In 2006, Nokia was the global leader in cell phones, growing by double digits. They were rated the eighth most innovative company in the world, according to BusinessWeek. What could possibly go wrong?
Turns out, plenty.
In 2006, Nokia invited me to lecture on driving growth through innovation before an elite group of 50 of their “high-potential” managers, who would be flying into Palo Alto from all over the world. A pre-session survey I conducted should have alerted me to Nokia’s future dilemma. I asked about barriers to innovation, half expecting they would leave that question unanswered. Instead: “We are risk averse.” “Our operational mindset dominates” and we suffer from large corporation syndrome.”
Innovation guru Robert B. Tucker discusses his personal experience with Nokia’s downfall from the … [+]
I still remember posing a question to this group: “If I work for you and I have an idea, what do you want me to do with it? One manager spoke up and said, “I’d just advise you to forget about it. In this company, you’re just going to frustrate yourself; there’s so much bureaucracy you’ll never get anywhere with the idea.”
I passed off what I’d learned about Nokia as an anomaly: “Rapid growth covers a lot of sins.” But one year later Nokia found out differently. In 2007, Apple introduced the iPhone and Nokia began its spectacular fall from grace. They were woefully unprepared for the inflection point that suddenly confronted them.
We are about to face the biggest business and social inflection point in history, and, like Nokia, we are unprepared.
Futurist Ray Kurzweil defines the Singularity as a period during which the pace of technological change will be so rapid, its impact so deep, that human life and business will be irreversibly transformed. We are almost there, and the impacts are everywhere.
Simultaneous revolutions are happening at the same time: in business, in society, in geopolitics, and in climate. Over the next ten years, industry after industry will experience exponential change. Customer needs will shift overnight. New technologies will emerge at record rates. The workforce and the kind of talent that will be needed will be radically different. In my work, I’m seeing a lot of companies caught off guard by the Singularity future. I believe that the single biggest issue organizations will face is the challenge of rapid change. In 10 years, research suggests that forty percent of the 500 largest public companies will no longer be around.
Intel, once led by a CEO (Andrew S. Grove) who wrote “Only the Paranoid Survive” got caught up serving the PC and data center markets. Intel missed the smartphone trend. Ten years later, they missed the AI revolution. But Intel rival saw the opportunity and pounced. Nvidia repurposed its chips designed for video games and began using them to power the AI Revolution.
Boeing faces its own Singularity Moment. Once the company’s commitment to safety and quality were second to none. Their catchword was “If it ain’t Boeing, I ain’t going.” Boeing gobbled up rivals, expanded from jets to military hardware to rockets. The Saturn V rocket that powered Apollo 11 to the moon was proudly manufactured by Boeing.
But then the bean-counters took over. Today Boeing appears in a never-ending tailspin. Two of its 737 Max jets crashed, killing hundreds of passengers all because, as various investigations revealed, Boeing tried to avoid pilot retraining costs.
Two astronauts, riding in a Boeing-built Starliner spacecraft, arrived at the International Space Station on June 6th, 2024. They were expecting to stay for a week. But because of an embarrassing series of technical failures they are still there. They won’t be heading back to Earth until February. NASA calls Starliner “too risky.”
Meanwhile, rival SpaceX is making the most of its Singularity Moment. Their Falcon 9 rockets are driving unprecedented growth and market share. The Falcon 9 was developed at a fraction of the cost it took Boeing to develop comparable systems. CEO Elon Musk’s insistence on a fixed-price, milestone-based payment model pushed SpaceX to adopt a leaner, more innovative engineering approach. Boeing limped along with the traditional “cost-plus” business model.
To thrive and prosper in the next decade, organizations and their leaders need to grapple with the ever increasing pace of change and the need to constantly disrupt or be disrupted.
This post was originally published on here
