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

The Features of Windows 8

Let’s start with a few details of these documents, you can find the full documents at “Microsoft Kitchen” but here is my brief analysis:

1. Microsoft envies Apple and the Mac OS
2. There will be stronger cooperation with hardware manufacturers to provide a better overall customer experience
3. Focus on Experience based Differentiation
1. “Partners are able to customize Windows in alignment with specific hardware and software offerings to create unique, integrated, and branded experiences.
2. Customers who are shopping for a new computer are able to clearly see the value of Windows 8 product offerings and are able to choose a Windows 8 PC that best matches their personality, interested and lifestyle.
4. Development focuses on improving efficiency, on/off transitions, diagnostics and management as well as resilience
5. There will be an App Store called “Windows Store”
6. There will be a stronger integration with Microsoft Cloud Services

Is this the ultimate strategic disaster with all this information about Microsoft’s most important product out in the wild? I don’t think so. Maybe this is the best that could happen to Microsoft and the Windows franchise.

There is nothing new under the sun

Many of the ideas and concepts described in these documents are definitely new for Microsoft and Windows. But they are not new in the IT industry. There is Apple and Mac OS X with an integrated hardware-software experience, we have application stores on various platforms and we have standalone applications that integrate cloud services on the desktop (i.e. Dropbox or the Upcoming Google OS). And of course efficiency and on/off transitions have a lot of potential on Windows – that’s something that every Windows user is aware of.

If you are observing the IT industry closely, most of the “news” in these slides already exist and many could have guessed which trends have gained enough traction to be considered in a future version of the operating system.

Yet creating PowerPoint slides is one thing, delivering the software is another story. But maybe now that these documents are available online, Microsoft can focus on executing, instead of planning.

Planning distracts from execution

I once heard the unconfirmed story about the CEO of one of the major Swiss pharmaceutical company who said after the final review of the companies 5 Year Strategic Plan:

“Great, now let’s pack everything up and send it to our competitors because it doesn’t matter if they know it or not. What matters from now on is execution.”

Definitely a bold statement but there is some truth to it. I believe that too often planning substitutes execution and instead of working on the fastest track to bring something to the market, companies focus on the most sophisticated planning exercise that creates the most beautiful and thought-through PowerPoint slides.

With your plans well known, you can focus on execution – and delivering all the ideas, concepts and improvements that have been put together in PowerPoint Slides. And now that the world knows what to expect in Windows 8, Microsoft can (and hast to) focus on execution. And the recipe for success is simple: Create a user experience that is better than your competitors and you don’t have to worry about customers.

Would you publish your product roadmap?

Now of course you don’t have to publish your strategy documents and your product roadmap. But I think it would be an interesting thought experiment who your organization or team would change its behavior when all its plans would be. What would change if you are suddenly confronted with a published version of your strategic plan/product roadmap and the only thing left to focus on is executing and implementing the ideas?

And once this question is answered, the next question is: What’s stopping you from doing that right now?

Yet if you are facing an operational decision whether you should increase the number of agents in your customer care center or if you should save costs because service-levels are still “good enough” you know that this question is more complex. One has to accept that there are times when you are not able to deliver a remarkable customer experience and I personally believe that consciously accept these situations as outliers is not a problem. But there is one area where you should not accept trade-offs: strategic decisions.

Don’t let operational goals interfere with strategic goals

If you are truly committed to delivering remarkable customer experiences you have to form your design decisions with the customer experience in mind. Kevin Mattice has written an article where he calls designers to be arbiters of truth who protect the customer experience.

Designers should be arbiters of the truth: They should be the kind of people who stand up and tell it like it is, and that usually calls for courage. Fixing a bad customer experience requires the courage to admit that something’s wrong, and it only comes from a willingness to be transparent, to be open and honest, to communicate, and to be accountable. Good design is all that, and good designers are as transparent as they can be, even if it hurts them. Sometimes it does.

