Nokia's innovation story part 2 - Internet innovation

Apologies for the tardiness of this second and final installment of this gripping story - a 2 day USA business trip has turned into a 10 day one, and my admin has gone to pot. Now back in UK, the advantage of jet lag is it gives you odd windows to do stuff. Carry on...

So, we could go on forever counting trends, but rather than just watch the world spinning ever faster we need to act. In the pulsating, chaotic maelstrom of today's globally connected economy, we need to put a stake in the ground, and I think that starts with defining what industry we're in. This is not as easy a question as it once was - we used to be in the telecoms industry, but no more. It's probably best described as the converging digital industry, and that now touches almost every sphere of life. Or to put it another way, we used to be a product company, and now we're a product and services company.

The red thread running through this is, in a word, the Internet. It brings accelerated innovation into disparate industries - fashion, travel, finance and sport to name just a few, and combined with mobility, heralds disruptive potential in a host of new markets. As such, the focus of our current innovation activities is the Internet. That's what lies behind our somewhat strange-sounding statements about becoming an "Internet company" - we are talking about the way we work more than about what we produce. It's about learning from the most innovative companies, especially startups, who have the Internet in their DNA. Of course, a big established, product-focused company such as ours will not have the agility of a fleet-footed startup, but heck, even bigger brutes than us have been learning the steps for years. And even that's not the point - you ask any garage full of pizza-scoffing, code-writing 18 year olds how they're going to scale their startup globally and the answer will probably be that they don't know, or "get bought by Google" (unless of course one of them is called Zuckerberg). Ensuring that Nokia's history, expertise (esp in mobility), size and scope is an asset not a liability in the Internet era is for me, the challenge du jour.

However, Internet innovation is an unwieldy beast, and I'll divide it up by stakeholder group - customers, employees and partners / developers. I leave out shareholders here, since they are the outcome, not the input to these efforts. So, what does Internet innovation mean to each of these groups for Nokia?

- Customers Internet brands have a deep relationship with their customers - either on the individual level (e.g. Amazon) or the aggregate (e.g. Google). They collect data about the service relationship and use it to improve the offering. Needless to say, Nokia currently has little or no relationship with the end users (customers, consumers punters, peeps...) of our phones. Our efforts here need to be about establishing a relationship with the end user to learn more about them, and helping them improve the experience of connecting with what matters most to them. One of the interesting angles to all this is IPR - how are we going to develop solutions together with customers, and not just expect them to hand over good ideas to us for free. Innovations in this area, together with payments to our customers (in cash, in kind or in kudos) will be key.

- Employees We need to ensure that our employees are as informed, motivated and effective as those in a startup. In a small company it's easy for everyone to know everything that happens, however siloes emerge naturally as the company grows. Information velocity matters - the right ideas need to find the right people, quickly. Motivation is an interesting topic - Nokia currently sits lower down the risk / reward axis than a startup. Should that change, if so how? And finally effectiveness - we need to figure out a way to let individuals take control and see that they are making a difference.

- Developers and partners Our external network of developers provides the content - the applications and services, that make our stuff better. We have certain core offerings, but we need to be as open as possible for web developers to build on our platforms. Our external developers need to be able to make money. And they need to be able to scale their applications to connect with the installed base of Nokia phones (one of our greatest assets) and find it easy to connect with the technologies and people inside the company. Our internal developers need to be free to innovate quickly and get rewarded for their efforts above the call of duty.

So, here's a selection of ongoing innovation activities we're doing that relate to the above areas.

1. Customers
This is probably the most visible part of the Internet innovation story - since it is about the products and services that we ship. This can be seen in two ways.

First, bringing "today's" Internet onto our devices, so that people can connect with their existing web services. This means that our browser needs to be the best in the world at squeezing a normally big screen web into a small screen real estate. Our current browser is damn good at this, and as an open source effort and shares much of its codebase with the iPhone one. It also means that the web needs to be natively integrated into our software, to turn what used to be known as applications into services. The core of the phone - contacts, calendar and call history need to benefit from web connectivity in ways they don't today. Another issue is that people are fed up with "empty icons" - which when pressed ask you to "enter your settings". This is offputting and intimidating for users, and dumb from a business point of view because we are fragmenting the valuable attention and real estate, distracting the user from using other things that work well. This is the result of a fragmented value chain that was not organization not user-centric. Hopefully it is changing now as operators, distributors and device makers realize that if they don't get figure out how to make a smooth, joined up user experience they'll wither on the vine.

