Fast Company

Nokia Uses Weak Signals To Build Its Stronghold

What struck me most about my interview with Taneli Ruda is how clearly Nokia appears to understand the source of its advantage.

Nokia knows what it can do and what its competitors can’t do, and it works to leverage and build on that information. As Taneli advised, “Look for sustainable long-term competitive advantage and don’t waiver from it.”

The rest of it – the next cool design or software application – is important, but it is too easily copied. So Nokia focuses on the other stuff and it has become its three key sources of advantage:

1.      Consumer insight: Nokia speaks to more users than its competitors and leverages consumer insights more quickly

2.      Brand: the Nokia brand is one of the most valuable and recognizable brands in the world

3.      Distribution: no one can match the strength of Nokia’s distribution capabilities

Nokia knows that any initiative that does not support one of these three may not produce a meaningful, lasting advantage. It knows its stronghold and sticks to it. This is pattern #4: stick to your stronghold.

It’s amazing how clearly Nokia’s management understands these are its three most promising sources of advantage. But what’s interesting is that the company seems to have an entirely different identity than its chief rival, Motorola.

You see, Nokia views itself as a consumer products company, not a technology company. So it does what a consumer products company does: talks to lots of customers, interprets consumer insight, and incorporates it into new features and products.  

Indeed, some research I’ve conducted, which I will be releasing shortly, shows that Nokia talks about users and consumers seven times more often than Motorola. You could say Nokia focuses heavily on tuning into those “weak signals,” as I call them in my book, The Way of Innovation, which are almost always a precursor to great innovation.

By clearly defining itself as a consumer products company, Nokia creates products that users are connected to. Maybe you can use this same approach by asking yourself two questions:

1.      What is my unique stronghold (e.g., consumer insight) and what are my competitions (e.g., technology)? 

2.      How can I move closer to the source of “weak signals” and how can I better use that information? 

Conclusion

There is so much more I could say about Nokia: how it engineered a fluid, non-hierarchical organization; how its focus on process rather than structure helps it move more quickly; how its culture keeps it thinking differently; and how the Nokia story (or narrative) encourages continual adaptation. Let me know if you want to learn more about Nokia’s competitive advantage.

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