Had I been the Nokia CEO, would I have done what Stephen Elop did?

I am sure a number of you would have seen the mailer from Nokia CEO this week to his employees. In case you have not seen the mailer it is available here:

http://www.ndtv.com/article/profit/standing-on-a-burning-platform-nokia-ceo-to-employees-140252

 This mailer has evoked a debate among the corporate circles with people saying it was the right thing to do and some others saying that this was not needed. I will attempt to present my point of view here.

I had the privilege of working with Nokia in their global headquarters in Finland for 30 months and I really admire this company and feel sad for the current state of affairs. I actually would support Steve's candidness and guts to call spade a spade and present the realistic albeit gory picture to all the stakeholders. I am sure he would have evaluated the fall outs of this mailer and has taken this conscious decision. This is just the beginning and he being the new kid on the block at Nokia we will need to wait and watch how he goes about strategising and executing the revival of Nokia in the coming months.

Nokia is really a 'burning platform'. Their products today are no where near Apple's iPhone which was introduced as early as 2007. In a consumer market where a few months can make or mar a market leader, being 4 years behind the competition is hardly a enviable position. Their Symbian platform is far outdated and keeping it any longer will only lead to demise of Nokia in the face of competition from iPhone and Android. Symbian was meant for a different age and has far outlived its utility.

Even if I were Steve I would do the following to regain the confidence of all stakeholders in Nokia:

1)   Customers:  Nokia has lost market share and is rapidly losing market share as we speak. As as CEO of Nokia I would not worry about the next 3-6 months loss of customer market share. I would look at the long term revival and regaining the position as the numero uno brand for customers. If I have an action plan say for releasing the new models of Nokia phones on a Windows platform in 2 quarters from now which will be a formidable competition for iPhone then I better let my customers who are drifting away from Nokia know that there are exciting phones coming from Nokia. Even today there are Nokia aficionados and many of them might postpone the decision to buy an iPhone if the Nokia road map is known to them. The customers are also fed up of poor quality of products and customer service and if they know that Nokia’s CEO is very serious about getting back Nokia to the numero uno position and means business and will take tough calls then it is only ‘Nokia Brand’ which will gain from this exercise in the long run. Nokia was a brand which had 80% market share in the past and it has the wherewithal to get its act right if given the right strategic direction and operational focus by its CEO

2)  Employees:   Employees know about the crisis that the organization is in and I would believe they would love the candidness of Steve. In a technology company with hundreds of mobile industry thought leaders who do realize that they are behind the competition and missing the bus, it is no secret that Nokia will not exist unless it changes the rules of the game . This message from Steve will help foster a common cause and a sense of unified direction to its employees and will motivate/ give a sense of purpose to the stars to fight the battle which lies ahead of them to garner market share by developing world class products. As far as the prospective employees are concerned it will give a message that Nokia is on a serious revolution path and a movement to set things right and it would inspire leaders who are keen on taking up challenges and changing the rules of the game to join Nokia and make a difference and be a part of the future success story.

3)  Investors:  The Nokia stocks are not doing well in the market and the market share us plummeting. If it continues this way it is only a matter of time when Nokia declares bankruptcy. It is a great move by Steve to garner the support of all stakeholders including investors by including them in the war to regain the lost ground and making it transparent to all of them. This is the only way he can get the support of the shareholders when he takes the next steps ( which are likely to result in some blood bath in terms of taking decisive and concrete steps like changes in top management layer, layoffs, closing down  dud businesses  etc.)

4)  Society:  Nokia is a household name in Finland and contributes substantially to the GDP of the country as well as participates in a number of CSR initiatives across Finland. At one point on time it employed 10% of the Finnish population. This message provides a pointer to the society that not all is well with their favourite and assures that concrete and tough actions are being taken to bring back their favourite company to the top of the charts!

Now R&D and Innovation for emerging markets?

It has been a practice in the past that stripped down versions of products designed for developed economies were positioned as a low cost and cheap alternative in the emerging markets. This will no longer be a successful strategy and the bitter truth has been realized by many global vendors servicing the developing economies.

Now-a-days the mantra is to carry out focused R&D efforts targeted at creating products that are specially designed and adapted to the emerging economies. The needs of the emerging markets are different and so are the price points and value realized by the consumers in the emerging markets. The design of a product that gives full value to the consumer in an emerging market and serves his needs fully needs a different thought process all together.

This needs innovations and inventions in core technology areas such as material sciences, electronics, fluid mechanics, power systems and the like. Consider the example of the Nano car developed by TATA motors which needed multiple inventions/innovations in technology and also needed cross functional teams working on different engineering disciplines to come together to solve complex issues and provide solutions while at the same time meeting the targeted price point.

The key is to provide a reasonably good solution that meets all the basic needs of the consumer at a lower price point that is affordable to the consumer and at the same time not being perceived as a low end product or a stripped down version. TATA motors calls this discipline as “Frugal Engineering” which is an art as much as science.

