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