When I read about the partnership between Microsoft and Nokia, I couldn’t help but think about Lou Gerstner’s book “Who says elephants can’t dance”. In the book, which describes how Lou saved IBM from collapse in the 90s, Lou likened IBM to an elephant on the dance floor, whose size limited its dancing agility; and he likened IBM's competitors to nimble ants that danced extremely well and took over the dance floor. Putting this simply, the larger a company is, the slower it responds to changes and the harder it is to keep up with the industry and remain profitable. Thus, while product managers in big companies are still polishing their PowerPoint presentations, smaller and faster companies might be able to push out new products quickly in response to the market.
Nokia and Microsoft are two such elephants. Nokia is the giant in the mobile phone industry, Microsoft had the highest Smartphone software penetration. However, they both allowed faster competitors to take over their dance floor. From reading Lou’s book, it is inferred that IBM’s major problem was all the policies and procedures that comes from being a big company – proposals took a long time getting through supervisors to top management and became obsolete by execution time. Executives wasted their time with trivial issues such as signing off on the color of an office carpet, while the important issues lay in a folder on their desk or in their email boxes for days. Nokia's CEO Steven Elop seems to think the same about Nokia. In his letter to employees, he says “We had a series of misses. We haven't been delivering innovation fast enough. We're not collaborating internally.” The key words are "deliver innovation fast". Nokia missed it for so long, and for the smartphone industry, if you're not fast, you're done!
I remember having a meeting with engineers from two well known telecommunication equipment manufacturers back in 2007 when I worked in the telecom industry. We were meeting to discuss a solution which required engineering input from both parties. Company A’s engineers brought out their laptops right in the meeting room and gave a response within 15 minutes. Company B’s engineers needed to get back to their office, hold a meeting with their manager, file a change request and wait until an expert from another country was available to log in remotely and work on the system – “That’s the office procedure”, they had said. Not surprisingly, Company B was and is still the market leader, but Company A is steadily eating away at that market share.
In my opinion, the partnership between Microsoft and Nokia is a good one. I’ve been a user of Windows Mobile since the days of the Pocket PC. Nokia still makes most of the mobile phones in the world, and Microsoft is still the world's number 1 software company. The only problem is they are considered by many as old-school, incapable of keeping up with the times - what with Apple rolling out product 2.0 while competitors are still struggling to duplicate product 1.0, and with the Android market share growing steadily each day. Also, Investors aren't too optimistic, both companies had their share prices decline after the announcement. It will be tough, just as it’s tough for elephants to dance, much less two elephants dancing in sync. However, if these two elephants can finally figure out how to dance, the ants had better get off that dance floor as fast as they can.