In order to get out of this situation, Nokia needs to do two things:

1. Define a new vision what Nokia, mobile communication and “connecting people” means in the future. A touch smartphone with maps, app store and music store (aka Nokia Ovi) will not be enough to reach a leadership position again. What is next after Smartphones? What is next after app stores?
2. Streamline the organization; optimize processes and increase performance, speed and agility in the organization with just one single goal: bringing new products to the market. Not concepts, not demos, real products that “wow” customers.

With these challenges ahead some obeservers are looking for a "Finnish Steve Jobs” for Nokia. But that will not – and should not – happen.

Nokia does not need a "Steve Jobs"

Nokia is still an excellent example of a design-driven companies. Jan Chipchase, former Nokia ethnographer (who left Nokia recently), has reached celebrity status with his research on mobile phone use in emerging markets. The Nokia 1100 is still the world’s best selling mobile phones. There have been countless design studies from Nokia about the future of mobile communication yet despite all these activities and concepts, none of them made it into real products that had sustainable success in the mobile market.

The negative highlight was the recent announcement of Nokia bicycle charger kit. Clearly this is not the way to beat Apple, Motorola, Samsung and Research in Motion and whoever was in charge of that should reconsider what his job is.

The reasons are manifold for this mess, ranging from bad integration of various companies and technologies into the Ovi platform, hanging on to the featurephone strategy for too long and still hoping that Symbian OS will catch up with other operating systems and countless other legacies that hold the design teams back instead of enabling them to write the next chapter in the mobile industry history.

Of course a "Finnish Steve Jobs" who has the same degree of reputation, respect and leadership qualities could lead a turnaround at Nokia. But Steve Jobs is Steve Jobs because he started Apple, got fired, came back, led the turned, survived cancer, revolutionized the mobile industry and through this created a company that has nearly outgrown its investor in 1997, Microsoft, which it needed at that time to even ensure liquidity. Steve Jobs is an outlier, a wonder child and genius.

Betting the survival of a company on finding an “outlier” leader like Steve Jobs is foolish. And setting the expectations that the next CEO will be a Steve Jobs will be fatal: cause he won’t be a Steve Jobs and can only dissappoint.

A co-CEO strategy with a business and a design leader

Nokia still has design capabilities, but at the end of the day it comes down to managing processes, operations and projects that turn these capabilities into real product. The best design capabilities in the industry are worth nothing if the organization doesn’t have the processes – from procurement, production, supply chain and marketing – that work together to deliver innovations. Nokia needs leadership that addresses the two most urging issues: First it is about leaving feature phones behind, catching up with Smartphones and envisioning the future of mobile communication. Second it is about creating a world-class organization that can execute this vision, without politics, without bureaucracy but with a clear focus on results.

Instead of searching for the “dear leader for Nokia” who can do this in one person, Nokia should aim for a co-CEO strategy with one CEO responsible for business operations and one CEO responsible for the design and engineering direction in the organization.

The “business-driven CEO” is responsible for business operations should be easy to find and his job is to streamline the organization, as fast as possible. The “design-driven CEO” does not need to be the ultimate visionary. Instead it

should be a designer who can lead the design organization (and be respected through his achievements and experience) but who is also able to work with the business side in the organization to develop the best concepts and to bring the best concepts to market.

I also think it is important to differentiate between a Chief Design Office and a design-driven co-CEO. While the first one still reports to the CEO, the design-driven co-CEO will be in charge just as much as the business-driven co-CEO.

First fix the organisational aspects, then the design challenges

Who is more important? I believe an excellent “Business-driven CEO” is more important in the coming 12 months than a “Design-driven CEO”. Nokia still has to catch up and therefore it needs to get its existing operations in order and turn existing concepts into reality. At the same time this gives time to build and nurture internal design talent with one person becoming “Design-driven CEO”.

Whatever will be next for Nokia, it is a fascinating moment in the company’s history and the industry as a whole. Will Nokia make the turnaround? It depends on the pressure – even the pain – that the organization feels in order to implement the changes necessary for a turnaround. Is the pressure and pain already high enough? We will find out in the coming weeks and months and see either a new and revived Nokia that will strive in the industry or a Nokia that will merely exist, holding on to existing strategies and keeping alive with innovative tactics.

inspired by The Register: Rescuing Nokia: A former exec has a radical plan

Deindeal.ch is the latest startup from Swiss serial-entrepreneur Adrian Locher (also a graduate of the University of St. Gallen) and his business partners Amir Suissa, Dario Fazlic, Flavio Rump and Lucas Vogelsang. In the weeks before this interview, the founders experienced their best-selling group buying offer which sold more than 1000 times in the course of a few days. That was the reason when I contacted Adrian to talk about the lessons he has learned from launching a Groupon clone in Switzerland. And it was an interesting conversation.

