"Essentially, Nokia has forgotten how to bring innovative products to market. This is despite a rich R&D base, which has pioneered many of the innovations competitors now feature. Instead, a risk-averse bureaucracy has grown up that stifles innovation – it makes progress slow or non-existent."
An old and familiar story.
"his diagnosis may be familiar, but the proposals quite radical. ... a bloodbath of middle managers – starting with 300 to 500 staff at senior VP, VP or director level. This he calls a GRO program, or Get-Rid-Of."
Yahoo had 300 or so VPs before its fall. How do companies end up with five hundred + VPs? What value do they provide exactly? (Genuine question, not snark. From what I've seen most people at VP level spend all their time in internecine politics)
Does anyone know how many VPs Apple has? or Google? (though I suspect , with no proof or numbers, that the latter would have relatively high numbers, given the "middle agedness" Google seems to demonstrate these days)
But what does "VP" mean? These titles are distributed pretty liberally, do not have a consistent rank/role across employers, and tend to represent very different things between say the UK, US and Finland. E.g - look at your average investment bank: VP is basically rank-and-file, and form the core group of the people that do the work.
This seems to be a good heuristic , find out the ratio of the doers versus middle-managers , the higher this number is the better it is.
One other company that exhibits this nimbleness ala Apple despite its size is Goldman Sachs. From personal experience , among other things , GS gets this ratio right where it counts.
at least the bottom levels of regular military hierarchies are usually quite well defined in terms of structure, titles and numbers. which is sort of the whole point: people know what is expected of them.
how much similarity there is between various countries I don't know, but it would surprised me if at least western military hierarchies are very different. (similarity between nations makes cooperation easier, but where there are differences there usually exist mappings. for instance between different systems of rank)
Yes. I was interested in how many `manager'-types vs `doers' there are in the various militaries. I read in a recent Economist that e.g. the German Bundeswehr is relatively top-heavy with too many officers.
While I worked at Yahoo someone did an analysis of the employee database and calculated the average number of reportees for each "manager". The numbers came close to suggesting Yahoo was organized as a binary tree.
I have worked in Nokia as consultant for almost a year and I have always wondered how Nokia became Nokia, given they way they managed software development internally.
Several consultancy companies were working on the same project - a communication nightmare and developers with little or no experience were brought on board.
But, as the book suggests, the main issue was coming from the Nokia managers involved in the project. They were absolutely unable to manage and run a large scale software development project and, above all, they weren't able to take any decision, a complete, terrified paralysis.
Not sure how they ended up being like that, the Peter principle is likely one of the causes.
I hope Nokia gets back on their feet, they surely have a massive technological asset and they can bring innovation to the telco world.
This is what happens when a field matures; companies transition to "managing assets" and source commoditized products and services rather than retaining detailed control and knowlegde themselves. This promotes cost efficiency and is a valid business practice.
At least as long as the field they operate in is stable.
The problem is that it makes businesses vulnerable to disruptive change, and when disruptive change does occur companies usually struggle to re-evolve talents that they shedded when their business matured. The trick is to realize the necessity of restructuring what they do and how and to do so before loss of revenue makes it hard or impossible. The first reaction, though, is often to cut cost. Which is a great way to start the downward spiral.
It is almost like drowning: all your natural reflexes conspire against your survival.
I can't remember what this cycle is called, but I read about it in some textbook used at business schools, so it is probably part of a typical MBA curriculum. (The rest of the book was too dull for me to actually remember its title).
When Apple raised the standard for handsets and brought handset software significantly closer to state of the art of software in general, handset manufacturers were caught napping. Then they panicked. And now they are taking on water.
My experience with Nokia is: great hardware and absolutely awful software. How to rescue Nokia? Continue making great hardware and switch to Android on all phones, before everyone else does.
I assume that recent nokia's phones are great mainly because they cannot run any other mobile OS than Symbian EKA2 (main reason being that EKA2 is hard-realtime microkernel with GSM/UMTS stack in userspace, while any other OS expects anything related to radio interface or telco protocols running on second separate CPU).
And I assume that this is major reason, why Nokia can pump out reasonable smartphones with size and battery life of dumb feature phone with price certainly bellow other smartphones. (Well I have E90, which certainly is not small or was not cheap, but battery life is unsurpassed by anything, except 10 year old high-end Nokia phones).
>My experience with Nokia is: great hardware and absolutely awful software.
