I remember somewhere around 2001 or 2002 when I was a student at KNUST. Mobile phones were becoming a big deal on campus, and owning certain brands said something about you. An Ericsson phone was one of those devices. There was something about having one in your hand that felt different. It was technology, but it was also status.

Sony was another brand altogether. Before smartphones took over our lives, some of us knew Sony through televisions, music systems and, of course, the Walkman. Owning a Sony Walkman, or sometimes even getting the opportunity to listen to one, was quite a thing. Those products carried a certain prestige. Sony had built enormous cultural capital around personal entertainment, while Ericsson had deep expertise in telecommunications.

Then the two names came together.

In 2001, Sony and Ericsson officially formed Sony Ericsson Mobile Communications as a 50:50 joint venture. The idea made strategic sense: combine Ericsson’s telecommunications technology with Sony’s strengths in consumer electronics, design, entertainment and branding. Operations officially began on October 1, 2001.

Looking back, this was an interesting lesson in partnership. Sometimes, you don’t have to build every capability yourself. You can borrow strength through strategic partnerships.

And for a while, it worked.

Sony Ericsson gave us devices that connected strongly with Sony’s existing consumer brands. The Walkman phones brought Sony’s music heritage into mobile phones. The Cyber-shot phones did something similar with photography. Sony and Ericsson themselves later described these as some of the joint venture’s best-known successes.

For those of us who lived through that period, these were not insignificant brands. They were part of the conversation.

But then the conversation changed.

The Ground Beneath the Market Was Moving

One of the dangerous things about business success is that sometimes you are busy competing with the companies you can see while another company is quietly changing the basis of competition itself.

Nokia, Motorola, BlackBerry, Sony Ericsson and others were competing heavily in mobile devices. Nokia had become particularly powerful, with Symbian serving as one of its major smartphone operating systems.

Then two developments accelerated a fundamental shift.

Apple introduced the iPhone in January 2007. Instead of treating the mobile phone primarily as a telephone with additional features, Apple presented a touchscreen device that combined a phone, an iPod and an Internet communications device.

The shift became even more significant with the launch of Apple’s App Store in 2008. At launch, more than 500 native applications were available. Within the first weekend, users had downloaded more than 10 million apps.

The phone was becoming something else. It was becoming a platform.

Around the same period, Google was making another move that would reshape the industry.

Google released Android in 2007 as an open mobile platform supported by multiple hardware partners. Android’s open-source model would eventually allow manufacturers to build devices on a common operating-system foundation rather than each having to create an entire smartphone platform alone.

That decision changed the economics of entering the smartphone business.

A manufacturer no longer necessarily needed to develop an entire mobile operating system from scratch. Android could provide the underlying platform while manufacturers competed through hardware, design, cameras, pricing, distribution and other differentiators.

Think about what that means strategically. You may spend decades building an advantage, only for somebody to change the architecture of the industry and suddenly make part of your advantage less valuable.

That is disruption.

Nokia Shows Why Legacy Can Become Heavy

Nokia’s experience is particularly instructive because the company was not ignorant of smartphones. It had enormous technical capability and had been building sophisticated mobile devices long before many of today’s smartphone brands became household names.

The problem was more complicated than simply failing to innovate.

The market was moving towards ecosystems: operating systems, developers, applications, cloud services, touch interfaces and increasingly seamless user experiences. The competition was no longer simply about who made the better phone. It was increasingly about which ecosystem customers wanted to live in.

By 2011, Nokia acknowledged that the competitiveness of its Symbian devices was deteriorating. It entered a major partnership with Microsoft and made Windows Phone its primary smartphone platform. Nokia’s reporting at the time pointed to declining Symbian market share, pricing pressure and weakening brand perception during this transition.

That distinction matters. Nokia did adapt. But adaptation came while the market itself was moving rapidly.

This is something business leaders need to understand. Seeing change is different from responding to change, and responding to change is different from responding successfully and on time.

Sometimes a company eventually makes the correct decision, but the window within which that decision could have produced the greatest advantage has already narrowed.

Sony Ericsson Actually Adapted Too

The Sony Ericsson story makes the lesson even more interesting.

It would be easy to say Sony Ericsson failed because it refused to move to Android. Historically, that would not be accurate.

Sony Ericsson did move to Android. In fact, when Sony announced that it would buy Ericsson’s 50 per cent stake in the joint venture in 2011, the company reported that Android-based Xperia smartphones represented about 80 per cent of Sony Ericsson’s third-quarter sales, and that Sony Ericsson held approximately 11 per cent of the Android phone market by value at the time.

So they saw the shift. They adapted. And yet adaptation alone did not guarantee long-term leadership.

In February 2012, Sony completed the acquisition of Ericsson’s 50 per cent interest, making Sony Ericsson wholly owned by Sony. The business was subsequently renamed Sony Mobile Communications. Sony’s strategy was to integrate smartphones more closely with its wider world of connected consumer electronics and entertainment.

This gives us another lesson about partnerships. A partnership can be exactly what you need for one season and no longer be the structure you need for the next.

Sony and Ericsson combined complementary strengths when that combination made strategic sense. Ten years later, the industry had changed enough for both companies to reconsider what they needed going forward.

Business leaders sometimes become sentimental about structures: “We have always worked with them.” “This partnership built the company.” “This product made us who we are.” “This is how our customers know us.”

Fine. But the real question is: Does it still serve where we are going?

Legacy deserves respect. It does not deserve immunity from review.