Ideas are important but Timing and Execution are essential for success

Adrian believes that the key ingredients for a successful new business are ideas, timing and execution. While many people focus solely on the first idea, ideas only define 10-20% of your potential success. More important are the right timing of your new venture (20-30% relevance) and the focused execution (60% relevance) to launch and scale your idea into a profitable business. Of course an unrealistic or simply stupid idea will not turn into a successful business through timing and execution. The point is that even a brilliant idea is worth little if timing and execution are not excellent.

“deinDeal.ch” builds on the same idea as the US site groupon.com so the idea part was easy in this venture. Even though the team already identified several areas that needed to be adapted to the local market and circumstances the main question was: Is Switzerland ready for internet-based group buying using coupons?

Finding the right timing – is your target market ready?

The biggest obstacle for a startup is that a target market is not ready for an idea – that’s why timing is everything. Based on the experience that Adrian made with his earlier startup smaboo, an ambassador marketing agency, he argues that a startup should never try to establish a completely new market. While the company is in its successful 3^rd year today, it took longer than expected to convince clients of the benefits of ambassador marketing and only after clients such as Facebook, Microsoft and Research in Motion/BlackBerry have signed up with smaboo, have other companies been willing to engage in this new marketing concept.

Educating customers about a product or service is expensive and takes a long time and is the reason many of the first-generation group buying websites are long gone. One of the most well-known “too much, too early” examples is the website letsbuyit.com, the group buying platform launched during the 2000 dot-com bubble which was quickly gone because the market and consumer were not ready. Ten years later the second wave of startups can now build on the triggers initiated in 1999/2000 that have changed consumer behavior and attitude towards e-commerce.

The success of the original Groupon concept in the United States showed that consumers are accepting this online group buying concept in 2010, nevertheless this still didn’t guarantee the success for a Swiss version of the website. Contrary to the US market, coupons are not very popular in Switzerland and the biggest bet was on the willingness of Swiss consumers to use coupons for special offers.

Focused execution with no time for decorations

While ideas and timing are still the easy parts in running a startup, the main capability for a successful startupshould be on agility and execution. This was especially important in the case of deindeal.ch since it was well-known that the US site is planning an international expansion. Based on the initial idea the decision was madeend of January 2010 to launch a Swiss version of a group buying site. Three weeks later a team of designers and programmers started the development of the site and the first version of the site was launched around five weeks later on March 24^th. Such a short timeline – in total less than 8 weeks – is impressive and is the results of more than just putting in long hours.

The key for such a short development cycle is to focus on the essential things that are relevant for your startup today. Don’t aim to build an application that includes features that you might need in a few months down the road – focus on today and cut out all the unnecessary noise and decorations of what you think might be useful someday.

Another important aspect is to push your application into production mode as early as possible and improve the application every day instead of delaying your launch until everything is perfect. One example how the team at deindeal.ch approached this is the management of a user’s purchase history. While this might require asophisticated interface with sorting, filtering and pagination, it is not necessary to have this feature as long as a user has not bought 20 or more coupons. And this will not be the case at launch but only after several months so there is no need to implement this in the first version. And this was just one feature that has not been implemented yet but will be once there is a need in everyday use.

Localizing a globalized idea

The answer to the main question, whether Swiss consumers are interested in coupon based group buying, could ultimately only be answered after the website was launched. The success of other web-based buying concepts such as FashionFriends.ch affirmed the founders that Switzerland is at least ready for new and innovative e-Commerce concepts. During the first coupon deals that were offered, it became clear that Swiss customers focus on high-quality, localized services and that they don’t want to save just few Swiss Francs but a significant amount of money when they buy a coupon. This lead to a selection of high-quality, high-value wellness, beauty, gastronomy and leisure offers instead of average-priced, standard offers.

