Saturday, March 7, 2009

What Would Nokia Do?

I just picked up Jeff Jarvis’ new book, “What Would Google Do?” In the book Jarvis deconstructs Google to determine how other companies can think the way Google does as a means to replicate their incredible success. His premise being that our economy and society have been so altered by the Internet that the old ways of thinking are not only outmoded but counter-productive. To Jarvis what’s needed is a new way; the Google way.

After reading the first chapter I believe Jarvis may be on to something. However, I think there’s another company that has a story that is just as, if not more, compelling and relevant for businesses that are trying to find their way in the current environment. That company is Nokia. Here’s what I mean.

The New York Times reported today that an astonishing 2.6 million jobs disappeared in the last four months – a rate unseen during the post-war era. This dramatic decline led the Times to speculate that the growing job loss “may reflect a wrenching restructuring of the American economy…and that many companies [appear to be]…abandoning whole areas of business.” A depressing assessment, but probably not too far from reality.

This reminded me of a case history I read awhile ago about Nokia and how it evolved over the years in response to changing conditions.

Nokia was not always the mobile communications giant it is today. It actually started out as a wood-pulp mill in 1865 and eventually, through acquisition, became part of the Finnish Rubber Company in the early 20th century.

By the 1980s, Nokia was a conglomerate that manufactured an array of wares including, among other things: paper products, tires, footwear, personal computers, televisions and telecommunications equipment. It wasn’t until 1992 that it decided to divest from most of its lines of business and focus exclusively on mobile communications. This was in response to a steep decline in paper prices caused by the deep 1990–1993 recession.

Today, 17 years later, Nokia is the undisputed mobile phone leader with 40% market share, and was ranked last year by Business Week as the fifth most valuable brand in the world (Google was number 10, but closing fast).

If there’s any silver lining to the current gloom it’s that companies and industries can turn adversity into opportunity. I’m sure it won't be easy, but Nokia is proof that with a little bit of foresight and some good timing it can be done.

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