Burning ambition
History is replete with examples of of strategies maintained long after they've been proven ineffective or even disastrous, such as walking slowly towards enemy machine guns in World War One, or socialists insisting it just hasn't been done right yet.
This, it seems, is what Nokia CEO Stephen Elop thinks his company has been doing. Having had a winning formula for years, it has failed to look facts in the face in the mobile Internet era, and has lacked either the inclination or ability to adapt to this new reality.
As we reported on yesterday, Elop is rumoured to have sent an internal memo setting the stage for a pretty major shake-up at Nokia's investor strategy day in London this Friday. Now, it seems, tech blog Engadget has got hold of the full memo and published it. We've reproduced it in full on the next page, but first here's our take on a few key statements.
Elop really labours the ‘burning platform' metaphor. The reason for this has to be to stress that, whatever change in strategy he unveils, it has to be preferable to the immolation he views as the inevitable consequence of sticking with the current strategy.
He talks about Apple owning the high-end mobile phone market, with more than half of it. "They changed the game," said Elop. While this is undeniably true, it's not often you see CEOs admit such a thing so frankly in a semi-public statement. He seems to be saying: no more denial, this is the reality, WTF are we going to do about it?!
"Google has become a gravitational force, drawing much of the industry's innovation to its core." Android is hoovering up the non-iPhone market, and Elop also points out that Chinese manufacturers are now out-competing Nokia in the low-end.
"The first iPhone shipped in 2007, and we still don't have a product that is close to their experience. Android came on the scene just over 2 years ago, and this week they took our leadership position in smartphone volumes. Unbelievable." This exasperated statement speaks perfectly for itself.
"We thought MeeGo would be a platform for winning high-end smartphones. However, at this rate, by the end of 2011, we might have only one MeeGo product in the market." This looks like the clearest indication yet that Elop is not prepared to put all Nokia's eggs in the MeeGo basket. He reiterates the ecosystem observation he has already made publicly.
"I believe we have lacked accountability and leadership to align and direct the company through these disruptive times. We had a series of misses. We haven't been delivering innovation fast enough. We're not collaborating internally." Expect to see a lot of Nokia execs update their Linked In profiles in the next few days.
UPDATE - 11:40, 9 Feb 2011 - Engadget asked us not to reproduce the memo in full as it's ‘not publicly available material'. Out of respect to the site we have taken down the reproduction, but this does raise the question of whether a third party memo is the public property of the first media to publish it...
