Over Promise and Under Deliver

Nikon's been in a bit of a conundrum for quite some time with mirrorless cameras. By pulling their first effort completely (the Nikon 1/CX series) and then seeming to rush back in with the Z mount, they find themselves playing defense, not offense. But the defense seems tired and out of sorts, and it's not communicating before, during, and after the game.

One of Nikon's defensive plays in full frame mirrorless was pre-announcing firmware updates, another was committing to a lens road map. Unfortunately, neither is working out the way that customers expected.

  • Firmware updates — Nikon partially delivered on some autofocus additions and improvements, but didn't hit parity with the market leader and and more importantly didn't fix 3D Tracking. Nikon didn't deliver on the ProRes Raw or CFexpress updates anywhere close to when they first mentioned them or when they were hinted at appearing (we're still waiting, though it appears there will be a firmware update this week that includes some or all of this). 
  • Lens releases — The 70-200mm f/2.8 S was supposed to be a 2019 release. It doesn't appear it will make it into users' hands before the big year-end party begins. Moreover, Nikon has removed the dates (and aperture information) for other lenses that they have added to the roadmap. This all seems to suggest that instead of getting faster and more consistent with lens releases, Nikon is not able to do that. Just how much they're slipping is unknown, but the lack of information sends a bad signal to customers.

Couple this with Nikon's behind-the-scenes discontinuation of third-party authorized repair stations, and you sense a trend: sluggish, opaque, go-it-aloneness.

If ever there were a time for Nikon to be transparent and up-front with its customers and to act quickly, now is the time. Not doing so is a classic marketing and public relations failure that will end up part of a Harvard Business School Case Study some day.

So, let me be transparent for Nikon. Here are the statements Nikon should have made recently:

  • "We are still committed to providing ProRes Raw support for the Z6 and Z7. Legal issues due to patent assertions have forced us to move a little more slowly than we planned, but as soon as the legal issues are dealt with, we'll release the update."
  • "We are still committed to providing CFexpress firmware updates for all our current XQD-based cameras (Z6, Z7, D5, D500, and D850). Compliance testing among all the parties endorsing the new CFexpress standard has taken longer than expected and pushed our schedule out, as well as that of others producing CFexpress products. This should all resolve soon, and at that time we'll begin issuing that firmware update."
  • "We made several important performance and feature changes to the Z6 and Z7 autofocus system with an earlier firmware update. We are aware that customers would like us to address a few remaining control aspects of autofocus, plus we believe we can continue to increase its performance. We have no specific target date for doing this work, but it has high priority here in our engineering labs, and we'll make your existing Z cameras work better some time in the not-so-distant future."
  • "The 70-200mm f/2.8 S lens was originally scheduled to be released in late 2019 and has appeared on our road map with that date. We want this product to be as high quality as our other S lenses, and demand for it is predicted to be high. It's taken us a little longer than expected to make sure we can fully deliver to our customers' expectations. This lens will get released in early—and we mean early—2020. We apologize for the slight delay."
  • "We're aware that we removed some information that would be useful for customers planning their system from our latest lens road map. The reason for that is that we're still assessing what would be the optimal release order, and as with virtually all our lens patents, we typically have options when it comes to the exact aperture of a lens. As we lock down specifics, we'll communicate these to you with road map updates."
  • "The continued contraction in the camera market has forced us to look more closely at our resource deployment. NikonUSA has made the decision to commit all of its support resources to official Nikon repair in Los Angeles and Melville. In no way do we intend to compromise on official Nikon repair. By not having to deal with stocking, selling, and distributing parts to others, we free up personnel to better handle and track official repairs."

Finally, let me say this: Nikon management is making a classic mistake, one that is so classic I studied a variation of it back in MBA school in the late 70's. What's the problem, you ask? Nikon is in a consumer business, yet it is not controlling and managing the message consumers get

The third-party repair situation, for instance. What was more important than the decision that was made—to end third-party repair support in the US—was how current and potential customers learned about this decision. They didn't learn it from Nikon. Instead, one repair-oriented Web site (iFixit) leaked the private letter that was sent to third party repair shops and then there was a giant Internet pile-on of condemnation. Several days later, I know of only one vague and uninformative response from NikonUSA that a Web site received to its query for clarification, and others haven't heard back from NikonUSA at all. 

So, who at NikonUSA thought that they could just change something important that impacted customers and that they wouldn't get any flak about that? Then, why did they think that a letter they sent would stay private and not become an issue in itself (let alone at a critical buying period of the year)? Then, once the whole thing became a PR problem, why was there no instant, clear communication explaining and clarifying the situation? 

Nikon didn't control the message, nor did they respond correctly when the message got out of control. Classic PR management mistake.

But it doesn't stop there. 

Meanwhile, Nikon's most recent financial presentation generated an additional message that Nikon then let get out of control. Specifically, the line "Generate enough profits to justify its existence..." That's the bit from the presentation that keeps getting quoted across the Internet. The original Japanese doesn't quite say the same thing, but close enough. However, when left on its own like that—which is exactly how most Web sites and customers have quoted it—the statement seems to imply that if profits aren't good enough Nikon will close the Imaging business. 

Wholly crap that's not a message you want potential customers to hear or believe. Two slides further down in the presentation was the answer: "In FY2021 and beyond, generate profits in excess of capital cost on a stable basis." (emphasis is Nikon's, not mine) 

The problem is that Nikon seems to think that their financial presentations are only heard by large shareholders, with whom Nikon management is always talking with anyway. From Nikon management's viewpoint, they seem to believe that they did their diligence here: they described that they missed profit expectations (and why), that the near period will be rough and involve much cost cutting plus restructuring costs, but that they are planning to exit the crisis smaller, leaner, and profitable. 

That last clause didn't make it into most customer-facing descriptions of Nikon's financial results. And it didn't because Nikon management is woefully inept at customer-facing anything (other than the products themselves, which tend to be excellent). Nikon's marketing is inept. Nikon's PR is inept. Nikon's management availability to customers (and to a large degree, the press) is nil. 

If Nikon does fail at staying in the camera business—something I'm not at all predicting, by the way—it won't be because of their product. It will because of management failures. Clear and easily recognized management failures. Nikon needs to figure out that they're in a consumer business and learn how to deal with consumers, simple as that. 

To start with, Nikon needs to get in control of their messaging to consumers. It's really not that difficult. The messages they need to provide really aren't that tough to create. But they have to be clearly and carefully communicated, and from Nikon first, not from the rumor mills and fora on the Internet.

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