david-cord
Business Management

New Book Charts Nokia's Wild Ride

The story of how a Finnish maker of tyres and Wellington boots rose to be the world’s dominant mobile phone company, then saw its market share crushed as Apple, Google, Samsung and others advanced, is one that was begging to be written up. Now it has been.

David J. Cord is an Indiana, US-born writer and former hedge-fund manager who has lived in Finland since 2005. A regular contributor to the Finnish business press, he has for several years had a close-up view of Nokia and Finland. In The Decline and Fall of Nokia, he provides a clear and concise view of what happened to this iconic company and what it meant to the people it employed, partners and the country as a whole. Cord provides many different perspectives on the Nokia story, steering away from snap conclusions and instead examining the many human stories and characters that emerge.

There are frequent references to classical mythology, whimsical aspects and self-analysis as the author chronicles his growing obsession. But there is also clear-eyed analysis of the financial numbers and the white-water changes to the mobile device marketplace, as befits this former investment executive.

In an exchange of emails, Cord provided more information and context on the book.

Q. You spoke to many people close to the action at Nokia and many of those people still seem to have a very emotional reaction to what happened. Did that surprise you?

It surprised me in the beginning that people were so emotionally attached to Nokia, but after thinking about it their emotion makes sense. When you dedicate so much time and effort to an organisation you become emotionally bound up with its success or failure.

One former executive I interviewed explained how for years he had sacrificed everything else in his life for Nokia, and later in the conversation he mentioned that his grown-up children didn’t visit him at Christmas. I couldn’t help but think the two were connected: Nokia had been so important to him that he had sacrificed relationships with his children and now was paying the price.

Q. You know Finland very well. Do you think that the country as a whole feels somehow let down by Nokia, or that Finland has been diminished in the eyes of the world given Nokia’s very significant contribution to its GDP and exports?

The relationship between Nokia and Finland is complicated. Finland went through a severe recession in the early 1990s, and as it was ending was when Nokia began to be so successful globally. Finns needed Nokia then, not only for the hard monetary contributions it made to the economy but also for the optimism it gave to the country.

It is dangerous to generalise, but Finns were proud of Nokia and what their little country was able to create. The global perceptions of Finland and Nokia were intertwined: if a tourist went to Egypt or South Africa and said they were from Finland, the first thing people would say was “Nokia!” and show off their phones.

When Nokia began to decline it was difficult for Finns to come to terms with. It was almost a personal and national failure, not just the failure of a company.

Q. There are many interesting and fast-growing startups in Finland today, some of them with Nokia in their DNA. Do you feel that there’s potentially going to be a major new chapter in Finland’s contribution to technology?

There was a great deal of expertise at Nokia that dispersed into these startups. If you couple that with Finland’s historical love of technology – the percentage of graduates with engineering degrees is more than double America’s rate, for instance – that makes me optimistic that we will see some great things come out of Finland in the near future.

Finland has done very well with gaming, sports technology and even robotics in recent years. But these new companies individually won’t have the same impact on Finland as Nokia. Rovio had a huge global success with Angry Birds, but they only employ a couple of hundred people. Nokia had tens of thousands of employees in Finland at its height. Perhaps collectively these new companies will have a big impact. It is also good that the tech scene is more diverse now: not all of Finland’s eggs are in the mobile telecom basket.

Q. Are you optimistic about the future of what remains at Nokia, that is, the parts not sold to Microsoft?

Yes, I think the new Nokia is very well placed for the future. All three units – Networks, the location-based business HERE and their patent portfolio Technologies – are profitable. Although it seems they have retreated from the consumer market, Nokia’s move into the Internet of Things will probably put their technology back into the hands of people on the street. I’m quite bullish about Nokia.

Q. You seem respectful of former Nokia CEO Stephen Elop in the book. On reflection do you think that perspectives on his tenure might become more positive over time?

