The Nokia case

The history of Nokia began in 1865 in the south of Finland. The paper mill was expanded and got a second location on the Nokianvirta River, which served as inspiration for its name - Nokia. In 1898, Eduard Polón founded a Finnish rubber factory that produced, among other things, boots and galoshes. In 1967 the company merged with a rubber factory and the Finnish Cable Works, founded in 1912, to form Nokia - a legend was born.

pawel czerwinski 0VR5DOVnVEA unsplash 1 scaled
Photo by Paweł Czerwiński on Unsplash

Nokia's first "mobile" phones

Nokia built the first "mobile" phones in the early 1980s for the Scandinavian mobile phone network NMT (Nordisk MobilTelefoni). Nokia's car phones for NMT, such as the Mobira Senator, still weighed a whopping 10 kilograms. After a long development period, Nokia introduced the first truly mobile phone in 1987: The Mobira Cityman mobile telephone mentioned weighed 800 grams and cost converted approximately 4,560 euro.

The change to a modern technology group

Over the next few years, the Nokia general store develops into a successful technology company of which the whole of Finland is proud. Together with Radiolinja, Nokia built a mobile phone network and also produced the phones for it. In 1991 the first GSM call was made with a Nokia cell phone via the GSM network. A milestone in the history of mobile telephony. Through further development, research, and innovation, Nokia became the world market leader in the still-young mobile phone market in 1998.

This period also shows how decisive leadership is for a company. From 1992 to 2006, Nokia was led by Jorma Ollila, who played a significant role in making the right decisions during this period. During these years, Nokia developed the most popular devices and successfully launched them on the market.

Known devices and technologies

The Nokia Communicator 9000 was launched in 1996 and was a revolutionary device that allows you to make phone calls and send faxes and e-mails. The Communicator 9000 even had an HTML browser to display Internet pages. Its software was based on a DOS operating system.

The 9000 weighed almost 400 grams, had 8 MB memory, and worked with an Intel i386 CPU with 24 MHz. The device caused quite a stir when it was presented at the CeBIT in Hannover.

WAP – Where Are the Phones

WAP was a standard of the German mobile network operators, which was available faster than devices. The WAP protocol did not allow users to see the "real" Internet, but pages specially prepared for mobile use, limited to text and small pictures - WAP and not Web. But lacking the right devices, WAP quickly became "Where Are the Phones?

Nokia produced the first matching device in December 1999 (Nokia 7110). The striking jump mechanism also became a cult device with the cinema hit Matrix.

Further development of the Communicator

In 2000, the Communicator was further developed and updated to the latest state of the art: dual-band, HSCSD, and a color display. It was the first step towards an ARM processor architecture and thus towards an EPOC operating system. EPOC is the direct predecessor of Symbian.

The peak of Nokia came with its own Symbian devices. While the last model in the Communicator series (9500) was already equipped with a camera and was the first model to have Internet access via WLAN, a change in the mobile phone market was already emerging.

In 2002, Nokia had a classic for business people in its range with the 6310i, which fulfilled all business needs, such as GPRS, HSCSD, Triband, and Bluetooth, but that changed. Decisions were made that put the company on a course that would ultimately lead to its demise.

Wrong decisions and failures

Nokia recognized that users wanted more from their phones than just making calls and sending text messages. In late 2003, Nokia launched its game console as a cell phone: N-Gage. Unfortunately, the devices did not perform as well as expected. N-Gage required its gaming platform, the development of which was repeatedly delayed. Moreover, the operation was too complicated and the games too expensive.

Nokia had recognized that Apple was working on a similar concept and wanted to offer both hardware and content, such as games. Ideally, exclusive hardware and multimedia and communication services are tailored to it. The idea was right and up-to-date, but it could not be implemented quickly enough and, above all, well enough. In contrast to Apple with iTunes and the resulting App Store for the iPhone, Nokia's own Ovi platform did not really come out of the starting blocks.

The change in the leadership

Nokia was the world's undisputed cell phone manufacturer from 1998 to 2011. Jorma Ollila managed the company from 1992 to 2002. In 2006, the company management changed to Olli-Pekka Kallasvuo. He caused many negative headlines, especially in Germany. He generously increased his own salary, but at the same time, the employees of the Bochum plant had to fear for their jobs. While Nokia was making record profits, it announced that the Bochum plant, which was built with many subsidies, would be relocated to Romania for cost reasons.

