Lost in Transformation


People, systems, societies and companies mostly learn from failure. If they survive it, that’s it. Just as Isaac Newton saw scientists „standing on the shoulders of giants“ (their predecessors), the winners in business are standing on the shoulders of: losers. Which helped, ironically by failing, to find new solutions, open new doors, reach out to new horizons. As a company you will not succeed when you’re not willing to learn – even from failure.


Yes, maybe sometimes you must learn the hard way. You may have to lose your own bet to learn once and for all how this feels. But also, it’s obviously much more convenient to gain experience the armchair way – by studying the cases of more or less bold, and/or more or less dumb failures. So let’s begin.


Yes, this once was the most valuable company in whole Europe. The shining star of mobile communication, the gold standard of usability and technology design. The one company that pulverized an entire industry – just to become pulverized itself shortly afterwards. Nokia’s mantra „connecting people“ could have been the cornerstone of a communication empire in the 21st century, and that is what analysts, media and the own C-level believed in. In itself a Big Transformational Idea. But the connection was seen more as a technical challenge than a dream to come true. Hey, the people to connect were not your engineers, they were your customers! A Big Transformational Idea has to be seen from THEIR perspective, more outside in than inside out.

Engineers are mostly poor at dreaming – designers are better. So, when the dream designer Steve Jobs entered the stage with the first iPhone, all the skills and capabilities that had paved Nokia’s way to the top became a massive roadblock for transformation. Only some years and one bitter defeat later the company managed to reinvent itself as a communications network provider; not really cool, but good enough to survive.


Apple – a loser? One of the best known, highest valued, most profitable companies on earth? Erm, yes. Not today, of course. But yesterday. And perhaps tomorrow. The elderly among us surely remember the bad old days of Apple Computers. During most of the 1990s its products lost market share, its brand lost its exclusive appeal, its stock lost value and the company lost money.

More and more, faster and faster each year. The two main reasons for that losing streak: sticking to once successful recipes and not living up to the brand’s promise.

After co-founder Steve Jobs had left Apple in 1985, the brand was mainly interpreted as building high performance computers for people in creative industries. With each new PC generation, the products became more powerful, and less beautiful. The avantgarde magic of the „computer for the rest of us“ faded away, just like sales and margins. When Steve Jobs returned in 1997, he revived the old magic of the Big Transformational Idea „think different“ – and translated it into new products. A reinvention so radical that it seems to be doable only after a near-death experience at the brink of collapse.


One can say that good brands don’t die. But this is the rare story of a brand that killed a company. PAN AM had been one of the best-known and best-marketed airlines in the world for decades. It was THE international US-American Airline, it was the airline that started the jet age (in 1955) and the first to introduce the Boeing 747 (in 1970). With air travel being an exclusive product mainly catering the needs of a small elite, margins were high, but volume not so much. When the whole market started to turn upside down at the end of the 1970s, PAN AM was caught wrong-footed. Air travel became an accessible commodity, and exclusivity could not be taken for granted, but had to be earned.

The 180-degree-turn – a true reinvention – that would have been necessary to regain competitiveness was not even tried: During the 1980s, the management sold its assets to cover the losses.

The speed change from slow tailspin to sudden crash happened on 21 December 1988. On that day, a PAN AM Boeing 747 was destroyed by a bomb, killing all 259 people on board plus 11 residents of Lockerbie in Scotland, where the plane crashed. PAN AM’s customers got that message and opted to avoid the brand’s risk: Sales plummeted, the already reeling airline never recovered and went bankrupt just two years later.


Reinvention is a continuous process. It’s never finished. Arrogance and lack of customer perspective is one of the main reasons for failure. Feeling too safe. Instead, allow mistakes and learn from them. If you see reinvention sporty and are well trained, then it can also be fun. More stories to come…