What the $7.2B Microsoft Nokia buyout can teach you about re-inventing your business

If you were awake in the 90’s, when you hear the word Nokia, you immediately think of mobile phones.

It may surprise you then to realise that Nokia as a company is actually 150 years old. It started as a paper mill before becoming a manufacturer of tyres, rubber boots and cables. Nokia only received international acclaim when it launched into the mobile market after a stint at producing TVs. At each change, Nokia has offloaded its previous business and used the capital to fund the next stage.

With it’s recent sell off of the Devices and Services division to Microsoft, for a cool $7.2billion, Nokia has again positioned itself for a reinvention, proving itself to be a master of adaptation even in the face of failure.

Nokia’s approach to a constantly changing market can teach business owners a lot about the potential of reinvention in an increasingly changing world. The world and the business market is constantly changing. Businesses must adapt and change with the world or risk becoming obsolete.

Kodak was a business powerhouse for over a century but moved too slowly in the face of changing technology with digital camera replacing film cameras totally within a decade. Competitors that moved quickly with the time like Fuji quickly took significant market share away from Kodak.

The call to respond to market needs by reinventing services and offerings applies to companies at the start of their journey as much as it does for those a century or two in. Fab.com, the internet’s leading source of designer made products, began life as a website focussed on information for the gay community called ‘Fabulis’. After realising that the need for its services was shrinking and that it wasn’t going to be possible to build the sort of revenue they had promised investors, the company pivoted in an entirely new direction starting from scratch.

Along with the change of name, they focussed on a small aspect of their website – flash sales of designer products – that received traction from both their current gay community members as well as non-gay members. It was clear that a better and more profitable business existed in a different direction.

“Pivoting isn’t easy.” confessed start-up founder Jason Goldberg at the time. “It is a huge decision to stop doing what you’re doing, throw away tons work, risk fragile user and customer relationships, and essentially start over.”

Nokia admits the same. CEO Risto Siilasma confesses that while the change makes rational sense for Nokia, it is more emotionally complex considering its strong ties to the mobile phone industry over the past couple of decades.

What Nokia makes clear though, in its continual reinvention of itself and its services in response to market changes or failures is that it is never to late to change direction and try something new if what you are doing now is not working. The key, as evidenced in the Fab.com story, is to test multiple different opportunities until one has the potential for success, always being willing to remain flexible and open to change.

Remember, fortune favours the brave. Nothing risked, nothing gained. Taking a step in a different direction could be just the thing to keep you, and your business, moving forward.