Two years ago, I awarded Angela Ahrendts a prize. The chief executive of Burberry, I thought, should be honoured for her tireless services to business jargon.
And so I made her my winner for Outstanding Services to Bunkum in recognition of the most baffling paragraph ever written by a CEO in an annual report. In her statement in the 2011 report she wrote the immortal words:
Is Twitter showing its principles, or its lack of principals?
One striking thing about the Twitter S-1 filing for its initial public offering was that it will have a single class of shares, with equal voting rights. Unlike Facebook, LinkedIn and other recent Silicon Valley entrants to the public markets, it is trusting in shareholder democracy.
Stephen Elop, ex-Nokia, soon-to-be ex-husband
I firmly believe boards need to be less squeamish about prying into their senior executives’ private lives, particularly when divorce is looming, because the corporate consequences can be grave. Now researchers at Stanford’s Graduate School of Business have broadened the debate to suggest that shareholders should worry about chief executives’ marital disharmony, too.
Divorce, they write, could undermine CEOs’ control and influence, affect their “productivity, concentration and energy levels”, and have an impact on their attitude to risk. They cite Rupert Murdoch’s split from Wendi Deng and the divorce of Harold Hamm, CEO of Continental Resources, from his wife. News of the first, thanks to a pre-nuptial agreement, left News Corp shares unmoved; news of the second, with no pre-nup, knocked 2.9 per cent off Continental Resources’ stock price as investors worried about the fate of Mr Hamm’s 68 per cent stake in the group.
A new account of “the fall of BlackBerry” in Canada’s Globe and Mail sheds light on the torment of the country’s once-mighty technology champion with some new revelations of internal rifts and missed opportunities. Four stand out for me.
There is more than one way to lead in the smartphone industry, and China is at work on all of them.
No longer content to copy foreign products. China is developing brands to compete with Apple and Samsung. Xiaomi is known as its answer to Apple, and Huawei and ZTE, the equipment companies, have moved into handsets.
I blame Wayne Gretzky.
Ever since the world’s greatest ice hockey player said a tearful good-bye to playing in Canada way back in 1988, his fellow Canadians have been smarting at the rules of big business.
Then, it was Gretzky’s move from snowy and quiet Edmonton to showy and glitzy Los Angeles. Now, 25 years later, the woes of BlackBerry, our one-time technological champion, have led some to wonder if national pride is again at stake. The putative bid by Toronto-based Fairfax Financial to take the company private has only added to the concern, with many analysts and investors unconvinced of the business case.
The news that Stephen Elop is receiving a pay-off of €18.8m to move from Nokia back to Microsoft will be the last nail in the coffin of his reputation in Finland, where many people resent what happened under his leadership of the national champion.
Mr Elop’s decision, on becoming chief executive of Nokia in 2010 to bet the future of its mobile phones on Microsoft Windows software, didn’t work. He rejected the more obvious path of adopting Android for its smartphones. Instead, Nokia has struggled to turn Windows into a rival to the Google platform or Apple’s iOS.
As the Lex column notes, Mr Elop is getting the money despite Nokia’s market capitalisation having fallen from €28bn to €18bn under his leadership. That hardly suggests he deserves a big payout.
The New York minicab service I used to favour communicated in code. When you rang and gave your address, the radio dispatcher would reply “five minutes” and hang up. This meant a cab would arrive at any time from one to 10 minutes later. “Seven minutes” meant 20, and “10 minutes” meant that anything, or nothing, could happen.
Many years back, an American friend who was visiting London from New York remarked on the odd way in which people were walking around with blocks of plastic held to their ears. “Why don’t they just use normal phones?” she asked.
First came Ben & Jerry’s. Now we have a new brand: Steve & Stephen. It sounds like a men’s hairdressing salon, but turns out to be the sign-off used by Steve Ballmer and Stephen Elop in their open letter telling the world that Steve at Microsoft has bought Stephen’s Nokia handsets.
The effect leaves me feeling slightly queasy. The ampersand usually belongs to more formal pairings – Johnson & Johnson or Dun & Bradstreet – and to see it joining two first names like that gives the new “brand” a cheeky, snappy feel.
What is the Finnish for “I told you so”? That is how plenty of Finns – including a large number of ex-Nokians, swept out in successive restructurings since Stephen Elop took charge of Nokia in 2010 – will greet news that Microsoft is to buy the mobile company’s handset and services business.
It won’t make any difference to them that Nokia has an increasingly important telecoms equipment business, NSN, which guarantees a future to the rump of the company. Since the radical strategy shift of the mid-1990s, when the timber-to-tyres conglomerate refocused on its fledgling telecoms operation, Nokia has been identified with home-grown phones. But a second coming under Finnish ownership for the country’s best-known consumer brand turned out to be impossible: its future will now be dictated from Redmond not Espoo.
This outcome, or a version of it, was already in the air in early 2011 when I visited Nokia’s headquarters to look at the challenges facing Mr Elop. His decision to leap from a “burning platform”, as he called it, into the arms of Microsoft as software partner for its smartphones certainly ruled out other options, such as using Google’s Android or a home-grown operating system. But a full takeover of the phones business by the US company was not inevitable.
Four elements have conspired to make it happen.
Steve Ballmer. Image by Getty.
No chief executive wants the company’s shares to jump sharply on the news that he or she is stepping down.
Pent-up relief, however, was the reaction to Steve Ballmer’s decision to retire as Microsoft chief executive within a year.
It has been a long time coming. Mr Ballmer has struggled mightily since becoming the boss in 2000 to keep Microsoft at the front of the computing and software industry, but has allowed it to be eclipsed by Google and Apple.
To be chief executive of a multinational tech company, even one whose sales are declining, rarely merits the description “underdog”. Yet this is how Henry Blodget, who heads Business Insider, refers to Marissa Mayer, in her first interview since becoming chief executive of Yahoo a year ago, which features in the all-important September issue of US Vogue.