Transcription
How Nokia lost its world market dominant position has been the subject of much debate. Is it an issue of stronger competitors? Is it an issue that Nokia did not have the right strategy? Or is it an issue that Nokia cannot execute its strategy? Joining us to explore this issue is Mr. Olli-Pekka Kallasvuo, a former chief executive officer of Nokia. Olli-Pekka, welcome to India.
Thank you, Deepika. You experienced a very disturbing and disruptive period during the history of Nokia while you were the CEO. Can you describe to us what it was like to face the competitive market dynamics during your time?
Yes, there was, there was plenty of disruption and turmoil in my time as well. And I think it basically so relates to the fact, never before in business history has the competitive environment changed as much as it did in the converging industry of mobile communication, internet, computers, etc., at the round 2006, 7, and 8. And for everybody who was playing in any of these industries, these were really important, difficult, and and also volatile times. And Nokia, definitely, caught its fair share of the of the of the volatility and change. With the benefit of hindsight, there were strong competitors like Apple, Google, Samsung, and we talked about this, play in nonlinear decline. Remove the BlackBerry as well.
Were you able to predict what would what would be happening with the transient markets?
Well, I guess nobody's able to predict that volatile environment. But you mentioned Google and Apple, or Apple and Google, it does not matter in what order. These are good examples of players who have been very strong in some industries that they outside the mobile communications and who suddenly enter and, in fact, in a matter of a couple of years, only pick a market leaders in an industry where they have never been before. I think that's unique in the business history of the world. And in fact, but I, in fact, believe that if you look at the the world, the business world, especially, especially some volatile industries that we do have now, I'm based the pace of change will continue, and there's nobody who can predict everything that happens.
So, you raise many intriguing points, such as the notion of timing, the notion of strategy execution. So, we would like to explore that more deeply about about those aspects. What challenges or dilemmas that you're facing with people in the organization in order to do make your nation move faster with the ability have the right strategy?
Yeah, in fact, I, I believe, and I have to believe, but I sincerely believe that the that the strategy at that point of time was correct. We did have to give it a try. Execution very often was difficult. Some people skills may sometimes be missing. You have to acquire them. And and in, in fact, as always in business, execution eventually is the key. You can sometimes manage with great execution even if your strategy is flawed. But if you're, if you're, your execution doesn't succeed, even a good strategy squares. And and of course, strategy execution always, or implementation, you need to be able to do to have everybody contributing. It's sometime it's difficult in a big successful organization to do to have the sense of urgency and hunger, because no company, in fact, that can can defend only if you've got the high market share, your market leader. If you stop defending, you cannot. Yes, you cannot sustain. Yes, you know.
And then I think, as CEO, you are faced with at least two major pressures. One is from the external, not that I guess you must be sensing the pressures for performance and for for financial performance from investors, for share prices. And in one hand, how to implement a strategy to make the major changes inside organization. What kind of tensions can be described, the tensions that you were experiencing during that time?
Sometimes, really, your organization does not understand the different lighted drivers that come from that pressure. For instance, a certain market is something that the shareholders might feel is extremely important to have a position there. And and some of your employees might question, why is that so important? Because we've got other markets as well, and so forth. And being laying, laying the being able to to bridge these different types, types of sort of constituencies together in the right way, it's always a challenge. Of course, communication is needed. And and and communicate, communicate, communicate. That's of course needed as well. But at the same time, big successful organizations are very slow to change. They are as well, lots of vested interests. People are starting easily to defend their position. Some people are even starting to backtrack their feet, knowing change might hurt me or my position or my my my department's position. And communication very often falls short. People just listen, but they don't hear you. And so, very often, unfortunately, it's my experience in business, real crisis is near, at least helps in the communications effort. Because when people feel that, you know, this is this is really a problem. Yeah, this is really a situation where everybody must act. Before that, sheer words are very often not enough. And and that's an unfortunate fact of life. Yeah.
I worked in, used to say at Nokia that, you know, in order for organizations to change, you need either a charismatic leader or a crisis. And I said, at least we have a crisis. Yeah, yeah.
The paradox, I'm reflecting aloud here with you, is that unfortunately, when you have to wait for crisis to initiate change, sometimes you didn't have enough time or enough resources to overcome the crisis if it's become very serious.
Well, what would it be lower than that? Of course, I need to say, and at least stress that, you know, of course, one cannot wait for the crisis. You of course need to a contact and hand tell and and so example and so forth. Yeah, make people realize their surprises even before the crisis hits. I think if somebody loses his his or hers position because of non-performance, I think that sometimes a very healthy message in the cutting a company. And an example, speed, and positive or negative, you know, will always help with letting backward.
What lessons would like to share in the areas of strategy, start execution, people management to future managers or CEOs when it comes to strategy implementation?
As I said, I am more and more believing in setting targets that are clear and even measurable. And and then following what is happening, and what is really happening in real terms, as opposed to defining soft targets that are opinion-based. My experience is, the targets need to be something that everybody can understand, was achieved or not. And people also enjoy that. And then if you're, if the, if then your incentives, monetary incentives are based on on unclear, measurable targets, so I think that helps the financial performance and the strategy execution as well.
Olli-Pekka, thank you very much now for sharing the wisdom with us and your experiences.
Okay, thanks so much.