Spreading the word and getting traction

Once the first version was launched, the next step was to spread the word and get the Swiss to use the platform. While many businesses today would go directly for a social media marketing campaign, deindeal.ch chose a different approach. In order to launch and promote the new service, the founders have formed partnerships with local media companies who have a sufficient leverage to promote the new concept through established channels. In Switzerland this was through the popular websites and mailing lists like local.ch, RonOrp.net and DayDeal.ch. Another critical factor for gaining new customers was the recommendation program where users earn money if they invite friends to the website. With the successful launch in Zurich, the site is now expending into other Swiss cities, the first on the list are Bern, Basel, Lucerne and St. Gallen.

Social media services like Facebook have proven to be an important tool to reach potential customers that have a high online affinity. However Twitter has had little impact in gaining customers but proved helpful to reach out to opinion leaders. The reason is that Twitter is simply not that widely used in Switzerland. So in comparison with other media channels, Facebook and Twitter are important but they cannot yet substitute traditional media channels.

In the next step deindeal.ch is in the process of rolling out an ambassador marketing program to further strengthen relationships with local companies and to integrate high-impact, localized media channels.

The key lessons learned from launching deindeal.ch in Switzerland

• The success of a startup depends on three factors which are Idea, Timing and Execution.
• Idea: 10-20% relevant for success
• Timing: 20-30% relevant for success
• Execution: 60% relevant for success
• Improve your timing by searching for indicators in the markets and with consumers that help you decide if your idea can gain traction or not.
• Focus and agility are the core during implementation, early releases with daily iterations are the key to success
• During implementation you have to review every day what is necessary today, what you have achieved and if you are on the right track.  Cut out all the noise and unnecessary things.
• Understand the core of a new business idea and then implement it locally by leveraging local partners.
• Facebook and Twitter are nice, but leveraging established media platforms still has the biggest impact.

Yet leadership is essential for successful innovation since not just processes, methods and techniques are relevant but the key is the creation of the right environment. This has a far greater impact on the success of innovation projects than jumping on the next creativity technique to generate new ideas. The problem that large corporations face is not that their employees don’t have good ideas – the problem is that they are reluctant of sharing them because the environment doesn’t support them.

Leaders for innovation projects should ensure that the environment allows the emergence of these ideas. The first step to better understand leadership is to understand the different types of leadership.

Leadership Styles: Coordinator vs. Innovator

One such taxonomy of leadership styles has been developed by Quinn in 1984 which identified eight leadership roles organized around the two dimensions flexibility vs. stability and internal focus vs. external focus as shown in the following figure.

The definition of these roles are:

• Innovator Role: The innovator is creative and inhibitions, encourages, and facilitates change.
• Broker Role: The broker is politically astute, ex-virus resources and maintains the units external legitimacy through the development, scanning, and maintenance of a network of external contacts.
• Producer Role: The producer is the task — oriented, work — focused role. The producer seeks closure, and motivates those behaviors that will result in the completion of the groups task.
• Director Role: The director engages in goalsetting and role clarification, sets objectives, and establishes clear expectations.
• Coordinator Role: The courting Nader maintained structure, does to scheduling, coordinating, and problem solving, and sees the rules and standards are met.
• Monitor Role: The Molitor collects and distributes information, checks on performance, and provides a sense of continuity and stability.
• Facilitator Role: The facilitator encourages the expression of opinions, seeks consensus, and negotiates compromise.
• Mentor Role: The mentor is aware of individual needs, listens actively, a sphere, supports the to be made requests, and attempts to facilitate the development of individuals.

Looking at this will it becomes obvious which kind of leadership style is supportive for innovation, change and empowerment off employees. Let’s dive a little bit deeper with another framework for leadership functions.

Leadership Functions: Directing vs. Empowering

Another approach to better understand the different types of leadership is to focus on the functions that leaders provide. Pearce et al. analyzed scientific literature and identified four types of leadership:

1. Directive leadership
2. Transactional leadership
3. 3. transformational leadership and
4. 4. empowering leadership

For each of these leadership types they have identified typical functions that are aligned with it:

Leadership type	Leadership functions
Directive leadership	· Organizing · Problem solving · Clarifying roles and objectives · Informing · Monitoring
Transactional leadership	· Recognizing · Rewarding
Transformational leadership	· Planning · Motivating and inspiring · Networking
Empowering leadership	· Consulting · Delegating · Supporting · Developing and mentoring · Managing conflict and teambuilding

Source: Pearce et. al., Transactors, transformers and beyond: A multi-method development of a theoretical typology of leadership.

