News

Nokia had to weed out a culture of fear to embrace a future without smart phones, in-depth interview study reveals

The radical strategic move demanded a sea change in Nokia’s management style.

Interviews carried out about the events between 2007 and 2013 show how the new board appointed in 2012 got Nokia’s top management to express their previously suppressed opinions and to dare to make an about turn in the company’s business.

Aalto University Professor Timo O. Vuori and Professor Quy N. Huy from Singapore’s INSEAD University have studied Nokia’s transformation during 2007–2013. Their new results show how Nokia’s board contributed to the company’s radical strategic renewal after years of difficulties by regulating top managers’ emotions. The board increased trust by enforcing new conversational norms for dialogue with top managers. They also sought to reduce emotional attachment to the prevailing strategy by generating many new options instead of forging a single line of thought. Top managers were also nudged to pay attention to data that would conflict with their gut feelings.

The research is based on 120 in-depth interviews, nine of which were carried out with board members and 19 with management team members.

Prior to 2012, Nokia’s stubborn attempts to develop for their line of smart phones initially their own Symbian operating system, and later on Windows, resulted largely from an entrenched culture of fear: managers did not dare to present any alternatives to the board. The decision in 2013 to scratch smart phones altogether and focus on telecommunication networks and services was based on a complete turnaround in the management culture. The new board appointed in 2012 sought to regain the trust of top management and to investigate alternative business strategies.

‘The new board began to consciously work on the emotional atmosphere in the management team in order to improve the quality of strategic work. This enabled deeper and more comprehensive dialogue across the management and the board, and brought on strategic renewal,’ professor Vuori explains.

 

‘Little by little, the truth kind of stared you in the face’

The board persistently encouraged managers to investigate different strategies and options for adopting Windows or taking on the Android operating system. In the interviews, managers said that having a diversity of options at hand had alleviated the fear of failure. Switching to Android, for instance, would have demanded massive investments, such as the sale of all the telecommunication network operations.

‘By considering and deeply analysing many different options, the management and board gained a better understanding of how Nokia could get through the crisis they were facing. This prevented them getting emotionally stuck with old strategies and old core business models,’ Vuori adds.

Switching to Android, for instance, would have demanded massive investments, such as the sale of all the telecommunication network operations that few thought of as Nokia’s core business. When managers were made to face the devastating data on the phones’ poor performance and the grim market outlook, a complete about turn, long deemed impossible, actually started to look like a promising strategy.

‘The truth kind of stared you in the face,’ as one manager described their moment of clarity.

‘Nokia’s renewal shows the crucial difference managing emotions proficiently can make in top-level strategic work. Our research deepens understanding of the different ways that this kind of leadership can and should be carried out,’ Vuori summarises.

Vuori and Huy’s article has been selected to the top tier of the Academy of Management’s annual conference in August. The results have been covered in, for instance, Harvard Business Review.

Further information:
Timo Vuori, Professor
Aalto University
tel. +358 50 441 9072
[email protected]

  • Published:
  • Updated:
Share
URL copied!

Related news

Aalto Summer School on Transportation poster
Research & Art Published:
Designs for a Cooler Planet 2020: Race for the Future
Research & Art Published:

Designs for a Cooler Planet — Helsinki Design Week 2020

Helsinki Design Week at Otaniemi showcases inspiring future designs related to the UN’s Sustainable Development Goal.
Learning Centre graphics
Research & Art Published:

Dawsonera database has been shut down

Dawsonera database has been shut down due to its provider’s going into administration.
Woman wearing an orange-colored dress and standing on the grass in between birch trees
Research & Art Published:

From her own little world to the other side of the globe

Her studies and her parents used to be her whole world, but now Dr. Avleen Malhi lives on the other side of the world, designs an Airbnb for car drivers, and encourages women to pursue their goals