Now you might say this is a mundane statement. But just have a look at the integration of MySpace with News Corp and you will understand that this is not just an empty call to action. At News Corp strategic design decisions have been made with a focus on short-term profits instead of the long-term customer experience. If you have been wondering why MySpace lost its edge over Facebook make sure to read the article “The rise and fall of MySpace” in the Financial Times that brings light to some decisions made at News Corp. Here is the section that was most eye-opening to me:

[…] Former MySpace executives say News Corp dragged its feet over implementing Ajax, a program that allows users to send a message, an e-mail or to post a comment on their friends’ pages without having to open a new browser window. Facebook was quick to embrace Ajax but MySpace did not follow suit, partly because to do so would have reduced the number of page views the site generated and therefore its advertising revenue. “It would take five steps to post a comment or send a message, so five different pages would open,” explains another former executive. “There would be ads on each of those pages, so we were making money. We went to News Corp and said: ‘We want to change this but in the short term our revenues will drop.’ It became a long back and forth. [They] were pushing back – they wanted to make sure we weren’t going to drop our revenue numbers.” (emphasis added).

News Corp, meanwhile, contends that the request to adopt Ajax came at the beginning of 2009 – when Facebook had already established its supremacy. In other words, it was too little, too late.

Such a decision is hard to comprehend but the responsible advertising manager might have said: “Well, if we change the system now, revenues might drop now and I risk losing my job. If we keep it this way, we might lose revenues later on, but at least I will keep my job for now”.

Conclusion

Consciously making operative decisions to accept a trade-off on the customer experience can be accepted if they are indeed based on operational conditions – increased call-center activity or short-term product and service problems. Nevertheless strategic decision should never be influenced by operative goals and responsible managers have to ensure that employees are able to openly communicate – to speak the truth – when short-term profit gains might have a negative long-term impact on the customer experience.

Read the full article “The rise and fall of MySpace” in the Financial Times

Read the full article “The Clear Way” by Kevin Mattice

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.

Even though top-management encourages employees to try something new and give them a “permission to fail”, many people do not go the extra mile but prefer to stay in a mode of “comfortable apathy”. It is too risky for many employees because if their endeavor fails, they risk their career, might lose their bonus, and in the worst case even their job. One can understand employees when they ask themselves “Why should I go the extra mile, when I can risk my bonus and career chances?”

Overcoming these challenges is difficult and there is definitely no silver bullet but with a different take on performance goals, it might be possible to stimulate the willingness to innovate and drive change while at the same time providing measure that limit the employee’s risks.

Strategic stretch goals to stimulate innovation

By reaching for what appears to be the impossible, we often actually do the impossible. And even when we do not quite make it, we inevitably wind up doing much better than we would have done.Jack Welch

The concept of stretch goals has been broadly applied at General Electric in order to limit the annual bargaining between managers and their employees on performance goals. Stretch goals should limit such negotiating and improve long-term view, stimulate breakthrough ideas and justify trade-offs in one year to harvest the benefits in the following years.

A definition of stretch goals

Strategic stretch goals are goals that cannot be achieved with what is known and how is worked today. They aim for something that is impossible today.

This definition is important because setting the wrong stretch goals will burnout your people. Such tactical stretch goals are goals that can be achieved with the current way of work and they usually result in employees doing more of the same – which ultimately means longer hours.

Strategic stretch goals really push the boundaries of what is assumed to be possible to strive for the impossible. Only when you aim for the impossible, something that cannot be achieved with existing practices, you have the “pressure” to come up with radical new ideas instead of increasing your workload.

An example

Let us assume that you have defined a 10% growth goal for your business segment in the coming year. Instead of defining a tactical stretch goal of 15% growth for next year, a strategic stretch goal would aim for a 50% growth. Confronted with such a growth target, managers would have to come up with different solutions than simply working harder and longer. Maybe new distribution channels, new partnerships or other strategies could be a solution but working longer hours will not even bring you close to the 50% growth.

The “urgency” to innovate

Defining strategic stretch goals gives employees that are willing to innovate an opportunity to realize their ideas. For those that do not see the need to innovate yet, stretch goals can create a “sense of urgency” that stimulates and forces them to work on ideas that help to achieve these goals. The point of “pressure” and “sense of urgency” is not to get people working harder. It is to get people to do things differently and raise the capability of the organization.

How can you define stretch goals in your organization?

