Microsoft employees in 1978 at company headquarters in Albuquerque, New Mexico.

• Microsoft, where a long-time, hard-charging number two has taken the reins from the man who founded the firm in 1975 and led it from a small handful of people to one of the world’s largest and most important companies.

• Nokia, a firm whose ascendancy to a dominant position globally was relatively recent.  In the last three years they have been eclipsed in industry leadership and market capitalization, and in the consumer imagination, by two firms who entered the industry within the last couple of years, Apple (June 2007) and Google (September 2008)—and one of them doesn’t even make phones.

The company is now led by a long-serving senior executive who, while he preaches change, says following a brutal analyst meeting, We are not getting the benefit of the doubt.  Adding, We need to change that.

To this, a long-time friend and Nokia alum who worked closely with many of the company’s senior executives,  commented,

That would be your challenge!  No one owes Nokia “benefit of the doubt” – you earn your way with cool, with “it” products at the right price, and that alone sustains a company.  No amount of marketing or PR will save a substandard product.

• General Motors, a firm that once personified American industry, as shown in this ad in happier days . . .

  
  
  

  . . . 12 months ago underwent one of the largest Federal intrusions ever in private industry and is now led by Ed Whitacre, an industry outsider who famously proclaimed, “I don’t know anything about cars” the day after he was appointed.  (Lesson 1: Lower expectations.)  Whitacre, a former telecom exec, has words appropriate for a firm of any size,

I want to make sure people understand that the responsibility for this company to be successful is not just with the C.E.O.  It’s them.

My style is really just to say, “Let’s get going, let’s do something, let’s move, and let’s not be constrained by something that has happened in the past.  Nobody is going to be fired for trying something new around here.

Some of the world’s most storied companies have faced major challenges that knocked them from their perch atop their industry.  Some turned themselves around after many counted them out, only to return as an industry leader.  Disney and IBM come to mind.  Others are works in progress, including Sony, Kodak, Ford, and Boeing.  And there are recent stars that are struggling, some with new leadership, such as Yahoo!, and others with largely the same management team, such as eBay.

Whether one leads a large company or a small one, it’s fascinating and instructive to watch all these companies.  The trick, of course, is knowing whether one is observing success or failure in the making.

…

Note: I’ve set set aside firms in the financial and health care industries, the shape and future of which will be greatly affected by Federal legislative and regulatory changes, and firms in any industry that can be easily digitized (e.g., newspapers, magazines, recorded music), which are all being radically transformed by the web.

Regarding the latter, this quote, attributed to Warren Buffet, comes to mind: When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is usually the reputation of the business that remains intact.

Innolux was founded six years ago by Terry Gou, who also founded and is chairman of Hon Hai Precision Industry, the world’s largest ( by revenue) contract manufacturing firm.   Among their customers are Sony, Apple, Motorola, and Nokia.   (This excellent August 2007 Wall Street Journal article profiles Gou and his company.)

How did Hon Hai get it’s start?  By “making knobs for black-and-white TV sets.”

One model of Nokian boots offered today.

One of those customers, Nokia, got it’s start in wood pulp in 1865, and later made a name for itself in rubber boots and tires.  It wasn’t until the 1990s that Nokia began to focus on telecom.  In 1990  the rubber boots business was spun out as Nokian.  Two years later Nokia released their first GSM phone.

One of the biggest challenges facing any leader is determining the company’s direction and allocating the resources across many different opportunities.

In the case of these two companies, both multi-billion dollar global firms, the earlier decisions—to give up tires and knobs and focus on telecom and electronics—seem obvious.  That’s seldom the case when you’re in the midst of making those decisions.

Today, faced with a rapidly-changing landscape, the management team at Nokia has reorganized (more than once), acquired several companies, and launched new services in an effort to better compete in this new world.  Whether Nokia can remake itself this time, as they’ve done many times over their long history, is far from clear.

The Hub from Verizon

When the Hub was launched nine months ago, their press release claimed . . .