The right leadership style for innovation

These two taxonomies of leadership styles help to understand which type of leadership is supportive for innovation. A flexible, internal oriented, empowering leadership style is necessary to help innovation teams achieve high performance where as a monitoring, controlling stability oriented leadership style will limit the emergence of breakthrough ideas.

Nevertheless concluding that externally focused, controlling leadership styles are useless would be superficial. A corporation is not just made up of departments delivering innovation but also of operations departments that staffed with managers who ensure that the corporation and administration keeps working. And there are enough projects in an organization that require a rigorous control and analysis as well as strategic projects that require externally oriented directors that present an organizations interest. Yet when you are aiming for innovation, when you are aiming to develop breakthrough products and services you will not succeed but creating a tighter controlled environment with more milestones and better reporting and a leader who wants to make decisions by himself.

Empowering employees, facilitating idea creation and experimentation as well as individual development of employees are necessary to lead an innovation team towards success. With these frameworks in mind it becomes easier to understand why it might be hard for managers in an organization to create innovative environments but it will also help to understand which group of managers can act as leaders for innovation projects and which group of managers is better in managing operational aspects within an organization.

Sources:

Quinn, R.E. (1984), Applying the Competing Values Approach to Leadership: Toward an Integrative Model

Pearce et. al. (2003), Transactors, transformers and beyond: A multi-method development of a theoretical typology of leadership

How would the focus in your organization change, if your corporate vocabulary is dominated by words and associations from either competitors, shareholder value or customers? If you talk about your customers all the time, your focus tends to shift on customers and through this you could take a big step in getting closer to your customers.

With this in mind it is interesting to see a blog post by Ian Sefferman, a former Amazon employee, about the use of the word customer experience at Amazon.

Customer obsession is the single most important asset you can have as a company.

Every second of every day you should be able to know exactly why you are working on whatever it is you are working on and how that helps the customer. What about it makes their life easier and their experience with your company better?

I worked as a software developer on the Email Platform team. That meant, among other things, we were responsible for sending massive amounts of marketing and transactional mail to customers. Obviously, not all customers find this to be the greatest experience, so it was particularly important for our team to ensure that we did not send spam, and we targeted each mail directly to those customers who would be interested in receiving the mail. The words “customer experience” were perhaps two of the most uttered words on our team each and every day.

The implications for your business

Reflecting on your corporate vocabulary and how it is used could provide valuable insights about the real focus in your organization. Is your organization focused on itself and communication is mostly about your organization, its products, management and processes or do you focus on the customer and actually mirror this in your language? Is your organization’s vocabulary focused on preserving the status quo or on shaping the future? If you want to change your corporate culture, how would you need to change the language that is used in your organization?

Research Potential

I think it would be very interesting to do a analysis of documents, emails and other communication in an organization to identify the degree of customer orientation and customer focus. Doing this with a longitudinal analysis one might get an interesting measurement tool about change within an organization.

One of the main tasks of management consultancies is helping companies finding and strengthening their competitive advantage – a finding a space for differentiation from its competitors that leads to higher profits. Higher profits can be achieved by reducing costs or charging higher prices. But here is the problem: You will reach a point where you are simply not able to significantly reduce costs without increasing the effort to do so.

The only way to increase your profits then is to be charging higher prices – something that can only be achieved with improved products and services. And this is exactly the stage where designers come in. Just to make things clear: the designer is not the guy doing the layout for your marketing folder. Designers are the individuals that create and re-define your products and services to deliver a unique and improved experience for your customers. And they are the ones that can help define something fresh and innovative which can be used to improve your products and services.

Is this a management task? I would say so because it is about the organizations positioning and competitive advantage which should definitely be on top managements agenda.

Nevertheless the question remains: does this really lead to higher profits? This certainly depends on your cost-control measures but if you are able to deliver improved customer experiences, you can certainly be sure that your customers are willing to pay a price premium for that.

What is the most fascinating about this interview and the story of Apple in general is that it shows what is one of the critical issues when starting a company: you need someone, who is passionate about the product or service (Steve Wozniak in the case of Apple) and you need someone, who is passionate about selling the product and making money (Steve Jobs). If these two characters are combined something great can be established.

And this is not just a one-time constellation at Apple but a general pattern, that can be found in several other interviews in the book.
Go and read it, if you want to find out more about famous Silicon Valley startups.