Oh, Noes! Not Another Ex-Insider's Thoughts On Nokia! (Part I)

As you all know, it’s been an interesting few weeks at Nokia - a new CEO, top executives leaving, the company stock wallowing at absurdly low values. When Ville Vesterinen asked me what I thought of the changes and the cultural and organizational challenges Nokia has to deal with to move forward, I knew I had a lot to say.

I worked for Nokia for a long time mostly in marketing and product development, leaving in the Great Exodus of talent in the summer of 09. My time at Nokia was marked by MS Stinger and our response with S60 and the 7650; the (slow) rise of 3G; iTunes and offspring (iPhone); and the rise of Web 2.0, Google, and Facebook.

Yes, it was a heady decade and of the many products I was involved with, only one is really still going strong and (just barely) true to self. All the other “disappeared” products and projects I worked on taught me so much about Nokia, its culture, and why it is in the fix it is in.

If Nokia had the folks to see the future why was it late and behind?


The crux of the question is why, with world class design, manufacturing, research, and logistics, is Nokia repeatedly whipped in cutting edge areas (it still excels in mobile phones for the masses)? Is it because it is run by Finns, mostly located in southern Finland? Is it a malaise normal to mega-corporations? Is it because of the Nokia heritage in manufacturing? Or is it a cultural and structural dysfunction that fails to produce amazing products?

In part, its all of these things. In a classic Innovator’s Dilemma, Nokia’s excellence is killing it.

Finns


Finns are honest, dedicated, excellent at following rules, and very hard working (even with European work hours and holidays). Therefore, it should be no surprise that Nokia has a surplus of competent project mangers, able to slog through the drudgery of getting products out based on whole long lists of specifications. Also, Nokia has been able to shift directions and workers when needed (most famously when Nokia bet on wireless) without rebellion (though not without the famous Finnish skill of complaining).

Finland


Helsinki is one of the northern-most capital in the world, the weather (cool summers and cold winters) and environment (swamp, rocks, and lots of pine and birch) require a certain mind-set to appreciate (I loved it, but then again, I’m mostly from New England, which is quite similar in weather and nature as Finland).

It’s no surprise that Nokia set up NYC as its US headquarters. It was the only way that the North Americans Simonsen (then CFO) and McDowell (then head of Enterprise Solution) would keep working for Nokia. Will Elop, coming from California, survive the darkness of winter? Will his family? Extra points, though, for him being Canadian.

And, of course, despite the world being flat, Helsinki is not London or San Francisco - not enough density or variety. Nokia has done a good job tapping into the wealth of design talent in the UK, China, and India. But is has never done a good job tapping into the strength of San Francisco, which is reflected in the Web products it has managed to produce. This split is sending Nokia deeper into phones and farther from being an “internet company.”

Still in manufacturing


The best internet-based services are creatively and iteratively built by companies with strong vision and leadership. Yet, Nokia has never shed its manufacturing spirit. Nokia excels at taking a specification, building to it, and cranking out millions of copies with incredible efficiency and profit margin. Once the specification is set, there is no need for any thinking (other than efficiency in manufacture and distribution) to get the product out to thousands of outlets across the world.

I used to call Nokia the Borg: create a product and it gets assimilated into this process, resistance is futile. Product mangers specify, and the rest just happens, a corporate pavlovian reaction that works well.

But good software is iteratively built. When I pushed for short iteration cycles for a project I led (that morphed into Ovi), it was exciting and new for Nokia (but old-hat for the folks we worked with in Silicon Valley). A classic problem at Nokia is locking specifications 2 years before a product is released. And that long-term cycle is ingrained at Nokia, even target setting is no shorter than 6 months, meaning at least a year to react to anything.

A time scale comparison - both Facebook and YouTube changed the way we use the Web in less than 18 months. In short, traditional factory processes make Nokia 2 years too late for everything.

Editor's Note: The second part of the post will be published later this week. The second part will touch on Managers vs. Leaders and much more. Keep refreshing that URL!

The guest post is by Charlie Schick, currently Senior Producer for Children's Hospital Trust, the fundraising arm of Children's Hospital Boston. Prior to that, as Editor-in-Chief, he built and ran Nokia Conversations. His career at Nokia also includes kick-starting Ovi.com, launching Nokia Lifeblog and the Series 60 Platform, and providing Internet strategy consulting throughout the company. Prior to joining Nokia, he was an editorial consultant for various online and print publications. In addition to having written numerous articles for online and print telecom publications, he has written various research papers in leading journals and co-authored a book on advanced phone systems. He has a graduate degree from the University of Massachusetts Amherst.

His public personal site is at http://www.molecularist.com/lifeblog.

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Tero Rinne September 27, 2010

"Helsinki is the northern-most capital in the world"...

Reykjavik?

Nevertheless, a very good post. Suggested further reading at the NY Times: http://www.nytimes.com/2010/09/27/technology/27nokia.html?_r=1

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Lauri Gröhn September 28, 2010

Nokia has the same problem as Tekes has in its technology programmes and European Union has in its Frameworks programs:

One must "know" the end result years before the projects are finished.

That's not the way of doing ITERATIVE software development.

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Mika Peltola September 28, 2010

Excellent post that drills down to the core issues.

It's interesting that the physical location of businesses has become more, not less important in our age of innovation.

And very few places are like Silicon Valley, London or Berlin in terms density and diversity..

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Julien Fourgeaud October 02, 2010

definitely good comments and views. Wrote about that a while ago on my blog: http://jfourgeaud.wordpress.com/2010/09/10/nokia-stephen-is-in-the-dream-team-is-complete-all-system-go/

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Lauri Gröhn October 02, 2010

I am afraid in the Nokia's future organization brown tongue is not highly appreciated anymore...

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Julien Fourgeaud October 02, 2010

and that is a good thing. In the intro Elop made to the employees of Nokia house Tuesday, he made clear that as soon as a direction will be set, he will not tolerate anyone going out of the way, no matter if they like the new strategy or not.

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otakusm October 02, 2010

I think that's why Nokia hired Elop, to be a software focused company, they're not back as they stated in NokiaWorld and I'm still expecting something from Nokia, they'll be back but not for another 1-2 years sadly, they have the $$$, patents, start-ups so Nokia can do it easily (if they want to).

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Lauri Gröhn October 03, 2010

Elop has worked only for b2b, not for sw products & apps.

I quess he didn't even know what QT was before joining Nokia.