Healing America’s Great Divide—A Burning Platform is not the Way

The Continental Divide of the Americas, known in the vernacular as the Great Divide, is big. Technically it’s the hydrological mountainous divide that stretches from the Bering Strait at the top of Alaska to the Strait of Magellan at the southern tip of South America. Yeah, it’s pretty long.

There’s also another big divide, and one that’s been growing steadily in the past two years. This one isn’t geological but involves people—some 320 million inhabitants of the United States. The intransigent intolerance shown by those on both sides of the political divide—Democrats versus Republicans and those won over by Trump’s marketing genius—appears to be just as entrenched at the start of 2017 as it was during the 2016 election campaign.

Anyone remember how Donald Trump promised to heal the division in America?

Oddly, his 16 minute inauguration address on January 20th didn’t lay out a vision for America, one which could have articulated how ALL Americans could see themselves contributing to the country’s future. Instead, Trump’s address was dark and foreboding, essentially a concise replay of his campaign rantings. Sure, the United States has problems, such as with growing income inequality, disastrous high school student test rankings on the global level, and tens of millions of Americans still without healthcare coverage. But the country still has so much going for it, such as being an engine for innovation, citizens who are known for their generosity, and a land that has been embraced by immigrants for over two hundred years. Take a moment to read Why America is Good and Great.

Somehow, America the good was kept under a blanket during Trump’s inaugural address. As a reality show host, he knows how to play to the dark side of people, bringing out their raw emotions and prejudices. No one does it better than Donald Trump.

How would employees react?

This brings to mind Nokia’s burning platform

Canadian executive Stephen Elon joined Nokia as CEO in 2011 (coming from Microsoft). He was shocked at what he saw: a world leader in cellular handsets that was steadily losing market share. Elon decided to write what has become known as the controversial “burning platform” memo, in which he stated that radical moves would be needed to stop the company’s decline.

Elop’s emotion-laden email memo was leaked to the media. Nokia’s board of directors was not impressed.

Here’s the full text of his “burning platform” memo:

As the fire approached him, the man had mere seconds to react. He could stand on the platform, and inevitably be consumed by the burning flames. Or, he could plunge 30 meters in to the freezing waters. The man was standing upon a “burning platform,” and he needed to make a choice.

He decided to jump. It was unexpected. In ordinary circumstances, the man would never consider plunging into icy waters. But these were not ordinary times – his platform was on fire. The man survived the fall and the waters. After he was rescued, he noted that a “burning platform” caused a radical change in his behaviour.

We too, are standing on a “burning platform,” and we must decide how we are going to change our behaviour.

Over the past few months, I’ve shared with you what I’ve heard from our shareholders, operators, developers, suppliers and from you. Today, I’m going to share what I’ve learned and what I have come to believe.

I have learned that we are standing on a burning platform.

And, we have more than one explosion – we have multiple points of scorching heat that are fuelling a blazing fire around us.

For example, there is intense heat coming from our competitors, more rapidly than we ever expected. Apple disrupted the market by redefining the smartphone and attracting developers to a closed, but very powerful ecosystem.

In 2008, Apple’s market share in the $300+ price range was 25 percent; by 2010 it escalated to 61 percent. They are enjoying a tremendous growth trajectory with a 78 percent earnings growth year over year in Q4 2010. Apple demonstrated that if designed well, consumers would buy a high-priced phone with a great experience and developers would build applications. They changed the game, and today, Apple owns the high-end range.

And then, there is Android. In about two years, Android created a platform that attracts application developers, service providers and hardware manufacturers. Android came in at the high-end, they are now winning the mid-range, and quickly they are going downstream to phones under €100. Google has become a gravitational force, drawing much of the industry’s innovation to its core.

Let’s not forget about the low-end price range. In 2008, MediaTek supplied complete reference designs for phone chipsets, which enabled manufacturers in the Shenzhen region of China to produce phones at an unbelievable pace. By some accounts, this ecosystem now produces more than one third of the phones sold globally – taking share from us in emerging markets.

While competitors poured flames on our market share, what happened at Nokia? We fell behind, we missed big trends, and we lost time. At that time, we thought we were making the right decisions; but, with the benefit of hindsight, we now find ourselves years behind.

The first iPhone shipped in 2007, and we still don’t have a product that is close to their experience. Android came on the scene just over 2 years ago, and this week they took our leadership position in smartphone volumes. Unbelievable.

We have some brilliant sources of innovation inside Nokia, but we are not bringing it to market fast enough. We thought MeeGo would be a platform for winning high-end smartphones. However, at this rate, by the end of 2011, we might have only one MeeGo product in the market.

