In the memo, Elop likens today's stumbling Nokia to a "burning oil platform," in which everyone who remains on deck will quickly be burned alive. The only chance Nokia has to save itself, Elop says, is to behave wildly differently than it has in the past--namely, to jump off the edge of the platform into the frigid waters of the North Sea.
We've been in business for nearly two decades now, and we don't recall another CEO ever being this honest and vivid about the desperate straits his company is in. (We recall MANY companies being in these straits, however).
The normal CEO approach in a situation like this is either delusional denial--("this concern about BlackBerry's future is ridiculous--iPhones are just fluffy consumer devices")--or a more nuanced evaluation of the company's strengths and weaknesses combined with confident assurances that the company will overcome its obstacles ("failure is not an option!")
The latter approach is easier and feels safer, but it has a huge hidden risk, which is that the CEO will dash hopes and lose credibility. In recent years, new CEOs like AOL's Tim Armstrong and Yahoo's Carol Bartz have taken this approach. Although it may have temporarily raised hopes and confidence, it inevitably led to a big let-down.
RIM's Jim Balsillie, meanwhile, continues to take the other common approach--outright denial of the obvious--and in the process has shattered his credibility. As a result, the chatter about RIM these days is mostly about how delusional its leadership is.
(Of course, one reason Balsillie has taken this tack, presumably, is that he himself is responsible for the situation RIM is in. It's easier to be objective about a company's situation when it was prior management who put it there.)
In any event, more CEOs should take Stephen Elop's approach, and just tell it like it is.
Yes, Elop's memo is risky: It will no doubt rattle and anger many employees, and the resulting shockwaves may temporarily hurt the company's productivity. It may also scare suppliers and customers, who presumably also don't want to be burned alive if Nokia goes down.
But as Elop himself suggests, this sort of shock treatment may be the only chance anyone has to save the company.
Elop's memo also accomplishes three important things:
First, it buys him instant credibility with everyone, from employees to customers to suppliers to journalists. People may not like what they're hearing from Elop, but they can certainly be confident that he's giving it to them straight. And no one will follow a leader they don't trust, especially in a crisis.
Second, it allows him to act with the urgency and scope that the situation demands. Nokia's situation IS desperate, and when your choices are certain-death by doing nothing and small-possibility-of-survival by doing something that seems crazy, people understand when you do the thing that seems crazy.
Third, it paves the way for him to slay sacred cows, fire popular but obstructionist managers, and give orders that might otherwise result in quiet mutiny. Everything that Elop does will now be viewed in the context of his trying to save the company, and it's hard to fault him for trying to do that.
CEOs tend to be optimistic by nature ("We have not yet begun to fight!"), and they rightfully worry that if they give the impression that even they aren't confident the company will succeed, everyone else will just give up.
But there's a difference between confident leadership and empty-headed delusion or cheerleading. And this is a difference that many CEOs miss.
On this tape, there was no panic. There was also no delusion about the seriousness of the situation or cheerleading about success. There was just swift, calm decision-making.
In these 100 seconds, in which Captain Sullenberger turned an almost certain disaster into a miraculous escape, he said only three words to the plane's passengers.
These words were carefully chosen: Sully wanted to alert the passengers to the situation, but did not want to trigger panic. He also did not want the passengers fumbling under their seats for flotation devices when the plane hit the water.
The three words Captain Sullenberger chose?
"Brace for impact."
Then Captain Sullenberger ditched the plane in the Hudson, ordered the evacuation, and made certain everyone had gotten out safely before he himself left the plane.
THAT is leadership in a crisis. THAT is understanding what many CEOs don't, which is that their people can handle the truth (and, what's more, want the truth). THAT is what gives CEOs and airline captains some chance of overcoming huge odds and pulling their people through.
Every CEO should read Elop's memo. And more CEOs should follow his example.
See Also: The "Burning Platform": Stephen Elop's Remarkable Memo To Nokia
a monkey could have seen that Nokia is dying a painful death.
the best part? It doesn't matter what Nokia does, it will continue to die.
on one hand you have RIMM that is completely delusional...not admitting they are screwed. ok fine. good for them. (but I know their CEOs know they are screwed, they just dont want to publicly say that because they cant).
then you have Nokia (who has been denying they are screwed for years and years) now saying they are pretty much screwed, unless they change. Nokia is powerless and irrelevant. Their brand is died and their great talent has probably left years ago. So we should applaud Nokia because they are now admitting they need to change?
This is like Steve Ballmer getting on stage saying they screwed up slightly with mobile but they are sure kicking butt now and just you wait for what they got coming up. No one cares anymore.
Nokia needed to make this announcement in 2008 or earlier, not 2011.
