in a a company with only on ethnic background. Company culture is also a type of culture, but since Woodford is a British Nationale, so maybe ethnic type of cultural difference may be overplayed, because it’s the most obvious trait. But reading through the original article, we know he was being expelled because he couldn’t understand Japanese way too well also.

        Also note in the original article, Olympus were asked why there is a difference between praising Woodford a couple weeks ago and then suddenly kick him off (they didn’t respond to this question). I don’t know what’s going on specifically, but from what I do know about Japanese culture, they probably really tried to worked with Woodford, but he was a bad fit to the company, so all they could do was praise him for restructuring and cost saving, because they couldn’t find anything else good to praise him with…. Japanese people (and in some East Asian cultures) usually praise people even when they hate them to make sure conflict don’t get out of hand, so it looks to me the conflicts has been going on for too long, but Board has been suppressing their anger because Woodford was the CEO, so they tried to work things out.

        I am guessing Woodford’s leadership style probably was too executive style rather than cabinet style. He probably had some plan he thought to be right so he wanted to tackle on single-handedly, which is totally against Japanese community-based culture where everyone’s opinion must be considered, which may sound very bureaucratic and inefficient to a westerner CEO, and can frustrate those who don’t appreciate such method. And I can understand, it’s a very slow process indeed to get everyone’s opinion to be represented in the final plan, which may feel too much like a “compromise” rather than an all-out effort.

        That would also explain Thom Hogan’s ponder that Olympus was “out of touch” of their users, but their plans are often well thought out. Japanese/Asian culture of community based culture rather than individualistic culture of European/American culture are very different indeed. Many American CEOs will feel a sense of duty to “save the company” where Asian CEOs tend to feel a sense of duty to “provide clothes and foods” (Asian idiomatic phrase of “bread and butter”) to the employees and their immediate families. That would also explain why European/American companies tend to go easy on restructuring to “save the company” and Asian companies tend to care about profit margin and more about the company’s reputation as an employer. Because any company (from any culture, usually from East Asia) that adapted Japanese style of business model are conducted in a family style of corporate culture, where the head of the company is considered the head of the family and must be revered and respected, because they literally provided subsistence to their employees as if they’re their own children, so cutting off their own children for company profit would be very unthinkable and lack of moral in the view of general public. Whereas there is no such thinking in companies that follow American style of business, where employer/employee relationship is strictly professional and money-based, not familial/relational-based.

        Notice I intentionally say “Japanese-style of business” and “American-style of business”, because there are Japanese companies that follow American model and vice versa. Which is kind of oxymoron also, because IBM, an American company in the old days uses the model more closely resemble what we would call “Japanese business model,” which really should be called old American model borrowed by Japanese. I can’t emphasize enough that it’s not about Japan vs America; who is right or who is wrong, but I would like you all to think about the meaning of corporate responsibility. Is the responsibility toward money or responsibility toward fellow human beings? Maybe that’s why Woodford was kicked out, treating people as expendable, but that’s just a speculation.

  • Sahaja

    A problem for Olympus cameras is that they are tied to their competitor Panasonic.

    • Anonymous

      Olympus is a strange company, it shows you that it can take risk – to create the line of micro 4/3 and mirrorless cameras, but it stubbornly stays with Panasonic sensors. If your competitors’ products have better DR and higher ISO, you should at least match theirs. 4/3 sensor size is not the problem, it has its advantages, Panasonic sensor is. At least Olympus got one thing right with its latest products – better and fast focus in low light.

      • Sahaja

        How much would it cost Olympus to get someone else to make a better m 4/3 sensor? There can only be a few companies that could manage that.

        If it was APS-C they could probably buy one off-the-shelf from Sony as Nikon and Pentax do.

      • @Anonymouse
        who’s sensors should they be using (Kodak might be going belly up soon).

        Also Panasonic have stated that new sensors with increased performance is one of their main priorities (dynamic range and higher ISO)

  • MichaelKJ

    The drop in stock price indicates that investors see this as an indication that Oly’s board of directors doesn’t know how to address its financial problems. Even though Woodford was the first non-Japanese CEO, he has been with the company for some time and one would have hoped that the board was familiar with him before promoting him to CEO.

    Sony’s British born CEO, Howard Stringer, has occupied the top position at Sony since 2005. Makes one wonder if he is better at adapting to the Japanese culture or if Oly’s corporate culture is incapable of adapting to today’s global economy.

    • Anonymous

      I am surprised he is still in charge. Since he became the CEO of Sony, Sony’s stock price has been going down.

