Faced with two immediate, split second choices with the potential for two similar outcomes, do you take choice A which is the choice of ‘do nothing’ and accept an almost certain fate all the while hoping for the best? Or do you take choice B, which is a very risky move resulting in either survival or a similar fate as if you had chosen A in the first place? How do you make the right choice right then and there? Do you have enough data from the previous sentences to make either choice? Would it make a difference in your choice if we replaced the title with a less stark example such as “What if you had to decide your company’s future strategy in the next 5 minutes?”
Earlier this month, Stephen Elop, Nokia’s new CEO, sent out a very frank memo to all Nokia employees with his view of the current state of the company. Likening Nokia’s challenges in the mobile phone market to a man standing on a burning oil well platform above the chilled waters of the Atlantic, Elop drives home his point between staying the course (a decision to burn to death with the platform) or taking the long dive with small hope of survival (make a radical decision to change).
We too, are standing on a “burning platform,” and we must decide how we are going to change our behaviour.
Over the past few months, I’ve shared with you what I’ve heard from our shareholders, operators, developers, suppliers and from you. Today, I’m going to share what I’ve learned and what I have come to believe.
I have learned that we are standing on a burning platform.
And, we have more than one explosion – we have multiple points of scorching heat that are fuelling(sic) a blazing fire around us.
Brian Boero of 1000 Watt Consulting, in an interestingly parallel ‘burning platform’ discussion about residential real estate, cites the following:
Intractable truth number 1:
Most real estate professionals are bad at what they do. This is not sustainable.
Intractable truth number 2:
Most real estate brokers and brands are wholly disconnected from the markets they serve. This is not sustainable.
Intractable truth number 3:
It is VERY difficult to foster excellence in this business. But survival dictates that we stop sustaining stupidity.
Boero’s assertions sound eerily similar to Elop’s shared thoughts on his own organization. Where Boero’s assertions meet Elop’s open truths is the recognition that the past is a poor indicator of future successes.
Elop’s open truths on why Nokia is a burning platform are measured in real numbers including substantial market share loss to its competitors as well as a devaluation of Nokia’s short-term credit ratings.
On Tuesday, Standard & Poor’s informed that they will put our A long term and A-1 short-term ratings on negative credit watch. This is a similar rating action to the one that Moody’s took last week. Basically it means that during the next few weeks they will make an analysis of Nokia, and decide on a possible credit rating downgrade. Why are these credit agencies contemplating these changes? Because they are concerned about our competitiveness.
Consumer preference for Nokia declined worldwide. In the UK, our brand preference has slipped to 20 percent, which is 8 percent lower than last year. That means only 1 out of 5 people in the UK prefer Nokia to other brands. It’s also down in the other markets, which are traditionally our strongholds: Russia, Germany, Indonesia, UAE, and on and on and on.
Elop has, at least in looking at previous period performance, the analytical data to cement his argument of the fundamental, deep changes required at Nokia so it will stay relevant going forward. Inherent in Boero’s arguments is the same imminent downfall of organized residential real estate with the current tide of opinion seeming to concur with his assessment of the REALTOR® landscape. His arguments raise more questions than answers with me especially as it relates to the future success of the local REALTOR Association/ MLS operator – our main market niche at Clareity Security.
One truth I am willing to bet on is the traditional local REALTOR association / MLS operator of old must give way to a value-driven organization with a focus on content and infrastructure deliver or it runs the risk of the same mass exit experienced recently in Columbia, SC.
In a “stunning” move, the Midlands’ largest real estate agency is pulling out of the professional Realtors organizations (sic), telling agents they no longer have to pay membership dues of more than $400 a year.
“I hated to do that,” Ron Roe said. “It’s a great organization.”
In the e-mail to agents, Roe and Russell said: “We will seriously consider rejoining the association when and if they establish true membership value for our agents.”
What happened at the Central Carolina Association of REALTORS®? From an outsider’s perspective, the quotes above ring of the truth. In essence, CCAR was on fire and probably didn’t even realize it. It might have had an inkling of trouble when the renewal rate for its membership started to slip dramatically between November and December. I would imagine Russell and Roe gave plenty of warning they were being painted into a corner by the requirements for all or none membership even as they, dealing outright with their own burning platform, struggle to sustain 200+ agents unable to pay basic business expenses.
At the final decision point, the leadership of the largest brokerage in that area didn’t see the value provided by the association compared to the relative dollars invested on an annual basis. Russell and Roe made the decision to jump off the burning platform. Unfortunately, CCAR was unable prove its intrinsic value was worth the price of admission and it lost a third of its revenue in one fell swoop.
Last week, my business partner wrote about the use of analytics to help drive business decisions. In her post, Measuring and Understanding MLS data and Subscriber Value, she presented the questions:
What are you doing in 2011 to better understand the value your subscribers are getting from your service? What tools are you using to measure it?
We are asking the same question Elop is asking of his employees at Nokia – “What are the choices you are going to make right now to ensure you aren’t the burning platform for your subscribers?”
 Leaked Memo from Nokia’s CEO to all employees
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