(Originally posted on The Innovation Workgroup’s LinkedIn page, 8th September, 2015)
Don’t get too comfortable with your company’s innovation process, even if you’re highly successful.
That’s the message in Robert Tucker’s fascinating blog post about how to build a culture of innovation. In 2005, Tucker was granted a rare inside look at one of the world’s most innovative companies, Nokia. What he found was troublesome, despite the company’s settled reputation as an innovation leader.
Tucker dismissed his negative thoughts at the time, but looking back, what he witnessed proved to be a portent of Nokia’s coming decline. From its position as a world-beater – the unchallenged market leader in mobile phone manufacturing – Nokia descended in a few years to the point where it sold its mobile phone division to Microsoft for a fraction of its earlier value.
How can you avoid a similar fate?
Sustaining Innovation Over Time
Tucker reports that, even at its peak, Nokia’s culture was characterized by some less-than-best features. Some, such as a lack of time for innovation, are common among companies at all levels. However, Nokia also had several cultural traits that are more typically found in more traditional, conservative firms.
For instance, Tucker observed that Nokia had a short-term focus. It suffered from “large corporation syndrome,” meaning that the organization moved slowly with a lot of bureaucratic processes. There was scant financial support for experimentation. Mid-managers were ready to tell lower-level employees to simply forget about introducing any new ideas of their own. Evidently, at Nokia, all good ideas had to come from the top down.
Perhaps the most interesting and relevant problem with Nokia’s innovation culture in 2005 was the overemphasis on technology. People with technical backgrounds tended to rise to the top rather than those with exposure to services. Predictably, these leaders tended to discount any non-technical innovations as “not real.”
An overemphasis on technology is likely to result in failed innovation. Nokia had lots of good technologies, but the company’s downward trend began when its competitors came up with the clamshell “flip phone,” a different form factor that caught Nokia flatfooted. Later, Nokia lost market share when it did not compete effectively in areas such as price and user experience.
Note that during this period, Nokia was spending $1 billion a year on innovation. The company was highly innovative, but its focus was too much on engineering and not enough on customers.
The most important take-away from this sad tale is that a culture of innovation must begin with a passionate focus on customers. Technology is fundamental, but as I teach, no one has yet invented a technology that can purchase itself. Technological innovations will only succeed if they create value for customers. Therefore, to sustain a culture of innovation, a company must continuously invest human and financial resources to learn everything there is to know about customers in order to invent solutions that will meet their needs.
How is the innovation culture in your organization? Your comments below are eagerly sought.
Additional reading on this topic: Six Essentials to Cultivating an Innovation Culture