Only Verizon Wireless can launch a new touch screen home phone system designed to replace old-style home phones with a souped-up home communications system, bridging wireline and wireless connectivity in one simple service, that runs on any broadband connection – whether supplied by Verizon FiOS Internet or DSL or any other high-speed service provider.

Unfortunately, it was a bridge too late.

One of the biggest challenges for any company, especially one in a rapidly-evolving market, is bringing the right product at the right price to the market at the right time via the right channel.

Verizon’s Hub came to late to overcome these three factors:

• Lifestyle trends: Consumers are moving on, replacing landline service with mobile service at a rapid rate, often the result of a move.  The cohort behavior is even stronger.  Kids get mobile phone and phone number from a young age.  Once they leave college, they’re unlikely to  even consider landline service.  After all, their network of friends has their mobile phone number–their number, really–and isn’t that who their friends are trying to reach, the person, not a phone screwed to a wall in a house?
• Technological trends: Increasingly your mobile phone is more likely to be a smartphone, which means most of the capabilities of the Hub are with you wherever you go, without having to buy yet another device.  And your computer is more likely to be a laptop with a wireless connection, giving you some of the functions of the Hub along with convenient data entry and display without additional equipment.
• Consumer behavior: The Hub, a shiny new technology gadget, is most likely to appeal to early adopters, who are just the folks who are dropping their landline and using smartphones.   And for the rest, the Hub wasn’t sufficiently compelling to overcome the headaches associated with integrating it into their network and their life.

Verizon is to be commended for killing the product so soon after they launched it.

The current issue of WIRED has a great article on Netflix and the several attempts they made, starting in 2000, to create and launch a movie downloading or streaming service.  It’s a story of envisioning the future, leading a group to help create it, and killing or spinning off the effort when they believed that what they were building wasn’t sufficiently compelling.

The surprising finding, as shown in the first chart below: Not the importance of reviews or the popularity of social media–Facebook, Twitter, and the like–but the very low use of the old fashioned suggestion box.  Of those companies surveyed, only 1 in 5 has a way for people to directly make suggestions and fully 1 in 3 have no plans to add this capability in the future.  By contrast, more than 8 out of 10 have a Facebook fan page.

Now compare the expected or perceived impact on sales of social media tools with the impact of a suggestion box.  As the second chart shows, after product reviews (ranked first by 78% of respondents), the ability to supply product suggestions is thought to make a much larger contribution to sales than any of the social media tools: 41% versus 26% for Facebook Connect, 13% for a Facebook fan page, and 7% for Twitter.

Chart: Current and planned use of social media and other tools.

Chart: Social media's expected impact on sales.

What’s going on here?

Three things:

1. Keeping up: Social media is all the rage and has made the leap from tech-centric early adopters to broad adoption in society. And if the marketing folks haven’t already set something up, they’re prodded by executives who ask, “Do we have a Facebook for our company?”  (Yes, that’s the way they talk.)  Setting something up on Facebook is simple and fast, so in no time their company is using social media.  Voila!  Transformation!
2. Linking tactics to sales: In most organizations, there is no comprehensive way to link sales to marketing tactics.  (Web-based businesses have a much easier time of this than those companies sell through multiple channels.)
3. Really listening: Customers want to connect directly in meaningful ways with a company in order to get products and services that better meet their needs.

It’s this last driver that ties all of this together.

• Customer reviews: “Here’s what I think of the product/service I just bought from your company.”  And often, “I wish it . . . “
• Suggestion box: “Please make or change or do this . . .”

Facebook, Twitter, viral videos, forums, and blogs are vehicles for expressing those views.

Implications

Marketing is too often the implementation of tactics.  These survey results are a reminder that it’s the content of the communications and the intent of the parties involved that really matters.

Even marketers, in their heart of hearts, understand that customers want companies to listen to their concerns.

The never-ending challenge for marketers is getting their company to listen, and for senior executives, getting their company to respond.