I could say the same of Motorola. However, Android hasn't been a saviour for them. The Droid X has been criticised for a bad UI skin (originally called, perhaps somewhat ironically, Blur), and pre-installed bloatware that can't be removed.
Exactly. I've been looking at the new phones coming out and I think that a Nokia Android phone would kick everything else, including the iPhone4, out of the water.
I don't know if they'd ever be as beautiful as an iPhone, but on the other hand, they'd likely be able to make phone calls even if you did things like hold them in your hand. And, joking aside, I have a suspicion that Nokia does more in terms of design and testing to ensure that dropping the phone isn't going to wreck it. Probably more so on the lower end phones that are likely to be owned by teenagers, but my wife and I have had Nokia phones for a while, dropped them every now and then, and (fingers crossed) never had a problem.
Their low-end consumer phones, maybe. In my experience their smartphones have been as poorly-built as everybody else's. My Nokia smartphones were the only phones I've owned that didn't still look good after two years, with discoloured plastic and loose parts.
My last Nokia ran Symbian. Lasted for years and years. Sure the case was pretty scratched up, but I didn't have to replace it every time I dropped it on the ground.
I've been working at a large Finnish company for a year or so, and there's a lot of people with creaky old E90's. Discoloured and floppy, but they still work great.
I think it is part of the deal with moving-chassis phones (hinges and slides) - it's very hard to make them durable and still light.
I (and also a lot of people) think they ought to ship Android phones, How bad could be for them that option? my limited vision says it is an excellent choice.
Shipping Android isn't an option for Nokia. They will be late to the party to the tune of two years. It's not a politics thing - they have a huge market and mindshare in smartphones. Actively commoditizing smartphones on the Android platform would be suicide.
If you like Macs you don't get a new computer, you get a new Mac. If you like Windows/Linux, you just get a new computer. It might be a Dell, a HP or a ThinkPad, you might have a preference, but in the end the specs matter much more than the brand.
If Nokia starts shipping Androids, they'll likely be the ThinkPads of smartphones. Rock-solid, reliable, great hardware, all boxes ticked, something of a following, but if you're in a pinch, there's an HTC that does the same for $100 less.
The only option for Nokia is figuring out how they can pivot their current smartphone market leadership into a niche that can compete with Android, the iPhone and BlackBerry.
I don't have the recipe, but it's going to require some very clear and bold leadership, that's for sure. Also, shipping three or four competing platforms isn't part of the solution, either (Symbian S60, Symbian 3rd gen, Maemo and MeeGo).
Symbian S60 and Symbian 3rd gen is the same (or actually 3rd gen is subset of S60); Maemo and MeeGo is the same. That makes it down to two platfoms.
They actually have also S40, but that is for feature phones. I believe that they want to get rid of S40, put S60 on low end and MeeGo on high end phones.
OK, I've got my facts backwards... Good for them on Maemo/MeeGo, I though they'd completely lost it there.
But Symbian 3rd gen (aka. Symbian^3) is indeed different from S60 (which has 4 editions: 1, 2, 3 and 5), with 5th edition becoming Symbian^1. As a matter of fact, Symbian^4 (in which the current UI is replaced by the Nokia Qt SDK) is positioned for a 2011 launch according to http://en.wikipedia.org/wiki/Symbian_platform
It's the Qt SDK that I counted as a new platform in itself.
Long story short: Focus. Nokia can't have two promising and incompatible smartphone platforms.
Yes, I agree with you, they lost focus wrt their platforms. The first step for them is decide, what they want and then follow with steps to achieve that. And only that, no forking and dead ends.
Shipping Android phones would be probably a smart move for Nokia but I don't think the company wants to be bound to Google that much.
Instead of insisting on Symbian, they should have worked on developing a proper Linux-based OS. Maybe is not relevant, but Linus Torvalds is Finnish and the country, even if rather small, has the brain power to do that. Maybe now is too late and probably the Android move would be the smartest but I don't think it'll happen.
I want a cellphone that's also a computer. I don't need a small computer, I don't care that it has a touch screen.
If they'd launched the 770 with a cellphone+3G modem (or GPRS at least, don't remember when it was launched), Android might not have existed today. They really dropped the ball there.
