Single Minded Focus On Your Innovations?

Recent announcements from Nokia and Motorola on their latest earnings and new found focus for 2007 left me wondering… Granted the handset market is quite competitive, driven by short product lifecycles, design and technology innovations and price pressures, but I can’t help but wonder if the firms had a dose of single minded focus when it came to their business strategy.

Nokia dominated the mobile phone market with their focus on design, ease of use, branding the phone as a personal statement as well as a technology innovation. However, somewhere along the way, they dropped into the shadows. They completely missed the demand for thinner/slimmer mobile phones, and allowed competitors to enter the market. For 2007, they plan to mitigate that mistake by offering a new sleeker portfolio of phones and refocusing on their design.

On the other hand, Motorola became an overnight hit in the market with their introduction of the RAZR — great combination of style, technology and price performance. Interestingly enough, as an outside observer it is hard to tell if Motorola has a portfolio of mobile phones (try to find a Motorola PEBL in the stores), and it is getting hard to differentiate the various RAZR product lines. Basically, they got stuck in incremental improvement mode for the RAZR: itunes, thinner/longer, slider, hip colors, … Motorola’s CEO also indicated that their sole focus on market share, pricing strategy utilized, and quality of their product mix greatly impacted their profit margins.

It seems to easy to fall into these traps where single minded focus (that might have helped before) becomes a hinderance, especially in fast moving and highly competitive markets. Here are some thoughts that can keep an objective perspective from becoming a horse with blinders on:

• Focus on market leadership both your product mix and your financial returns;
• Continously enhance and innovate your products and scan for opportunities to extend into new markets;
• Product innovation will only carry you so far. As your products and the market grow and mature, utilize the innovation lifecycle model to incorporate needed process, logistics and customer relationship management related innovations.
• Establish regular portfolio reviews to ensure you have the right projects, the right level of investment and the right innovation initiatives to support your business goals and financial objectives.
• As humans, we seem to be overly optimistic and confident of our estimations. Unfortunately this can be a dangerous combination for strategy development. Utilizing scenarios during the strategic planning process, with the err on the pessimistic side can compensate.
• As economics dictate, a sunk cost is a sunk cost. Establish milestones, do regular reviews and don’t be afraid to switch gears. The more quickly you learn and rebalance your portfolio of projects, the lower the sunk costs will be.
• Keep constant tabs on your customers (old, new, lost and future) and market trends. Continuous changes in customer tastes, new technologies, low-switching costs makes it quite easy for you to lose existing customers.

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