Two of the most outstanding, but often overlooked, strengths of Nokia over the last 20 years have been its continuity of management and deep sense of collective direction. These have resulted in Nokia growing and becoming the number one handset brand globally. A supply chain and design process that have enabled the lowest cost for India, China and Africa, and helped the cellular industry move from 20% penetration to 70% in less than 10 years, are no mean feat! During this time Nokia was also hailed for its innovation, design and user interface. The tight management team strategically outmaneuvered Motorola, kept the Korean competitors at bay and forged some of the most powerful relationships in the industry. Yet now the iPhone and Blackberry phenomena have started the process of unraveling Nokia. The aggregated knowledge that this management team had is beginning to seep away. Nokia revealed that it is to replace CEO Olli-Pekka Kallasvuo with Microsoft executive Stephen Elop. This has been followed by the loss of Anssi Vanjoki who has been instrumental in so many of Nokia’s handset successes and was seen as the potential savior of the Smartphone category. It is probable that these departures are the first of many, as the raison d’être of the company shifts under a non-Finnish leader. It is also likely that the reality of the new converged world of the Mobile Internet will cause many to question Nokia’s ability to scale the heights it formerly claimed.
In a recent article in Business Week, there is a great deal of in-depth exploration on the sad state of Nokia. It is forced to choose Microsoft OS for it’s smartphone and that itself pretty much declares what the future would be. Nokia would become a good business case study for what it has failed to do to keep up with the market.