Analysis: Is Nokia's leadership fit for purpose?

By Graeme Burton
03 Jul 2012 View Comments

However, Rikkilä is critical of Elop's handling of the company - especially his Gerald Ratner-like "burning platform" memo that the company's sharp decline has been attributed to by some.

Further reading

"It was the wrong statement. As a CEO myself, I'd be very sensitive about releasing such information," he said.

He added: "It's normal for companies to devise a strategy, to execute on that strategy and then - only when it is ready - to announce the transformation."

Elop, though, pre-announced the tie-up with Microsoft in February 2011 before he even had a deal in the bag - tying his own hands in negotiations with his old employer.

The "burning platform" memo that preceded that announcement effectively tarnished the company's products before it had anything to replace them with. That not only damaged its reputation with customers, but also encouraged network operators to either drive a hard bargain with Nokia, or to stock alternatives instead.

"I'm shocked that the board of Nokia let Elop do that," said Silicon Valley veteran Jean-Louis Gassée, a former Apple executive and now a venture capitalist. Gassée described Nokia's board as "terrible" and believes that both Elop and its board of directors ought to be replaced.

In a June 2010 meeting, before Elop was appointed, Gassée had urged Nokia's board first to fire the-then CEO Olli-Pekka Kallasvuo, and then to adopt Android, as the company had already lost the platform battle. While they duly obliged with the first suggestion, they rejected the idea of adopting Android as the company would, they said, no longer be in control of its own destiny.

Institutional rot

Gassée attributes the firm's decline to an institutional rot that started a long time before Elop's arrival, as reflected in the proliferation of competing platforms that previous CEOs Jorma Ollila and Kallasvuo had presided over.

However, Gassée questions Elop's qualifications and suitability for the top job. "He has zero experience in terms of what makes a smartphone maker tick. And what is his experience in supply chain management? Zero," claimed Gassée.

An understanding of the supply chain - all the way from the designer's drawing board to the factory, before a device goes on sale - is essential in the mobile phone market, as Apple has demonstrated.

The day after Microsoft's Windows Phone 8 pre-announcement, London's free Metro newspaper carried prominent advertisements for Nokia Lumia phones - at half-price. In some mobile phone shops, Nokia phones are marginalised, if they are stocked at all.

Meanwhile, Android phones remain cheaper and more alluring. Windows Phone 8 will therefore have to be very special to divert people's attention away from Android and Apple's iPhones, especially with the new iPhone 5 expected imminently.

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