How Does A Giant Become Insignificant?

So I was thinking that how does one go from market leader to market dinosaur.  Nokia was once the King of the Hill in cell phones and Microsoft the Goliath in PC software. 

At one time Nokia continuously brought new innovations in phones that people couldn’t wait to buy.  Microsoft was the giant who delivered PC software that everyone had to have.  Now the two behemoths are struggling to stay current.  And to certain extent, they are hanging on just to be thought of as an innovator rather than a product used by people because “they have to”.   Not to mention, attempting to just keep relevant.  Oh, how the mighty have fallen.

Why? Did they just get fat and lazy and slightly complacent?  Maybe too big and not nimble enough? It just may be just be all of the above.  Maybe it’s the weight of being so large that creates levels of bureaucracy that stifles innovation.  Maybe it’s the weight of having so many layers of fat that slows own the ability to keep up with the small players who continually bring new products to market.

It may also be the fear of developing new markets and products that may cannibalize existing markets which continue to deliver flows of cash. Why develop a new product which may risk eating away at a cash cow which fills my coffers?  Why? Because either you innovate or end up in the junkyard beside many companies who also the dominant player at one time.  Ever hear of the Roman Empire?

Many companies fight this dilemma as they grow over time.  Think of the phone companies.  They have toiled over the idea with deploying  Voice Over IP (VOIP) networks and dealing with other products that allow phone calls over the Internet while watching the archaic phone network become obsolete.  But it comes down to either making a new offer for service or people will go elsewhere.  Join ‘em and beat ‘em or go home.

Or maybe it’s just a lack of watching listening, and understanding consumer behavior.  When it comes to electronics and technology – especially communications devices – people are always looking for the next best thing. It’s a part of consumer evolution.  It’s called marketing research. It’s now called – thanks to social media – engaging with your network of friends, consumers, and potential users.   It’s not an easy thing to do nor is it easy to translate those consumer needs into profitable products that will evolve into consumer loyalty. 

One of my favorite stories of listening is Wild Planet.  These folks simply set up play areas for kids. They are given the toys and they just watch what they like and don’t like about toys. Put them in their natural habitat (so to speak) and watch ‘em go.  So simple. So successful.

But one thing is certain. The need to continually listen to the marketplace and push yourself to innovate should never be under estimated.  It should never end up on the bottom of top managements “To DO List”. Just ask Nokia and Microsoft.  Now they are partners.  For better or for worse.

What do you think? Nokia and Microsoft asleep at the wheel?  Or afraid to change?  Let me know.