If you have not defined stretch goals in your organization, it will be difficult to introduce the concept, define them and link them to the bonus system in your organization. Nevertheless, you could easily run a workshop where you define stretch goals and work together with other people in your organization to develop radical ideas that might bring you closer to the strategic stretch goal.

Avenue A | Razorfish recently published the “2008 digital outlook report“. On 164 pages they present what happened in 2007 and what they think will happen in 2008 in the digital media landscape.

For many consumers, an engaging advertisement still powerfully influences their decisionmaking. But even more powerful, are the opinions they share with each other through trusted blogs and social networks. A mother in Topeka, Kansas, or a teen in a London flat can become trusted authorities, influencing more decisions than the best formulated professional branding campaign that an advertising agency can offer. Consumers are turning to a seemingly endless source of specialized media – so much so that commonly accepted best digital best practices have very short shelf lives. Yesterday’s solutions simply aren’t adequate to solve today’s problems. Is it any wonder that most businesses are coming to the hard realization that they aren’t organized effectively to respond to change?

Avenue A | Razorfish’s 2008 Digital Outlook Report examines where that digital spend is going. We provide direction on how marketers can align their organization to respond to the new digital environment, as well as a framework for effectively managing emerging channels and social media. And we give you some interesting new insights into consumer behavior.

The chapter “ten digital media issues to watch in 2008″ is especially interesting, so watch out for:

1. The move beyond media buying
2. The impact of a recession on online advertising
3. The redefinition of online media measurement
4. A limited increase in average CPMs
5. The fallacy of the “digital upfront”
6. The slowing of ad network acquisitions
7. A breakout year for mobile—but not for mobile advertising
8. Nokia’s emergence as a key player in the digital marketing industry
9. The continuing lack of video ad standards
10. The Internet’s impact on the 2008 presidential election

For me personally issue 8 “Nokia’s emergence as a key player in the digital marketing industry” provided new insights.

Nokia made two important moves in 2007 that will impact digital marketing in the coming year. It acquired both Enpocket, a leading mobile advertising and marketing services firm, and Navteq, a leader in navigation data and systems software. While there have been no formal announcements from Nokia about how its assets will fit together, it is clearly going to be a company to watch in the coming year. Nokia appears to be vying to expand its own business outside of consumer mobile devices and into the software and services that consumers are able to use on those devices.

Nokia now has assets that may accelerate the use of smart devices that use location-based services that know where we are. The potential benefit for marketers is the ability to deliver relevant, geographically contextual advertising opportunities to customers. Accomplishing this feat in the U.S. today, while not impossible, often involves orchestrating a small army of carriers, devices, marketing services providers, and agencies whose interests are not always aligned.

Download the full report.

The article “Deeper customer insights – Understanding today’s complex shoppers” published by IBM Business Consulting Services provides some valuable insights into customers in the retail industry.

Here are some excerpts of the report:

Five “megatrends” for 2010
[...] we identified five deep-seated trends that are reshaping the business environment [...] :

• Customer value drivers fragment
• Gatekeepers become more guarded
• Information exposes all
• Megaretailers break the boundaries
• Partnering becomes pervasive

These megatrends are driving the industry to a “world of extremes” where customer diversity and individualism are pervasive, and traditional segmentation is rendered inadequate. Customers demand low prices for basic goods, but pay premiums for products that matter more to them personally. Consequently, those best positioned to grow and succeed will be huge megaretailers on one end of the spectrum and targeted retailers on the other, while undifferentiated companies, lost in the middle,
risk fading into irrelevance.

Corporate thinking thus needs to switch from “bell curves,” where firms try to serve a generic mass market but do not meet anyone’s needs particularly well, to “well curves,” where companies drive growth by applying distinct models in each part of their business to deliver the greatest value to explicitly defined groups of customers.

A customer value cube is used to describe the value expectations of retail shoppers.

Another interesting chart are very/extremely important shopping services and features.

Groceries

Apparel

Download the full report.

You have to talk about something with more rigor. ‘Design method’ is how you organize multidisciplinary teams, how you exploit technology or what processes and practices you might apply. These are all things that are as natural as breathing to a designer—but which aren’t regularly used in a business sense. To start talking about ‘design thinking’ in the boardroom or in the business school doesn’t seem strong enough. It seems a little conceptual—I want to get deeper than that.