There were enormous protests, in which not only did Nokia employees demonstratively throw away their Nokia phones, but many politicians also followed this protest. As a result, in the following year, 2008, Germany's turnover - one of the most important markets for Nokia - collapsed massively. Nokia lost its positive image until then within a short time. The consequences of these decisions were clearly underestimated.

The change in the mobile phone market

Apple introduced the iPhone in 2007. It was not a revolutionary new technology, but it did have a phone, a browser, and an iPod. Also, it could be operated intuitively via a touch screen - as is usual with Apple. Besides, the necessary App Store was also available at the same time to provide the device with additional functions. Apple was, therefore, worlds ahead of Nokia. In addition to iOS, Google is also entering the market with its acquisition of Android. Samsung, the largest hardware provider for Android phones, is even quickly overtaking Nokia and is now the former world market leader in third place with only 22.5% market share.

A momentous decision

Nokia reacted far too late to this new trend, which was foreseen but not consistently implemented. The cell phone manufacturer insisted too long on its own, much too rigid Symbian, which could not prevail against the new technology in favor of the customers. One reason for this was probably that Symbian was not designed for touchscreens.

When a former Microsoft manager replaced the company management, it was quickly decided to use the new Microsoft Windows Phone operating system. However, as many software providers could not provide apps for this, Nokia phones could hardly establish themselves on the market. Even cooperation with Zeiss for better cameras could not compensate for the weaknesses.

Conclusion

Until the early 2000s, Nokia seems to have done everything right. But a series of wrong decisions led to the world market leader's downfall with a market share of almost 34%. Decisions such as the closure of the Bochum plant and the use of Windows Phone were undoubtedly the primary triggers. Behind this, however, are a whole series of decisions based on assumptions that ultimately turned out to be wrong, but also on a lack of information, which was, however, available.

It was known that Nokia's Appstore was not yet available when the N-Gage phones were presented on the market. It must also have been known that the hardware could not provide the software's performance under consideration. Neither was it checked whether the devices could be operated merely enough. Indeed, the facts were known separately, but they were not used to verify and compare them in joint action, thus putting decisions on a broader basis.

Red Teaming could have saved Nokia from making the wrong decisions.

The techniques are relatively simple: You listen to the employees from the departments concerned and give them a voice. Red Teaming offers so-called liberating structures for this purpose, making it possible to hear the ideas of employees who otherwise tend to keep their thoughts to themselves (introverted employees) and place them on an equal footing with those of experienced and usually more decisive employees.

Especially when it comes to bringing new products to market, Red Teaming offers a technique (Devil's Troika) that puts an idea through its paces before it is brought to market, thus identifying any problems in advance. This way, issues with hardware, software, and operation could have been placed in advance, and a decision could have been made differently.

Also, the decision in favor of the Microsoft phone could have been checked utilizing an Advanced PreMortem analysis. This could have revealed that software manufacturers might not provide software for a Windows Phone because they would otherwise not be allowed to sell software for Apple and Google. A switch to an Android operating system might have been made earlier, and a sale of the cell phone division might have been prevented in the end.

In the end, the use of Red Teaming tools always depends on the managers. Because here, such deployment must be desired. In the case of the ex-Microsoft Manager, things might have looked different. Red Teaming offers the necessary tools in a large toolbox that can be used to make better decisions quickly, even in crises. While it does not guarantee that better decisions will be made, it always puts the findings on a broader basis so that they can be made better and usually faster.

Do you also want to make better decisions quickly with Red Teaming?

Arrange a free telephone appointment!

Just choose an appointment on my calendar. If you have any questions in advance, please write them down. I am looking forward to a joint discussion.

This might also be of interest to you

Contact

André Daus Red Teaming
Lokomotivstr. 28
50733 Koeln

T: +49 (221) 16 53 18-0
kontakt@andredaus.com

Are you interested in working together?

Are you facing a big challenge, or do you want to learn more details about Red Teaming and how it can help you? Let us talk about it without obligation. Pick a date. I look forward to the exchange.

en_USEnglish