Apple Took a Different Route

Apple’s response is interesting because it built a tightly integrated system of hardware, software, services, developers and content around the iPhone.

The App Store was particularly important because every developer building useful applications increased the usefulness of the device itself. The customer wasn’t buying only the specifications of that year’s iPhone. The customer was entering an ecosystem.

That creates a very different competitive advantage.

A competitor can copy a screen size. It can improve a camera. It can reduce a price. It is much harder to reproduce an entire ecosystem of devices, software, developers, services, customer habits and accumulated user investment.

This is why today’s businesses need to think beyond products. What ecosystem are you building around what you sell?

Sometimes the Disruption Doesn’t Look Like Your Competitor

This lesson goes far beyond mobile phones.

Look at transportation.

For decades, the taxi industry understood competition largely in terms of other taxis and transportation operators. Then software changed the structure of the business.

A smartphone, GPS, digital payments, mapping technology and an application could connect a passenger with a driver without the traditional taxi-dispatch infrastructure.

Suddenly, a major competitor to the traditional taxi business was not simply another taxi company. It was a technology platform.

That is one of the things disruption does: it attacks from angles established businesses may not originally classify as competition.

The company that changes your industry tomorrow may not currently operate in your industry.

Your Greatest Strength Can Become Your Greatest Blind Spot

This is where legacy becomes dangerous.

A successful system creates evidence: “We have done this for 30 years.” “Our customers love this.” “We are the market leaders.” “This is how the industry works.”

Those statements may all be true. The problem is that they describe yesterday and today. Strategy must also deal with tomorrow.

Your legacy product may still be profitable while its replacement is quietly growing. Your distribution model may still work while customer behaviour is changing. Your brand may still be respected while becoming less relevant to younger consumers. Your technology may still function perfectly while a completely different technology makes the problem it solves less important.

This is why market leaders cannot spend all their resources defending today’s revenue. Some money, time and attention must be allocated to questioning today’s revenue.

Research and Development Is Also About Asking Uncomfortable Questions

When people hear research and development, they often think about laboratories, engineers and huge technology companies.

But every serious business needs some form of R&D.

For an SME, it might simply mean deliberately studying customer behaviour, technological changes, cultural shifts, competitors, younger consumers, new distribution channels and emerging business models.

Ask questions such as: What is changing in the way our customers live? What technology could make part of our current offering unnecessary? If somebody wanted to destroy our current business model without copying us, how would they do it? What are younger customers doing differently? What are customers tolerating today that they will refuse to tolerate five years from now? What capability don’t we have internally that we should acquire, develop or access through partnership?

And perhaps the most uncomfortable question: If we were starting this company today, knowing what we know now, would we build it the same way?

If the answer is no, then something needs attention.

Think Wide, High and Low

As founders, CEOs and market leaders, we need to develop the discipline of looking wide, high and low.

Look wide at industries outside your own. Sometimes the technology that will change your business is already disrupting another sector.

Look high at global movements: technology, regulation, demographics, economics and culture.

And look low, close to the ground, where your customers actually live. Watch their small frustrations, changing habits, purchasing behaviour and the things younger consumers no longer value.

Because disruption does not always arrive with an announcement.

Sometimes it begins as a strange new product nobody takes seriously. Sometimes it is an app. Sometimes it is a partnership. Sometimes it is a new operating system. Sometimes it is a cultural shift. Sometimes it is a small company serving customers the market leader considers too insignificant to bother with.

Then, gradually, the strange new thing becomes normal.

I think back to those university days at KNUST and the excitement around Sony, Ericsson, Nokia and the other devices of that era. At the time, these brands felt enormous. Some appeared almost untouchable.

That memory keeps reminding me of something about business.

No brand is too big to be disrupted, and no legacy is strong enough to excuse a company from adapting.

But there is another side to it. Adaptation itself is not enough. Sony Ericsson adapted to Android. Nokia attempted a major strategic transition. Partnerships were formed. Billions were invested. Smart people made serious decisions.

Sometimes you can see the future and still struggle to catch it.

That is why leadership requires more than reacting when change becomes obvious. It requires building an organisation that is constantly listening, experimenting, questioning, partnering, learning and, when necessary, willing to dismantle parts of its own legacy before somebody else does it for them.

Build your legacy, certainly. Protect what deserves protecting. But every now and then, put that legacy on the table and ask:

If what brought us here cannot take us there, are we prepared to let it go?

Remember, I’m your brand and publishing consultant.

The best is yours.

Sources

Sony Corporation & Ericsson. Sony and Ericsson complete joint venture agreements (2001). https://www.sony.com/en/SonyInfo/News/Press/200109/01-0912E/

Apple. Apple Reinvents the Phone with iPhone (2007). https://www.apple.com/newsroom/2007/01/09Apple-Reinvents-the-Phone-with-iPhone/

Apple. iPhone 3G and App Store launch information (2008). https://www.apple.com/newsroom/2008/07/10iPhone-3G-on-Sale-Tomorrow/

Android Open Source Project. About the Android Open Source Project. https://source.android.com/docs/setup/about

Nokia. Annual Report / Form 20-F for 2011, including Symbian and Microsoft strategy discussion. https://www.nokia.com/system/files/files/form20-f-11-pdf.pdf

Sony Corporation. Sony to acquire Ericsson’s 50% stake in Sony Ericsson (2011). https://www.sony.com/en/SonyInfo/IR/news/20111027.pdf