The Approach to Organizational Culture in the Nokia Company
Ans: Jim Collin’s Book “Good to Great” is a management studies marvel, compiled through half a decade of research and scrutiny of various corporate groups and entities. In retrospect, the book lays out the basic elements that a corporate entity has to adapt to, to actualize the dream of capital excellence. The book defines a framework for the Good to Great journey. The framework, Jim Collins says, has all of three components: The first component is the ‘Process’. The process evolves from the Build Up to achieving an spiking point that elevates a business to greatness, the author has named it the Breakthrough component.
Then there are various phases: To count, there are all of three different phases in the ‘Good to Great’ transition. The first is picking out/ creating Disciplined People: this constitutes picking the right leader for the right team. The second phase from Good to Great is acquiring disciplined Thought process which involves critical thinking, acceptance of facts and values. Last but not the least is disciplined Action: Creating a an environment and culture where the right people will work within the defined core values with the right amount of autonomy.
If these components are followed to the letter, the author assures that no company can ever drown itself. For the Nokia angle, the second principle of discipline thoughts was violated, Understanding the brutal facts. The brutal fact of the Telecom global market was that Smartphones were the new revolution and Apple had taken the driving seat. Any corporate entities that were in denial were fooling themselves and were bound to crash and burn; this fact was swallowed a tad too late by the once-leading telecom giant Nokia.
They missed out on learning, they missed out on changing, and thus they lost the opportunity at hand to make it big. Not only did they miss the opportunity to earn big money, they lost their chance of survival. During the press conference to announce NOKIA being acquired by Microsoft, Nokia CEO ended his speech saying this “we didn’t do anything wrong, but somehow, we lost”. Upon saying that, all his management team, himself included, teared sadly.
The statement of the CEO, while emotionally draining, is incorrect; the company didn’t adapt to change. The company, as a collective, didn’t see far ahead. That was their basic and fatal mistake; not projecting into the future and seeing. As the author of Good to Great establishes, not being able to change with the market is a mistake that many corporate giants have made and they have lost decades of buildup owing to corporate ego or just plain oblivion.
Ans: The quality of followership, the other end of leadership, at Nokia on the time of its failure is immaculately described in a research paper published in 2015 Distributed Attention and Shared Emotions in the Innovation Process: How Nokia Lost the Smartphone Battle by Tim O. Vuori, assistant professor in strategic management at Aalto University and Qui Huy, Professor of Strategy at INSEAD Singapore who conducted a qualitative study. The study consisted of interviewing 76 Nokia top and middle managers, engineers and external experts and conducting in-depth investigations.
Mr. Huy and Mr. Vuori observed that at that time of its decline “Nokia suffered from organisational fear. The organisational fear stemmed from a culture of temperamental leaders and frightened middle managers. Elaborating the fear, the authors say that the middle management was scared of telling the truth because they feared being fired. Similarly up the chain, the top managers were afraid of the external environment and not meeting their quarterly targets. Towards the end, the company’s executives were afraid to publicly acknowledge the collective inferiority of Symbian, Nokia’s operating system.
The executives knew that it would take several years to develop a better operating system that could compete with Apple’s iOS. Top executives were afraid of losing investors, suppliers and customers if they acknowledged their technological inferiority to Apple. To further deteriorate the quality of followership, the top managers intimidated middle managers by accusing them of not being ambitious enough to meet their goals, the top management was lied to by middle management who felt it was useless to tell the truth and the top managers lacked technical competence which influenced how they could assess technological limitations during goal setting; by comparison, the top engineers at Apple were all engineers.
Instead of allocating resources to the achievement of long-term goals such as developing a new operating system, Nokia management decided to develop new phone devices for short-term market demands, an example of which was the N-gage, a gaming phone developed by Nokia that failed terribly. The quality of followership is directly affected, as observed, by the dishonesty and lack of steering qualities by leadership. The followership of any company is as good as its leadership and Nokia’s leadership failed at many fronts including the ability to face the market’s bitter truths and tough competition. Nokia, being the giant that it was, could’ve tackled Apple, experts opine, but their inability to comprehend how far behind they lagged led to their gradual crumbling.
The phone giant failed to adapt to its basic core: technology. The technological revolution in the dawn of the smartphone era was a red flag enough to have Nokia try and change its tact, go into research and development and to attempt to replace the Symbian with a more advanced operating system, to come even close to its competition. That would’ve retained most of its loyal clientele. Nokia could’ve foreseen the incoming haze but it didn’t. According to different opinions, Nokia perhaps overestimated the girth of its brand, had the staunch belief that even though it was late to the smartphone game, considering its market share, it would be able to catch up without much haul. A considerable time after the mega l2007 launch of the iPhone’s, Nokia continued to insist that its hardware designs were still superior and would retain their users.
To this day, users have the opinion that if the phone giant had continued with its own operating systems, instead of adapting the terrible failure that was the Windows Phone in 2011, Nokia could have sustained itself. The managerial truth is that even before the Windows phone, Nokia had disappointed its users with various flop ideas by the time the world had hit 2010 and the Symbian had already come out with too many bugs and software issues, not including the lack of intuition as discussed in other parts of this answer, which go over Nokia’s inability to sense the market dynamics. After 2004, the top tier executives of Nokia were not technologically apt or strategically wise to straighten up their direction and prioritize their issues; overhaul their systems to avoid collisions incoming.
The years that followed, Nokia was prisoner to its reliance on its stagnant OS which could not be innovated. This era also saw a period of in-house conflict that multiple rehauls of the structure did nothing to fix. True, that the Symbian had kept Nokia at an advantage in the early years, the operating system was it was device-oriented and the world was adapting to applications. In a statistical disaster, the OS put lags when the company had to launch new phones because as a whole, fresh sets of code had to be written and tried for individual models. In a shocking number, by the year 2009, Nokia was using 57 different and incompatible versions of its operating system.
While Nokia persistently produced its greatest financial results in the late 2000s, Nokia’s top management was striving to look for an answer to adapt to the changing paradigms: Software over hardware was the new slogan of the industry. All this while, the crucial essence of what were coined as ‘application ecosystems’ had become evident, but Nokia lacked the leadership qualities and the courage to change its course and adapt to the new directions. In the final quarter of of 2009, Nokia had very evident market dominance in the global smart phone market clocked in at 38.6%. To understand the sharp decline, by the time 2014 had come to an end, Nokia had killed itself entirely, off the face of the market.
It is quite evident, through the course of events, to judge why Nokia failed in adaptation. The first and foremost, to summarize, was the outdated way of critical thinking. The flaw was exhibited in the Symbian, an outdated operating system, which lacked the capacity to innovate in a world that was making millennial leaps by the minute. The second great flaw was not adapting to competition. The floor of the mill was almost empty when Nokia entered and conquered. But Apple and Samsung were quick to follow and suffices to say, Nokia didn’t see them coming.
Cite this Essay
To export a reference to this article please select a referencing style below