Therefore diaper Nokia sold - Aftenposten

Nokia calls the decision to sell most of mobile business to Microsoft for a new chapter. But for many critics this is also the last episode in a Helsinki-based crime series. For them, the villain behind the assault against the country’s industrial pride obvious. There are Canadian with the smoking gun, standing beside the still warm corpse of Finland’s best-known companies, Nokia CEO Stephen Elop.

Spy?

online Tuesday he was reviled for being such as a Microsoft spy, guilty of “sabotage” and for having done a job on the inside to deliver Nokia to the U.S. company he worked for, and where he now faces return.

Speculation that he might succeed Steve Ballmer as Microsoft CEO, seems unlikely, given the lack of success of Nokia, but critics are unfair for two reasons: first, Elop attempted an extraordinary strategic exercise: Getting through a radical turnaround in a historic company for the second time in less than two decades. Secondly, Nokia far from extinct.

The first rescue, Jorma Ollila below, transformed Nokia from a timber-and-tire-conglomerate to a mobile phone company in the mid 90s. This was probably even more ambitious than the task Elop did in 2010. But Elop critics underestimate the problems he inherited, which he described in his burning platform memo in early 2011, not to mention the lightning industry changes Nokia faced.

Dramatic changes

Mobile phone market has changed so dramatically since Elop took control that has shaken established rivals like BlackBerry and Motorola and relative newcomers such as Taiwan’s HTC.

this living example of creative destruction is the sector’s development outpaced the development of the companies that helped to increase the rate of change.

Elop chose arguably Nokia’s new strategy – to connect to Microsoft to develop Windows software for its smartphones, while he dropped home-grown alternatives. He was also responsible for the implementation of this plan.

There is also no doubt that he failed to turn around the company in line with the plan. Nokia’s Windows Phones have not conquered any meaningful market share, so Elop and his team thought they would. They hang behind the phones that use operating systems from Apple and Google’s Android.

So do not

Iphone danger

same time, sales of simpler phones, such as Nokia in 2011 considered that the solid base for the turnaround in the smartphone market, plummeted in fast-growing markets such as China. But former executives who elope predecessor Olli-Pekka Kallasvuo and Ollila himself (as Nokia’s chairman he was instrumental in hiring both successors) must take responsibility for not having seen Iphone danger. Even after Elop bet on Microsoft, the latter’s takeover of the telephone business is not inevitable. A combination of factors made the sale to a given:

class=”quote”> Nokia bosses’ fault that time was to think that the world around diagnosis of the company’s robust health condition was permanent.

One factor was the growing realization that the distinction between hardware and software designed Nokia Microsoft team did not give any sense, especially as the U.S. company realized that it needed to invest more in mobile technology. To facilitate collaboration, Nokia had already built parallel teams with equal job titles as counterparties to Microsoft. So why not remove distinctions entirely?

Ten-year license

Another factor was the increasing imbalance in the financial strength of the two partners. Microsoft’s well-stocked box could be used more effectively if the money went directly to support Nokia’s Windows Phones.

And finally NSN, Nokia’s telecom equipment business, come back strong. When Elop bought out partner Siemens in this area in July, the foundation was laid for a different future for the Finnish company.

Nokia’s mobile phone brand can disappear as fast as Microsoft’s ten-year license to use the name of the current models expire. As it’s been said in connection with BlackBerrys case, no one can be sure that the old corporate name will live forever. However, the Nokia seems to be able to live on through NSN. Many stepchildren, Finnish games, software and other technology companies founded by ex-Nokia employees also live in the best of health.

Nokia bosses error

Future management studies might come to look at the Microsoft agreement as the beginning of yet another transformation of Nokia. It will not be as dramatic as it Ollila got to the 90s, or as brilliant as the Elop announced for two and a half years ago. But remember that while Nokia was business academics’ pet the early 2000s, Apple was under pressure allegedly misunderstood markets.

Nokia bosses’ fault that time was to think that the world around diagnosis of the company’s robust health condition was permanent. They allowed sclerosis, both organizational and technological, which destroyed the company’s future in mobile phone area. Elop tried at the last minute to revitalize the company. He failed. But letting go of the telephone business that defined the modern Nokia could now prove to be the best for the company.