Similarly consider the portable medical scanning devices from GE that have been used successfully in the Chinese market for diagnosing patients in rural areas in mobile clinics. This needs a different thought process and every component in the machine needs to be designed and innovated to provide value at that price point. Merely stripping down the frills of a medical scanner used in the US and selling at a lower price does not work in China as the desired consumer value is not provided by such a device.

There is a huge market potential waiting to be tapped in the emerging markets if the consumer behavior and consumer needs are well understood and if specially designed products invented/adapted/innovated for these markets are introduced. To quote CK Prahalad, there is indeed huge potential fortune at the “middle and bottom of the pyramid” which is untapped and directed innovation can help unleash this potential.

Infact there is also a term being heard in the management circles called “Reverse Innovation” where in the products designed for emerging economies are taken back to the developed economies and positioned there as ‘value for money’ products. This shifts the center of gravity where in the products once designed for advanced economies were stripped down and sold in developing economies where as now the innovations made by MNCs in the emerging markets are taken back home to the advanced economies.

Can Social Networking be used a strategic marketing tool?

Social networking is a very powerful medium and competes with the most populous nations in the world for the number one position in population terms. The moot point is as to how the marketing teams of leading MNCs can leverage this powerful medium and get a first mover advantage.

People on social networking sites like facebook and twitter talk among the other things about the products consumed by them, their experiences starting from the first interaction with the product company and ending with the product experience post purchase. The entire experience of the customers and the thought processes that they followed throughout the product purchase life cycle and even post purchase is there for the entire world to see via social networking sites. Satisfied customers become evangelists of the product and spread good words about the products and vice versa. Since other consumers on the internet trust the experiences of their co-netizens much more than any of the marketing campaigns unleashed by the product companies the views of their compatriots on the internet may make or mar a product’s future.

It becomes very important for the marketing teams of the MNCs selling products in various countries across the world to keep in touch with the customer pulse by tuning into the conversations of their customers on the social media. They can infact use social media effectively for presenting the company’s point of view and influence conversations happening on the social media to their advantage. A lot of companies have already formed discussion forums on the Internet and the conversations happening in these forums help the companies understand the pain points of their customers much better and will help in bridging the crucial product deficiencies which if filled can add substantial value to their customers.

MNCs need to have a CXO level officer ( e.g, CMO or Chief of Corporate Communications) keeping abreast of the conversations happening in the social media and assess the impact this will have on the company and also initiate corrective actions to nip the potential problems in the bud. Forbes magazine advocates the role of a “Chief Conversation Officer” as being quintessential for the continued success of the organizations in the digitally connected world.

Co-Creation is yet another strategic initiative that can be fulfilled by leveraging the social media. The joint product development by a joint team consisting of the company’s experts and customers can be extended to a larger canvas of customers by making use of social media. The term “prosumer” ( a combination of a producer and consumer all rolled into one) has indeed become a reality in today’s world.

Several leading management experts are strongly in favour of the companies adopting social media and having a presence in the world of social networking. Kotler in his latest book “Marketing 3.0” extols the virtues of social media and collaboration and talks in detail about how the 4Ps of marketing should be re-aligned keeping in view the changes happening in today’s world. Several leading journals including the most recent edition of Harvard Business Review talk about the impact of Social media on the brand and how to leverage this new kid on the block to gain a competitive advantage.

In summary the potential offered by “Social Networking” needs to be harnessed by the companies to be successful in today’s age by doing the following:

ü  Have  a strong presence on Social Networks

ü  Leverage the customer social networks not only to co-create and but also to build stronger brands

ü  Use social media for a 2 way conversations with customers that provide valuable insights into the customer minds

Why every Manager should think and act like a CEO?

Every Manager be it a unit head, group head, account manager, program manager or even managers in supporting functions like HR, Marketing etc should actually start to think and act like a CEO. This is a mechanism of ‘self-empowerment’ and will give a much broader canvas and a larger purpose to work on within the confines of their work boundaries. Every manager needs to run his unit like a company or atleast a pseudo profit center. They must know where each dollar comes from and where each dollar is spent and where the inefficiencies lie. This will enable managers to think big, get rid of the blinkers and impact the organization on a larger scale.

Every manager needs to run their respective unit with a focus on the stakeholders just like the CEO of the company does. They should work with the strategic objectives of the company in mind such as improving top-line/bottom-line, launching new services, reducing the time to market/cycle time, penetrating new markets etc and at every point in time keep the units objectives aligned to the organizational objectives.

