Nokia's problem: Is there time to change culture amid a burning platform?

Nokia's problem: Is there time to change culture amid a burning platform?

Summary: An internal memo from Nokia CEO Stephen Elop diagnoses the company's problem well. The problem is Elop doesn't have time to change Nokia's culture in the fast-evolving smartphone market.

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Nokia CEO Stephen Elop in an internal memo diagnoses the company's problems very directly. Nokia resides on a burning platform and the company needs to do something.

That's the gist of a memo posted by Engadget. Elop talks about how Apple's iPhone and Android lapped Nokia. He pointedly notes that Nokia's savior OS---once thought to be MeeGo---will only be on one device in 2011. The memo highlights a sense of urgency for Elop and provides a nice lead in to Friday's strategy powwow.

First, let's give props to Elop for diagnosing the problem. But I'm not hopeful about Nokia's prospects. Why? Elop's money graph for me is here:

How did we get to this point? Why did we fall behind when the world around us evolved?

This is what I have been trying to understand. I believe at least some of it has been due to our attitude inside Nokia. We poured gasoline on our own burning platform. I believe we have lacked accountability and leadership to align and direct the company through these disruptive times. We had a series of misses. We haven't been delivering innovation fast enough. We're not collaborating internally.

Bottom line: Nokia's culture is broken. When the platform is burning revamping a culture can take too long. As Nokia retools---perhaps by joining the Windows Phone 7 or Android ecosystem---it will lose at least a year in the smartphone race. Simply put, Nokia's task ahead is daunting to say the least.

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Topics: Software, Banking, CXO, Hardware, Mobility, Nokia, Operating Systems, Smartphones, Windows

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24 comments
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  • Elop's "EcoSystem" already exists, it is THE INTERNET

    It really isn't all that complicated. The INTERNET is the ECOSYSTEM. Java Virtual Machines, Flash Video, HTML5 (and a Great Browser) are all that is really needed to succeed in the coming years. The User Interface thing is probably overblown. Here in the U.S. because of Cellular providers not being happy with Nokia's Unlocked Phone plan, users have not seen much love. If Nokia can focus on the above things, they will have provided a great phone/OS and provided an Ecosystem where quite a bit of the functionality is free (just as it is now on a PC), instead of having to buy and APP for everything. iPhone users are going to look back in a year or so at the money they have spent(i.e. wasted) on APPS and it's is going to be "Pet Rock" regret all over again !
    jkohut
    • hey look Steve Balmer from 3yrs ago got in a time machine..

      @jkohut ...and wrote a post on ZDNet.. lol.. <br><br>ecosystem is not just apps and app revenue.. ecosystem is media sale and distribution, content delivery services, media time and place shifting, search, mobile advertising, location based services etc, etc, etc.. AND all the money that can be garnered from that.. your plan which involves giving up all that revenue to online service providers puts Nokia even worse position that it is today.. this is the kind of simplistic thinking from <i>yester year</i> that got Nokia on its burning platform in the first place..
      doctorSpoc
      • RE: Nokia's problem: Is there time to change culture amid a burning platform?

        @doctorSpoc
        Sorry, Balmer was never about the cloud or internet 3 years ago (he may be now). Nokia gives a signficant amount of decent software away with it's phones already. The problem they face right now, is how to get back in the game. If they waste too much time and resources doing anything OTHER than focusing on making phones that can work with with technologies already making the Internet a success, they will never catch up. Many of the things that you say are "ecosystem" are pretty much available to PCs on the internet today using standardized software (not all, but many).
        jkohut
  • mdn take

    nokia will be dying a slow and painful death and they deserve it.
    as often, mdn said it best: "Going from MeeGo to MeToo is not a winning strategy, it's merely a survival strategy. It's wholly unsurprising that Microsoftie Elop would chose such a route."
    banned from zdnet
    • RE: Nokia's problem: Is there time to change culture amid a burning platform?

      @banned from zdnet Eek! They plagarized me! I posted a comment a few days ago about going from MeeGo to MeToo. I was too mature to use the term "Microsoftie" however. :-)
      jgm@...
  • or this one ...

    mdn: "MeeGo down the drain and, if Nokia gives up and shackles themselves to Google or Microsoft, so does their future. Becoming just another dime-a-dozen assembler of pretend iPhones is not a strategy, it's desperation. Our idea from last September was better: "Nokia should concentrate on their specialty ? crap margin, low-end, mechanical-buttoned candy bar cellphones ? hope they can coast along on emerging markets while they try to figure out what businesses to try next (kitchen appliances? floor wax? breakfast sausages?) before the money runs out."

    hilarious.
    banned from zdnet
  • I don't get the strategy..

    1. Mr. Elop leaves Microsoft to become CEO of Nokia
    2. Fires the management
    3. Publicly compares Nokia to a burning oil platform
    4. (speculation) instructs the remaining management to focus on Microsoft WP7
    5. (more speculation) Jumps off the burning oil platform using his Golden Parachute
    6. ???
    7. Profit! (for whom, though?)
    dontfear
    • what about the previous strategy..?

