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Samsung Electronics Co Ltd
They say there are no atheists in foxholes. There are also no jerks.
The tech industry is in a foxhole. All of it. Even the winners. The increasing commoditization of products and the overlapping of product categories continues to challenge the way companies do business. Yesterday’s success means nothing, and today’s victories can be overturned in a couple of fiscal quarters.
Which is why prickly pears who don’t play nice with others are being shown the door. First it was Apple’s iOS chief, Scott Forstall, and now Microsoft’s Windows head, Steven Sinofsky (I know, Sinofsky said it was his decision. Sure.) In both cases, words such as “polarizing” and “controversial” followed them wherever they went.
The message is clear: Stakes are high, and no time or energy can be spent on managing the egos of difficult people. As Patrick Swayze put it in Roadhouse, be nice.
Once-mighty companies have already stumbled—Sony (SNE), Nokia (NOK), Palm, Hewlett-Packard (HPQ), Research In Motion (RIMM), to name a few—and recent data only highlight how heated the competition has gotten. Here’s an example: According to Horace Dediu, a mobile-industry analyst, only three companies are currently making a profit selling smartphones. Three. Apple (AAPL) is responsible for 60 percent of smartphone profits, Samsung Electronics (005930) garners 39 percent of profits, and HTC (2498) takes 1 percent. (Side note: Way to go, HTC!).
That’s great for Apple, but even it must look over its shoulder: According to IDC, Android now accounts for 75 percent of the mobile-OS market, up nearly 92 percent since last year. Apple commands only 15 percent of the market. Even when you win, you have to keep fighting.
In addition to take-no-prisoners competition, the entire structure of the tech industry is in upheaval. Such companies as Microsoft (MSFT) and Apple could once have divisions, but what do divisions mean today? The lines between mobile and tablet and PC and cloud and set-top box are blurring at an increasing rate. You can’t conveniently wall off a part of your business and let it run semiautonomously. There’s no such thing as the Windows “division” anymore. It’s related to the mobile side of the company, to Xbox, to Windows Live, and so on and so on and so on.
Everyone in tech knows what happens when fiefdoms develop at a company. It’s a little show they like to call “Sony: The Movie.” The company turns into a balkanized assortment of “teams,” which never want to work with one another. There was a time when that kind of dysfunction was tolerable. Microsoft could let the Windows team do its own thing, because Windows was the engine that drove the company—so what if the team that worked on keyboards and mice felt stiffed. But Microsoft can’t just be a Windows company anymore: XBox and Surface are evidence of that. And Apple can’t afford to isolate iOS from the rest of the company: Mountain Lion and iCloud show how the mobile and desktop environments are converging.
Tech companies don’t need teams; they need team players. They need versatile executives who can work with lots of different people, foment consensus, and get everyone moving in the same direction. If key players are unwilling to take meetings with you, that’s not just a personnel problem; it can ultimately affect a organization’s performance. Being nice is now a competitive advantage.