Nokia: An 'Old' Company in a 'New Economy'

Paper in proceeding, 2001

In 1998, Nokia's head of the mobile phone division presented his view of the company in terms of 'speed and timing', the need of considering the 'whats' and 'hows' simultaneously, experimenting and fast decision making. He also emphasized soft concepts such as learning and culture and ended up proposing that "culture is our strategy". This study of Nokia aims at analyzing to what extent this inside top management view of Nokia also is shared by other employees in the organization. The study is based on interviews conducted in 2000, with Nokia employees, both Finnish and international employees, at the Nokia headquarters in Espoo, Finland. It was found that Nokia´s promoted values, attitudes and behaviors are an essential component of Nokia's strategy to quickly and smoothly react to unexpected threats and opportunities. At the same time, Nokia has aligned a number of organizational mechanisms to support its culture and to foster innovative, adapative behavior, and improvisation under certain rules. Nokia's strength might not be in its values - customer satisfaction, respect for individual, achievement and continuous learning - but more in the attitudes promoted by management and reinforced by the leaders visible behaviors. Among the important attitudes is the concept of ‘Nöyryys’, which can be interpreted as not being ‘arrogant’, knowing that “you should never take things for granted, that nothing is given, and that even when you are successful, you have to remember it”. In Nöyryys is also the notion of focus, of “doing one thing at a time”. Nöyryys seems to be a deeply rooted Finnish value and it seems strong among Nokia’s employees. In general — and what was also our ‘aha’ experience during our interviews — Nokia’s culture is strongly reinforced by management behavior, “who live the values”. However, history shows that becoming No.1 often has been the starting point to decline, and Nokia is not immune to this virus, even if the company earlier has shown an impressive ability to transform itself. What could be potential threats to Nokia? First, when Nokia more and more is becoming a global corporation, with international alliances and acquisitions and with employees from all over the world, the base for the values is no longer homogenous, and this may go counter to Nokia’s corporate culture, which seems deeply grounded in Finnish culture. Second, the only thing we know for sure is that there will continuously be disruptive changes at irregular intervals, driven by technological innovation or other major changes. In order to stay a top, Nokia has established many mechanisms for renewal, including intelligence and the new businesses organization. However, being a large corporation with a continued need for growth, there is a risk that these new potentially disruptive technologies will not be acted upon. The main reason being that when you are a large well managed firm, you are only interested in those new business opportunities which according to a market estimation result in a large revenues – i.e. in line with Christensen’s observation, the new and possibly initially inferior disruptive technologies may be left to someone who is more keen on starting small.