Sony lost money for two more years on purpose. Then the turn held.
Sony lost ¥128 billion, then ¥126 billion, while booking ¥80.6 billion and ¥98.0 billion of restructuring charges. In fiscal 2016 it earned ¥147.8 billion. A first profit is not the finish.
Transcript
A real turnaround takes its losses on purpose, so the run rate is clean later. Sony is the case.
After a profitable year it could have called a comeback, Sony lost ¥128 billion, then another ¥126 billion. Then, in fiscal 2016, it earned ¥147.8 billion, and that turn held.
The losses were partly chosen. Sony booked ¥80.6 billion of restructuring charges in fiscal 2014 and ¥98.0 billion in fiscal 2015, and sold its VAIO PC business.
By fiscal 2016, Sony's operating income had reached ¥294.2 billion, against ¥68.5 billion two years earlier.
If your turnaround has just shown a first profit, ask what is still on the books that should not be. One company is not proof, but Sony shows the clean-up can come after the first good year.
The records behind this video
Every figure in the video comes from this Decision Record, each with its sources.
Run this decision
The Turnaround Strategy Pack. “Is this plan a turnaround, and can it be finished?” The framework, a model, a deck and the sourced cases, for running the same call on your own business. See the pack, $499 → Or start with the free guide to this decision →
