Impressions of “Transforming Nokia: The Power of Paranoid Optimism to Lead Through Colossal Change,” by Risto Siilasmaa with Catherine Fredman
Transforming Nokia ties together three business stories I’ve been reading about for years: the history of Bell Labs, the history of cell phones, and the history of Microsoft. The perspective is biased — told from the perspective of the last Chairman of Nokia’s cellular era and first Chairman of Nokia’s networking era — but informative. The book’s only weakness is it feels like a rough draft of a business self-help book glued onto a corporate history — I would take less self-help, and more corporate history.
The last ten years of the cell phone business has seen the death of companies like Blackberry and Palm, while Apple and Google formed a duopoloy.
Two other players in this market where Nokia, with the Symbian Operation System, and Microsoft with Windows Phone. The middle episodes of Transforming Nokia place place during events which made it clear that Symbian was now obsolete, but where it was unclear if Windows Phone provided a meaningful way forward. Windows Phone had less technical debt, better design, better monetization options for the company, and better tooling for engineers.
Unfortunately, it was impossible to combine Symbian’s marketshare with Windows Phone’s modern platform. There was no ability for apps written on one platform to run on another, and seemingly no discussion about this either. Windows Phone entered the market with no apps that could run on it, leaving it a worse library than any operating system. And new apps were written for the new market leaders, Apple iOS and Google Android, which already had share. To have bet the company on two different operation systems, both of which had complementary advantages and neither of which were able to survive on their own, must have been incredibly frustrating.
And not just frustrating — a major failure for another company too. Microsoft’s failure with Windows Phone lead to the firing of CEO Steve Ballmer and new CEO Satya Nadella’a major strategy shifts. Microsoft’s investments in Nokia were scrapped, and even Microsoft’s internal hardware development focused on a sister project, Windows RT, was fundamentally impacted by Nokia and Microsoft’s total defeat in the hardware market.
Stephen Elop, Nokia’s CEO during its attempted transition, temporarily ran the Microsoft Mobile division it bought from Nokia until Satya gave up on that effort. A lot of the book is given to the perspective of Risto Siilasmaa, who regularly criticizes the actions of the prior chairman while defending Elop, who had been hired by the prior Chairman. It seems that Riisto sees his role as primarily that of chief investor — a position typically taken by the CEO in the U.S. — and not of executive leader — also a role for the CEO in the U.S. While Risto ultimately abandoned the phone as a business, he seems to believe that Elop ran the phone business as successfully as possible given the circumstances.
Ultimately, Nokia sold the phone business to Microsoft, and used that successful sell to buy one and a half real businesses: the half of Nokia Siemens Networks the company did not earn, plus Alcatel-Lucent — Lucent itself being a rebrand of Bell Labs. The history of (Nokia) Bell Labs is tragic. The invention of the semicoonductor made computer miniaturization possible. Terrible leadership clapped itself on the back for changes that lead to the death of its ability to function as a first-class company or laboratory. Four years ago I read the most recent book about the firm, which was “high detailed, impressionist, echoing with nostalgia,” and impossibly beautiful.
Bell Labs – in the form of Alcatel-Lucent — enters Transforming Nokia near the end. Nokia is seeking safety in the telecommunications business, and Alcatel-Lucent is a similarly sized company with similar problems but complementary product lines. What feels like it should have been the most dramatic part of the story — a potential merger-of-equals under French control becoming a takeover of Alcatel-Lucent by Nokia — is oddly downplayed. Perhaps because those events are the most relevant inside the company, Siilasmaa is careful to avoid providing signals as to the company’s future intentions.
I enjoyed the history a lot, and the Siilasmaa’s in general seemed more forthright about Nokia than Satya did about Microsoft. The tone feels closer to very self-critical works, such as We Were Yahoo or Robert X. Cringley’s takedown of the modern IBM. My gripe is that the author uses a lot of buzzwords – phrases like “The Paranoid Optimist” and other jargon is used a lot, and I’m not sure if this is how the author thinks or if he’s planning a consulting career after Nokia. Or just really likes some phrases.
On a personal note I enjoyed hearing about the post-Nokia history of their phone business, called “Devices and Services” in the book. I knew Nokia D&S became Microsoft Mobile, I did not know these assets then formed the core of HMD, the company that made my (current) Nokia phone.
I read Transforming Nokia: The Power of Paranoid Optimism to Lead Through Colossal Change in the Audible edition.
