Nokia’s kamikaze move as Kallasvuo falls on sword

Image representing Stephen Elop as depicted in...

Elop in pole position: Picture: Microsoft via CrunchBase

Vendor boss commits Hara-Kiri as fratricidal tendencies outweigh external panic

by Paul Quigley

ECM Plus – It started in America. A seppuka moment. Finnish mobile has-been Nokia has just ditched the last of the Old Guard this week. 

After a swift internal coup that had been simmering for some time, thirty-year veteran CEO Olli-Pekka Kallasvuo is gone.

With immediate effect, the company stated, a little known former Macromedia/Adobe/Microsoft Cannuck by the name of Stephen Elop has been installed to prop up the ailing fortunes of a corporate empire in decline.

The mad mobile move has come, ostensibly, due to the Finns’ fear that shareholders were long since losing their patience with the current management performance. Falling market share and a crash in profits and poor new products did for the hapless Kallasvuo, while new boy Elop is now expected to work some sort of software chicanery on the manufacturer to play catch-up with the Big Steve Jobs’ cult and the insurgent Linux-based Android device challenge.

“The time is right to accelerate the company’s renewal” said Jorma Ollila, chairman of Nokia’s board of directors, “to bring in new executive leadership with different skills and strengths in order to drive company success,”

Elop popped up adding “My role, as the leader of Nokia, is to lead this team for this period of change, take the organization through a period of disruption. My job is to create an environment where those opportunities are properly captured to ultimately ensure that we are meeting the needs of our customers while delivering superior financial results.”

In common with other recent corporate strategic objective failures, Kallasvuo is filling his boots with a severance package worth around $5.85 million, plus a cool 100,000 Nokia shares he was given back in 2007, due to vest next month.

Whichever form of corporate governance model Nokia had been following to maintain their handheld hegemony, it was totally unfit for purpose in the wake of the rise and rise of smarterphones-than-theirs. The mere fact that Nokia has been peddling software alternatives for years such as Ovi, Symbian, Window Mobile and others rather suggest Nokia just doesn’t do software sufficiently expediently to float the collective boats of punters. 

And by bringing in some unknown bod from Canada’s finest is unlikely to change anything anytime soon.

Nokia is, was, and always had been, a manufacturer to reckon with. It’s software aims for Mobile 2.0 are a red herring and the installation of Elop is too simplistic in and of itsefl to change the firm’s fortunes.

As the market consolidates still further, as evidenced by the joint venture with Siemens and Alcatel-Lucent, the infrastructure business is where Nokia should be focussing. It ought to concede that the smart handheld world is probably now over for them.


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