Culture, Not Technology, Often the Source of Success or Failure

Yesterday's NY Times discusses how Nokia prototyped a device in 2004 that would have pre-empted the iPhone only to decide not to develop it because of perceived risk:

A few years before Apple introduced the iPhone, research engineers at Nokia prepared a prototype of an Internet-ready, touch-screen handset with a large display, which they thought could give the company a powerful advantage in the fast-growing smartphone market . . . 

But management worried that the product could be a costly flop, said the former employee, Ari Hakkarainen, a manager responsible for marketing on the development team for the Nokia Series 60, then the company’s premium line of smartphones. Nokia did not pursue development, he said.

There are no revelations in the piece (except perhaps for that opening section) but it's a solid illustration of how cultural issues, often invisible to outsiders, can be determinative of success or failure in the marketplace. 

Pundits and the blognoscenti tend to focus on gadgets and technology as the key to success but corporate culture behind those gadgets is much more significant in the scheme of things. Culture is what permits such gadgets to come into being or quashes them, as in the opening example. The following passage captures the main point of the article and stands as a metaphor for the Nokia's challenges:

Juhani Risku, a manager who worked on user interface designs for Symbian from 2001 to 2009, said his team had offered 500 proposals to improve Symbian but could not get even one through.

“It was management by committee,” Mr. Risku said, comparing the company’s design approval processes to a “Soviet-style” bureaucracy. Ideas fell victim to fighting among managers with competing agendas, he said, or were rejected as too costly, risky or insignificant for a global market leader. Mr. Risku said he had left in frustration at its culture; he now designs environmentally sound buildings.

To succeed, new Nokia CEO Stephen Elop must alleviate this "management by committee" phenomenon and associated bureaucracy that stifles innovation. Microsoft, where Elop is from, suffers from some of the same cultural challenges. Accordingly it will be interesting to see whether he's able to enact change, not just among top management but at the middle management and grassroots levels.