So there’s this article that has been coming up on my Facebook feed a lot recently. It’s about Nokia and was published in November 2015. I don’t know why it’s suddenly become so popular again. Maybe because it has a sexy sounding conclusion – that Nokia failed because they didn’t learn and change and that if we want to avoid going the way of Nokia, we need to learn and change.
That conclusion is sexy. But also terribly lazy. And extremely inaccurate – Nokia did change and learn. After seeing the success of Apple’s iPhones, Nokia did try to compete in the smartphone market. It did learn (some lessons). It did change (somewhat). It innovated (in some areas). It would be more accurate to say that Nokia failed because it wasn’t changing fast enough and in the right ways. Or more specifically, Nokia failed because it didn’t take enough risks.
Nokia was enthralled by its past successes. It became an extremely successful company by building great hardware. Following all the management practices taught in the best business schools, it continued to focus on doing what it did best and tried to do better in those areas. As a result, Nokia continued to plough resources into sustainable innovations in the handphone hardware part of their business. Because that’s where the money was made at that point in time. In that respect, Nokia did nothing wrong. Diverting resources to fight in a niche market with small volume seemed too risky, some would say stupid.
But not taking that risk, not doing something that seemed stupid, is what led Nokia to be overtaken by the likes of Apple. Why? Because Nokia was focussing on what people wanted at that point of time, not what they might want in the future. But what people want today may not reflect what they want tomorrow. As Steve Jobs was quoted as saying: “A lot of times, people don’t know what they want until you show it to them.”
That is the crux of the innovator’s dilemma.
So it’s not just about learning, changing, or the pace of change. It’s about taking risks. It’s about doing something that seems to be counter-intuitive and stupid at the point you start, because it seemed then that only a very small group of people would use your product or service. Yet, that “stupid” thing eventually grows into something that takes over the market.
Why is this relevant to Singapore?
Because we have been talking about moving up the value chain here in Singapore. I think that misses the point. We shouldn’t just aim to move up the value chain, we need to create entirely new value chains. Instead of just trying to give what people want today, we need to take the risks and try to create something that would give people what they might want in the future.
To the government’s credit, they have at least said that that is what Singapore needs to do. The Committee on the Future Economy chaired by Minister Heng Swee Keat ostensibly aims to shift our economy from a value adding economy to a value creating one. I hope that means that our government will take the lead to take risks and implement some radical policies in various areas.
What areas and what policies?
I can think of a few.
Government HR policies. Do away with forced rankings and pay for performance practices. Hire well. And fire incompetent, ossified staff. But for the rest, don’t assume that they are money grubbing monkeys that you can bribe to give better quality work. Instead, help them see the purpose of their work, help them gain mastery in their workplace, and give them some degree of autonomy and trust that they will do right by you.
Economic and social policies. Raise the cash component of the Workfare Income Supplement. Increase the payouts of the Silver Support Scheme. These two moves will eliminate much of the absolute poverty in Singapore. It would also inject money into the economy, and go a long way in improving business conditions in Singapore.
Growing businesses. Be more generous in giving money to innovative startups. Go out on a limb and give more grants to people whose ideas are different from what is already in the market, even if you don’t know if the idea would work. Make it easier, reduce the number of hoops that the applicant needs to jump through and the number of forms he needs to fill. Don’t need to do so much “due diligence” that people get put off from applying for the grants in the first place.
All of these policies are risky. Some seem outright stupid. But if we don’t want to go the way of Nokia, we need to take risks. Do things which may not entirely make sense now, but will have a huge potential payout in the future. We used to dare to take risks, we used to dare to be contrarian. Let’s reclaim that pioneering spirit so that we are prepared for the future, so that we will still be thriving come SG100.