Ringtone: Exploring the Rise and Fall of Nokia in Mobile Phones
By Yves L. Doz and Keeley Wilson
Nokia, which easily can be termed as the most innovative company, helped bring the mobile revolution which currently we are in, adapting the need of being connected 24×7, and at its peak having more than 40% market share and a true leader. Though unnoticed many of us don’t know Nokia still exists and is the world’s largest 5G infra company and still innovating. But what touched us is the Nokia Mobile Company, and this book is about its rise and fall. Breaking general misconception and reasons behind its fall.
Against the general perception of failure due to not looking ahead or lack of innovation, the reason behind the fall of Nokia Mobile company is due to a change in business model to a matrix organisation
That’s the summary of why Nokia mobile failed so miserably, it’s just because of poor execution of matrix organisation. And that’s what interests me, as a leader myself, justifying the use of matrix organisation for better productivity, it’s even important to understand the consequences of its poor execution. This book covers all those aspects with Nokia as a centrepiece. Whereat all the phases of it, we were touched as a consumer or as heartbroken engineers to see the fall of such a beautiful product company.
Before I begin the review of this book, let me share how mammoth the Nokia is. We always see it’s mobile and thinks Nokia started as a mobile company and ended as one. However, it’s surprising to know Nokia started as a Cable company in Finland in the 1800s, moved to Telecom infra in the 1900s, followed by infra for the first car telephone and diversified with the mobile decision in the late 1990s
What this book Is about
It tries to answer following questions, which generally we also want to know.
- Could Nokia’s decline have been unavoidable—just an extreme case of Schumpeterian creative destruction?
- Was it an instance of organizational evolution and adaptation gone astray down a dead end in the face of disruption and business model change?
- Was this a failure of management volition—the wrong strategic decisions, poor choices of organization, inadequate management processes, weak leadership, and bad timing?
Nokia always had the edge with its strong innovation. For example, although Sharp launched the first camera phone in 2001, it was Nokia’s camera phone released the following year which really changed the landscape, providing not only superior picture resolution but also picture-sharing applications that paved the way for multi-media communication. This product innovation came from fifteen labs around the world and a number of technical cooperation projects and partnerships.
Beyond product innovation, Nokia’s success was supported by an innovative and highly efficient supply chain system that had been built in the 1990s. Through this, Nokia was able to achieve much lower prices from suppliers than its competitors and ramp up new production lines to full capacity in a matter of days. In the 1990s it had also mastered lean production and Japanese quality processes and organized its integrated manufacturing around a few key regional hubs in Europe (Finland, Germany, Hungary), Asia (China), and North America (Mexico).
Just as success often results from many small positive steps, the roots of failure can usually be found in multiple small mistakes, which seem manageable when viewed in isolation. However following this book we can see small cracks, however, they are evident now, and could not be avoided in the actual scenario. For example communication gap between R&D and Sales and Marketing lead to ultimate failure with the Symbian operating system. Though a leader in OS development themselves, delay in adapting Android and working with Microsoft’s half-cooked mobile platform led to the last nail.
Author has evaluated the various ups and downs in Nokia with CORE dimensions .
- C Cognition: this is what leader saw during that phase at Nokia, and strategise
- O Organisation : it’s outing strategy to action
- R Relationship : it’s about relationship with people.
- E Emotions : Emotions are at play during various phases, this is what impacts the relatioy
- Shifting from Symbian to Microsoft OS, Nokia overestimated brand loyalty and weren’t innovative enough
- Decision made in 2001-05 made its impact in decline in 2013-15. Management need to be mindful of its long term impact.
- Strategic foresight and intellectual leadership would have no value if not acted upon.
- Poor management choices contributed to strategic stasis.
- Successful past commitments leave a legacy
- Outside parties, customers, major shareholders, strategic partners, industry pun- dits, and regulators can excessively and unduly influence one’s sense-making, particularly in adhering to a “being close to customers” logic.
- Failure of cognition may not result from ignorance or lack of information, or even poor foresight, but from inadequate sense-making—i.e. not making effective sense of available information.
- Management systems and processes have to acknowledge the irrepressible influ- ence of emotions, and thus leave some room for them to be legitimately expressed.