“Nokia said it would delay again its flagship smartphone N8 model, hitting its shares on the day new chief executive Stephen Elop started at the helm of the world’s top cellphone maker”, wrote Reuters, a few weeks ago.

The year 2010 sounds like a hell story for Nokia.

The world number one mobile handsets manufacturer is still financially very sound. Though, the global market position of the Finnish company is eroding (30% in Q3, coming from 34% year on year).

In the end of this summer, Nokia’s management top has been reshuflled.
The company, once the most admired and profitable in the industry, laid off 1.800 people. It encounters very annoying delays in design and commercialisation.

Nokia missed a number of critical steps, during the last couple of years, especially :

• the move to the new generation of smartphones
• the open applications service plateform
• tactile screen handsets

Surprising enough, though, all those ideas, today making the succes of Apple, HTC or even Samsung, had been investigated and discussed within Nokia’s teams, years before.

So, what happened ?

A lack of collaborative/open culture, a too tech focused approach

Juhani Risku, a former Nokia executive, responsible for Symbian’s design user experience, wrote a recent best-seller in Finland : Uusi Nokia (New Nokia).

“Altough Nokia remains one of the best companis on Earth for its logistics, manufacturing, sourcing and R&D, a risk-averse bureaucracy has grown up that stifles innovation – it makes progress slow or non-existent, writes Risku, in the book. The company is the obsessed with data gathering. Turn to almost any page on the website, and you’re invited to fill in an questionnaire”

“I had about 5,000 innovations in front of me – a huge portfolio. And many, about 500, were very good. But there’s a huge approval process. When the people and designers and product specialists get their own strategy it’s first of all, a bit old. There’s a four month delay, so the strategy reflects the business situation four months ago”

“Nokia’s product portfolio is made of phones, each with minuscule differences to other similar units, that wouldn’t look out of place in a phone catalog from 1997″, writes Fast Company magazine, commenting Risku’s book.

“This strategy, adds the magazine, has served Nokia well in delivering cheap low-power phones to the world’s poorer nations. But its lack of innovative, game-changing phones at the high-end of the market. Nokia is bogged down, suffocated, and squashed by its many layers of management.”

So, how can you fix Nokia ?

“Gut the management structure, injecting some vitality and speed to the way new projects proceed from concept to reality”, seems to think Juhani Risku.

Would enterprise 2.0 be one solution for Nokia ?

Back from the E20 Summit in Frankfurt, we can definitely think so.

1. Information and idea management

The issue at Nokia is not data collection. The company, according to Risku, funds and buy a lot of studies in many fields (anthropology, marketing, etc.). However, the Finnish company is struggling with its ability to digest information and use it in a proper context. The collected datas should support the idea generation and idea killing process within the organisation, not (only) be used for months-long validation procedures…

Social tools, information sharing culture and communities, some key aspects of the Enterprise 2.0, could help Nokia better to filter and to let the relevant information find the right persons in the organisation, at a proper timing.

2. Speed up decision process

Furthermore, Nokia is trapped in its own organigram.  The decision process is far to long in an industry where changes happen in months.

Enterprise 2.0 flattens the pyramid, bringing quicker decisions and more reactivity, though with a double check brought by the collective intelligence embed in the company.

3. More disruptive innovation

Nokia was, sometimes, stuck in an engeneering mindset. Technology had the first word, rather than having a more diverse set of inputs driving the group’s actions. Nevertheless, unless Nokia’s engineers achieve a real technological breaktrough, dribbling the competition with a two year advance, strategic moves remain expectable.

Again, the Enterprise 2.0 approach could balance the “hardware” focused culture thanks to the transversal discussions and collaboration initiated between people with different backgrounds across the whole the company. This increased diversity should ignite more original ideas and disruptive innovation.

As we heard at the E20 Summit, companies such as Renault, BMW, Hypoport, Telecom Italia, Danone, Auchan,… are slowly embracing this shift. Thanks to new social platform,

Why not Nokia ? But maybe is it already the case ?

He is a specialist of creativity. According to him, Japanese companies have always been good to procuced very nice technological state of the art products. Nevertheless, they integrated too seldom the creativity, design and cultural inputs which give, today more than ever, the value to new items.

Toyota, once the champion of innovation in the world, is now facing a huge crisis due, for a part, for its inability to start from the customer’s taste and cultural sensitivity instead of giving the key of innovation mainly to engineers, who draw very efficient cars but too light in terms of emotional attraction.
Nowadays, however, Japanese cultural productions are becoming very popular all around Asia.

Will the economy of Japan rely more, soon, on cultural soft products than industrials outputs ?

Flickr Biotwist

Among the many options within Dell’s order process, I could choose de design on the back of the laptop. My choice, though, was limited to a range of propositions, going from a full purple colour version to an arty futuristic composition. And what about a drawing of mine ? Or a picture of my childrens ? The view from my appartment, during the last vacation ? No clue…

Would Dell be in a mindset of Mass Customization, this feature would have been available on the website, may we think.

What about design mass customization ?

