Nothing lasts forever. Period. Nokia was a resounding success during the 1990s and 2000s as they became a dominant player in the consumer market for mobile phones. Becoming dominant might be an obvious goal for any executive team or board, but once there, you are at the highest risk a company can be at.
For any market leader, being dominant and arrogant is a quite natural stage, whether it’s in business, sport, art or music. From this leading position, you try to duplicate your own good behavior faster and faster, over and over again. Quarter after quarter you please the market and shareholders with great financial figures, and for the next quarter you promise another 5% increase. No problems in sight. Just repeat what we are doing now and everything will be fine.
Coming up with innovations always starts with understanding the problem. An innovation is always a solution to a problem—or is it?
Nokia delivered a number of great innovations, but for a very long time they only delivered incremental innovations where the focus was on feature improvements in existing products or services. In the meantime, a couple of time-zones to the west, another company started to think about how they could change people’s behavior. This company was in a painful situation. It was thinking about how to create a demand for something you don’t know you need until you have seen it.
The power of pain
Pain is actually a good driver for coming up with new innovations because it forces you to produce new ideas. Being a leader is not painful. While you are concentrating on looking ahead, you might not detect what the competitors are doing and how your customers’ behavior and preferences are changing because you were too busy pleasing the financial market.
Now we can see that the smartphone market is getting more mature, resulting in more features at lower prices. The incremental innovations will probably continue for a couple of years. Today Apple, Google, and Samsung are the leaders, but that will not last forever. Period.
Dare to say “no”
What about your company? Does your company have the individuals who can be influenced by other industries to create new products that will secure your future business? Do you have a company culture where individuals dare to say “no, this is not the right way to do it”? Will your management listen and act?
For Swedes, Nokia’s product history is quite well known. They started to produce galoshes (in 1870) then wellies, and tires. In the beginning of the 1980s, Nokia launched its first mobile phones. In 1992 they were fully focused on mobile phones, and in 1998 were #1 with a 40% market share. In 2007 Nokia was acclaimed as the #5 brand in the world—the same year Apple released the first iPhone and a new era began in the world of mobile phones.
What will happen in the world of ERP, and what is IFS doing to remain at the forefront? I will talk about innovations at Radar Summit in Stockholm, November 5th. For those of you in Scandinavia, please take this opportunity to meet and share experience about innovation, and future trends and opportunities.