I'm not a chairman of the board of a major Japanese corporation, but I did stay at a Holiday Inn Express last night. That qualifies me as much as anyone else here to comment on this stuff.
There's probably a little "ageism" going on here in some quarters. The Japanese wisely respect the wisdom that only comes with age to those who are open to learning from their experience. This gentleman certainly is not a fool, judging from his past performance. I see nothing wrong with him taking control right now. Perhaps if he were 86, not 76, there would be a real question of his physical capabilities; if he is healthy, he will most likely do very well for Canon for some years to come. The clues to what must be done are not just available to those whose credentials are mainly that they have less experience. Sometimes, younger people have new and valuable insights based on not being wed to today's orthodoxy, sometimes not, and those younger people who do have valuable ideas can submit their insights to older peers who can most likely best evaluate their efficacy. I doubt that Steve Jobs came up with the idea for the iPad, but he probably grasped that it would be a great product when it was presented to him.
As to specifically what Canon does need to do, there have been some good suggestions in this thread already. Furthermore, I would offer that, generally, they should avoid trying to match Nikon, Sony, et al, but try to come up with truly new ideas, totally new technology that either leapfrogs their competition or entirely changes the paradigm. Examples would be something like an effective true color sensor that avoids the pitfalls of Sigma's Foveon design (low overall sensitiviity and poor SNR at higher ISO's, complex manufacturing and less than great color response because of uneven absorbtion rates of the medium in which the sensors are embedded ), new original technology to increase DR and resolution per sensor area without the usual negatives, new marketing areas for the application of their technologies to increase business opportunities, and, finally, a rationalization of their manufacturing to include the outsourcing of the best and cheapest comnponents from other manufacturers.
That's enough babbling from me, folks.