A Marketing Reminder From Nokia – Stay Paranoid

Outstanding article in this week’s BusinessWeek on the fall of Nokia. It is a fascinating tale of complacency and complete disregard for a changing marketplace.

From the article,

Nokia’s initial reaction to the iPhone is the most embarrassing example of what went wrong. When Steve Jobs unveiled the device in January 2007, “it was widely disregarded,” says former manager Dave Grannan, who now runs Burlington (Mass.)-based voice recognition company Vlingo. “The attitude was that we’d tried touchscreens before, and people didn’t like them.”

…As iPhone sales took off, Nokia remained strangely detached, say a dozen current and former executives. The company didn’t sit still, exactly. It opened its own app store, Ovi—but never put marketing muscle behind it. With no runaway hit like the iPhone, app developers largely ignored it. When Elop euthanized the Ovi brand name on May 16, it had 50,000 apps; Apple had 500,000. “It was an ignorant complacency, not an arrogant complacency,” says Nokia human resources head Juha Akras.

It would be one thing if Nokia was unable to respond to the shift driven by Apple and Google but in reality, it sounds as if the company just chose to ignore all signs of change. They assumed that customers would keep buying their products no matter how the market was changing.

Nokia never stepped away to look at the marketplace through their customers’ eyes.

If you don’t have time to read the full article, Andrew Grove’s famous quote sums up what happened at Nokia in one sentence, “Success breeds complacency. Complacency breeds failure. Only the paranoid survive.”

Image Credit:  Alicakes*