When businesses don't innovate they collapse...

Some say that you never forget your first love, kiss, or whatever. But, I say, you never forget your first mobile phone. My first mobile phone which I acquired in 2002 had a reputation for being one of the unbreakable mobile phone (s) ever commercially produced. It was the Nokia 3310 - and almost anyone who could afford a mobile phone had one. In Rwanda, this phone was affectionately called Bagore Beza. Unlike today’s smart-phones which come with dreadful battery life and fragile screens, I only had to charge my 3310 every once in a while for it to function reliably days on end. As for the durability of its screen, well, I knew that if my 3310 ever fell on the floor, I’d better prepare an explanation for the hole in the floor. But, sadly, my love affair with Nokia ended within five years. This was not because the 3310 had failed me, but because overall, Nokia failed to take me to the next level. Allow me to explain. Nokia was once a global mobile telephony giant, which is beyond dispute. In fact, according to Emily Cadman of the Financial Times, in 2003, Nokia’s market share of the mobile phone sales stood at an impressive 35 percent, dwarfing Motorola which came in second with 14.5 percent market share. Of course, Nokia did not release the first ever mobile phone. That honour went to Motorola in 1973 when, Martin Cooper, Motorola’s senior researcher made the world’s first mobile phone call using a devise that weighed over one kilogramme. Ten years later, in 1983, Motorola released the first ever commercially available mobile phone known as the DynaTAC 8000X. The handset although revolutionary at the time, offered its user 30 minutes talk-time, and cost nearly $4,000 in today’s money. When Nokia entered the industry in the early 1990s with the Mobira Cityman 900, everything about mobile phones changed. Nokia’s mobile phones weighed less by comparison, were affordable, and above all, trustworthy. Nokia phones sold in developed and underdeveloped markets with equal success. To Nokia’s credit, between 1998 and 2008, the Finnish company managed to continuously post impressive global market shares of mobile phone unit sales. In fact, according to Statista, Nokia’s global market share grew from 22.5 percent in 1998 to a record peak of 38.6 percent global market share in 2008. And then came the fall… It all started in 2007, a year before Nokia posted a record that still stands today; a 38.6 percent global market share of mobile phone unit sales. Many telecom experts and those in tech Research and Development (R&D) agree that the sudden fall of Nokia all started when Apple’s ex CEO, the late Steve Jobs walked on to a stage in January 2007 and pulled an iPhone out of his pocket, and said: “Today, Apple is going to reinvent the phone.” After that day, a mobile phone had become a smart-phone; it was no longer just a devise used to make phone calls or send text messages, but also a devise that provided the breakthrough internet communications, introducing us to an entirely new consumer market of applications that we now use for shopping, learning, communicating, gaming, and so on. The smart-phone also connected its users to a new world of music, perhaps spelling the end of an era for CDs or the Sony walkman. Similarly, the smart-phone reinvented the way in which we began taking photographs – we no longer needed to carry a camera devise with us. In short, the smart-phone was the beginning of the end for Nokia, which had dominated the market but crucially failed to innovate. What Nokia failed to grasp, in my opinion, was the need to innovate its software front and become a leading player. Even when Apple, Samsung, and Microsoft innovated, Nokia failed to keep up. As a matter of fact, Ben Wood, senior analyst at CCS Insight also observes that: “Nokia make great phones, they still do. They went through this incredible decade of innovation in hardware, but what Apple saw was that all you needed was a rectangle with a screen, and the rest was all about the software.” Similarly, in his book, The Decline and Fall of Nokia, David Cord although he contests that overall Nokia wasn’t innovative, he agrees that Nokia’s management hindered the company from bringing innovative products to the market. And since Apple’s entry and other competitors, Nokia’s global mobile phone unit sales market share which stood at a dominant 38.6 percent in 2008, plummeted to 9.9 percent just six years later. In 2014, Nokia’s handset division was acquired by Microsoft. What is innovation, and why it important for business? Innovation is, according to John Black, a professor of Economics at the University of Oxford, the economic application of a new idea. Whether the new idea is a product, process, marketing method or organisational method, one factor holds; when businesses fail to innovate, most face dire consequences. There are, I believe, several reasons why new ideas can be vital to success of private sector organisations. While companies will of course have priorities depending on area of work, innovation ensures that businesses are always offering something that competitors aren’t - which can be the difference between staying relevant or becoming obsolete. Likewise, contrary to the common belief that innovation requires a lot of money for R&D, innovation can also mean applying new ways of thinking about a problem or an opportunity. For instance, a new idea can be about a business finding new ways to communicate with its customers, for example, opening up social media accounts to widen the reach and scope of your business. Nokia’s storyline is not unique. Other big giants like Motorola, Blockbuster, and MySpace all went under for failing to innovate on how we like our mobile phones, how we rent films, and how we interact with friends around the world. Today, in Rwanda, we have problems and opportunities that require new ideas. For example, our generation is set to preside over an ageing society, mostly thanks to improved life expectancy. But, how are we going to deal with overpopulation, inadequate housing, pressures on health services, food security, and so on? While we begin to think of new ideas, let us keep in mind that: Alibaba, the most valued retailer, has no inventory; Uber, the world’s largest taxi company owns no fleet; AirBnb, the largest accommodation provider owns no real estate; and Facebook, Instagram, and Twitter, all prominent media platforms, create no content. So, next time you think of an idea, bear in mind the changing landscape. junior.mutabazi@yahoo.co.uk

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When businesses don't innovate they collapse...