It is almost impossible to believe, but the iPhone isn’t even 10 years old. If you used a cell phone before 2007 you almost certainly owned a Nokia product at some point. They were THE mobile phone company.

But Nokia is gone now. Microsoft bought them in 2013 after the company’s market value dropped by 90% over just six years. Many reasons are given for Nokia’s decline. Most observers blame the iPhone or the fact that Nokia just didn’t have the capacity to keep up.

But those stories don’t add up. Nokia was once worth $150 billion. Nokia had the creativity and the money to keep up with Apple. Nokia’s problem was cultural.

Nokia’s leaders never took Apple seriously until it was way too late. A key reason for this misstep was that mid-level managers did not feel safe confronting their leaders. There was too big a power distance gap between top leaders and other coworkers.

Power distance is a concept developed by professor Geert Hofstede to help explain differences between cultures. The basic idea is that some cultures (like Eastern and Latin countries) place a high value on hierarchy and defer to power while other cultures (Western and European countries) do not.

In high power distance cultures lower power people are less likely to confront higher power ones. In lower power distance cultures people are much more willing to confront powerful people. Which brings us back to Nokia.