In 1992 Jorma Ollila became the CEO of the conglomerate named Nokia, and went right to work shedding distal appendages of the company such as computers, cables and TV’s and began focusing only on mobile technology.
Nokia then focused on making their phones fashionable, smaller than the competitors’ and equipped with batteries that lasted much longer than previous models (all this sound familiar?). They even had a grasp of Asian market with phones that rang much louder than the American counterparts.
Eventually Nokia was recognized as having the most sophisticated phone in the market, and quickly became the market leader. Nokia developed a phone with a color touch screen, as well as a touch screen tablet computer with a wireless connection, 7 years before Steve Jobs mind you. “Nokia led the wireless revolution in the 1990′s and set its sights on ushering the world into smartphones” (Wall Street Journal).
However, Apple and Samsung have stolen Nokia’s market share, and as a result, Nokia had record losses last year of $1.1 Billion, all three major credit ratings agencies have cut Nokia bonds to “junk”, and Nokia plans to cut one in five jobs. Let’s examine what went right and what went wrong for Nokia:
Alas, Apple seized the marketing and product development opportunities very quickly and trampled Nokia in their path.
How ideas and cutting edge technology gets stolen is very simple. If you don’t treat an idea good, it leaves you for your competitor (spouses are also renowned for this). This is a very common tale in marketing, for instance:
- Visa stole the idea of the first credit card which was developed by Diner’s Club in the 1950′s. Visa had the resources to market this product while Diner’s Club did not.
- A British aircraft maker named de Havilland invented the first jet. The only thing faster than his invention was Boeing’s ability to rush in and develop a larger, safer and more reliable jet. After that failure, the de Havilland Company then attempted to make rockets. Today those fuel tanks are used to house and feed chickens. Depressing.
- Bic stole the idea of ballpoint pens from Reynolds and Eversharp who developed the pen in the 1940′s. Bic took the idea and began marketing a cheap and disposable version. Don’t look for Reynolds and Eversharp anymore because they are kaput.
But don’t be too hard on Nokia because they had a lot of factors working against them over the years. For example, the economic crash taken together with the public’s undeveloped taste for smartphone technology. The latter is very common. For instance, telephone answering machines were created in the late 1950′s but didn’t take-off until the 1980′s. You may be sitting on a million dollars worth of diet pills, however, you will be broke until your target market realizes they’re fat.
So here’s where Nokia went wrong from people who know the company the best:
- “We would present Nokia with a new technology that to us would seem as a big opportunity. Instead of just diving into this opportunity, Nokia would spend a long time, maybe six to nine months, just assessing the opportunity. And by that time the opportunity often just went away.” -Qualcomm Chief Executive Paul Jacobs
- “You were spending more time fighting politics than doing design. The organizational structure was so convoluted that it was hard for the team to drive through a coherent, consistent, beautiful experience.” -Alastair Curtis, Nokia’s chief designer from 2006 to 2009
It seems clear that Nokia’s problems are a result of big bureaucracy and very little marketing implementation.
So how can Nokia be saved?
A corporation is like a big 18-wheeler moving down a highway. Product design is like tons of cargo weighing the rig down. Yes it will be viable at your next stop; however, marketing should be the mechanism that throws the excess load overboard because the competition is further down the proverbial market highway. You need decision-movers in the driving seat, not decision-makers.
Meetings are useless enough, but Nokia held actual conventions in the interest of making key decisions. The more moving parts a mechanism has, the slower it moves from East to West. Integrate a system like Yammer that perpetually monitors, measures and signifies product popularity within the organization as a whole. I don’t need a convention with 426 of my Facebook friends to know that the majority of them “like” Supporting our Troops.
Nokia needs to flaunt their R&D prowess by celebrating the superiority of their products’ design and functionality. Over the course of their collective existence, Nokia has invested 4 times as much as Apple in R&D. Showcase product superiority because people’s perception of a product relies very highly on the promotion of how it’s made.
It is still not too late to perpetuate the fact Nokia invented the smartphone and tablet. Celebrate the fact that Daddy invented the phone, but the kiddies temporarily got a hold of it, broke it, and are now seeking money for the scraps of an originally superior vision. Focus on one tradition, one brand, one product and set the evangelists loose.
Let me know when you need more customers.