Skip to main content

Why McDonald's and Lego succeeded where Nokia and Blackberry failed

Posted , updated 
Use of the once-popular Blackberry phone has plummeted in the US.()
The past three decades are littered with brands and products that were built to be key parts our lives, only to become almost obsolete when they failed to reinvent themselves. RN Drive speaks to a leading business analyst who has charted the heady rise and subsequent steep fall of some of the world’s once-mighty companies.
Loading

A decade ago, if you lived in Australia and had a mobile phone in your pocket, chances are it was a Nokia.

It is easier to give birth than raise the dead. Sometimes let that product, or even that business or initiative, die a natural death rather than try to revive it.

In America, Blackberry once commanded nearly half the mobile phone market share.

Both could blame the remarkable reinvention of Apple and the rise of Samsung’s Android products for swallowing up their markets.

But how do once ubiquitous products and brands suffer such staggering decline?

Business analyst Michael McQueen points to a combination of bloated internal bureaucracy and complacency as crippling inhibitors to innovation.

‘One of the big challenges for big brands is they become bureaucratic. Once you have a whole lot of organisational systems in place, it becomes like trying to steer the Titanic,’ says McQueen.

‘This is the great challenge when you have agile start-ups who can respond really quickly to what is changing in a marketplace.’

McQueen, who has studied the demise of major brands in his most recent book, Winning the Battle for Relevance - How Even the Greatest Become Obsolete, say companies often stagnate once they achieve success.

‘That old saying is true: the moment you think you’ve made it, you have passed it. A sense of complacency or arrogance can creep in,’ he says.

‘I call it the intoxication of success, when there is that sense that we’re so big and successful, we figured it out, we’ve arrived at the success formula.’

He says Blackberry’s position in the US market serves as an ideal case study as to how quickly a brand can suffer almost irreversible decline.

‘In January 2010, [Blackberry] had about 43 per cent market share in the US. As of mid 2014, it had slumped to 2.3 per cent. A huge, huge fall, very, very quickly.’

Nokia once enjoyed a stranglehold on the Australian market, but has since lost significant ground to Apple.()

Elsewhere, he says Nokia, like so many other major corporations, suffered from desperately poor internal communication.

As brands attain success, McQueen says they quickly become more accountable to shareholders and increasingly fixate on quantifying their success in each financial quarter.

‘Instead of taking risks and innovating in ways that are maybe unproven, that maybe won’t earn you a whole lot of revenue next quarter but will set you up for where you need to be in five years, it becomes all about the here and the now,’ he says.

‘Businesses focus on the tangibles, often to the exclusion of the lead indicators of where their business is at.

‘The numbers are a lagging indicator; that’s what most businesses ignore until it’s almost too late.’

He suggests there is as much to learn from those who fail as those who succeed.

In the face of flagging performance internationally, McDonald’s Australian arm has maintained a stronghold in the local marketplace through what McQueen calls a ‘culture of innovation’.

He also cites Lego as a particularly remarkable example of reinvention and innovation.  

‘Back in the mid 1990s, Lego was in massive trouble. You maybe would have thought they’d had their time; that technology had come along and all the cool kids want to play video games,’ he says.

‘In the last 15 years, they’ve turned it around. Even though they are 91 years old, they have kept reinventing themselves. Look at their one-time rival Meccano; still there, but a shadow of their former selves.’

Sometimes though, it’s better to just cut your losses and start again with a new product, brand or business venture.  

‘It is easier to give birth than raise the dead,’ says McQueen.

‘Sometimes let that product, or even that business or initiative, die a natural death rather than try to revive it.’

This article contains content that is not available.

RN Drive takes you behind the day’s headlines, with an engaging mix of current affairs, analysis, arts and culture from across Australia and around the world.

Posted , updated 
Business, Economics and Finance, Financial Markets, Advertising and Marketing Industry, Industry