Nokia

Andrew Hill

New Microsoft CEO Satya Nadella has produced an opening memo to employees that is rich in repetitive rhetoric but short on substance. Here is what he really meant.

From: Satya Nadella

To: All Employees

Date: Feb. 4, 2014

Subject: RE: Satya Nadella – Microsoft’s New CEO

Today is a very humbling day for me.

“Humility” is the appropriate tone for CEOs these days, but, believe me, when I got the nod I was punching the air like Steve Ballmer on an adrenaline highRead more

Andrew Hill

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. Read more

Andrew Hill

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. Read more

John Gapper

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. Read more

The life and career of Ronald Coase, who died last week aged 102, spanned the century in which modern management developed. That is appropriate, because Coase contributed immeasurably to our understanding of the potential and limits of the basic management unit that is the modern company.

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.

Lucy Kellaway

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. Read more

Andrew Hill

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. Read more