Toshiba’s grand vision may have a microcalendar

There is no single way to run a business. Toshiba knows this better than anyone. In little more than six months, it has gone from proposing a three-way split to putting units up for sale, as its new boss, Taro Shimada, lays out his vision of those businesses as the core of a software- and data-centric future. However, with shareholders’ attention focused on the potential privatization of the $19 billion Japanese conglomerate, their contribution may be just one step in that process.

After three months as CEO, Shimada unveiled a plan last Thursday that aims to break down silos within Toshiba and help its 7,400 software engineers, spread across some 30 units, better collaborate with one another. In theory, they will help Toshiba tap into data collected by companies, including commercial lighting and elevator companies, whose sale was announced in February. In Shimada’s expression, the result would be a “quantum” transformation. For investors, however, it is little consolation that a view focused on growth, and not spin-offs, has taken so long to find its way.

Considering its timing, Shimada’s project falls somewhere between being a long-term strategy, a rallying cry for Toshiba’s 116,000 demoralized employees, and perhaps an argument for the new owners keep him on the job. His projection of 5% CAGR revenue growth by 2030 doesn’t seem ambitious, until one remembers that Toshiba has only managed to grow sales, year-over-year, twice in the last decade.

Still, for Toshiba shares, the only strategy that currently matters is one in which eight groups have submitted non-binding purchase proposals and two others have suggested strategic equity alliances. KKR, Blackstone and Brookfield Asset Management are among those considering making offers, according to Reuters. Next month, a small group of suitors will have to start carrying out the necessary procedures for binding proposals.

Asked at a media briefing on Friday if management’s recommendations for that group might be colored by buyers’ alignment with their own vision, Shimada said he hoped his ideas would inspire buyer suitors. Toshiba to come up with even better plans of its own.

Jerry Black, who has been on the board of directors since 2019, described the strategy as part of an iterative process, while warning that the sale was not a foregone conclusion. Still, after years of going around in circles, progress in a clear direction seems good enough for shareholders — for now.