    • Anonymous

      That’s it exactly. Share price reflects that this move is a sign of a steerless Board. Think about it, they probably opted for a non-Japanese CEO because they realise some things have to change drastically, beginning with corporate culture. But within six months, after the first bits of friction, they shitcan the dude.

      It could, of course also be the case that the guy had no clue on how to transform the firm and corporate culture, was more interested in Sake than in performance measures, or brutally insulted one of his Japanese staff by pointing his chopsticks in their direction.

      Both options are bad. Either the board does not have the guts to push through what’s necessary, or they are very bad at selecting the right leader for the firm.

      An opposite example is Nokia. I’m sure Elop is creating some cultural friction as well at Nokia, taking radical directions that a lot of people doubt (going against the consensus model that’s more part of the Finnish than US culture). Yet, the board still supports him. Not sure if they should, but they probably have targets that they will watch.

    • That’s not the way I interpret the stock drop. Woodford represented some clarity of what might happen going forward (cost reduction). Removing him and putting a board member in place doesn’t provide any clarity towards what might happen next. There’s no indication of what, if any, decisions Woodford was making might be unwound, or what new decisions might be made. The change indicates that there was a problem that wasn’t visible to the public, but the description of that is vague. In short, Olympus appears directionless to investors at the moment. Investors don’t like directionless.

      • MichaelKJ

        I don’t think our views are that much different. My comment that investors don’t believe that Oly’s board knows how to address its problems is consistent with your opinion that “Olympus appears directionless at the moment.”

        • @MichaelKJ @Thom Hogan
          I’m pretty sure Olympus will be showing more direction within the next 2-3 months once this all dies down…

          Also I’m pretty sure it wasn’t long term investors that were selling off their shares and those short term ones will quickly buy back there shares.

          • Direction to whom? Consumers, or shareholders?

            The comment here is about shareholders, which downsold the stock the point where it dropped 18%. That’s a big drop of confidence.

            Thing is, we all know Olympus had financial issues, mostly centered on the camera group. Investors want a story that shows that Olympus won’t continue to bleed money in cameras while they make money in medical. With Woodford’s proposed cost cutting gone, where will that come from? Investors are saying they don’t know, as the whole point of replacing the old management with Woodford was to perform cost cutting that wasn’t being done. Now we have the old CEO under whom the financial issues occurred stepping back in.

            I, too, think Olympus stock will go back up, but mainly because 18% was an over reaction and Olympus will lobby some of its bank and other friends to up their holdings. But the problem remains: we’re back to the management under which the problems occurred. Do we really think they will solve them this time? And if so, how?

            • @Thom Hogan
              an 18% drop in share price is due to financial institutions seeing an opportunity to make a quick buck and has next to nothing to do with confidence in Olympus ….that’s the reality!

              “the whole point of replacing the old management with Woodford was to perform cost cutting” not really sure that was the “whole point” of promoting Woodford, cost cutting isn’t the only way to restore profit (probably one reason for the culture clash)…

  • hiplnsdrftr

    Working with the Japanese can be complex (as most people realize).

    They have a tendency to over-employ, so you will see several people doing the job of one person. So the suggestion to lay off people sort of goes against their whole working culture.

    There is also a very convoluted way to gain information from your colleagues. Direct confrontation or rejection is usually avoided. So there is an art to reading peoples replies. Sometimes they will say yes, but they are actually saying no.

    There is also an entrenched system of purposely spending more money than necessary. Part of it comes from a philosophy of “flowing money”. If you stop spending money you disturb this flow.

    I am sure it is amazingly complicated for a Westerner to successfully lead a Japanese company.

    • Vlad

      .

    • cL

      You can read my other post above. Japanese executive’s mandate tends to be provide their employees with job security rather than looking at profit margin as top priority, so your “they have a tendency to over-employ” is a very froeign notion. My past employers are all American companies, and I can tell you we’re doing 3-4 people’s jobs and often not enough coverage and corporate support. When you struggle like that, you often just want to “get the job done” instead of following the proper procedure, and that’s the reason company which downsized is on the path to bankrupt itself.

      Remember the head genius behind Olympus Maitani said if every engineer can put their 120% of their effort, there can be a lot of innovation. When you downsize your company too much, you should feel lucky if your engineers can even put out 50% of their effort…. You’re not giving them enough time to think for improvement, because they’re merely struggling for survival.

