From The Editor | September 25, 2013

Microsoft's Purchase Of Nokia Translated Into 3 Field Service Mistakes To Avoid

Sarah Nicastro

By Sarah Nicastro, publisher/editor in chief, Field Technologies
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Sarah Nicastro

Last month Nokia announced an agreement to sell its handset business to Microsoft for $7.2 billion. As I was looking through the news, I noticed a blog on the New Yorker titled Where Nokia Went Wrong by James Surowiecki. The titled piqued my curiosity, and as I was reading the post, I realized the mistakes by Nokia that the author was pointing out can easily be translated into a cautionary tale for organizations that are failing to recognize that field service has become a crucial differentiator.

Mistake #1: Focusing Too Heavily On The Tangible, Neglecting The Intangible
The first mistake of Nokia’s that Surowiecki points out is the company’s tooheavy focus on hardware. He says, “Nokia was, at its heart, a hardware company rather than a software company — that is, its engineers were expert at building physical devices, but not the programs that make those devices work.” How can this be translated to field service? Well, the focus of many companies has shifted from the products they provide to the intangible value they provide — i.e. service. As products commoditize, the only real way to set yourself apart is in how you make those products work — how you install them, how you service them, how you make them effective tools. The same way Surowiecki says that Nokia’s focus on hardware versus software contributed to the company’s downfall, relying too heavily on your product itself for your company’s success is risky. Once you begin viewing your service force as your biggest asset and arming them with tools to maximize their potential, you’ll start to protect your company from the harm of focusing too narrowly on the product you provide.

Mistake #2: Failing To Realize The Impact Of Mistake #1
Surowiecki goes on to say that Nokia “also underestimated how important the transition to smartphones would be. And this was, in retrospect, a classic case of a company being enthralled (and, in a way, imprisoned) by its past success.” Take this as a warning not to ignore the shift mentioned above ... a failure to take some of the focus off your products themselves, and put some of that focus on the service your company provides, can be detrimental. You must shift the idea of service within your organization from a cost center to a profit center — it’s not a necessary evil, it’s your competitive advantage and the key to your company’s future success.

Mistake #3: Don’t Fall Behind Your Competition
Finally, Surowiecki points out that “Nokia overestimated the strength of its brand, and believed that even if it was late to the smartphone game, it would be able to catch up quickly.” You may indeed produce the best XYZ product on the planet and have the majority market share in your industry, but the reality is that we now exist in a service-centric and customer-centric world — and you need to adjust your business model to comply.