Frictions Revisited

I'm mentioned this before, but in my management days one of the things that I kept very high in my visibility were "frictions." I define a friction as being something that keeps a business (or product) from reaching its highest potential result.

I've long believed that Nikon is making their life more difficult for themselves by increasing frictions in their business and products rather than eliminating them. Some of the other camera companies do similar things, though not as consistently or unilaterally as Nikon does.

So let's talk about frictions and how they work. 

Let's imagine a simpler time. You've just invented the camera. You're the only maker of cameras. At the moment you have no competitors. There, we've just identified a possible friction: competition. 

One reason why companies love monopolies or duopolies, is that competitive friction is near zero, if not actually zero. As much as the Pentax and Sony folk want to believe that their DSLRs and SLTs are competitive, in point of fact DSLRs are a strong duopoly. Canon and Nikon together own about 95% of the DSLR market. For quite some time the market shares of these two companies didn't vary much, rarely changing more than two or three percentage points one direction or another. 

While Canon and Nikon were wary of each other in DSLRs, and tried to match each others' products over time, competition wasn't really a serious concern between them. Indeed, what competition there was between the two simply improved each others' products as they tried to match features or performance. 

But as I noted in yesterday's article on Nikon's slow failure in Japan, something is changing. Nikon's ILC market share is going down due to lack of a serious mirrorless offering, but so is Nikon's DSLR market share. What's happening?

Well, other frictions have appeared and are taking hold. 

Let's list some of the key frictions I see in Nikon's recent efforts:

  • Quality Control. With D600, D750, D800, DL, SnapBridge, and numerous lenses all having birth pains due to quality control issues, customers now have a wait-and-see attitude towards any new Nikon offerings.
  • Customer Service. I've long documented Nikon's deteriorating customer service, and at some point customers noticed and are responding by not rewarding the company with purchases. The whole "won't repair gray market" thing is just the tip of the iceberg, but it's a huge iceberg now that Nikon is dumping so much product into the gray market.
  • Communication. Want to know what Nikon's doing with the Nikon 1? Sorry, no information since 2015, and that was just a product launch. The D3400 and D5600 were launched with press releases, and those didn't say anything useful. The lack of communication from Nikon corporate is now obvious to consumers. Consumers want to be talked to...which brings:
  • Marketing and Advertising. Over time Nikon has slowly been cutting down the amount of this that they do. They've also become extremely clumsy in the stuff they actually do, as in the TV spots that were promoting the social aspects of SnapBridge at a time when half the US market couldn't even load a SnapBridge app on their smartphone. It didn't help that the ads were just bad and didn't actually outright say "buy our camera and you can send photos socially." Nikon also keeps getting hung up on trying to reach millennials in their advertising, but without features in the products that those same millennials would want. Waste. of. time.
  • Repairs. I've also long documented NikonUSA's declining repair satisfaction. We're now to the point where almost one-fifth of NikonUSA repairs don't happen right the first time the gear is in their hands, requiring a second trip. This creates a new friction: time without camera. 
  • Missing Products. Buzz, buzz, need I say more? Okay, I'll say more: there are plenty of things that a photography-oriented customer might want that Nikon is simply not supplying. Even when Nikon does supply it—the SB-5000 comes to mind—you discover that critical accessories aren't in stock (e.g. a WR-R10 with the right firmware). 

The list actually is far longer than that, and many of those frictions have or create sub-frictions within them, as I note in the Repairs bullet. But the interesting thing is that virtually all of the frictions Nikon is creating for itself come in the company-to-customer relationship. Customers are going elsewhere (leaking, sampling, switching) because they've had enough of that bad relationship are looking for a better relationship.

Moreover, the genesis of all those Nikon frictions is one simple thing: cost cutting. Nikon management thinks of cost cutting in the same overly simplistic way that IBM once thought about the mythical man-month (look it up, or better read the book about it). As it turns out, neither cost cutting nor man-month hiring practices actually do what you think they do. Both are not the metric you should use to produce better results. In the case of man months, the problem is that you increase the internal communication n ways, and this slows down the process of completing products. In the case of cost cutting, the problem is that you either make your products non-competitive by taking out key parts/features/performance—Nikon hasn't done that, fortunately—or by not marketing or supporting the products properly. 

Nikon management perceives their biggest friction as being the bank shareholders wanting some fixed numeric markers being hit. They're managing to keep that friction from getting worse (which is why cost cutting keeps happening). Why? Because it's the key source to their access to capital. If Nikon could ever discover a real path to growth in their overall business—I don't believe the medical initiative is going to see any meaningful growth for Nikon for years, if ever—they'll need capital to expand to meet that growth. Heck, they need capital just to stay in place, really. That's because the technology world doesn't stand still. What sufficed with steppers 10 years ago is mostly a dinosaur today. The film camera business pretty much had to be written off in 10 years, too. It doesn't help that quakes and tsunamis and floods have impacted their production facilities and required re-investment, either.

I use the word "friction" for a reason. Yes, you can overcome frictions, but only with force, lubricant, or with removal. What is not happening at Nikon is that anything is being applied directly to the frictions they've created in order to overcome them. Thus, business slows down because the frictions lower the business performance. 

The problem is simple: frictions left unaddressed mean you sell fewer product. Selling fewer product may also create new frictions (lack of resources via profit). More frictions slow you down faster. This all becomes a giant tail-spin that eventually has you hitting the ground. 

Just once I'd like to see Nikon remove a friction. Any friction. Making a great product (e.g. D5 or D500 or D810) doesn't do it. The frictions are still in place, so the great product produces less result than it could. 

If you're managing a product, a group, a business, then take some time today to figure out what your frictions are. Then figure out what you can do to remove them, or at least lower them. You'll be a better manager tomorrow when you do. 

text and images © 2017 Thom Hogan
portions Copyright 1999-2016 Thom Hogan-- All Rights Reserved
Follow us on Twitter: @bythom, hashtags #bythom, #dslrbodies