Home > Mobile > Nokia CEO Will Step Down; What a Waste of Four Years

Nokia CEO Will Step Down; What a Waste of Four Years

It happened much sooner than I thought. “Nokia Corp. said it was replacing embattled Chief Executive Olli-Pekka Kallasvuo with Microsoft Corp.’s Stephen Elop, as the world’s largest handset maker seeks to reverse steep declines in earnings and market share that have decimated its share price”. After four years of constant struggle and lack of a clear strategy toward future products and particularly high-end mobile phones (smartphones) Mr Kallasvuo kicked out of the door. It was a well know fact that Nokia is heading south, but the speed of it was really surprising for everyone. Many analysts feel that Nokia was caught flat-footed by the iPhone’s success and blame its weakness in smartphones for shaving about 70% off of Nokia’s market value; or more than $90 billion, over the past three years. Basically, Nokia morphed into a “giant dwarf”; a huge player but not a huge force to shape the industry; a follower and not a leader. And it was not all about market share; the overall management of the company was a shenanigan! Former employees describe the structure of the company as a confusing matrix organization, akin to the “Soviet Union.” While Nokia was ahead on hot trends in the tech industry such as internet services and 3-D, lengthy approval processes and a lack of leadership inside of Nokia bogged down these innovations. One former employee added that Nokia, given its size, was never eager to invest in innovations that didn’t have a high volume potential across many of Nokia’s markets. Even the timing of the announcement is awkward and shows a little bit of rush and chaos within the organization. Next week, the company holds its annual “Nokia World” conference in London, where Mr. Kallasvuo was expected to articulate a new strategy to regain its footing in the industry and to present a new smartphone, the N8. The switch at the top of the company will likely draw attention away from those issues. But how this change is going to affect Nokia as a company? First of all Mr Elop is not Finish; he is not even European. “Nokia is definitely a Finnish company. It was born from Finnish culture,” says Juhani Risku, 53, a former Nokia executive, who also wrote a book about the company. He is Canadian at least and not American, so he can be a little bit less brutal. But in any case, this is going to be a dramatic cultural shift for Nokia. Northern American management style is definitely more aggressive and non-European. Secondly, the momentum is already shifted toward Apple, Google and HTC as the leaders of smartphone market. And finally he comes from Microsoft; well they have their own struggles in mobile market for the past couple of years. It will be tough to change it in short term. How Mr Elop is going to tackle these issues and change the direction of the company are questions that will be answered in the next couple of months, if not years.

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