Every Manager needs to keep a hawk’s eye on operational and delivery excellence and should have up-to-date operational metrics and dashboards at their finger tips at any point of time. This should reflect the grounds up data from the grassroots and should be cross verified for correctness and accuracy. The operational pulse of the unit must be known to the manager at all points in time. The operational metrics must encompass the parameters that are vital to the health of the organization. In IT services industry this will cover parameters like revenues, utilization, billability, attrition, sales pipeline, recruitment pipeline, innovation metrics, adherence to certifications like ISO 9001 and SEI CMMi,  program dashboards, program quality metrics, risk factors impacting delivery of programs etc

A very strong ‘Financial Control System’ needs to be in place such as systems for tracking the allocation of resources to projects, rate cards, expected revenues (both projected and actual), invoicing systems, accounts receivable systems etc. While the above systems are used for tracking the revenues we also need strong and stringent control systems to track the costs such as employee salary costs, sales and administration expenses, infrastructure costs, R&D expenses, consumables, travel expenses and other miscellaneous expenses.

A very important aspect of running a unit is Sales and Marketing. Managers must remain connected with the sales teams and customers where ever possible and try to gain insights into the customer problems and what can be done to delight the customers. Managers must always have a finger on the customer pulse and must be able to predict the customer’s perception about the unit’s offerings without having to wait for the annual customer survey done by the company. The acid test of a strong customer relationship is when the customer comes to your rescue when you are having problems in meeting sales targets and works out a mutually beneficial plan.

An effective ‘Financial Control System’ together with an efficient ‘Sales engine’ will help the unit to forecast its quarterly earnings accurately with minimum deviations. This engine is a must for the companies that need to face the bourses quarter on quarter and year after year on the earnings front.

 On the people front needless to say managers must adopt a ‘People First’ policy and should be sensitive to people’s issues. Managers should coach and mentor employees as well as provide them career guidance and roadmaps. There must be continuous and constant engagement with the employees and communications will need to keep flowing. Having said that poor performance and lackadaisical attitude must not be tolerated and must be dealt with an iron hand.

Thinking and acting like a CEO provides a larger purpose to the managers and will open their creative gates which will enable them to function more efficiently and contribute to the growth of their organizations. It will not be possible to operate independently at all times and take decisions on their own but even if done sometimes will give the desired results. Within the sphere of influence and control if managers’ work for a larger cause and act like a CEO within the constraints and within the permissible limits of freedom it will go a long way. This will not only give short term benefits to the managers but will also poise the managers for taking on higher roles and bigger positions in future.

Social Networking and Collaboration on the 'Intranet'

Social Networking is a rage on the Internet with popular sites like Facebook and Twitter competing with countries like India and China on the "population" front. Unfortunately many corporates globally restrict access to the Social Networking sites from the office due to security as well as work productivity related reasons.  It is however a good idea to have the equivalent of a social network on the Intranet.

Several companies are leveraging the social networking phenomena on the Intranet as this fosters bonding, networking, exchange of innovative ideas, joint problem solving and many other benefits which result in creating benefits to the organization like stronger camaraderie which might lower attrition due to the feel good factor, free exchange of information across the functional boundaries which will help resolve complex problems involving multiple functional areas, communications between like minded people bypassing the traditional hierarchical lines  will also help foster innovation and growth.

There are two broad categories of social networking applications on the Corporate Intranets of today. The first is the “Facebook” like applications which build social networks within the company and the second is the “Wiki” like applications which are used as tools of collaboration. Both the types of applications serve their designated purposes and may be even more within the Corporate Intranets.

“Wiki” like applications can be used for the following purposes:

·         Creating a Knowledge Management portal within the organization to tap the tacit and latent knowledge which groups of people have in a specialized area. This will serve as a repository or storehouse of information which remained untapped earlier. The beauty is that several people can simultaneously collaborate in creating this storehouse of information and can enhance the quality of information collectively.

·         Some companies use “Wiki” like applications when they need to come out with crucial documents such as the “Company Strategy” or “Unit Business Plan” in a collaborative manner involving the people at multiple levels. This can achieve even better results if it is moderated and driven by an SME. Several global companies have successfully used this tool for coming out with a bottom’s up strategy and when they need to incorporate the ideas from grassroot level folks in the creation of the strategy. A properly moderated “Wiki” can yield good results especially when there is an enabling structure for consolidation and funneling up of information.

·         Even day to day documents like user manuals, project plans, RFP responses, technical documents etc can be created by teams of SMEs using “Wiki” like tools

·         These can be used for collation and dissemination of information across geographically dispersed teams

“Facebook” like applications can be used for the following purposes:

·         Creating a purely informal social network for people within the organization (for friends within the organization) to share personal information and photos, videos etc. This will replace the email which has been used so far for this purpose

·         To create a ‘project workgroup’ for people working on a project to share and exchange information and ideas related to a project. This can gradually lead to people on the group sharing personal information as well and thus fostering stronger ties within the project team.

·         For Initiating discussions within a company or a unit on various aspects of the company such as policy changes, opinions on business strategies, trends in the industry etc

·         Create a forum for like minded groups to share and exchange information across the company pertaining to their topic of interest

Many corporations the world over have embraced these social networking trends and are in-fact using these tools for their competitive advantage. Any organization that needs to compete in today’s world cannot do without these kind of tools.