All right. Perhaps plastic printing technologies is not that developped yet. So far, any electonic device manufacturer isn’t abble to deliver a washing machine in the exact olive green colour I wish to fit with my walls. Though, several online companies live now on the model “the customer is the designer”. Not the least are textile producers like Threadless, Lafraise or Spreadshirt. He/she can bring his/her own symbol, drawing, tattoo, message (as far as not copyrighted) and make it printed on the clothes. Cafe Press users, another example, sold goods for 100 millions $ of self customized T-shirt.

Mass customization is taking ground. Examples flourish, where one can custom its own wine, its music instrument or a piece of furniture.

Frank Piller, a researcher from the RWTH Aachen University in Germany, is confident that mass customization is heading to a bright future. Even if we are still in early days :

“The market for mass customization still is a tiny niche, but growing rapidly. Confirming the research we recently finalized for our SERVIVE project (an EU funded project on mass customization or apparel), the Spreadshirters confirmed our assumption that customized products are still addressing a very small fraction of the market only. The core task today is to educate the market, not so much surprising it with ever new offerings. Most consumers just have never heard about the opportunity that there is something else then ready-made stuff on the shelves. Sounds strange to you when you are reading this blog and this lengthy posting until here, but these people exist. And they are the majority!”

Personaly, I look forward to see car manufacturers letting their customer order and choose online the colour and the flavour of their new vehicle’s outfit….

Crowdsourcing and supply chain

The toy producer Lego is not doing something else, by the way, with his succesful Lego Mindstorm platform, where fans can design their own robot, machine, truck, etc.

But the Danish company adds something on top of that. The best designed products will be put into production and broadly marketed, with a royalty fee given back to the original designer. There, mass customization meets crowdsourcing and the boundaries between client and vendor are shrinking.

Should mass customization  take off, the impact for the supply chain management, transportation, logistics, will be substantial. Or maybe not. After all, we already live in a time-to-market economy, as Dell, Nike or Levi-Straus show. With mass customization, the challenge will be to open the array of choice, not restrict it to a preselected list of features,  in order to allow a real personnalisation of the items. That is a new way to innovate.

1. Left and right brain innovation

European policy makers have long seen innovation as a left brain thing: scientific, rational, processed, structured, top-down…
Europe has been pretty good in doing that. Many European companies are world leaders in a number of key sector, like aerospace, chemistry, automotive, etc.

But innovation is also a right brain stuff, based on creativity, imagination, entrepreneurship, emotional behaviour, human and social relationship, bottom-up… This part needs informality, serendipity, interactivity, unleashed thinking…
Those later aspects are as important to drive the innovation potential up. To let right brain innovation grow, we need to set up open and inspiring environments (physical or virtual), to ease and amplify human interactions, to free up radical imagination, etc.
On that field, though, Europe is lagging behind.
We use to say that succesful companies have managed to create a right balance between left and right brain. So can it be with economies.

2. Untapped bed of creativity and innovation within corporations

Huge innovation potentials sleep in employees head, untapped by their employers. Top-down, command management focuses on efficiency at the expense of creativity and side moves. Hereabove, “Job” told about management innovation. Perhaps is it the most difficult to achieve. However, there lies one of the biggest innovation tank we can dream of.
A.o., it can pave the way for more intrapreneurship, then more innovation.

3. The tight link between entrepreneurship, innovation and culture

Should it be within (intra) or outside an organisation, innovation comes with entrepreneurship. Foster people to speak up, believe in their skills and ideas, help them interact with the best experts to make the case for their project, will boost innovation.
A European economy with many startups, well connected, with access to bigger corporation’s open innovation processes, or just cluster of SME’s, could sparks.
For sure, that is a matter of culture. Europe should lead by as many examples as possible. We should also tell the story of a changing economical environment. Why are we heading toward a more innovative economy ? A.o., because knowledge, today, is almost everywhere. Globalisation has made the world economy so fluid that, soon, anyone can become a partner or a competitor. Change comes from the outside as well.

The recession is coming to an end, says the president. In his weekly address to the US citizens, Barack Obama stressed that a solid recovery should be supported by a recaptured spirit of innovation.

“It is only by building a new foundation that we will once again harness that incredible generative capacity of the American people. (…) All it takes are the policies to tap that potential — to ignite that spark of creativity and ingenuity — which has always been at the heart of who we are and how we succeed”

For the American president, innovation is part of anybody’s DNA. Innovation doesn’t belong to scientist and white coats solely. Innovation is embed in any active or would-be entrepreneur. Innonvation blooms thanks to fresh looks, unleashed from any kind of prejudice.

On that respect, the American president is in tune with similar considerations regarding the corporate world. In a country’s economy as in a private company, innovation pops up from individuals. The creativity and the engagement of individual people is the first engine of it. In order to fuel a new period of growth, one needs to put a appropriate climate that will foster individual innovators to speak up, and set a proper environment to help them convert ideas into achievements.

Obama’s statement could (should) be, today, what CEO’s say to their employees and executives. Trust people. Forget paternalism.