And your point is? Same tactic used by Steve Jobs answering to people's e-mails, and you love it and would not point your finger at him. Get a life.
In addition, please pass the MSFT juice or whatever you are on because Windows Phone 7 has done nothing and shows little signs of live. thank you in advance for the juice.
maybe the truth hurts?
general apple hate?
walrus hate?
Mobile equipment manufacturers go bust regularly. Nokia's last visit to bankruptcy was in 1991 when they offered to sell the whole kit-n-kaboodle to the Swedes (Ericsson) for a pittance. The Swedes turned up their noses and went "peeeyuuu" and promptly went bust themselves in 1993 and again in 2002 (after already having done so in 1960 and coming close several times up to 1993).
1. Obama
2. Ben Bernanke
3. Geithner
They need it urgently after all US is the same position.
Microsoft does an end-run around Android and iOS by gaining rapid marketshare. While Nokia finally gets a well designed smartphone OS with an actual usable UX. Bing will be hardwired as the defacto search engine for all Nokia WinMo7 smartphones. Win Win for both.
Cough...you've-obviously-never-used-it...cough...or-you-work-for-microsoft...cough...cough....retch!
I think you have correctly diagnosed the situation. The problem is that Microsoft and by extension Nokia has no tablet play. Until Microsoft admits that Windows 7/Windows 8 is a lost tablet strategy and write a tablet OS based on Windows 7 Phone (and better yet, renames W7P, dropping the words "Windows" "7" and "Phone" from it) they are dead in the tablet market, which will hurt their mobile efforts vs. Apple/Android.
The Meebo platform is a failed lab experiment and is still born given the mess of compromises to accommodate both Intel's and Nokia's respective stacks.
Nevertheless, Nokia does make some nice hardware and has excellent product distribution model and carrier relationships in place. Microsoft's WinMo 7 actually is a nice version 1 smartphone platform that has potential to grow if they can get access to good well designed hardware.
So an eagle might not be the natural offspring of this ungodly union, but perhaps a buzzard?
In that context Android and iOS are Miss World and Miss Universe while Symbian and MS's crap are still...sheep. Baaaaa.
(And please don't insult Finns on psychaedelics. There is no drug powerful enough to have resulted in Symbian's GUI).
I've actually written code on iPhone, Android, Symbian, and several versions of Microsoft's Mobile/Smartphone/minWindows/Whateveah OS's. Also founded, ran, and sold a mobile SW firm.
If Nokia wants to shred the company by partnering with a firm pushing OS junk who has absolutely no clue how to succeed in the mobile marketplace - be my guest. Nokia stock will be my new fave short.
I note that your knees are still a-trembling after meeting Sully in Davos.
Personally, I'd prefer the RIM approach -- quietly going about a real solution while staying on message to an outsider burning the company down from the inside with likely no real solution in sight.
http://bit.ly/e4SBcR
2. Make great cutting edge high quality hardware and offer it at a great price.
3. Service and Update the hell out of it.
4. Market the hell out of it and take care of your distribution channel. Leverage the Nokia brand while its still worth something around the world.
5. Layer on a GOOD Nokia-proprietary differentiating "Special Sauce" like HTC Sense over Android to help further differentiate.
6. Offer a free Cloud entire Phone Backup service.
you must add value and differentiation or you will be commoditized.
p.s. Henry - please peel back your spam filter. it's obnoxious.
Only the chipmakers can advance Android in any market moving way. Android is to phones what Windows was to PC's. Only Intel made any real money in PC's, while PC makers rotated in and out of profitability (and bankruptcy).
The same forces are at work in the Android smartphone market. The chipmakers are calling the shots while the handset makers are running on razer thin margins.
Posted by Aaron Gingrich in HTC, News, Nexus One, Off-Topic
http://www.businessinsider.com/chart-of-the-day-htc-gross-profit-2011-2
Right now they still think the only way to differentiate is by changing the skin, but that's not true. There's an infinite ways of differentiating with Android. They just need to think about them and innovate. I'm actually expecting them to drop the skinning of Android in the future, as it's a waste of time and money and it doesn't give them as much value as they think it does. They will focus their money on other type of experiments with their Android phones.
Been there, seen that.
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@Gordon
Like your QCOM investment. Their Android chips are currently leading the pack.
i have an EVO 4G and love it.
Now that tells something about this memo as well.
i sold my INTC and MSFT long ago. these guys dropped the ball and lost focus.
however... Nokia must think about itself... Their HUGE size cuold let it ask for both Win Mobile 7 and Andriod and so far, fight against RIMM (with Microsoft Business Service) and Apple (Android of course).
Anyway, it's hard to imagine that he didn't see any of this when he took the job because everybody else with a heartbeat sure did.