      When I mentioned corporate support, I don’t expect something radical (radical in American sense) like Fuji, where engineers stubbornly insisted x100 must be made the way they are, even when the corporate thought it might not sell, but they conceded to engineers anyways and made x100 based on original specs without modification based on marketing reports. Probably doesn’t make sense to Americans….

  • Daemonius

    I think that his stupid European ways simply didnt go well with Japanese. They have respect for old ppl and old workers, they dont fire ppl “just like that” to reduce cost. They value ppl that work for them or worked for most of their lifes. Plus those leader boards are usually full of quite old ppl too (cause they have experience).

    Olympus can adapt to today economy, m4/3 part of them is doing just fine.

  • Bryan Brunton

    “I guess Michael Woodford would have gone rid of the digital camera business if it keeps to loose money like it did in the last years.”

    And this analysis is based on what?

    That’s right nothing.

    Nada. Zip. Zilch.

    The value of the camera business in advertising and mind share has been stated many times.

    The effect on the bottom line of the camera business (a small part of the company) to Olympus’ overall earnings is fairly meaningless. The Olympus camera division is a tiny gog in a larger machine. Next time try to come up with something to base your “analysis” on.

    Please. Otherwise you just look pathetic.

    • chuck

      I do not understand your argument. “The camera business (a small part of the company) to Olympus’ overall earnings is fairly meaningless”. Does that mean you think the camera division should be shut down or not? Usually superfluous businesses are the first ones to be shut down if they are running at a loss or requiring too much management’s time.

      The question is should Olympus shed the camera division since it really does not fit well with the rest of the core money making products of the company. Japanese management answer would be “very difficult”. If you lived and worked in Japan you will know what that means.

      “very difficult” = get out of here with the donkey you rode in here on

  • Kung Lao

    The guy probably isn’t even a real CEO, probably just some actor they picked off the street. The talking head though he had power, so they axed him.

    • Anonymous

      like Kagemusha?

    • cL

      Or as I speculated when he was appointed as the CEO. His job is to do a job no Japanese CEO with moral is willing to do….

  • This news from 1 okt. has been removed.

    October 1, 2011
    Michael Woodford – President and Chief Executive Officer

    The Board of Directors met last Friday, 30 September to appoint Michael Woodford to serve as Chief Executive Officer of Olympus Corporation, in addition to his existing responsibilities as President and Chief Operating Officer, with effect from 1 October 2011.

    It has been six months since Mr. Woodford was appointed as President of Olympus Corporation, and in that time, the Board have been extremely pleased with the progress made under Mr. Woodford’s leadership in this role, which has exceeded the expectations at the time of his appointment.

    Over the last six months, Mr. Woodford has established a number of important initiatives, particularly ‘Cost-Cutting 20’, which has not only already had a positive impact on the financial results, but also in creating an environment where change is not only accepted, but actively encouraged. The company has also made significant progress in building genuinely global functions in the context of the new Group Management Structure which was introduced on 1 April 2011.

    Announcing Mr. Woodford’s appointment to Chief Executive Officer, Chairman of the Board, Mr. Tsuyoshi Kikukawa, commented “I believe it is now the right time for Michael to assume the Chief Executive role, with full executive responsibility for the day-to-day running of the global organization and I’m pleased to pass over this responsibility to him. The initiatives Michael has put in place to bring about change in the operations of our company have already had an extremely positive effect and I’ve been particularly impressed by the way in which he has shown a great sensitivity and understanding of the different cultures across our global organization, and how these can be brought together in the most positive way for the company.”

    Mr. Kikukawa will remain as a representative director and Chairman of the Board and continue to support Mr. Woodford in his management of the business in this new expanded role to further implement the changes necessary to achieve the company’s goals in the context of the company’s Corporate Strategic Plan.

    In commenting on his appointment as Chief Executive Officer, Mr. Woodford explained “Mr. Kikukawa has been an extremely strong Chief Executive and I’ve always been inspired not only by his visionary leadership, but also his personal motto of ‘Creative Destruction’, demonstrating his willingness to challenge the established order which is essential if the business is to avoid becoming stale or ‘resting on its laurels.’ I’m pleased to build upon these foundations to create a strong and well respected global company as we move towards our centenary anniversary in 2019.”

    link http://www.olympus-global.com/en/info/2011b/if111001corpe.html

    • Yes. That recent posting was what made this week’s firing so dramatic and unexpected.

      Something happened that we don’t yet know about. Woodford’s habit of going around management chain doesn’t completely explain it, unless he did so and made a decision that was really out there.

