Seeds of Destruction planted before Elop and OPK’s time
Image via markevanstech.com
As CEO, Jorma Ollila (now Chairman of Nokia),was the guy responsible for steering Nokia to number 1, taking over the mighty Motorola.
An interesting post over at hs.fi highlights how things started going wrong for Nokia. Mikko-Pekka Heikkinen has a rousing 4-part article that outlines the seeds of distruction planted at Nokia before both Elop and OPK ever got to the helm. Things may have been looking OK on the outside, but the necrosis at the core was never seen until now when it’s too late.
The article comprises of interviews with ex Nokians. They all seem to have seen the problems and solutions needed for remedy and future innovation, but the structure laid out inside Nokia prevented such things from ever being executed.
http://www.hs.fi/english/article/Knock+Knock+Nokias+Heavy+Fall
- Change began when OPK became president and CEO. Nokia apparently became a colder, more disconnected place to work in. Instead of folks working together for a common goal, it was replaced by a “me me me spirit”, supposedly then killing creativity.
- All blame for Nokia’s demise does not fall on OPK however, as he fell into decisions that were made long before he was CEO.
- In 2000, Nokia’s market cap was 300B (Though at the turn of the century, didn’t a lot of company market cap spike?) EUROS. 300B EUROS. Apple is 300B USD. Equivalent? Nokia would have been 429B USD. Apple are yet to reach past 400B mark.
- In many markets, Nokia was synonymous with mobilephone
- Nokia as an economic and technological miracle and stealth weapon that overcame not just the world, but their neighbour, the Swedes (Sony Ericsson) helping Finland rise out of the ashes from early 90s recession.
- Nokia was a pioneering name in mobile phones
- 1996, Nokia launched the “earth shaking new breakthrough” that was the Nokia 9000 – communicator, creating the smartphone which now everyone wants a piece of.
- But these internet capable smartphones needed geek savviness to work them.
- There’s a piece on Apple that you can read about yourself (Hs.Fi). Former Nokia VP said”Apple has only gone and done those things that were envisioned by Nokia, but which Nokia has itself been unable to bring into the real world.”
Why Nokia couldn’t respond?
Post 2000 a decision was taken to make more handset models. Instead of making people choose between Nokia and competitors, make them choose between Nokias. This worked well at the time as Nokia’s competitors weren’t as strong. They had undoubtedly the most usable user interfaces at the time that allowed folks to actually use mobile phones (which were complicated pieces of tech back then) with ease.
As pace increased, the vision for mobile phones shifted. Instead of phones being constructed with the intention of making mobile phones for people, phones were made based on components, becoming characterless – not differing in any meaningful way.
Bureaucracy
You’ll really have to read the article yourself (Hs.Fi). Check out the portion where they discuss how long and convoluted the steps are into making a change within Nokia. The talent at Nokia see fixes and improvements that would take, what, 2 weeks. But due to disgusting bureacracy, endless passing of responsibility, unecessary levels of risk assessment, two MONTHS go by. The product has progressed too far and the changes can only now be made onto the next devices. Oh darn it!
We’ve heard this before – internal battles at Nokia between the operating systems available (I remember it was Ollila that supposedly encouraged this). Teams were more concerned with what their rivals within the company were doing at NOT just competitors. At Nokia we have seen time and time again that they FEAR cannabilizing the sales of one handset by another. BUT WHY? So what that one product is really good and not a diluted offering so sales go there instead of another department. At least money is still feeding into Nokia instead of the hands of your competitors.
Competition within Nokia
“The products using a certain software platform were not permitted to implement the newest or the cleverest things, because this might make the device in question a competitor to some other Nokia phone using a different platform.” – Ex Nokia executive
FFS! Were not permitted? This is why we NEVER got the true flagship post N95. We’ve seen time and time again that Nokia has always had all the features, all the capabilities spread out over all their handsets. They could never muster it all into one, as well, bosses at the top said that wasn’t allowed.
