Innovation Nokia style – How did Nokia become the leader in mobile phones?

How did Nokia become a leader of the mobile phone industry in the 90s ?

It’s really hard to see favorable predispositions for a Finnish group initially specialized in mining and forest exploitation, although Nokia already had activities in the radio phones back in the 60s.

It seems that one of the thing which triggered its astonishing success as a mass-market mobile phone producer goes back to a mission carried out by Gary Hamel, the famous strategy guru. To boost the Finnish company creativity,  Hamel suggested that teams of Nokia senior managers be sent in three rather special places : Venice Beach in California, King’s Road in London, and the Tokyo night club area…(probably for the greatest delight of the managers, who we rather think of as more used to the polar circle…) Why? Because it was thought that in these areas, trend setters in the use of high technology could be found. The creative spark is not always hidden in a 250 page Gartner Group report, nor in series of endless internal brainstorming meetings… Sometimes, it’s more productive to live as real customers, in remote places ; the creative spark is there, right under your nose. It’s after these “learning expeditions” that Nokia understood that mobile phones had gone beyond their utilitarian purpose, and that they had become “fashion accessories”.

Jim Collins “The ultimate creation”

The article mentioned here appeared in a book published by the Peter F. Drucker Foundation ("Leading for innovation", Josey-Bass 2002). In this chapter, Jim Collins stands aloof from a quite ordinary managerial practice : focusing all the company resources on the "next big innovation", the "silver bullet" which is going to strike the competition dead.

To defend his case, Jim Collins reminds us of all the innovation pioneers who fill the corporate graveyards ; Burroughs computers in the 60s were far more innovative than IBM’s, the civil aircraft was not invented by Boeing, but by De Havilland, the first spreadsheet was called VisiCalc, not Excel, and so on…

For Jim Collins, the ultimate form of innovation, or "innovation squared", is managerial innovation, which he even calls "social innovation". It’s Procter & Gamble which initiates employee profit sharing as early as the end of the 19th century, approximately one century before the practice becomes common. In the end, the options raised by Collins are "Are you focusing on the next big innovation", or "Are you trying to build an organisation which stimulates innovation" ?

C. Markides and P. Geroski : “Fast second”

What if the smart strategy to win the over competitors was to be a "follower" ?

This provocative question is raised in "Fast second", written by Constantinos C. Markides, management professor at the London Business School, and Paul Geroski, economy professor, former Dean of the LBS MBA, and current Chairman of the UK Competition Commission,

Which firm create onlined bookselling in the 90s ? If you instantly think of Amazon, you’re wrong. The concept of online book selling was born and put into practice by Charles Stack, an Ohio-based bookseller in 1991. Amazon started selling books over the internet in … 1995. In the same spirit, Ford didn’t create the automobile market, nor Procter & Gamble the disposable diapers markets.

C. Markides and P. Geroski remind us of what we all know : individuals or companies who create new markets by innovating are not always in the best position to make these markets grow. Other organisations are often more adequate to bring the new market to its full potential. A must-read if you still think "first-mover advantage" is a golden rule of strategy…

Kodak, a failure to innovate?

It’s becoming common to use Kodak as a showcase for failing to innovate: the company is described as having missed the digital revolution because it was focused on protecting its core business, traditional photographic film. The reality is different, though. Kodak is in fact one of the first companies to have worked on digital imaging. In 1992, for one of my clients’ projects, we bought a digital camera. It was a Kodak, the DCS 200, and it costed about $200K. Yes, that’s two hundred thousand US dollars. One can not say Kodak was ignoring the digital revolution! Today, Kodak is still leading digital imaging, as the company holds many patents in this field that are used in products such as HP printers. The painful Kodak factory closures that one can see nowdays are nothing but the price to pay to transition from one era to the other, from the era when Kodak was a chemist to an era when it is a software company. For all its mistakes, Kodak is doing what few companies have been able to do.
No doubt, Kodak was victim of the innovator’s dilemma as described by Christensen: the company tried to "cram" digital photography into traditional photography with the pathetic APS system. But that didn’t stop the them from pressing ahead and ending up, today, in the leading group of digital camera manufacturers. Not bad for a chemist! The initial dilemma, however, probably costed them their leadership, maybe forever, as forecasted by Christensen’s theory.

Andrew Hargadon “How breakthroughs happen”

In "How breakthroughs happen" (Harvard Business School Press 2003) Andrew Hargadon , professor of technology management at UCLA, takes us into the history of radical innovations, from Edison’s incandescent lamp to Reebook shoes. He takes into pieces the complex mechanisms at play behind the "lonely inventor" myth. After studying for ten years the companies which demonstrated their ability to bring radical innovations to the market, Andrew Hargadon concludes that the ones which succeed are "technology brokers". It’s the ability to understand and integrate previous or exogenous technologies, to creatively recombine ideas and concepts, which enables a few companies to work as "innovation factories". A unique and well-researched point of view really worth reading.