Business

Why Nokia boss was right to rant

Stephen Elop
Image caption Stephen Elop said Nokia was standing on a "burning platform" surrounded by innovative competitors

Last week Nokia's new head sent an outspoken and frank memo to his staff that suggested the phone giant was in crisis.

Stephen Elop, who recently joined the mobile brand from Microsoft, warned his company about rivals in their market place: "They are fast, they are cheap, and they are challenging us."

But was such an outburst a bad thing? The chief executive of computer firm Psion, John Conoley, thinks not:

So. Your chief executive has just written to you as a member of the same company, and told you, you are failing. And everything you do is failing. And that'll get worse if nothing is done.

Well that's not good for morale, is it? I mean, you get up and work hard and your efforts are not valued. That makes you mad. Why work here?

Well, the only reason to be angry with your CEO is if he is not prepared to take tough decisions.

Some jobs are going to go. Do nothing, and all the jobs go.

If you look carefully at his letter, he is clear on the direction of the company and he can see the beginnings of renewed differentiation in the future. He cares about success for your company.

If he tells you what most people want to hear, well you are all going to lose your jobs. Then it's right to be angry. And guess what, you have quite a few colleagues who will have punched the air on reading this and said "at last", even though they know they might be at risk in the future.

People threat

I don't know the culture in Nokia. But I do know, that so long as you have got cash, then business is primarily a people business.

And as has been said a few times in our boardroom, "culture eats strategy for breakfast".

Image caption No pain, no gain, Psion's John Conoley says

The biggest threat to and opportunity for successful renewal is the Nokia people.

You have a boss who has just told you how it is. He treated you like adults and he did not care who outside the company knew it.

He already earned a lot more respect for his company than in recent years, right from the get go. And he has shown you a lot of respect in doing that.

Some of you are going to love the journey despite the risks. Some of you are going to quit but fail to leave the company until pushed. Whichever way you look at it, the people who embrace this despite it all will have a happier couple of years than those who fight it.

But this is where Darwin comes in.

I have loved it in hard situations where people put their hands up to fight me, and I mean resistance rather than debate. No problem. You select yourself out and disappear from the evolutionary tree of the company. And whoever you are, hardly anyone remembers you a week later, because people are getting on with their jobs.

So you have a year of pain coming up, maybe more. Then two or three years of change and fine tuning. Unfortunately, until you are 80% of the way the through the pain, you will see little of the gain.

And I know how that feels for the CEO, as well as for you. He has started running a marathon through a long tunnel. Now and then, he will look up to check the direction is still right, but if in the first 20 miles, he worries about how far it is, he won't get there.

He needs to just put one foot in front of the other and imperceptibly, the distance will get shorter.

Then there will be positive indicators and milestones but he has to, at some point, make a profit from the changes.

The opinions expressed are those of the author and are not held by the BBC unless specifically stated.

More on this story

Related Internet links

The BBC is not responsible for the content of external Internet sites