      @dontfear Nokia losing double digit market share for 3yrs in a row and says.. yeah, we'll just roll with the status quo.. huh??
      doctorSpoc
  • Might only have one MeeGo product

    Elop actually says "However, at this rate, by the end of 2011, we might have only one MeeGo product in the market." Which to me clearly points a transition to an all MeeGo lineup, not WP7 or Android. By saying this he points out they are not jumping ship on MeeGo and a move to Android wouldn't provide a competitive advantage over other Android phones.

    I expect an all MeeGo lineup of Nokia phones.
    dchase@...
    • They can use MeeGo WITH the Davik application environment, to have the best

      of both worlds. Differentiation, AND an app ecosystem.
      DonnieBoy
    • RE: Nokia's problem: Is there time to change culture amid a burning platform?

      @dchase@... So, with MeeGo floundering, you think he's going to decide to just twiddle his thumbs for what, two years or more until there's an all-MeeGo lineup? He needs to do something NOW. MeeGo can come when the company has reversed its market share losses.
      jgm@...
  • RE: Nokia's problem: Is there time to change culture amid a burning platform?

    Nokia-Microsoft mobile merger on the way to create a third force in mobile devices?
    moloned@...
    • RE: Nokia's problem: Is there time to change culture amid a burning platform?

      @moloned@...

      Oh, that worked Sooooooooo well with Palm...
      K7AAY
      • RE: Nokia's problem: Is there time to change culture amid a burning platform?

        @johnbartley Palm wasn't a unification of the world's largest cell phone maker and the world's largest software maker.
        jgm@...
  • I think that Nokia needs to get back to making the best and cheapest

    hardware, and port the Javik / Harmony application environment to MeeGo, but, FIRST change the name of MeeGo. Then, they can differentiate, but, also take advantage of all the Android apps.

    http://www.linuxfordevices.com/c/a/News/Myriad-Group-Myriad-Alien-Dalvik/
    DonnieBoy
    • RE: Nokia's problem: Is there time to change culture amid a burning platform?

      @DonnieBoy What's the difference between using alien Dalvik and just putting the real Android on their phones? Do this, and no one will write MeeGo-specific software.
      jgm@...
  • They should

    join the android platform. Its thriving and with nokia behind it, its sure to steamroll any other platform. WP7 hasnt been very interesting. It hasn't really gone anywhere since its launch, and its still lacking fundamental features. iOS is still only run on Apple devices and only ever will be run on Apple devices. Over time it will become a niche market just like Apple computers did years ago.
    Jimster480
  • RE: Nokia's problem

    Larry, there are some folks on Twitter who think that memo is a hoax. http://meb.tw/gd0vXs I hope is it, actually, given what I read here. http://bit.ly/gU2Xed As I interpret it, there are two possibilities:

    1. It's genuine and refers to Elop's opinion of Nokia's dismal performance in the US market and the bold step he is planning to take, whatever that may be, to get Nokia back in the game here.

    2. It's a hoax, and between the Securities and Exchange Commission and Arianna Huffington, whoever perpetrated it is in more trouble than he or she could possibly imagine.

    I'm actually hoping it's the first case and that the bold step is to form a "Meego ecosystem" here in the US to challenge Blackberry, HP/Palm, ChromeOS, and Windows on phones, netbooks and tablets. And by "Meego ecosystem" I mean *shipping* devices and a *viable* market opportunity for carriers and developers with *products* that US consumers and enterprises actually *want*.
    ThoughtFollower-23855554368340454166801624405803
    • RE: Nokia's problem: Is there time to change culture amid a burning platform?

      @ThoughtFollower No one's denied it, BBC and CNN have confirmed it, and at the Maemo forum an employee who recently resigned but had access to the internal blog at the time this was posted confirmed that it's real.

      Also, this message must be made clear: there is NO TIME to develop a MeeGo ecosystem; something must be done now. His own memo says there may only be one MeeGo device ready in 2011. What you're talking about is a years-long strategy.

      I recall when Linens 'n Things brought in a CEO who came up with a 5-year plan. Problem? The company was basically out of credit, had little cash on hand, their biggest vendor had decided they were only going to take cash up-front, no credit for inventory purchases (and LnT didn't have the cash to do that) and internal surveys showed stores didn't stock what customers wanted and they did not enjoy their shopping experience when they did go there.

      Needless to say, Linens 'n Things went belly-up WAY before the five-year plan could be implemented. Nokia risks losing too much ground to their competitors if they wait the two-years plus it's going to take to deliver what you're asking. U.S. customers might not even know about Nokia by the time they'd be ready to deliver what you're asking. Elop's memo shows he understands this and he's going to be taking drastic action now to deal with the problems. This is why he was brought in in the first place - to clean house. He's supposed to be cleaning house with lots of firings, and you don't fire people and have a continue-with-what-we're-doing-now plan in mind.
      jgm@...
  • RE: Nokia's problem: Is there time to change culture amid a burning platform?

    This is what happens when a Linux 'culture' infects a company - other large scale companies need to learn from this mistake.

    As for trying to keep Symbian alive - WTF were they thinking?

    Nokia have a bunch of handheld devices all trying to use a different platform / OS - that's their main problem, and has been for quite some time!

    Ultimately it costs them a fortune. They need to pick one, maybe two, and stick to it.

    Sadly their Intel + Nokia Linux was a bad choice for a phone.
    scott2010au