The second and more interesting way that the web will be coming to our devices is when it moves from "stateless" to contextually aware. The experience that you will get from your web service will be different because that service is interacting with the intelligence in the device. This will make services much richer, but also involve the consumer more directly. Companies will need to figure out what deals will entice them to give out their location information in order to receive tailored offerings for example (anyone thinking of doing this without their permission, better find a new job). This is in essence the three dimensional web (as in the title of this blog) and I see it involving 5Cs - context (e.g. location, proximity) contacts, calendar, call history and content (stuff you've made, recommendations and linkages you've created).

One other point to mention here - we'll be seeing a lot more use of the phone to merge people's real world with their online and virtual personas.

Nokia doesn't talk about future product (or services) releases, so there's not much detail here, but now that there has been a major reorganization to create a services and software group, new acquisitions (Gate5 and Navteq for navigation, Loudeye for music and Twango for social networking) as well as a new brand vehicle to launch consumer services (Ovi), expect to see a lot more in this area in the coming months, and check sites such as womworld and noknok and other forthcoming blog sites for details.

2. Employees
Nokia's culture and values are one of its major assets - there is the assumption that people from all over the company will help you out if you ask them, and there is a mountain of stored knowledge in the employees' heads. However, as with any big company, it's not always easy to know who to ask, especially if you're new (I remembered with dismay when I started they didn't have photos next to the names, and I was constantly befuddled by long Finnish names that seemed to consist entirely of Ks and umlauts). Information sharing - often and early - reduces the danger of not invented here, duplicative products and repeated mistakes.

This can be done as a one off event or as a process. We worked with IBM's innovation team last year and held a "Jam" - when each of the employees was asked to contribute to the creation and dissemination of our Internet strategy during a 3 day online meeting. This will probably continue on a regular basis, and meanwhile, at the micro level, we've been making heavy use of blogs and wikis. One story illustrates how this came about: A colleague from the research group, Harri Lakkala, was fed up with using the traditional knowledge management and collaboration tools, so started hosting his own wiki solution for his projects on a spare computer under his desk back in 2003. Word spread about these new tools - which are basically just simple web pages editable by anyone - and soon he was hosting hundreds of wikis with increasingly business critical information under his desk. Happily our IT group figured out that if you can't beat them join them, so now wikis are supported internally and used regularly by over 6000 of our employees. Similarly we've got about 300 internal blogs (and a bunch of external blogs) which have helped to change the culture to become more open and collaborative.

You don't have to be a psychologist to realize that cash is not the only motivation for employees. I'm constantly amazed at how much discussion and active participation there is on the mailing lists about issues that are not on people's short term objectives plan. So, while innovating the compensation will undoubtedly be one of the actions discussed, the most obvious motivational efforts are about giving people the feeling that they are in charge of their own destiny and recognized and rewarded for going beyond the call of duty. This is what happened to Harri - he was given an innovation award, saw his project go mainstream, and is now working on a new team dedicated to bringing about wide-scale change across the company.

On a more systematic basis, we have created a process that allows any employee to have the chance to create a new application or service: Nokia Labs. This was the top recommenation that came out of an Internet innovation conference we organized last year, and is intended as a handy place to showcase they many early stage projects around the company, share the ideas, improve them and engage the creator as "intranpreneur". This has now grown into the public Beta Labs and the internally facing, earlier stage Alpha Labs, which is where many Beta Labs ideas come from.

3. Developers / partners

The third leg of our innovation story concerns developers, and here we have an organization that is devoted to serving them full time - Forum Nokia that is leading most of these efforts, together with our research centre. Some of the more exciting web efforts here are the web runtime and widgets (and widsets for a J2ME service) and the contacts book extensions (e.g used by Gizmo). There are many open source efforts going on, such as the S60 browser, Maemo development platform, Python for S60, Affix (a bluetooth protocol stack for Linux), Hildon touch screen app framework, Carbide development tools, the mobile web server, and Open C which which allows web coders to more easily code for S60 using C and C++ libraries.

In this category we'd also include outreach to universitites, academics and researchers (such as via research.nokia.com and through our collaborative work at the NRC office locations of Palo Alto, Cambridge, MA for MIT, and Cambridge, England where there is a nanosciences lab). Also, corporate tie ups abound, with both the gorillas (e.g. IBM) and the startups as either developers or technology partners and vendors.

Forum Nokia starting to extend beyond the traditional developer demographic with more consumer focused platform MOSH, and the regular Mobile Mashups have started a discussion forum with VC's and start-ups in Silicon Valley, the most recent on on 1 Nov on the subject of Mobile Social.

So, probably time to draw breath and leave it there. I'm fairly confident that this review only partially identified the range of Internet related innovation activities going on around the company, so more than happy to be put right by well meaning readers, and hear about areas where you think we might not be doing enough. But for now, there's quite a bit to be working on.