Yesterday we talked about Kodak bad management which led to bankruptcy. Today we will see another example, Nokia. A similar story but with a happy ending, so far at least...
Nokia as many of you remember went crazy on sales in the 90's. I remember everyone in school and friends having at least one Nokia device. They had the best cell phones, pricing was good, really reliable, best cameras everything about them was pioneer (mine kept for 7 years until I stepped on it, on a Prodigy live..). Between 1996 and 2001 Nokia’s sales increased almost fivefold, to reach €31 billion. Just imagine that!! They owned the market and played the game as they wanted until....
In 2001 Nokia delayed to implement new technologies on phones. From 2000 the sales were weaker than expected resulting in a 19% drop in shares. In the first half of 2002, sales fell another 9% . In result they cut almost 7000 staff to reduce costs by 10%/. Why did that happen? As the dailymail article points:
"
As Nokia grew, it took longer and longer to get anything decided.
‘There were lots of managers,’ says Watson. ‘You would get so far in talks, then it would emerge that some other part of Nokia had already bought a company doing the same thing as us, and was trying to work out what to do with it.
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"
But then things began to slip. Juhani Risku points to a corporate arrogance on the part of Nokia during that period, as well as a string of bad decisions.
‘An invasion of businessmen and engineers took over highly sensitive design areas,’ he says.
‘They led Nokia’s visions, strategies and execution without any education, track record or passion. Their arrogance was a compensation for having too much responsibility but no clue as to what to do.’
"
So, in other words Nokia grew too much too soon and had a slow decision making center. In addition to all that, the arrogant way of thinking "working and managing the best company" and the undermined Finnish culture was the reason, this company was overtaken by antagonists.
But in comparison to Kodak, they had much better reflexes! They fired people and tried to keep up with others. Of course with time, more mistakes were made like 2003 with NGage, but it was only a bad choice! As you can see in the article, they always tried to keep up with trend and give products markets needed, meaning they learned from their past mistakes. The unfortunate is that since 2000 Nokia from a leader became a follower ...
Nokia as many of you remember went crazy on sales in the 90's. I remember everyone in school and friends having at least one Nokia device. They had the best cell phones, pricing was good, really reliable, best cameras everything about them was pioneer (mine kept for 7 years until I stepped on it, on a Prodigy live..). Between 1996 and 2001 Nokia’s sales increased almost fivefold, to reach €31 billion. Just imagine that!! They owned the market and played the game as they wanted until....
In 2001 Nokia delayed to implement new technologies on phones. From 2000 the sales were weaker than expected resulting in a 19% drop in shares. In the first half of 2002, sales fell another 9% . In result they cut almost 7000 staff to reduce costs by 10%/. Why did that happen? As the dailymail article points:
"
As Nokia grew, it took longer and longer to get anything decided.
‘There were lots of managers,’ says Watson. ‘You would get so far in talks, then it would emerge that some other part of Nokia had already bought a company doing the same thing as us, and was trying to work out what to do with it.
"
"
But then things began to slip. Juhani Risku points to a corporate arrogance on the part of Nokia during that period, as well as a string of bad decisions.
‘An invasion of businessmen and engineers took over highly sensitive design areas,’ he says.
‘They led Nokia’s visions, strategies and execution without any education, track record or passion. Their arrogance was a compensation for having too much responsibility but no clue as to what to do.’
"
So, in other words Nokia grew too much too soon and had a slow decision making center. In addition to all that, the arrogant way of thinking "working and managing the best company" and the undermined Finnish culture was the reason, this company was overtaken by antagonists.
But in comparison to Kodak, they had much better reflexes! They fired people and tried to keep up with others. Of course with time, more mistakes were made like 2003 with NGage, but it was only a bad choice! As you can see in the article, they always tried to keep up with trend and give products markets needed, meaning they learned from their past mistakes. The unfortunate is that since 2000 Nokia from a leader became a follower ...
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