I don’t think we take competition serious enough. I don’t think we fully understand how important digital transformation is, and the far-reaching economic implications of not competing effectively. In 2014 in a discussion about the struggling Finnish economy, Mr Stubb, the former prime minister of Finland, told a newspaper, "Steve Jobs took our [country’s] jobs." His words describe the severe impact of not competing effectively on a nation’s economy. In a global market innovation and competition from the other side of the world can powerfully and rapidly impact the local economy for good or bad.
In April of 2014, Microsoft acquired mobile phone maker NOKIA. NOKIA was never able to effectively transition from mobile phones to smartphones and suffered heavy losses as a result. NOKIA’s CEO spoke to his employees after the acquisition was announced and shared an insightful comment, “We didn’t do anything wrong, but somehow - we lost”. This comment remains puzzling. It seems to demonstrate a misunderstanding of the very nature and scope of competition in a global market. It’s not about doing something wrong; it’s about doing something right fast enough to matter.
NOKIA had a better vantage point than most competitors. They dominated the mobile phone market for many years. They were not, however, able to change their “thinking” and “pace of innovation” to keep up with both competition and the fast changing preferences of mobile consumers. The world changed faster than NOKIA management could evolve and transform. NOKIA’s more nimble competitors adjusted faster, and innovative newcomers, minus the baggage of past successes, out played them.
Acting fast enough in a fast evolving market is key. Sports Authority filed for Chapter 11 bankruptcy this week and gave this statement, "We are taking this action so that we can continue to adapt our business to meet the changing dynamics in the retail industry." Sports Authority was founded in 1928. How much time do they need? Obviously they needed more time than they had.
Sports Authority CEO Michael Foss said in a written statement this week (March 2016), “We need fewer stores as consumers are increasingly shifting to online shopping.” We have all known the adoption of e-commerce and mobile commerce is rapidly expanding and changing retail for decades. These statements seem to reveal the inability of an organization to digitally transform even in the face of overwhelming data.
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