They couldn’t see that times had been changing. Competitors were catching up. Before it worked that mass Nokia devices meant folks were choosing Nokia v Nokia v Nokia. instead of Samsung v Moto v Nokia. But with stronger competition, Nokia KEPT this mindset of DILUTING their abilities across a range of devices. It’s ok to have a diverse portfolio, but it’s NOT ok to actively restrict the abilities of the flagship – you know, that thing that shows the competition what you can do. Yes, have dedicated segments, reduce costs perhaps as a handset targets a particular market, but at the high end, there should be no compromise. If it isn’t the best you can do, why bother putting it out?
Talent, technology and expertise is all there, but met with a brick wall.
Basically, Nokia new what to do, Nokia had the expertise to do what they needed to do, Nokia had the technology to put that all into action. But there’s a bottleneck, no, a blockage that stifles it all. Ideas for new features have to be signed off at every stage and can still be stopped by a VP with cold feet as he hasn’t a clue on this subject matter (zomg, why did they become VP). SAFER choices are made. Instead of committing time, money and people into producing something BETTER, they’re frozen as a safety blanket just in case they’re needed for something else. The innovation is no longer novel, another company implements it and Nokia play catch up to it. The talent is there, but there was never anyway to take advantage of it properly and quickly enough.
The article points out the google way – where people are ACTIVELY encouraged to come up with new ideas. Don’t they have like a day off or special time off during the day to just work on things hey want to do? People are inherently creative – recognizing such a thing and nurturing this attitude is genius. People still work hard and pour effort into company set strategies, but they can also work on things that can change the company’s future for the better. At Nokia? You have an idea? Well, here’s a maze to pass through AND if you somehow make it to the other side, you may have an incompetent/ignorant VP that will just say no anyway.
Companies need a visionary to give direction. The article says Nokia’s board did not have such a person. Members were essentially untrained where Nokia’s business is actually concerned. Recognizing that OPK was not that man and that there wasn’t anyone else at Nokia to be that visionary, Elop was head hunted. But Heikkinen notes that Nokia’s problems began before OPK but when the Ollila set in motion things that set Nokia off track
Seeds of destruction
80% of Nokia’s income came from mobile phones. In 2003, it was decided that this would be split into basic, multimedia and business.
Seeds of destruction were planted. Units began competing for resources. There was no leadership to oversee the bigger picture.
Oh here goes:
People tried simply to respond to the challenges and needs of all the different product lines. There was not enough time and money for work at the long-haul end. For example for things like updating and upgrading the operating system software
With Nokia fragmented inside, they could not quickly enough (some would say at all) respond to iPhone when it arrived. Just look at what happened when the clamshell craze set in. Fortunately for Nokia they were so strong in other places back then, but as we know, such missteps right now are not forgiven.
Nokia had already seen the importance of touch screen phones though with the 7700 and 7710. I remember their videos of futuristic UIs that would have given iPhone a run for their money. But resources went elsewhere to support the current line of samey handsets. A former Nokia manager accepts that Nokia were making far too many average products instead of concentrating on fewer but much better ones.
Whilst Ollila planted the seeds, OPK tended to the sapling, adding more restructuring and further confusion at Nokia.
“They took the organisation in an ever more confused and confusing direction and created a kind of internal impotence. Ultimately nobody knew who was making the decisions and about what”
Ollila had possibly set his subortinates too much freedom, with the numbers of managers growing to exceed what was necessary and creating an overly crowded, overly viscous, slow, clogged Nokia.
The article ends with the opinion of the former Nokia employee of 25 years. Speaking of Elop:
“I see good in him. I believe that he will be able to achieve a lot of good things. I’ve just got that sort of feeling about it”
This article was written in October 2010, before Feb 11 and the shift to Windows Phone. As we know, Elop has recognized that this bureacracy had to be changed. He poured weedkiller and hacked away with a chainsaw. He has said that Nokia is now moving faster than ever before and on par with others, possibly faster (and they need to be).
Now it’s Elop’s turn to take all the blame.
