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