They should ship Android phones now. This will buy them a year and a half in which to progress their own operating system to the point of it being competitive, at which point they can launch phones with that, and have it be a differentiating factor amongst the, by then, sea of Android phones. They have no viable product in the smart phone space now, and the feature phone market has increasingly limited profit margins, so Android is the best option.
Right now, the 400lb pound gorilla for all phone companies is Apple. Moving to Android is the best thing for Nokia to do because of the availability of applications, interests, etc. To build something to compete from the ground-up would be insane.
Nokia should take a page out of the HTC playbook: Implement Android but have it's own flavor through TouchFlo.
This reminds me of the way that, in the late 90s, everyone was calling for Apple to dump Mac OS, switch to commodity hardware, spin off the OS division, or whatever, things that in retrospect would have meant Apple never got to where it is today. I suspect that Android would be a local maximum in Nokia's solution space, missing out on huge wins they could make if they took some radical steps as this article suggests.
Nokia simply isn't capable of producing a phone OS that is better than Android or iOS. The sooner they accept this fact and migrate to Android the better. The software side of their business is doomed. They can save the hardware side, but they need to migrate to Android in order to do that.
Palm had confidence in it's innovations and look how that went. It's a very long road from innovation to shipping product - just ask Microsoft's Kin team.
I like how confident Apple or Nintendo are in their products. Look at Wii- it was launched against more powerful consoles, iPhone was launched when other smartphones were more powerful, had multitasking, copy-paste(!) etc.
The fact that Nintendo was confident it could sell more Wiis because theirs was more fun and Apple confident about iPhone because theirs was more usable. Nintendo revealing a DSi-esque 3DS when Sony is trying to make PSP more iPhone like etc
It is this confidence that developers want to see when they want to invest in developing for that platform. You cannot lead others when you can't even be confident in yourself.
Especially interesting about the Wii case is that I think Nintendo was presumed to be a lost case before the Wii launch. Not sure how much of what they did was inspired by confidence and how much was just desperation.
I think they changed their approach to the market. I guess they have capable people at the top who think clearly.
When asked about how they felt about their rivals, Iwata responded
"... rather than trying to identify a specific rival and to think about how to fight against it, it is more important for our unique business to always ask ourselves, and try to answer, such questions like "What does it mean to make people interested in something?", "What is worth spending people's time and energy on?", or "What do people find amusement in?" We would be glad if you understand that, as the basis, we are not conscious of any certain rivals."
What went wrong at Palm? I just remember that somehow they didn't ship any interesting hardware for years. Then they came up with a cool operating system, but still no acceptable hardware ("oreo effect"). Still, I think they got a good price for WebOS?
‘We can’t find the piece of code that could shift [a dialog on screen] up 5mm.’ They said, ‘There’s 20 million lines of code in the phone – it’s impossible.’
Ouch. That sounds like a code base seriously out of control.
I may be the only one, but I would gladly pay $50 for a Nokia 3210 - at the very least as a party or back-up phone. I think that it still holds up well today, and if not, they could just improve the hardware and add a camera and colour screen: "3210S"? I have actually tried finding and ordering a mint 3210 on eBay without any luck.
I don't see anyone beating Apple in the app phone market - maybe Google themselves might fare adequately with a new Nexus and some Android tweaks. I am not an Android person myself, but I am sure that others are.
I was actually thinking the other day that there could be a market for rock solid, no nonsense businessphones. Which makes phone calls. A week or two of battery life. Small but legible b/w display. Good, physical buttons. Solid construction. It couldn't be that pricey to make and if marketed correctly, it would probably manage to get its niche market.
Too bad that nobody is interested in niche markets these days.
"Essentially, Nokia has forgotten how to bring innovative products to market. This is despite a rich R&D base, which has pioneered many of the innovations competitors now feature. Instead, a risk-averse bureaucracy has grown up that stifles innovation – it makes progress slow or non-existent."
An old and familiar story.
"his diagnosis may be familiar, but the proposals quite radical. ... a bloodbath of middle managers – starting with 300 to 500 staff at senior VP, VP or director level. This he calls a GRO program, or Get-Rid-Of."
Yahoo had 300 or so VPs before its fall. How do companies end up with five hundred + VPs? What value do they provide exactly? (Genuine question, not snark. From what I've seen most people at VP level spend all their time in internecine politics)
Does anyone know how many VPs Apple has? or Google? (though I suspect , with no proof or numbers, that the latter would have relatively high numbers, given the "middle agedness" Google seems to demonstrate these days)