Elop now inherits the problems of both OPK and Ollila. Not just inheriting but being credited for Nokia’s down turn. The aftermath of Ollila and OPK’s management is being seen in Elop’s tenure, therefore to some, it must be Elop’s fault. Taking the difficult and seemingly to some, crazy decisions, Elop is indeed making changes at Nokia that they had desperately needed to be agile in such a fast paced market.
Some may view that Elop is accelerating Nokia’s demise to improve Microsoft’s chances of buying the company. ‘Killing’ Symbian, ‘killing’ MeeGo and opting for his previous Boss’ Windows Phone. On the other hand, others might see that Nokia’s problems had spiralled long before Elop, leaving him with little space to manoeuvre, but to turn instead to the best option Nokia might have at ever regaining their glory.
Thanks HaugMedia and Vlado for the tip!
SOURCE: Hs.Fi
UPDATE: Relevant link – rebuilding Nokia from within. Removal of bureaucracy.
http://mynokiablog.com/2011/04/15/rebuilding-nokia-from-within/
Category: Nokia
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Hey, thanks for reading my post. My name is Jay and I'm a medical student at the University of Manchester. When I can, I blog here at mynokiablog.com and tweet now and again @jaymontano. We also have a twitter and facebook accounts @mynokiablog and facebook.com/MyNokiaBlog. Contact us at tips(@)mynokiablog.com or email me directly on jay[at]mynokiablog.comSubscribe
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i blame obama
lol I kinda remembered obama-bush arguments reading this
the mentality is possibly still there. or was there up till last year.
N8= Best ever camera
E7= Best Hardware keyboard and much better screen than
N8 but camera with edof, no SD card support ruined it
C7= Beautiful and slim with NFC
why didn’t we get ONE device with N8 level camera, SD card support, Hardware keyboard, relatively slim, CBD amoled screen and NFC support running maemo ?
Yes, the E7 could have been the one that had the lot, but Nokia still fragmented its technology. They did the same thing with X7..
A combination of the 3 with the works and still more, could have been a market killer..But we now never know..Im still waiting for that Top End device, like many others..
Because it’s Nokia…
YES !
even with maemo 5 – a phone like you have described would destroy everything out there today, and possibly tomorrow too.
if we can see this – why can’t they ???
to me this is what samsung are doing with their galaxy s line of phones – basically putting every single thing they can think of into them – and funnily enough they are the highest selling phones in androids history (ever ?)
I’m pretty sure that there are plenty of people within Nokia who would have seen the possibilities. But its failings are purely down to continually useless management. From pre-opk, to Elop, they’ve all made some utterly stupid and bizarre decisions.
But Nokia sound *very* like Microsoft in their idiotic internal beaurocracy, sadly in many ways the two companies are made for each other.
I would like to be Optimistic about the N9, but somehow, i fear the same mistakes will be made.
E7 – most people don’t want a full QWERTY hardware keyboard. Also the CBD screen is only slightly better than the N8′s not ‘much better’ and the N8′s screen is already excellent.
C7 – most people don’t want, need, or use NFC.
In short, the N8 is already a perfect device for most people with everything they want or need.
The N8 is a good device, but announced last april. You would think it would be ok if something in the X7 significantly improved on it.
I hope things have changed( Its about damn time anyway) And we get a complete package in the form of N9(50). At least things are looking good if rumors are to be believed. One can only hope that they don’t mess it up
Yup, fingers crossed!
elop still shouldn’t said anything till they where actually ready and now at Nokia they are fucked cause of elop opening his mouth too early
poor timing…
We all knew symbian is dying.
But it was really hurt, when it is told directly from Nokia CEO.
What makes it even worse is, it will be replaced by WP7
+1
To me, that was exactly the mistake.
The announcement of an OS change, without having a WP7 phone to present, was a rookie mistake…
That is the kind of speech you only give, when you already have the alternative ready for the consumer to get.
That was what killed Symbian, and what’s killing Nokia
+1
“With Nokia fragmented inside, they could not quickly enough (some would say at all) respond to iPhone when it arrived.”
That’s their problem, they shouldn’t have had to respond to iPhone, they should’ve led the market instead.
I’m telling you they had 20+ year plan to produce N95 remakes.
