Statistics don’t mean squat in competitions
Like football managers, CEOs need time for turnarounds
THE so-called El Clasico (the Classics) is over. The bi-annual grudge match between two of Spain’s finest football clubs saw Real Madrid pip Barcelona 2-1. With the win, Real Madrid was also able to avenge its 3-1 defeat to Barcelona last December.
So what does this have to do with a tech column? Well, for starters there are some uncanny parallels you can find behind professional football and the tech world.
For instance, statistics don’t mean squat in competitions, especially head-to-head ones. Barcelona may have come into El Clasico with an edge having beaten its bitter rivals some four months ago but this did nothing for them on that day as statistics won’t determine the outcome of any game.
Similarly, in the business world, statistics may mean very little to companies battling it out with their competitors. Every battle a company goes into with its competitors is a battle unto itself. Even if a company had won the previous rounds, or was the undisputed champion from its past life, it must still compete as if the next battle is a fresh new one.
Simply put, businesses can’t live on past glories. Two Reuters tech stories that appeared over the week illustrate this point clearly.
The first is a pre-earning’s call story noting that Nokia is under a lot of pressure to show a turnaround plan; the second is that the Finnish handset maker had dropped its sales chief, Colin Giles, who will leave in June “to spend more time with his family.”
For many years, Nokia was the de facto leader of handsets in the world. From its iconic “Butterfly” phone, the Nokia 8250 that glowed a bright blue at night, to the 9000 series Communicator “brick” model, Nokia led the way in engineering, design, and software that powered its phones.
To me, Nokia’s decline from its zenith to what is seemingly now its nadir was because it lived too long on its past glories.
Beginning with the onslaught of Apple’s iPhone and later on, the Google Android train, which helped more nimble players like Samsung and HTC, and to a lesser extent, Motorola, LG and Sony Ericsson gain market share, Nokia continued to struggle but in reality, had already lost the plot several years ago.
Its comeback trail has been led largely by the biggest gamble of its life — the strategy to partner up with Microsoft Windows Mobile platform, a deal cut more than a year ago.
But sales of the new Nokia flagship phone, the Lumia has been slow. Reuters noted that Nokia’s switch to Microsoft’s Windows operating system has yet to help it win back smartphone customers.
To be honest, even my own interview with the Nokia vice president of Southeast Asia’s sales, Neil Gordon, in February before the launch of the Nokia Lumias 800 and 710 here in Kuala Lumpur left me unconvinced.
To be fair, it’s not that I don’t think the new Nokia Lumias are at all badly designed smartphones. As I’ve said before, although I have not reviewed any of the Lumias yet, my cursory observation tells me that other selling points for them include a solid body design, reasonable hardware specifications, vivid colour choices, and an operating system that is way slicker than previous Nokia smartphones.
But the problem Nokia suffers from is one of bad perception, not necessarily bad engineering or design.
Which leads me to another similarity businesses might share with the Beautiful Game: Like managers in football leagues who do not perform at the highest of levels and are dismissed — sometimes very quickly (think Roy Hodgson of Liverpool or Andre Villas-Boas of Chelsea) — as a result, so too CEOs have very little time to work their magic to turn things around.
As such, they would need to make an immediate impact with their turnaround strategy or risk being removed. But here’s the kicker — for Stephen Elop, Nokia’s CEO, to ramp up sales, he would need to do a lot more than to just spend a lot more in marketing, advertising and promotions because at the end of the day, it’s a battle of perception.
However, therein lies the problem: Like a chicken and egg situation — which comes first? How will Nokia reverse the perception if it can’t get consumers to try its smartphones in the first place? And if they can’t get consumers on board, how will they succeed as a third force challenging Google and Apple?
That said, just as I don’t agree that managers should be fired so quickly, especially after a certain number of non-performing games, I think Elop shouldn’t necessarily be dismissed until he’s been given enough time to make the transformation he needs.
More often than not, the transformation of a team, or a business, is a humongous task as the effort needed to kickstart a large company like Nokia needs at least a year. But how much time should he be given, some may ask? A year? Two? And what would he have to do to keep his job?
Well, Elop’s year is up, and many pundits believe he will have up to the end of the year to show exponential progress. His aim? To ensure that sales of the Lumia series of phones take off in the next two quarters, plain and simple.
And perhaps his best bet now is to bank on moving aggressively into China, where Apple, and to a lesser extent, Samsung, do not yet have the dominance in the market. In the final analysis, this is the nature of the beast in today’s highly competitive globalised business world — a curse which both top flight football managers and CEOs of flagging public-listed companies share in common.
This article appeared previously in The Malaysian Insider