Brief Musings: Microsoft Nokia deal – opportunistic punt or ‘new strategy’ in action?

Muzeable Thinking No. 13 – posted by Tim Brooks 4th September 2013

The news…

Interesting, very interesting.  I talk a lot about leadership/business and its need [often failure] to embrace the new world with new approaches to strategy; including a review of what might be new age essential skills. The skills that allow us to navigate in a world only idiots and charlatans pretend to understand or be in control of!

3 recently articulated new age skills were:

  • IMAGINATION – being the ability to see how the tectonic plates ‘might’ be shifting and to view innovation or M&A in this light
  • EXPLOITATION – when a freebie comes along… exploit it, but don’t pretend it was a strategic outcome resulting from your genius – publically sell the luck – then back to reality!
  • AMBIGUITY – or the essential ability to cope with and embrace the fact it’s too complicated out there for us to know with any certainty… much at all.

The Microsoft-Nokia deal is, or should be, about all this and more. At this point who knows if it is genius or desperation, a well-considered long term move or a last punt from an out-going leader, etc. but whatever holds true, it’s bold.

The bottom line

The Windows Phone is not winning and it already looks like it can’t win. It looks like a niche alternative for people who ‘just have to be’ different! With predictions [as in BBC link above] predicting 5% share by 2017, the business is looking unsustainable and for Microsoft – a bit like X-box/Tablets  – another ‘exciting leading edge division’ that the core just funds ad infinitum i.e. a commercial luxury.

In terms of the new world essentials above:

  • IMAGINATION: Microsoft is seeing their trad PC software business ebb away. The mobile world currently is marginalising them, so picturing a world with a smaller Microsoft and a series of platforms that don’t need or want ‘windows’ doesn’t need much imagination! But investing big [it’s more than money, it needs BIG CHANGE too] in competing via an integrated solution a la Apple is imaginative… as without it Windows Phone will die. With it… it might still die as this is a steep hill, but… The key is that IMAGINATION is not just about the WHAT [‘let’s get into integration/hardware’] it’s more about the WHY [‘how does this fit?’ strategic integrity] and most importantly the HOW [‘what changes round here to make this happen?’]. From here, Microsoft’s ability to do the last 2 MUST BE QUESTIONED!!
  • EXPLOITATION: Nokia are on the cusp of irrelevance in the phone world… without sales of old tech phones in Emerging markets it would be further along its decline… so Microsoft are exploiting the situation to buy a still great BRAND with tech creds and track record of note. It’s still an ASSET!
  • AMBIGUITY. Either they are supremely arrogant or MS management must be knee [neck] deep in uncertainty at the moment… mainly because I can’t really think of many e.g.s of tech companies pulling a vertical integration or leap into a brave new world off. Let alone the uncertainty brought by the current speed of change. It’s possible that developing a competitive position in Smartphones might be old hat by the time they’ve done it! I suppose the hardware platform means they are better placed to invent, create or drive that. And what does all this mean for the MS tablet division – separate it should not remain!

So, to an outsider this is a bold move with more challenges than easy money, but it has a certain logic and [potentially] it was based on a bit of imagination. For that reason alone some of me hopes it comes off [the other bit that has to work with Windows 8 on a PC doesn’t give a monkeys!]. As always to test against my principles I need some evidence that it is attached to a strategic framework that reflects something akin to a cunning plan and the IMAGINATION goes as far as the HOW.

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