Tag: life lesson

  • Nokia Story

    Nokia Story

    Case 2: Nokia

    The case:

    With humble beginnings from a small Finnish town, Nokia became a household name in the world of mobile phones. So successful was it that in 1991, it made a profit of $1bilion. In 1998, it made sales of $20billion, posting profits of $2.6billion. Nokia did everything right – it was innovative and launched new handsets every year. It was the first to introduce radio and music capabilities into their handset and even toyed with the touchscreen idea with is Nokia 7710 model in 2004. In the area of gaming, some may remember the “snake” game and even now, I struggle to think of a phone which compares with Nokia in terms of battery life and durability.

    Going back to a statement I made earlier – Nokia did everything right! Perhaps I should qualify it a little bit better. Nokia did everything right in making their phones more suited to making calls, however they missed a trick – its customers wanted more from their device; they didn’t just want to make calls, but to have an all-purpose device at their fingertips.

    So, it wasn’t surprising that in 2007, at the height of Nokia’s dominance where it had a 51% market share of mobile phone sales, it faced its first threat with the launch of the Apple iPhone. Slowly, Nokia lost its dominance and continued to slip in rankings. Sales dwindled and eventually, Nokia had to be sold in 2013. In just 6 years, all the hard work of many years prior had been undone…

    Many business scholars have tried to explain how this came to be – some blame it on the fact that Nokia’s headquarters was not based in Silicon Valley, hence it didn’t have the ability to benefit from knowledge spill overs. Others have said it was the rigidity of Nokia and its lack of speed in responding to market needs and the one I particularly like is that Nokia did not possess the dynamic capabilities needed, meaning it couldn’t sense the market needs and didn’t seize opportunities to innovate correvtly. I believe Nokia’s downfall was more a combination of all three.

    Life Lesson:

    In relation to our life, we are not immune from making the same mistake as Nokia. There is a place we all love to dwell – it’s a place more commonly known as a “comfort zone”. The sad truth is the comfort zone is mostly arrived at after a period of prolonged success. We enjoy the success so much and rather than choose not to rest on our laurels and take a leap forward to the next level, we plateau. Sadly, as the adage says: “standing still is equivalent to going backwards”.

    To continually be relevant, we must learn to constantly be aware of our surrounding and what skills need to be developed and adapted to remain relevant. The simplest example I can think of is social media, which cost me a lot in my business because I took too long to learn how to use it. For some of us, its out-dated work skills, yet for others it could be new lingo used in the market place. Whatever it is, we must learn to have our feelers out to sense new opportunities and seize the opportunity to be transformed through adapting our learnings. This is what business scholars refer to as using dynamic capabilities and is key to ensuring we stay relevant and on the constant path of success.

  • Honda Story

    Honda Story

    Two subjects that I’m passionate about are excellence in business and excellence in life. Interestingly the more I learn about business and the more case studies I read, the more I see an intersection. I believe there’s a life lesson to be learnt from each business success or failure story. Today, let’s learn from Honda!

    Case 1: The beginning of Honda in the USA

    The case:

    It was the 1950s, Soichiro Honda decided it was time to explore the US market, so he sent his trusted ally, Kihachiro Kawashima to make Honda great by competing against established motorcycle manufacturers such as Harley Davidson. After all, the Americans rode long distances and the fuel-saving capabilities of his motorbike would be a welcome bonus.

    Well, not so! At the time, motorbike riders were seen as outsiders or what many of us will refer to as “bad boys” thanks to Hollywood’s portrayal on the screens and they liked their brand names as much as the benefits they offered. Besides, Honda had under estimated the effect of long distances on its new invention and there were several reports of engine failures.

    There came the dilemma – with losses piling up and no sign of a turnaround, should Honda have cut its losses and folded up its US operations? Should it have persisted with its initial plan and keep developing its big bikes until they were accepted? The Honda team continued in their development work and ran errands around town with the lightweight “50cc Super Cubs”. It was great for intercity commute – inexpensive to maintain and a great way to avoid the busy traffic. It was so good that it caught the attention of locals who wanted to purchase them.

    Before long, Sears, one of the leading US retailers came along. It offered Honda the opportunity to supply them large quantities of the super cub and of course Kawashima refused. He was adamant on pursuing the initial goal of selling the big bikes and taking the market share off companies such as Harley Davidsons and the likes. Eventually, when Honda realised its purpose was not just big bikes, but wealth creation, it yielded to Sears demands to sell these Super Cubs in their sports section and open motorbikes to a new market. The offer worked… Sears achieved its aim and Honda came out of the red. By 1959, Honda went from no presence to 63% market dominance. Today Honda is not only successful with small motorbikes, it sells high capacity too. More interestingly, it managed to change the perception of bike riders with its campaign slogan “you meet the nicest people on a Honda”

    Life Lesson:

    Honda’s success came as a result of their flexibility with the initial strategy and an understanding of their underlining purpose. I get it because I have been in this situation many times and you probably have been too – goals don’t line up, and you end up frustrated with the outcome of your decisions and a step you made to advance in reality translates to a more disastrous position than the point from which you started. Can I encourage you to ask this question: “What was the end goal in the first place?” For Honda, it was wealth creation through expansion to a new market. No, it wasn’t to sell the big bikes, it was to gain market share and make money. It was only by deferring back to this starting point instead of insisting on the latter that success came.

    In conclusion, I want to remind you to be true to your core purpose and be flexible with strategy. Remember, strategy can change as long as it delivers on the underlining purpose.