…

Survey details: The e-tailing group/PowerReviews 1st Annual Community and Social Media Survey, September 2009.  (The slides are here, and oddly not on Slideshare, the social media site that has great tools for displaying, discussing, and embedding notable presentations.)

. . .  read some of Buying in a Post-Store World and sent a note that included this question:

Lee, would you consider yourself a shopper or not?   Do you like stores, hate stores, etc?

I love finding a great store, but there are so few.

I drive further to buy produce and meat at Central Market, and further to North Haven Gardens, a nursery with knowledgeable, helpful staff. I enjoyed REI’s flagship store when I was in Seattle. I still have fond memories of the Georgetown University Shop, a men’s clothing store located near the Georgetown campus where I shopped when I lived in Washington, Gimcracks, a store with unique crafts and decorative items located in Evanston where I bought several gifts when I lived in Evanston, and the Cameron Trading Post, which we discovered this winter along a desolate section of road on a Navajo reservation.

While this varies greatly by product category, my biggest frustration with stores is frequently the difficulty in finding useful information upon which to make a buying decision.

How many times have you asked a clerk about a product, only for them to fish around and begin to read the hang tag (in the case of a garment) or the box in which the product comes? I once explained to a clerk, “Literacy isn’t the problem here; I’ve already read the box. Do you know anything in addition to what’s on the box?”

I’ve given up on mass marketers reversing the tide and investing significantly in staffing and training, but even if they did, the Web is unparalleled in its ability to deliver a large amount of objective (or at least, more objective) information on products, from reviews in traditional media and insights from hobbyist and fan sites, to newsgroup posts and comments on shopping sites (Amazon, for example) from people who have bought the product.

In addition, the Web can also usually delivers more product details, including technical specifications and how the product is installed, set up, and used. Many sites are wisely making their product manuals available for download, which can be a great tool to make sure you know what you’re getting yourself into before you buy the product. Thankfully, product manuals are written in a more detailed and accurate manner than most of the blurbs on boxes or in the short product descriptions in catalogs, all which are typically written by copywriters under the direction of marketing and advertising folks.

My second biggest frustration is figuring out if they have the item I want. Rather than driving all over town, sorting through racks and walking down aisle after aisle, then searching for a clerk to confirm that they don’t have what you’re looking for, the Web cuts through all of that.

On a recent trip to Borders I had some clues to the specific book I wanted, but the information I had was not well-suited to the only search tool that they provide, and the computerized search at the information counter returned hundreds of results when I tried to search for the cookbook I’d read about.

After about 15 minutes, I finally called a friend who I knew was probably near a PC. Within a couple of minutes, thanks to her Google search, I had the title of the book.

“Do you have it?”

The clerk didn’t know, and pointed me in the direction of the aisle where it would be if they had it. After searching through the stacks, I couldn’t find it.

When I got back I did a search on the Web, read the reviews, and learned that there was another cookbook that would probably be better.

Total time at the store: About 30 minutes; with drive time, about an hour.

Total time online: About 10 minutes.

(Note: Give Target Stores credit for investing in an integrated inventory management system that enables store employees to scan the shelf tag with their handheld scanner and then, after punching a few buttons, tell you whether they have anymore of that item in stock. This improves the consumer experience and employee productivity. )

My third is feeling confident that I’ve got the best item for me (i.e., the right product with the right features at the right price). Again, the Web’s ability to compare products is unparalleled.

So given my typical goals in product acquisition . . .

• Will this product meet my needs?
• Is this the optimal product (given the price-feature trade-off) to meet my needs?
• Is this the optimal merchant (given trade-offs between price, return policy, shipping and handling, taxes, and delivery schedule, and overall confidence) from which to buy this product.

. . . I frequently find that the Web is the best way to maximize these, and then seek other avenues for entertainment.

For things that are difficult or expensive to ship, items where fit, texture, color, or finish are critical, items where there is a high value placed on local service,  perishables, inexpensive things I need right away, and staples I usually head to the store—the one down the street, that is.