Say Nokia, and mobile phones come to mind. Yet more than a hundred years ago, the company sold wood pulp: Finland had forests, and turning trees into pulp and selling the pulp was the whole business. Later the roads filled with cars, every wheel needed rubber, and the company moved from timber into rubber. Later still, judging that mobile technology would matter, it moved into handsets and became the world’s number one phone maker of the 2G era. Today it sells 5G equipment, and has even changed what it calls itself — no longer a telecom manufacturer, but a provider of business technology solutions. Three changes of trade in a century, and every entry was made as an outsider.
The Word Core Business Has a Shelf Life
Some say focus on the core business and leave cross-industry ventures to dilettantes. While the core is healthy, that is right. But industries die, and the phrase core business carries a shelf life of its own. Pulp was once the core. Rubber was once the core. 2G handsets were once the core. Each argued its case with full confidence, and none has held the title to this day. Defending the core is sound strategy on one condition: the industry still exists. Once the industry starts to sink, the tighter the grip, the faster the sinking.
The Phone Died; the Company Did Not
Others say Nokia’s phone business still died, and no transformation myth saved it. True, and the death was no injustice: number one in the 2G era, the 3G opportunity in plain sight, and it was missed all the same. What died was the phone business, not the company. Whoever confuses a business with a company gets buried along with the business. Missing 3G killed the 2G-era identity; an identity can be repealed, and the company lived on.
Luck Explains One Turn, Not Three
Still others say each transformation was a lucky bet, not strategy. Luck explains one turn; it cannot explain three. From pulp to rubber, from rubber to handsets, from handsets to 5G equipment, three entries share three traits: each began as a novice, each carried no old baggage, each gave the old identity’s seat to the new opportunity. That is a repeatable move, not a lottery ticket. If it were a lottery, hitting three times across a century is a probability not worth discussing.
An Amateur’s Tuition Costs Less Than a Professional’s Baggage
And others ask: if a company changes trades and becomes an amateur, who pays the tuition. The amateur status is the tuition. A newcomer does not understand the old processes, and therefore does not protect them; has no stake in the old trade, and therefore needs no reason to turn. Insiders are the opposite: those who master the old processes cannot let go of them, and those who placed their bets refuse to concede. An insider’s baggage costs more than an amateur’s tuition. For people who mistake their business for themselves, the day the business is buried, they go down with it.
An Identity Is a Document That Can Be Rewritten
The argument does not apply to companies in growing industries: while the industry climbs, focus remains the first correct choice, and transformation for its own sake is waste. Nor does it extend into stock judgments — a company living long and a share being worth buying are two questions. It makes one claim only: a company’s identity is not carved in stone; it is a document that can be voided and rewritten. Companies that lived a hundred years did not avoid dying — they dared, each time, to answer the question of who they were again.
