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The Wrong Guy: Nokia's New CEO, Stephen Elop, Lacks Smartphone Smarts

Nokia (NOK) is hiring Stephen Elop, former President of Microsoft's (MSFT) Business Division, as its new CEO. The move is intended to shake things up at a company that saw its profits drop 40% in the last quarter. But Microsoft has had little success in the smartphone market so far, and Elon was in charge of MS Office, not mobile. That doesn't sound like the right skill set for turning Nokia around.

As my colleague Erik Sherman points out, Nokia has become infamous for its inflexible management culture, the legacy of being a 100 year old corporation. It's clear that the company is willing to break with some of its traditions in order to reinvigorate its ailing business at the high end of the phone market. After all, Elop is the first non-Finnish CEO of the company.

If you listen to the Nokia board, you, too, might believe that:

Stephen has the right industry experience and leadership skills to realize the full potential of Nokia. His strong software background and proven record in change management will be valuable assets as we press harder to complete the transformation of the company.
Sure, Elop has experience in software, most obviously with the Microsoft Office division, but also prior to that at Macromedia and Adobe (ADBE). The problem is that none of that experience translates well to the smart phone market that Nokia is hoping to recapture. His experience has been creating proprietary software. The key in mobile is creating a great OS that can serve as an open platform for independent app developers.

The new CEO is also without any experience in the other important piece of this puzzle: consumer electronics. No one is expecting him to be a Steve Jobs, imbuing every new Nokia model with a holy geek glow simply by standing on a stage and pointing lovingly to all the new features. But having a sense of what it takes to design and market gadgets is crucial. The only hardware Elop has dealt with are high speed routers from his days as COO of Juniper Networks.

Nokia will have to count on Elop's reputation as an aggressive leader -- his nickname is reported to be the General -- that has led him to a series of progressive larger positions. Because in terms of his history, Elop is not bringing anything to the table that Nokia needs right now.

Image from WikiCommons
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