Untitled - socium.ge

Silicon Valley and Finland 75respects more advanced than Nokia’s but neither one was big enough tosucceed globally on its own. Therefore, in 1979, Nokia and Salora saw thatthey had to join forces to compete in the new NMT network market andstarted a joint company called Mobira. Soon, Nokia was able to acquire thecompany entirely and thus concentrated the innovators and the culture ofinnovation in mobile phones in Finland. Nokia’s first successful product wasthe Mobira Talkman phone for the NMT network and the global “killerapplication” was the Nokia 2100 GSM phone series in 1992–3.A work and management culture of innovation is something that has beenstrongly emphasized by the new leadership at Nokia, which lifted Nokiafrom near-bankruptcy to be one of the most successful global companies. Inthe process of finding a way to survive the crisis of the old industrialconglomerate model that Nokia had become by the beginning of the 1990s,an analysis was made in order to define the key characteristics behindNokia’s earlier success. The result was the so-called “Nokia way,” whichvery much summed up the spirit of the early innovators of Nokia lab, andwas seen as the work and management culture for the dynamic networkenterprise that Nokia wanted to become.Beyond the rhetoric, the key content of this restructuring can be summedup in the following way. By the late 1980s, Nokia had become a hierarchicalconglomerate of eleven largely unrelated industries in mature markets,led by an old industrial-patron style of management. This structure andmanagement culture meant that Nokia had become very undynamic in reactingto, and even less in leading, its markets. The new CEO Jorma Ollilabrought with him a new way of thinking about the company structure and itsmanagement. First, he determined that Nokia should become “telecomoriented,global, focused, and value-added.” Following this vision, Nokiagradually sold off all its divisions other than mobile telecommunications.Another key principle that Ollila introduced was “structure drives strategy.”As a result, Nokia started to turn into a network enterprise that focused onthe core innovation, branding, and production and networked with othercompanies for the rest of its needs. Nokia’s market, production and R&D areglobal, so that, currently, the network includes thousands of partners fromproduction and R&D partners to clients (mobile phone dealers and networkbuyers).What differentiates Nokia from many other companies is the fact that, inproduction, it concentrates on the key mobile technology production andbuys all the other components from its subcontractors. Nokia’s own R&D isalso much more product-oriented than is generally the case: Nokia leaves thebasic research to universities and then cooperates with them closely (this isguaranteed by the fact that the Nokia Research Center has to earn 70 percentof its finance by selling its research to the business R&D units). But the main