Nokia
Complexity slays giants
Thursday, October 15th, 2009 | commentary, predictions, product vision | No Comments
Nokia reported a $1.36 billion loss in the third quarter as the company wrote down the value of its wireless networks venture by $1.35 billion and global sales declined 20 percent.
The company [..] acknowledged that its lead in smartphones, the fastest-growing segment of the market, had fallen to 35 percent from 41 percent, losing ground to Apple’s iPhone and Research in Motion’s BlackBerry devices.
Nokia’s problem is not execution. It knows how to build things and bring them to market: it cranks out new models by the dozen. Its problem is not innovation, at least not at the tactical level: every feature you’ve heard has made it into a shipping Nokia device. Nokia’s problem is in product vision, of being able to imagine a coherent future reality with an ideal smartphone.
You might think that Nokia, with 25 years in the business, wouldn’t have allowed itself to be surpassed so easily. But we should expect it. It’s common pattern among big, old, successful companies. Sony, Dell, GM, Motorola and countless others have fallen into the product vision trap, opening the door to disruptors.
Product vision becomes a bigger factor the more dials there are to turn in product formulation.
Sony traveled a similar arc in consumer electronics. Sony was untouchable when their gadgets did only one or two things. Like Nokia, it could master those core capabilities and move on to providing a variety of product variants for every segment, on marketing and on operations. These were the business drivers as long as there was a steady state in the market.
But as technology enabled new classes of products, those old recipes no longer worked. As the number of dials to turn in product formulation increase, the tried-and-true approach of cranking out incrementally better products breaks down. Leadership gets overwhelmed by the plethora of choice. In lieu of product vision to guide the way, they resort to guesswork, throwing everything against the wall to see what might stick.
Without a clear, coherent image of how things should be, design suffers. Nokia’s products (and Sony’s, and Motorola’s, etc.) became complex, incoherent, and frustrating to use. When products take on more capabilities, keeping things simple gets exponentially harder, because every feature relates to every other feature. The possible associations grows with the square of the number of features. (Even the best-of-class iPhone and Palm Pre are not immune. Both could do their core tasks considerably easier.)
When products get more and more capable, the only way to cut through the jungle of choice, and the only way to keep the user experience coherent is with a clear product vision.
PS: Nokia has the market power but not the product vision. Palm has the vision but not the market power. I’m hungry for my Reese’s Peanut Butter Cup. When will Nokia acquire Palm?
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Philip Haine is principal of Product Vision Associates, a product innovation consultancy that helps product leaders and their teams envision new, breakthrough products and reboot older ones. To follow him on Twitter click here.
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