How Nokia Fell from Grace – BusinessWeek.
The author asserts that company success and failure are determined by the location of its headquarters. He also adds a bit of stupid manager theory to flesh out his thesis for Nokia’s failure.
I’ve already debunked the stupid manager theory here. So let’s look at what’s left.
The bad geography thesis is a far less common theory than the stupid manager theory but maybe it’s worth analyzing.
Here are the basic questions anyone can ask:
- When did Finland become a bad location, exactly? It was clearly a good location for Nokia when it was winning and growing. It seems to have become a bad location for Nokia around the same time its business began to slow down. That puts Finland at a geographic disadvantage around 2005 or so. As far as anyone can tell nothing changed with the population or intellectual capital of the country around then (if anything all the surveys seem to show it’s gotten better). So whereas Nokia was successful in Finland and unsuccessful in Finland and Finland did not change, Finland cannot be causal to the failure.
- If Finland had something to do with it, did companies in Finland succeed at the same time as Nokia and fail at the same time? I don’t have any evidence to confirm or deny this but I will say that the iPhone’s most popular application is written in Finland (Angry Birds by Rovio). So there are still creative and clever people around.
- If location in “hub” locations like Detroit for automobiles or New York for finance, ensures success… oh, never mind.
- Since Sony was successful in Japan in the 70’s and 80’s then should they also have moved in the last decade when their business turned? Is Japan also an isolated place for innovation?
- What about Microsoft? Seattle was the technology boonies when Microsoft moved there.
- Finally, when Hewlett and Packard started in the agricultural plains south of San Francisco, I’m sure the residents of electronics hubs of New Jersey and upstate New York pointed and laughed.
The hypothesis that location matters in success or failure of business models is so easy to disprove that it’s hardly sporting.