Nokia: a business culture problem?

As Jim points out in his blog, there’s plenty of material in Nokia’s recent announcements to keep business students busy. I’ve picked up on a link that looks at their problems and presents them as a case study in a failing business culture.

The recent “burning platform” memo outlined the serious challenges that the business faces. But a report from the BBC claims that insiders have long known what’s wrong, and that it lies at the heart of Nokia’s corporate culture.
Some of issues include:

- A local Finnish culture, insulated from outsiders
- Managers who have worked for the business for their whole careers
- A masculine culture, with deals brokered in the sauna (the firm’s offices from Afghanistan to Zambia have been fitted with steam rooms)
- A lack of innovation and lengthy product development times
- A lack of focus, with too many products on the market

One of the challenges the new boss faces is tackling this culture and implementing change. This is doubly difficult for a firm that is one of the mainstays of the entire Finnish economy.

It would be wrong to overreact, and the article quotes a former Nokia executive who is now a consultant and author, saying that critics ignore the fact that the company has a greater share of the worldwide phone business than anyone else. “If you lead the market and are twice as big as your nearest rival, that is something any market leader would desperately wish for,” he says. “Ask Toyota or Coca-Cola or Airbus.”

In fact, there is a direct counterattack: too many other firms, he argues, are driven by the “voracious” nature of the stock market – and are often focused on short-term domination and quick results.
“The culture is radically different, and this may explain why Nokia is seen to be struggling so much more than it actually is struggling,” he says.

Whoever is right, it’s interesting that Nokia have employed an outsider (a Canadian) to map the route from here. Sony, another giant who lost their way, employed an American to try and turnaround their fortunes.