I tried to be fair. Stephen Elop has been crucified in the press and, let’s be honest, for good reason. The move into Windows was a catastrophe by any conceivable measure. Still, all of the good things Elop accomplished have been completely ignored. He took a chainsaw to Nokia’s blubber and cut away a lot of nonessential fat. He changed the culture from one of inward-looking bureaucracy to be more in harmony with the consumer.

Stephen Elop did this in all sorts of ways, and even the smallest details didn’t escape him. For instance, the top executives at Nokia used to be called the Group Executive Board. He changed their name to the Leadership Team. When you think of a Group Executive Board you might think of greasy old white men sitting around a mahogany table in a board room blowing cigar smoke at each other. When you think of a Leadership Team you think of a group of leaders, of people active in the execution of the company’s business. This was a little change, but it was indicative of how he tried to transform how the company worked. For this, he deserves credit. Hopefully, in time more people will realise this.

Q. Did you speak to Stephen Elop at any point in the writing of the book?

I’m sorry, but I don’t want to mention any names about who I talked to or who I didn’t talk to besides those that are explicitly quoted in the book. The majority of the people I interviewed did it on the condition they be anonymous.

Q. Many critics feel that the Burning Platform memo was a bad error because it effectively reduced demand for pre-Windows Phone Nokia devices. Was the Burning Platform memo the biggest error of Elop’s reign?

No. The biggest error of Elop’s reign was the way he implemented the move to Microsoft. I think the Burning Platform memo may have had some negative impact because he talked down their current products and services. But it was also positive in that it announced to the world that they were serious about fixing their problems. The day the Burning Platform memo came out everyone was so optimistic that Nokia’s stock shot up to the highest price in nine months. Investors were glad to see change coming.

Q. Did you think that committing so fully to the Microsoft platform was an error?

Yes. In hindsight it is obvious how big a mistake it was, but even at the time some people realised how much of a gamble it was. I interviewed one former top Nokia executive who had by this time moved to a different company. He was astonished that Elop signed a long-term exclusive deal to use Windows and voluntarily removed their freedom of action. There was no plan B. The interviewee said that whenever he makes a decision he wants to know what he could do if it went bad. But what was Nokia’s plan if something went wrong? Divestment of the mobile phone division?

Q. You write very interestingly about how studying Nokia affected you as a person and journalist. Have your views on Nokia continued to change even since you submitted your final draft?

Not really. I’m still rather fond of Nokia. In the book I describe some guilt I experienced after giving up Nokia products for the first time in my life. The only brand of mobile phone I had ever owned was a Nokia until I bought a Samsung in 2012. Well, recently I went through the same process when I was looking for a new phone. I considered a Lumia, but bought the new Samsung Galaxy S5 instead. It is a marvellous product, but I still feel a bit like a Judas.

Q. Are you optimistic about Microsoft’s strategy and do you think much of Nokia will persist under its new ownership?

I’m not very optimistic about Microsoft’s foray into mobile devices at this point. The market has stabilised as a near duopoly with iOS and Android, and the other options are left with small slices of the consumer and industry mindshare.

But historically the mobile industry has gone through a revolution soon after the next generation of mobile technology standards becomes widespread. The acceptance of 4G is happening now, so I expect a new disruption within the next couple of years. When this occurs everyone will start again close to zero, like a new season in football. Then maybe Microsoft will be able do bigger and better things.

Q. Are any former executives likely to provide their view on the Nokia story in future books?

Yes, I think so. There is a lot being written about Nokia at the present, both books for general readers and case studies at universities. I know some former executives have consented to tell their stories for these projects. I have spoken to some of the writers and researchers on these works, and I’m very excited to see what conclusions they come up with.

Q. What will be your next writing project?

I’m going back to fiction and am working on a novel. This is what I’ve done in the past, alternating between fiction and non-fiction. It is nice to be introspective and work by myself after spending so many countless hours in interviews. I think it is healthy to change things up, and working on fiction has improved my non-fiction prose. After the novel is completed I’ll probably go back to some high-tech business story of some sort. My publisher is already talking about ideas. There are a lot of great stories to tell!

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Martin Veitch

Martin Veitch is Contributing Editor for IDG Connect

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