Nokia Appoints a Bureaucrat To End Bureaucratic Slowdowns

Last Updated Sep 28, 2010 9:24 AM EDT

The New York Times spoke with some former Nokia (NOK) employees for a view into why the company has lost its grip in the smartphone market. The answer: "[I]t grew complacent, slow and removed from consumer desires." So, remind me again, why did Nokia hire Stephen Elop, a major Microsoft (MSFT) bureaucrat, to clear up the hurdles that bureaucracy represent?

Nokia's hidebound culture has been obvious from the outside. The company has been overly comfortable and insistent on doing business the way it always had, with nary a nod to changing conditions. That's a big reason why it has had no big hits for a long time. According to the Times story, Nokia passed on touchscreen devices when it had a prototype in hand years before the iPhone's release:

"It was very early days, and no one really knew anything about the touch screen's potential," [Ari Hakkarainen, former marketing manager on Nokia's premium phone line at the time], explained. "And it was an expensive device to produce, so there was more risk involved for Nokia. So management did the usual. They killed it."
It's easy to understand concern about cost. In retrospect, how could anyone have known that a smartphone company could have charged a large enough amount to make the device profitable? Oh, right, Apple (AAPL) did. It's because strategic decisions largely mean plotting a course to where you've never been before. To insist on a comfortable approach to business is to remain in an easy chair and avoid the necessary trip.

So Nokia plans to set things aright by setting a new CEO loose. But let's remember something about the knight in shining armor. His major qualification was having run the Business division. Just as Nokia's condition has been clear from the outside, so has Microsoft's. The company has long suffered from slavish devotion to outmoded strategies and the determined protection of its cash cows -- Windows and Office -- from any threats. That includes internal ones from new products and businesses with major potential to overturn the old order.

Elop has experience in exactly the type of culture that Nokia must overcome. Only, he was responsible for it. It's almost like recruiting one of the villains of the financial meltdown and asking him to turn around a financial services company that is in trouble.

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Image: Flickr user Harald Groven, CC 2.0.
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    Erik Sherman is a widely published writer and editor who also does select ghosting and corporate work. The views expressed in this column belong to Sherman and do not represent the views of CBS Interactive. Follow him on Twitter at @ErikSherman or on Facebook.