- Back in 2007, Nokia and Blackberry
were the dominant players in the mobile phone market.
Nokia's global market share was almost 40%
and Blackberry was the preferred choice of people
including President Obama who wanted a device
for secure email communication.
But within five years, both companies would be swept aside
by the iPhone Juggernaut.
Leaders of Nokia and Blackberry
completely failed to anticipate the innovations
that Steve Jobs had already been working on
for several years.
Worse, they pooh-poohed Apple's prospects
even after it stunned the world with the iPhone launch
in January 2007.
Jim Balsillie, then co-CEO at Blackberry,
said that Apple was just one more entrant
in an already busy place and hardly mattered
as a sea change for Blackberry.
So why do Nokia, Blackberry
and millions of other organizations stumble at innovation?
Let's explore five of the most important reasons
this can happen.
First is the baggage of past success.
People at the top with the power to say yes or no
to projects and to allocate resources
know the past far better than the present.
They have been industry insiders for years.
They probably created yesterday's business models.
If not, they at least know how to implement them very well.
As a result, they tend to look at tomorrow
from the lens of yesterday.
In 2007, Microsoft's then CEO Steve Ballmer
said in an interview with USA Today,
there is no chance that the iPhone
is going to get any significant market share.
No chance.
It's a $500 subsidized item.
The next stumbling block is earnings pressure.
Organizations become prisoners of investors' expectations.
How well did you do in the last quarter
becomes far more important than what you might do
the next year, the next five years or even the next 10.
The third is following customer feedback too closely.
People get trapped in the dilemma of whether or not
to listen to customers.
Clearly, it's always foolhardy to not ask customers
what they think of current products
and what else they might need.
Yet it's also dangerous to assume that customers always know
what they need or want.
In the late 1950s, leading market researchers
told the founders of Xerox that based on customer surveys,
there did not appear to be any need for photo copiers.
And as we know well, no one was clamoring
for smartphones either before Steve jobs
waved his magic wand.
Next is the fear of cannibalization.
People get scared that new products,
a new lines of business will hurt the sales
of existing ones.
If we embrace digital media,
will it hurt the sales of our print newspaper or magazine?
If we embrace e-commerce, will it hurt the sales
of our retail stores?
What people overlook is that fear of cannibalization
is a trap.
As surely as the sun will rise tomorrow,
the new will sweep away the old.
The only question is whether you are the one
ushering in the new or another player
who wants to eat you alive.
And the last stumbling block at innovation
are well-honed processes designed to maximize efficiency.
Mastery at efficiency makes it difficult to become skillful
at experimentation and the search for new ideas.
Companies are often quite innovative when they're young,
yet as they find their footing and begin to grow,
they realize that they must put in place processes
to deliver efficiencies.
If you want to scale,
you have to become a well-oiled machine.
This is entirely desirable,
yet it's also dangerous as people begin to worship order
and start looking at uncertain experiments
as frightening endeavors.
Still, as large as these barriers to innovation are,
they are surmountable.
The first step is to always remain humble and run scared.
As Andy Grove, Intel's legendary CEO, famously advised,
only the paranoid survive.