Strategy: What Nokia Needs to Do To Survive

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Stephen Elop’s leaked Nokia strategy memo (full text here at the WSJ TechEurope blog) has caused a bit of a stir. At the center of the memo is uncertainty. The message he gives is that people need to embrace uncertainty like the man in his allegorical burning platform, jump into icy waters and be transformed.

The emotion of the icy waters and the subsequent transformation is fine, but I think Nokia needs to be systematic, thoughtful and challenging when engaging with its future. Nokia is, as Elop suggests, on a multi-platform stage—a single answer will not transform the company.

Nokia needs to do  the following in order to shore up its strategic positioning:

• Create scenarios of different futures centered around different futures for markets. One set of scenarios won’t do. Not all countries, for instance, that expect low-end products today will continue to require low-end products tomorrow. Nokia needs to model potential transformations within the consumer and business markets and create plans to deliver products and services anticipating those transformations. The company needs to work rapidly to remain credible as a transformation agent. It doesn’t need to be radically successful right now, but it needs to be radically thoughtful so its customers trust and anticipate its next move. It needs to build an expectation into its brands within its segments.
• Figure out what Nokia wants to be. I’m not sure of Nokia’s mission at this point or how it wants to fit into the market. To be a premier handset developer is clear from the Elop memo, but I’m not getting vision beyond embracing uncertainty, which is a good start. I’d like to see Nokia figure its strategic competitive reason for existence and then execute like hell to get there. Some of the following comments assume part of that mission is to be a leader in mobile communications for consumers and businesses. I may be wrong, but that is my assumption.
• Don’t embrace Android just yet. Android is a development from a non-communications company. Granted, it has evolved rapidly, but Elop and the Nokia team need to examine Android, Blackberry and iOS from multiple perspectives and determine rather quickly what the market still isn’t getting and what the competitors still don’t have right. I’m sure Nokia thinks they already do this. Evidence in the market argues, at minimum, that they don’t do it well. And then they need to address those issues in a product that either offers a significantly new and positive user experience or meets existing user experiences and then shores up the weaknesses of other device OSs. These plans need to be rapid, and constantly monitored and revised to stay ahead of the market because the competition isn’t sitting still.
• Re-create customer service. Apple is good, but it isn’t infallible, and the Android market is highly fragmented. Device experiences aren’t consistent, and customer service lives at the mercy of carriers and device manufacturers. Nokia needs to out-service its competitors and use that as a means of gathering sophisticated customer intelligence. You want people to prefer Nokia, then get to know them like no other company. Microsoft isn’t going to do that. Apple only does it on the surface, and Google hasn’t positioned itself as the keep of Android, so once the coolness wears off, customers are going to wonder just where Android lives. Part of customer service is demonstrating constant value improvement. Make sure that Apps and devices are easily upgraded and patched so that Nokia can keep pushing innovation into the market.
• Radically simplify the company. Eliminate barriers to execution. Empower people. Kill meetings that don’t add value. Let people pursue their passions. Don’t second-guess everything too early. And for G-d’s sake, use a standard connection for power and data transfer.
• Figure out the marketplace. This may be the tipping point toward Android. Android is the only competent alternative to the Apple Apps Store, and the high end of the market demands Apps. It may be competitively prohibitive to develop another App market at this point; if Nokia decides that is strategically the case, then drop down to the next section.
• Carrier partnerships. Work the deals. Keep the carriers as close as the customers and even shore up their shoddy customer service. Be the advocate of the customer to the carrier, not the excuse for the carrier to the customer.
• Be patient and don’t panic. Change isn’t going to happen overnight. Celebrate small wins, including things like canceling standing meetings. Internal transformation will be experienced before market transformation. Don’t forget to acknowledge the pathway, including the small changes internally.
• And finally, on this list, executives must model the behavior they want adopted. You can’t create a culture of “Do what I say, not what I do.” Elop and his directs need to be the starting point for change, from empowerment to innovation. Making this happen will be the first test of Elop’s leadership, not the first new phone it ships.

Now, in an alternative future, Nokia adopts Android. This doesn’t negate any of the other Android-related items above – it could help focus them into becoming:

• The most thoughtful Android developer and platform integrator
• The best Google partner (drive innovation back into the platform)
• The maker of the most innovative, finely market-tuned and intuitive Android devices
• The creator of the most innovative and intuitive display user experience atop Android
• The partner recruiter (and internal developer) of innovative business applications that make the Nokia Android the choice for business. Apple and Blackberry are the best there is at this point (for very different reasons), but it isn’t all that good for business people. Make a Nokia device and set of services that establish it as a no-excuse business phone.

One radical idea of my own here: Nokia becomes the phone teachers don’t want to take away in the classroom because it has such a high-value proposition based on its collaboration and interactive content features and partnerships. If you can’t get them young, you might not get them at all.

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