Watch it,  your business could become extinct!

Remember Nokia, the mobile phone giant? There are many theories about what brought about the fall of Nokia. These range from pervasive bureaucracy, weakness in some key markets and faulty organisational structure. One undisputed reason, however, is that Nokia underestimated new entrants into its industry. Nokia was the undisputed pioneer and leader in the wireless space. At the heights of its prowess, Nokia accounted for a whopping 4 in 10 mobile handsets globally. The same was true of Kodak, the undisputed leader in the photography and film industry. As at 1976, Kodak sold 90 percent of the photographic film in the US and 85 percent of the cameras.

There are a couple of lessons we could learn from these big icons that became extinct.

1. Spot Trends

The world we are living in is changing at a rapid pace. Citizens are grappling with the wave of terrorism, loss of savings, financial meltdowns, natural disasters and the likes. Every country seems to be facing problems that past generations did not have to deal with. A business that fails to spot trends in its industry, country or the world at large and respond appropriately will sooner rather than later become extinct. It’s imperative that businesses have a structure that identifies threats to their industry or existence even before they manifest.

2. The Voice of the Customer (VOC)

.As we all know, businesses exist for the customer and not the other way round. A business can get away with fleecing customers, lousy customer service, defective products and the likes if they are a monopoly. However, the moment that a second, third or fourth credible player comes into that industry, then customer sentiments suddenly begin to shift. When businesses don’t constantly keep abreast of the pulse of their customers, they begin to die slowly. All it takes is another party that offers something that looks like a better alternative. Businesses must therefore always be open to genuine feedback from current and future customers. One hallmark of companies that are built to last is direct feedback from its customers to the top leadership of the company. Businesses need to have a feedback mechanism that ensures that the highest level of management receives direct feedback from the customer and not just reports from the management team, who might sometimes leave out any negative feedback because of the need to impress the leadership team.

3. Underestimating Your Opponent

We spoke about Nokia and Kodak earlier. With both of these behemoths, there were new entities entering their industry, but they were too comfortable with their past successes and their market share, that they failed to recognise the threat of these new entrants. Nokia’s handset business has been bought over by Microsoft and the name Nokia will be gradually phased out from mobile phone business, with Microsoft choosing to use the Lumia brand. This was virtually unthinkable fifteen years ago. Kodak, on the other hand, filed for bankruptcy in 2012, Perhaps, if these entities had taken these new entrants a little more seriously; if they had bothered to adopt some painful internal restructuring, the story would have been different today. The lesson for established businesses is always to ask, “What could go wrong; what are the potential threats to my existence; who are we losing market share to, and why?”

4. The Demography Question

Nigeria’s largest demographic group can be found between the ages of 15 and 35. It therefore stands to reason that any business or political party that will succeed in Nigeria must actively court this group. This group are social media savvy, they want their views to be heard, and they are creative and opinionated. In terms of strategy, some corporate thought leaders believe that no strategy session is optimal unless it has some under 30 year olds in active attendance. These sets of people offer fresh perspectives, a bold outlook to the future and some creativity. For businesses  the take away here is to begin to populate their boards, management teams and strategy sessions with the younger folks who would challenge traditional forms of thinking and offer alternative forms of reasoning. Imagine the difference it would have made if Nokia for instance, had a number of 20 + year old individuals as part of their strategy team. Those individuals were the ones who were being targeted by Apple phones and Android powered phones, which eventually became the nemesis of Nokia. This is, however, not advocating the lowering of standards, but a call to embrace diversity right from the production line to the board rooms

So if you find yourself in a position of leadership, are dominating a market or starting out in a business, be careful of the upstart competitor. Always seek  direct customer feedback, embrace diversity as a way of life and  always cover your flanks, so that they don’t end up in the history books.

Oguche Agudah- A former special adviser on access to finance to Nigeria’s minister of industry, trade and investment is a fellow of the Chartered Institute of Bankers and an Associate of the Chartered Institute of Stockbrokers Nigeria. He can be reached on gucciifp@yahoo.com