Tag Archives: Corporate History

Impressions of “Transforming Nokia: The Power of Paranoid Optimism to Lead Through Colossal Change,” by Risto Siilasmaa with Catherine Fredman

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.

Impressions of “Hit Refresh: The Quest to Rediscover Microsoft’s Soul and Imagine a Better Future for Everyone,” by Satya Nadella with Greg Shaw and Jill Tracie Nichols

Impressions of “Hit Refresh: The Quest to Rediscover Microsoft’s Soul and Imagine a Better Future for Everyone,” by Satya Nadella with Greg Shaw and Jill Tracie Nichols

Hit Refresh is a book published by Microsoft CEO Satya Nadella to cultivate a cult of personality within Microsoft, to cement the use of rhetorical phrases common in the company, and to sell himself to both large enterprise clients and regulators. While Lou Gerstner’s Who Says Elephants Can’t Dance was written on the retirement of a CEO, and Alan Mullaly’s American Icon was effectively a resume aimed at larger corporations, Nadella is aimed at cementing and continuing his leadership of what is now America’s most valuable company. Of this genre, Hit Refresh is the first where I am able to judge in a context of closely following the company in question at the time.

There is a short section on Satya’s childhood in India, which largely cuts off around high school. I assume the material in that section is accurate. After that, Satya’s narrative suffers from very selective editing and time dilation. Events are presented as causal when years have (silently) passed between them. Important events are described, sometimes using tortuous language, to hide the presence or activities of certain others. One specific example of this is the renaming of Microsoft’s Windows Azure cloud platform to just “Azure” (dropping the name Windows), which is presented as the result of a specific customary verdict. Another is when a chain of pronouns is needed to hide former Windows-head Terry Myerson‘s role in delaying the purchase of Mojang AB (creator of the popular game ‘Minecraft’) for years.

Nadella either elides or downplays the most significant decisions he made during his first years at Microsoft: the shift away from consumer products and the shuttering of the “Nokia / Microsoft Mobile” smart phone and manufacturing business. (Nokia herself, which sold the phone business to Microsoft, used the proceeds to acquire Alcatel-Lucent, which was profiled in Douglas Coupland’s mesmerizing Kitten Clone). The first is not mentioned at all, and the second is quickly discussed in what seems a paragraph. But these were the most high-stakes, high-risk and potentially high-payoff decisions that Nadella made. Microsoft literally scrapped one of the most modern and effective manufacturing organizations in the consumer electronics business as virtually his first decision. I understand that the renaming of “Windows Azure” to “Azure” is something of a shorthand which describes the point without boring business readers with details, but it means Satya’s narrative is not factually — at least — reliable. This is neither an in-depth portrait of a leader like Walter Isaacson’s Steve Jobs nor a journalist history of an industry like Blake Harris’s Console Wars.

And yet…. And yet there’s no arguing with success. Microsoft under Satya Nadella left a generation-long malaise and is now the most valuable company in America. Nadella’s Microsoft is more valuable than Apple. And this has not been the result of “cost cutting” or hasty decisions. Satya’s starving and demoting of the Windows organization — not covered in this book — was Solomonesque, and Microsoft’s handling of political risk well before it lands has been masterful. Perhaps the nature of Satya’s authorship here — collaborative, intellectually, and hiding more than it shows — is typical of his leadership. If so, it may be for the best.

I read Hit Refresh in the Audible edition.