  • SteveO

    An amazing turn of events. Love to have been a fly on the wall to know what really went down. My guess, his cost cutting measures were appreciated so long as they only impacted westerners, but when he had the temerity to apply the same principles to the homies he was tossed out.

    What it leaves is an unavoidable impression of a company out of control, with the consequent drop in stock value.

  • Joey

    As others have mentioned, large Japanese companies are expect to “give back” and support the people of Japan by over employing and the old defunct (in the west at least) job for life. This is all tied to the Japanese social contract, and leads to a much smaller, state supported welfare system. Reading between the lines, this may be the cultural differences that Oly is alluding to imho.

  • flash

    If the truth be known that most CEO, of companies Olympus size, leave for personal or cultural (country or company) reasons. Major plans of running the company are mostly done by consensus.

    As the board hired him, and they knew a lot about him as an employee, they did not want him to fail. If it is perceived that he failed (i.e. they failed) it would hurt the stock price for a little while; till some fundamental analysis is done.

    • MichaelKJ

      Your analysis can’t be reconciled with the fact that Oly’s board of directors praised Woodford just two weeks ago and added CEO to his titles of President and COO. This sudden turn of events doesn’t appear to be caused by any long standing dissatisfaction with Woodford’s leadership style, despite today’s press release. One can only speculate, but my guess is that Woodford’s ouster was the result of something personal that recently happened between him and the Board’s chair (or someone else with a lot of clout).

      • flash

        I would view that as personal reasons. But who knows he or his wife may of just not liked the food. Some people are not cut out to live in a foreign country for extended periods of time. It did not have to been him but a family member. Or he may have a need to be some where else for personal reasons. It happens. I wish him and Olympus well in the future, and the exact details need not to be known by me or anyone.

        I just feel he and the Olympus board were basically on the same page as far as running the company, as demonstrated by the reporting you sited. We will be able to see, to some extent, by future actions of the company. The curt press release seems similar to others I have read. It could of even been a pay issue, some firms do not compensate you more when you move from President to CEO, and to ask is frowned upon.

        Remember, their is more to Olympus then consumer cameras. I have had many pictures taken of me with the non-consumer cameras; from the inside :( ; and used their microscopes in the lab.

  • Nic Walmsley

    He’s been in senior roles for a long time. And they remove him 2 weeks after applying as CEO. There’s no way to spin that – it’s a disaster. There must be something very deep and big that needs to be addressed at Olympus, and he tried to address it. Like the strategic relationship with Panasonic. I mean, is that relationship really working for Olympus?

    • flash

      Nic you are right, I just read that there was a big feud between the Chair and Woodford. Woodford described him self as loudmouth and direct multiple times previously; that would explain some of his poor public comments about the Camera division and his inability to play well with others in Kindergarten :) ; not what you want in a CEO of a multi-national company.

      I saw this in different places http://www.bloomberg.com/news/2011-10-15/former-olympus-ceo-dismissed-over-acquisition-probes-ft-reports.html

      The stock has taken a tumble yesterday. Well at least it was not the Camera division fault. It was the Gyrus acquisition again (cost them more then probably the whole consumer camera division). I find it very odd that he was supposedly going back to look at that. It was 3 or 4 years ago. In most cases you would want a new CEO to be thinking of the future not the past. Possibly “sour grapes” or trying to settle an old score.

      It is interesting that Gyrus is UK based, maybe he had other knowledge based on sources in his homeland. It is troubling for Olympus. I do not have a copy of the 2009 report, that should of been the end of it, I wonder what firm or who did the report. In the Financial Times it has been described as from an internal audit committee; but that may not be totally true as internal audit committees sometimes hire outsiders to do the actual work.

      If I was on the board I would be very upset with him, unless there is some criminal evidence what is the point in bring up a past (multi-year old) failure, by the CEO? At worst it will show the old board of directors and old CEO (the current chairmen) were stupid (they did hire a firm based Cayman Island http://www.ft.com/cms/s/2/87cbfc42-f612-11e0-bcc2-00144feab49a.html#ixzz1artdd9J9 .

      The NY Times article http://www.nytimes.com/2011/10/15/business/global/in-rare-move-olympus-fires-its-chief.html was more mundane and talked about Woodfield bypassing company division leaders in directing rank and file; real bad management when done on a routine bases. As the US Navy says no respect down, no respect up.

      In the past a lot Camera companies failed not because of bad product or even high production cost, but from other bad activities of the parent company. I wish they used that cash to develop some home grown new sensor technology instead of just making the river wider. Dam following mFT is getting a lot like my old real work job.

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