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    Who Killed Nokia? Nokia Did: Strategy

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    Raisul Islam Nayan
    Nokia's fall from dominance in the smartphone market was due to a culture of fear within the organization that paralyzed its ability to respond to the iPhone. Middle managers at Nokia were terrified of its temperamental leaders who would shout and threaten firings. Additionally, top managers feared admitting weaknesses in Nokia's operating system or missing quarterly targets. This created a climate where bad news was suppressed and the company remained inert as the iPhone disrupted the market.

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    Who Killed Nokia? Nokia Did: Strategy

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    Raisul Islam Nayan
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    Nokia's fall from dominance in the smartphone market was due to a culture of fear within the organization that paralyzed its ability to respond to the iPhone. Middle managers at Nokia were terrified of its temperamental leaders who would shout and threaten firings. Additionally, top managers feared admitting weaknesses in Nokia's operating system or missing quarterly targets. This created a climate where bad news was suppressed and the company remained inert as the iPhone disrupted the market.

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    Nokia's fall from dominance in the smartphone market was due to a culture of fear within the organization that paralyzed its ability to respond to the iPhone. Middle managers at Nokia were terrified of its temperamental leaders who would shout and threaten firings. Additionally, top managers feared admitting weaknesses in Nokia's operating system or missing quarterly targets. This created a climate where bad news was suppressed and the company remained inert as the iPhone disrupted the market.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    67 views1 page

    Who Killed Nokia? Nokia Did: Strategy

    Uploaded by

    Raisul Islam Nayan
    Nokia's fall from dominance in the smartphone market was due to a culture of fear within the organization that paralyzed its ability to respond to the iPhone. Middle managers at Nokia were terrified of its temperamental leaders who would shout and threaten firings. Additionally, top managers feared admitting weaknesses in Nokia's operating system or missing quarterly targets. This created a climate where bad news was suppressed and the company remained inert as the iPhone disrupted the market.

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    © All Rights Reserved
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    of 1

    STRATEGY

    Who Killed Nokia? Nokia Did


    Quy Huy, INSEAD Professor of Strategy and Timo Vuori, Assistant Professor of Strategy, Aalto University |
    September 22, 2015

    Despite being an exemplar of strategic agility, the fearful emotional climate prevailing at Nokia
    during the rise of the iPhone froze coordination between top and middle managers terrified of
    losing status and resources from management. The company was wounded before the battle began.

    Nokia’s fall from the top of the smartphone pyramid is typically put down to three factors by executives
    who attempt to explain it: 1) that Nokia was technically inferior to Apple, 2) that the company was
    complacent and 3) that its leaders didn’t see the disruptive iPhone coming.

    We argue that it was none of the above. As we have previously asserted, Nokia lost the smartphone
    battle because divergent shared fears among the company’s middle and top managers led to company-
    wide inertia that left it powerless to respond to Apple’s game changing device.

    In a recent paper, we dug deeper into why such fear was so prevalent. Based on the findings of an in-
    depth investigation and 76 interviews with top and middle managers, engineers and external experts, we
    find that this organisational fear was grounded in a culture of temperamental leaders and frightened
    middle managers, scared of telling the truth.

    Deer in the headlights

    The fear that froze the company came from two places. First, the company’s top managers had a
    terrifying reputation, which was widely shared by middle managers—individuals who typically had titles
    of Vice President or Director in Nokia. We were struck by the descriptions of some members of Nokia’s
    board and top management as “extremely temperamental” who regularly shouted at people “at the top of
    their lungs”. One consultant told us it was thus very difficult to tell them things they didn’t want to hear.
    Threats of firings or demotions were commonplace.

    Secondly, top managers were afraid of the external environment and not meeting their quarterly targets,
    given Nokia’s high task and performance focus, which also impacted how they treated middle managers.
    Although they realised that Nokia needed a better operating system for its phones to match Apple’s iOS,
    they knew it would take several years to develop, but were afraid to publicly acknowledge the inferiority
    of Symbian, their operating system at the time, for fear of appearing defeatist to external investors,
    suppliers, and customers and thus losing them quickly. “It takes years to make a new operating system.
    That’s why we had to keep the faith with Symbian,” said one top manager. Nobody wanted to be the
    bearer of bad news. However, top managers also invested in developing new technological platforms that
    they believe could match the iPhone platform in the medium term.
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    “Top management was directly lied to”

    Ok

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