Strategic Agility for Nokia

Nokia

As we know Nokia today, it had never been the same. Nokia, the present Finnish Giant, laid its humble roots in 1860 and gradually expanded into the business of forest products, rubber, generators and cable works. Entry into some of the business had resulted from diversification stemming from its emphasis on technology and innovation . Finally, Nokia dived into the Telecom Business. Nokia had acquired a handset maker in 1970, SEL in Germany & Ericsson Data in Sweden for Computers and sold off its cable business. Its success in USSR, its major market outside Finland, overshadowed these hefty acquisitions and exposed Nokia where it underestimated the intensely competitive industry. It became imperative that it wasn't strategically sensitive given its fall in ex-USSR. Top Management was in disarray and ownership was in turmoil. Following the suicide of its then CEO Kari Kairamo in late 1988 and difficulties in various businesses, Nokia struggled to rebuild a top management team. There was no Leadership unity on which business to build on. In the absence of the above two capabilities of Leadership Unity and Strategic Sensitivity, it could not channelize its resources properly.

Birth of Strategic Sensitivity

Nokia's focus on digital mobile communications was the result of the fortuitous convergence of foresight about some key discontinuities and of various personal insights, not of a systematic formalized approach to strategy formulations. With its long experience of serving small but demanding local operators in Finland, and with recent market liberalization, Nokia happened to know how to provide cost efficient end to end solutions to small operators who did not have R&D centers of incumbent telecom monopolies. A bright young business planner suggested the regrouping, and got support for the regrouping of base stations and switches into a new Cellular Network Division. This left Handsets as a separate business group. Thus, breaking Tunnel Vision, it grew into Nokia Mobile Phones. This could not have been possible without High Quality Internal dialogue.

Nokia became aware of two key discontinuities: (i) Governments were likely to invite new entrants to provide mobile services on a commercially competitive basis & (ii) full digitalization of network was seen as likely. Nokia displayed Heightened Strategic Alertness by entering into pan European GSM Market. It started building its focus on ‘3G' Expectations of its key operators. Thus, Nokia opened Strategic Process. After fall of Dotcom business in 2000, it started concentrating value domains which converged entertainment business and Mobile Devices.

Channelizing Resource Fluidity

With such resurgence there was flood of Resources. This Resource fluidity led to fast uncontrolled volume growth. To channelize these resources