Burning Platform – the real cause of Nokia’s Crisis

Further to ‘How quickly it can all change …’, Michael Schrage (of Havard Business Review Blogs) has offered his insight of the current crisis facing Nokia:

Nokia’s technology isn’t a root cause of its current crisis. Don’t blame its engineers and designers either. The company still knows how to innovate. There’s a simpler and more strategic explanation for why this once-perennial market leader became second-rate.

Nokia ignored America. The company simply refused to compete energetically, ingeniously and respectfully in the U.S. America was treated as an innovation afterthought. Nokia tried to get away with preserving its market dominance in Europe and growing its leadership in Asia. The richest country in the world was, literally and figuratively, a third-class priority for the Finnish giant.

Schrage asserts that ‘you can’t be a genuine global innovator if you’re a loser in America’:

Nokia’s unwillingness or inability to bring its best game to America has undermined its brand as both a technical and market leader. Marginalizing America allowed two of Nokia’s most dangerous competitors to swiftly, safely, and smartly out-innovate it.

Schrage observes that Nokia have belatedly realised this error and that it is ‘not an accident that Nokia’s (relatively) new CIO is a North American’.

Real leaders do well wherever there’s real competition. They don’t de facto abandon the world’s wealthiest markets because they think they can do better elsewhere. Most important, they respect the inarguable reality that, while global innovators can emerge from anywhere, they are still most likely to emerge from the place where Google, Apple, and Facebook began. Techno-entrepreneurs who want to win in the world still need to win in America.

… despite the North American hubris, I think he has a point.

Reference Links:

Micheal Schrage – The Cause of Nokia’s Crisis – 15 February 2011

Dilbert’s abridged hype curve

As always, Scott Adams cuts straight to the heart of the current hype …

 

Harsh, but fair.

How quickly it can all change …

The only constant is change

Heraclitus of Ephesus (c.535 BC – 475 BC)

This truth of this insight must be searing through the consciousness of Nokia’s management …

[Courtesy of AFP / SMH:]

The worlds top mobile phone maker Nokia is standing on a burning platform surrounded by a blazing fire of competition, new company head Stephen Elop said in a dramatic call for radical change.

How times have changed for Nokia …

The Finnish company was once the industry’s top dog, with a 40 per cent share of the mobile device market as recently as second quarter of 2008 but it has been on the slide ever since, falling to 31 per cent in fourth quarter 2010.

According to a leaked memo, Nokia is beset with the following woes:

non-competitive operating system Symbian, a lack of accountability and leadership, painfully slow product delivery, a lack of internal collaboration and a general series of misses

What I found quite profound about this rapid turn-around in fortunes for Nokia is that the competition didn’t come from ‘a better phone’ – it came from a different type of consumer device, the ‘smart phone’ (and the associated ecosystem), which many commentators claim is ‘an inferior phone’.

I remember when I bought my first iPhone (after years of using Nokia and Windows phones) – I was blown away by the intuitive, ease-of-use features – and the market place of applications.  It was a completely different device! – one that also happened to make phone calls.

I look forward to seeing how Nokia responds – and other business insights from a company that was once the clear market leader.

Cheers,

Carl

Reference links:

Nokia ‘on a burning platform’: new CEO in leaked memo – smh.com.au, 10 February 2011