The Impact Of Corporate Politics: A Lesson Learn From Nokia
The maker of the world’s best selling mobile devices that sold more than 250 million units of its 1100 and 1110 — Nokia Corporation. The company once became a shining light in the telecommunications and electronics industry from 1865 to 2006.
But how did Nokia declined and fall terribly?
At the height of the 21st century, Nokia’s end series with the flagship product line — N95, the phone that had all the makings of the modern smartphone but with the wrong type of human-machine interaction. The series received a generally positive response until the industry was rocked in 2007. The significant swings in Nokia hit when Apple released the iPhone, it was a phone with a full touch interface, and the secret to Apple’s success was the capacitive touchscreen display and desktop routes in its Operating System (OS). In the following year, Google has released its first Android Operational phone and the famous battle of the Smartphone Operating System between iOs and Android had begun. To cope up with the market trends, Nokia did respond with the 5800 model, and it was indeed a commercial success because of the supplied Stylus and sold at an affordable price, but it was viewed negatively by critics due to its poor software implementation.
But how did Nokia started to fall? In an article released by Wall Street Journal in 2005, Nokia’s Former Vice President and Chief of Design Frank Nuovo revealed that in wage to counter Apple’s Operating System, one of Nokia’s Research and Development team have tried to revamp Symbian Operating System which is commonly utilized for Nokia’s devices and the other has tried to run MeeGo — a new operating system from scratch. People involved in both efforts said that the two teams competed with each other for internal support and attention from the top executive.
Internal politics is a divisive force that plagued Nokia’s R&D operations.
In addition, Nokia’s key business partners; Qualcomm, a chip manufacturer has complained over Nokia’s inefficiency and abortive approach to come up with new strategies. Nokia kept throwing money to a problem where instead of investing in innovation.
In 2010, Nokia’s CEO Stephen Elop arrived, has terminated out of the core priority projects from its operation centers around the world. He then called for a meeting in Germany where attendees are engineers and product managers as far as from Massachusetts to China. One of the attendees described the meeting as a ‘nightmare’ were all representatives from its essential partners grappled to make themselves heard, “People were just trying to keep their job. Each group was essential factors for delivering the most competitive phone, as you could see from the situation it was pretty much cut through dog-eat-dog, not a good environment. However, out of these meetings, two OS has emerged a new version of Symbian and MeeGo, a promising software that finally arrived in Nokia N9, although MeeGo was a pretty good attempt and was a great step in the right direction, it was little too late.” one of the attendees recalled.
In 2011, Microsoft and Nokia collectively announced a major partnership which has concluded that Nokia will adopt Windows OS as its primary platform of smartphone features taking Symbian and MeeGo out of the picture. Nokia then unveiled its first Windows Phone 7 devices, Lumia 710 and Lumia 800. In 2011, Samsung degraded Nokia as the largest phone manufacturer in the world. Two years later, Nokia has introduced the 925, a slimmed version of 920.
Despite the introduction of new smartphones to competitively race in the market, app developers are slow to keep on board the Windows platform which led to €115 Million of operation-related loss with revenues falling to 24% of the second quarter of 2013, and since 2011 Nokia sustained a €4.1 Billion of operating losses, at this stage, the game is almost over.
In September 2013, Microsoft announced a $7 Billion Deal to acquire Nokia’s Mobile Phone Business Unit, and Stephen Elop has stepped down as Nokia’s CEO where he ended his speech saying, “We didn’t do anything wrong, but somehow, we lost”. A year later, Microsoft then announced that it has phased out Nokia’s brand on Lumia’s smartphone, and now known as Microsoft Lumia.
Being the first in a business idea is not a guarantee of commercial success and the advantage you have yesterday will be replaced by the trends of tomorrow.