Exactly
The leaked N87, which was the original/early N8 with 12MP camera and xenon flash, was a fkn slider with a 3 inch screen – non-touch.
This article actually makes so much sense.
That’s actually true. They bought so much components and invested so much to making N95, they had to rehash it to get the value out. Shame.
The Elop plan:
1) F**ck Symbian
2)F*ck Nokia
3)Give it to Microsoft
4) F*@K Elop
How about “every spec known to spec-hungry peeps” within a phone and have that phone available in different form factors?
nokia’s market cap was never at 300B euro. and in year 2000, the exchange rate of euro vs dollar was 1 euro = 0.85 usd.
Reading the entire article from the link was more than an eye opener.. I knew for some time that Nokia had problems in its upper echelon, but I never knew it was this severe.. Software optimization that would only have taken two weeks to implement on a product would take more than two months to be approved???? WTH was that?? No wonder those recent phone releases seem to be only half baked… Nokia’s engineers had the ideas, the capability, to bring something that could surpass the iphone both in hardware and software, only to be stalled by incompetent VPs and management, imagine that, more than 300 vice presidents and SVPs?? Bullsh*t…
Well, it really is true that your biggest enemy is yourself… I don’t really have a clue, but I would really like to know what steps Elop made to fix this, or is he really fixing it… It’s still not over for Nokia to turn things around (well that depends on the current management), the smartphone era is just beginning, we don’t even have those superconductor, graphene stuff yet out in the market, no significantly exciting improvement in battery technology, no terabyte storage memory on mobile devices, cloud computing and services is still in in its infancy, 4G is just starting to be implemented in the world as the next standard, materials technology/materials science has ongoing progress and discoveries just waiting to be implemented on the next generation of mobile devices.. I could go on for a long time, but my point is, we’re just barely touching what’s possible in terms of mobile.
If it’s possible to bring in more players in the mobile space to really push innovation, then by all means, in the end the consumer wins…
Great comment, you reminded me of http://mynokiablog.com/2011/04/15/rebuilding-nokia-from-within/ on what exactly elop is doing to change this necrotic, self imploding core.
True that we’re barely starting in mobile. We’re just at the beginning. Though competitors and “analyst” like to say the window is small and there’s little time left (As they’re on top).
Consumer wins if we have more players. It is in their best interest that Nokia succeeds. They’ve been true innovators in the mobile space, visionaries that other companies borrow and perfect. They’ve made mistakes, and hopefully get back on form and start leading again.
Thanks.. Also I feel the need to mention this in terms of the future for mobile… Wireless energy transfer or wireless electricity, Nikola Tesla, about a hundred years ago, have already started on this even demonstrating its ability (not the tesla coils which spew out bolts of lightning). But of course, greedy businessmen don’t want to just do something that could be easily utilized by the public for free, that’s why they wired everything and installed meters in every homes so that they could charge us for every drop of electricity that we use… If proven possible it could be one of the pillars of mobile technology, imagine not needing any batteries making phones slimmer, you could go anywhere without worrying about having an empty battery at the end of the day… this has been demonstrated by Palm Pre’s Touchstone Wireless Charger.. But in theory, you could go anywhere and power your device without the need of a battery… How cool is that.. If only those businessmen were less greedy….
Anyway, with the clean-up and fine tuning of the upper management, maybe we could expect something like a twice or thrice a year FW update from Nokia.. Well, just hoping..
I believe that like others, ditching symbian on feb 11 was premature by elop and that is the main reason for nokias current predicament. To elops benefit, it was to be inevitable nonetheless. Better now rather than later. Why i say that is in relation to what ‘ssdh’ states above and i agree wholeheartedly with his point that being the smartphone market is in its infancy and drastic changes are yet to come. Fixing nokias current state would only enable them to be competitive for the future disruptions. If they turned a blind eye to the problems they have then when the next wave hits, they become rather irrelevant as a company very quickly and probably implode into obscurity.