I am able to relate that it might be difficult to convice executives to “think about design” when they would rather prefer to apply some “design method” to solve their problems. A “design method” also has the benefit that you can suddenly become really busy with planning projects, calculating business cases and setting milestones which is all very complicated when you are talking about something conceptual as “design thinking”.

Nevertheless it is essential to differentiate between actual design methods and the philosophy behind these methods: the way of identifying problems, seeing potential solutions and the focus on fulfilling customer needs. These are just some areas within design thinking and they can’t be substituted with design methods.

If the use of “design method” instead of “design thinking” is what it takes to spread the word, then this is what we should use. Yet we should not forget, that we have to “design think” as well and not just apply “design methods”.

The main determinant for successful projects is always top management support. I don’t know how many papers, surveys and interviews I have seen where the final conclusion is that the most important key success factor is top management support. This factor becomes even more important when talking about designing and delivering customer experiences.

Two basic patterns of strategic direction can be present within an organization. It is either inside-out oriented, focusing on their organizational performance (i.e. cost structure, production network) or it is outside-in oriented, focusing on markets and customers and deducing organizational requirements from this. In the field of strategic management this has been discussed in detail with the two concepts of “the resource based view” of an organization and market orientation. The decision what concept is dominant within an organization is naturally given by the direction that is defined within an organizations strategy which is ultimately defined by the CEO.

Convincing the CEO to focus on Customer Experiences or even just on customer focus when he is busy with controlling and production strategies is a difficult thing. The discussion whether leaders are born or made is an old one. What I am asking myself is this: Are customer oriented CEOs born or made? And if you are not customer oriented (enough), can you still change yourself as a CEO? (Or can you become more customer oriented through you employees?).

It is possible to become more customer oriented as a CEO. If people are able to climb Mount Everest or cross the Sahara it is possible for a manager to become costumer focused. What does it need for that? Determination to become a CEO that feels the pulse of the customer.

A few examples?

We have the usual suspects here, Steve Jobs of Apple or Tim Brown of IDEO. Another interesting person is Ron Dennis, the leader of the McLaren Formula 1 team. Here is an article about the McLaren technology center and as they say in the article: “a man’s obsession”. (found via metacool)

Bruce Nussbaum at the Businessweek talks about the challenge that “CEOs must be designers, not just hire them”. Here is one great excerpt from his article:

In the US, CEOs and top managers hate the word “design.” Just believe me. No matter what they tell you, they believe that “design” only has something to do with curtains, wallpaper and maybe their suits. These guys, and they’re still mostly guys, prefer the term “innovation” because it has a masculine, military, engineering, tone to it. Think Six Sigma and you want to salute, right? I’ve tried and tried to explain that design goes way beyond aesthetics. It can have process, metrics all the good hard stuff managers love. But no, I can’t budge this bunch. So I have given up. Innovation, design, technology—I just call it all a banana.

This could be an independent software developer producing some customized software application, a biotechnology entrepreneur trying to sell his potential blockbuster medicine or a musician playing music on the street.

The problem is that most of us are very focused on ourselves. What we have, what we do, what we can offer and what we want to get form that. When you catch yourself thinking “What can I do? What can I offer? How can I sell what I already have?” you should step back and take a look at the big picture again.

Here are some questions that should help you in this process:

1. What exactly is it that I am offering?

2. Who could be interested in that (a.k.a. Who are my customers)?

3. Why should anyone care about my offering?

4. Does my product or service increase anyone’s overall performance?

5. Does my product or service decrease anyone’s costs?

6. Are you really sure that your answers for 4 & 5 are realistic?

7. Why exactly should anyone choose you or your product and not someone else?

8. What could you do to improve the performance or decrease costs for someone?

Don’t get me wrong here. With these questions I don’t want to be overly pessimistic. All I want to do is to think about your business not from the point of “What’s in it for me?” but from the point “What’s in it for them?”. Because at the end of the day, everyone is thinking more about himself than they are thinking about you – so you better give them a good reason to do business with you!