At the midrange, we have Symbian. It has proven to be non-competitive in leading markets like North America. Additionally, Symbian is proving to be an increasingly difficult environment in which to develop to meet the continuously expanding consumer requirements, leading to slowness in product development and also creating a disadvantage when we seek to take advantage of new hardware platforms. As a result, if we continue like before, we will get further and further behind, while our competitors advance further and further ahead.

At the lower-end price range, Chinese OEMs are cranking out a device much faster than, as one Nokia employee said only partially in jest, “the time that it takes us to polish a PowerPoint presentation.” They are fast, they are cheap, and they are challenging us.

And the truly perplexing aspect is that we’re not even fighting with the right weapons. We are still too often trying to approach each price range on a device-to-device basis.

The battle of devices has now become a war of ecosystems, where ecosystems include not only the hardware and software of the device, but developers, applications, ecommerce, advertising, search, social applications, location-based services, unified communications and many other things. Our competitors aren’t taking our market share with devices; they are taking our market share with an entire ecosystem. This means we’re going to have to decide how we either build, catalyse or join an ecosystem.

This is one of the decisions we need to make. In the meantime, we’ve lost market share, we’ve lost mind share and we’ve lost time.

On Tuesday, Standard & Poor’s informed that they will put our A long term and A-1 short term ratings on negative credit watch. This is a similar rating action to the one that Moody’s took last week. Basically it means that during the next few weeks they will make an analysis of Nokia, and decide on a possible credit rating downgrade. Why are these credit agencies contemplating these changes? Because they are concerned about our competitiveness.

Consumer preference for Nokia declined worldwide. In the UK, our brand preference has slipped to 20 percent, which is 8 percent lower than last year. That means only 1 out of 5 people in the UK prefer Nokia to other brands. It’s also down in the other markets, which are traditionally our strongholds: Russia, Germany, Indonesia, UAE, and on and on and on.

How did we get to this point? Why did we fall behind when the world around us evolved?

This is what I have been trying to understand. I believe at least some of it has been due to our attitude inside Nokia. We poured gasoline on our own burning platform. I believe we have lacked accountability and leadership to align and direct the company through these disruptive times. We had a series of misses. We haven’t been delivering innovation fast enough. We’re not collaborating internally.

Nokia, our platform is burning.

We are working on a path forward — a path to rebuild our market leadership. When we share the new strategy on February 11, it will be a huge effort to transform our company. But, I believe that together, we can face the challenges ahead of us. Together, we can choose to define our future.

The burning platform, upon which the man found himself, caused the man to shift his behaviour, and take a bold and brave step into an uncertain future. He was able to tell his story. Now, we have a great opportunity to do the same.

Stephen.

Indeed, Elon correctly referenced what Nokia’s competitors had achieved in just a few years, namely Apple and Android. While his memo was driven by events that had overtaken the Finnish-based company, he should have emphasized that top management assumed responsibility for the company’s slide in market share due to: a) lack of foresight, b) failure to remain aware of how the industry was evolving, and c) absent leadership to engage employees. Yes, Elon was the new sheriff in town, and he inherited a mess. And he attempted to include himself in the situation and the need for a solution.

Criticize Elon if you wish, at least he made an effort to reach out to Nokia’s employees, providing a reality check, specifying the competitive challenges, and emphasizing the need to move forward together as a company.

So back to Donald Trump and his own version of America is on fire and what he plans to do to put it out.

Well, that hasn’t actually been playing out as expected since his inauguration. Whether it’s through his sycophantic mouthpieces, such as press spokesperson Sean Spicer or counsellor Kellyanne Conway, or directly from himself, Donald Trump has insulted journalists, judges, Democrats, business people, and anyone who ventures to disagree with him. You don’t hear Trump including himself as part of the problem as did Elop. With Trump, it’s all about other people being the problem, from Mexicans to Muslims to Democrats to the media to the “coastal elites.”

Donald Trump is not capable of healing America, and indeed appears intent on tearing it apart further.

This is not leadership. Real leaders engage people, enrolling them in a collective vision, in which each individual can see his or her role in contributing to something bigger. Steamrolling people, insulting them and attempting to punish will get you nowhere.

It’s unlikely that Donald Trump, an insecure megalomaniac, will ever understand what true leadership represents. Unfortunately, he is on the path to undermine a great country of 320 million people.

People ask the difference between a leader and a boss. The leader leads, and the boss drives.
— President Theodore Roosevelt

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