Don’t be the Nokia CEO
10 years ago seems like yesterday. Which means a startup might kill you tomorrow.
Do you remember where you were in November 2007? You bet Olli-Pekka Kallasvuo, back then CEO of Nokia, surely does: he was gracing the cover of Forbes, his company had just surpassed the 1B customer mark and the headline wondered if there was anyone who could catch the dominant player in the technology world as it was known at that day.
Well, it looks like 10 years later, there are still a whooping 87% of businesses who didn’t get the memo. That’s the percentage of company leaders who still don’t know or don’t use innovation methods, according to the data we found during our research about the state of digital innovation. We’ve been digging into reports, surveys and information from all kinds of sources and the picture is bleak to say the least. Here it is, if you dare to take a look at it:
While 52% of business owners have already experienced significant disruption to their industries through startups, still the number of executives woke enough to respond to this thread is way too low: only 22% of CEOs are taking a “digital to the core” approach to their businesses. Which means that at least half of the companies out there are susceptible to be blindsided by a faster, more nimble and younger company and just a fifth of all companies are in position to avoid being the next Nokia. Or Kodak, or Toys’r’Us, for that matter.
While some may argue that startups and innovation are these new hip trends and buzzwords that, as any other, will come and go, the numbers show that big enterprises might end up going away with them as well. The average company lifespan in the S&P 500 index keeps decreasing and by 2025 will be barely above 15 years. Even today, 38% of the businesses included in the index didn’t exist when Nokia’s CEO was on that infamous cover.
So here’s a case for all CEOs and business leaders to start listening the drumming in the back and turn their priority list upside down. Our research tells us that more than half of those who pushed for digital transformation saw results with increased profits. It’s time for the 85% of the businesses who believe that they don’t have the skills to guide a digital strategy to drop whatever they are doing and seek for help: not only because they are missing out on opportunities to increase their bottom line, but also because we all know that 10 years ago seems like yesterday. Next thing you know, you are the Nokia CEO.
We asked and dug, and the 3 biggest roadblocks for leaders and executives pushing for innovation and digitalisation seem to be resource constraints -as in time and talent-, budget constraints and lack of innovation processes in place. But not pushing through these obstacles will make your price of doing business as usual just unbearable: letting them stop your innovation efforts today might be the dead of you and your company tomorrow.
How to break the cycle? Most big corporations, old and new, such as Walmart, Google, Amazon, or Facebook, keep the pool of ideas fresh by writing checks to avoid being made obsolete by younger companies. Or they shamelessly copy and crush them. Sometimes that strategy pays off — as in the case of Instagram, for example — but usually, two times out of three integrating startups into corporates fails.
The other emerging strategy to solve this friction is to build startups from within companies, guaranteeing 100% ownership, plus keeping the failures and successes as learnings or earnings inside of the organisation. Like a VC investing in startups, they would make room in their budgets to finance failure to find their future goldmine. But given the lack of innovation acumen inside of companies, the fastest way to switch at this point might be admitting the truth about digitalisation, calling for help and having experts on building companies grow your internal portfolio of startups in 100 days.
As I say in my speaking commitments:
“Digital transformation is like teenage sex. Everyone talks about it, nobody really knows how to do it, everyone thinks everyone else is doing it, so everyone claims they are doing it.”
So here’s an idea: maybe it’s time for everyone to cut the teenage attitude. Because to be honest, Nokia was trying in 2007. They were really trying. But were they trying hard enough? Were they honest to themselves, saw their weaknesses and asked for help? Did they pick up the phone and called the experts in innovation, and most importantly, did they listen to them?
If they were like you are today, they probably didn’t. They kept listening to themselves and thinking their business models were healthy and nothing was going to crush them in less than 10 years. But I’m telling you: learning from the past mistakes means picking up the phone. Preferably today.