What i believe that elop has done right, and yes he has if you may think he hasnt is as follows. As we all know, nokia is nottorious for their hardware. Right to the last moment of feb 11, it was their strongest points. What hurt them is 2 things. Hardware was not one of them and neither was technollogy. It was mismanagement and the lack of os developement mainly being centred around software. That said, if you want to make changes but dont want to fall apart during transition you need to decentralise and outsource just to make returns to keep the ship afloat. Hence, moving software developement and management to another company makes sense as it frees up resources and unfortunately leads to cutting heads but the overall savings on managing this is really substantial. The second aspect is shifting the focus now to restructuring from within and starting afresh. To do this elop had to choose a software giant who are specialists at just that. Maybe not the best but money devils with a broad appeal globally with huge market reach. It was vice versa for nokia too as ms tends to gain substantially as well with nokias reach. Now the focus on restructuring can be effective as someone else does the job for them while construction happens from within. Now what i honestly believe is that elop talks about 2 things that being fighting google and secondly future disruptions. Fighting google is to nokias benefit and not ms’s. Why i say that is because if google grows too large in the market they’d become the next ms of the smartphone market. He has an agenda and its not ms’s but one that would enable nokia to re-enter the market with a new fresh disruptive os that would be easier to realise with many competitors being combined strong against google. Lastly, elop cannot be blatant with what he is trying to achieve with his future disruptions as he needs sales to take off with wp7 to keep the cash flowing and also to surprise the market with a disruptive device. If they divulge too much on what they working on, then competitors will counter the threat before it is born to market. Much like what they should have done with apples entry initially. I’d say, lets see what the man does bèore we judge him. It is way too early to do that. Few more days before all is revealed. Something big is coming. I can feel it!!
Great comment, I like the optimism and fairness. Let’s judge Elop when it’s time to, when his strategies fall into place.
I’d love to believe that Nokia really do have something amazing up their sleeve. It’s an interesting notion (and has been said by some) that indeed WP is just a stop gap to make some money, stay relevant and then blow everyone else out of the water when they’ve finished their project.
It’s all too easy to bash Nokia as they have been lacking for so long. Fingers crossed it works out for Nokia.
Execution and marketing. That’s what Elop needed to fix. That’s all. Not a small job, but he’s gone and f**ked everything up now.
Nokia does not have a “market disrupting” device (what idiotic, meaningless management-speak). If they did, they wouldn’t have committed suicide on 2/11 would they?
some of the management staff need to be fired. I Hear only news of engineers being fired.
I say; start from scratch. Symbian isn’t all that crappy, it’s just waaay behind in some parts, taking Symbian inhouse was a huge mistake. They should’ve made it more open, allowing users to customize everything and I mean EVERYTHING. Rebrand Symbian as ‘some new OS’. Make a S-series for Symbian, M-series for MeeGo, W-series for WP7 and let the users choose which they want, give them all NEW hardware… 3 phones per series, Candybar touch, QWERTY touch and another that is synonymous with the OS. I mean who doesn’t want variety? Some still love Symbian, it just needs some work, MeeGo is also bound to be awesome and apparently WP is the next best thing, so why not have them all? Why not just make phones that dual boot with all three OS’s on? They spend too much time trying to make something awesome that by the time they’re done, they’ve wasted more than a year and the whole R&D budget. Stop wasting ALL of your money on R&D and make due with what you have, when you’re back on top you can waste all that excess money R&D. And another thing, sure feature phones are Nokia’s main source of income, but more than 20 new ones? Serious waste of money, make ten and spend the rest of your money on smart phones. We don’t need some super-slim phone using a new type of display technology, something as thick as the C7 with a better resolution display, better processor and some more RAM would be good enough for me and most of the other users too. And 3D is a terrible idea so that patent for a 3D Communicator is just a waste of time and money. 3D-like is better than actual 3D, I can watch a 2 hour 3D movie, but permanently using a 3D screen is something I’ll never do… All they’re doing is trying to make a huge variety when one device would suffice, I mean look at the iPhone (nausea) one model a year was enough tto make it one of the most popular devices out there. And I’m currently using Android on my Tab 10.1v, great choice not going down that road, it’s awful and full of constant bugs and errors…