Nokia's Ollila moving on to meet even greater challenges

Jorma Ollila leaves top post at Nokia and moves on to Shell Oil

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By Anni Lassila
     
      What are great managers made of?
      Single-mindedness, temperament, self-confidence, intelligence, and a powerful work ethic.
      Words like these can be used to describe 55-year-old Jorma Ollila, who is leaving his day job at the helm of Nokia at the beginning of June. Ollila has worked at the company for 21 years, and more than 14 of those years he has been the company's CEO.
      He has turned a company involved in many different activities, and which suffered from both a financial and a leadership crisis, into an efficiently-operating manufacturer of mobile telephones and networks.
      About every third mobile telephone now being sold in the world is manufactured by Nokia. The company is in second place in the market for mobile phone networks.
      In Finnish industry, Nokia is in a class of its own. Its turnover of EUR 34 million is almost three times that of Finland's second-largest corporation - Stora Enso. Nokia's business profit was more than ten times that of the paper giant.
      In 14 years Nokia's market value has risen from about half a billion euros to nearly EUR 70 billion.
      So how has Ollila managed such a feat?
     
The vision of Nokia as an international giant in the technology field was born earlier, in the mind of the company's previous top executive Kari Kairamo. However, the steps that were taken were fumbling and unsuccessful.
      Grandiose and poorly-planned corporate purchases brought the company close to bankruptcy in the late 1980s. Nokia was still an image of a company led by established financial camps, managed on the basis of old-boy networks.
      Ollila represented a new age in which the measure of success is the rise in the value of a company's shares, and in which merits are more important in appointments than friendships or family ties.
      Key advocates of appointing Ollila were Ahti Hirvonen, the managing director of the Union Bank of Finland at the time, as well as Casimir Ehrnrooth, Nokia's Chairman of the Board. They felt convinced that Ollila was the right person for the job. He had studied abroad and worked at Citibank in London - something that was quite rare at the time.
      At the age of 40, Ollila had a clear vision of what needed to be done to get the company out of its crisis. Cuts had to be made, with no regard to rank or prestige. There were plenty of good people in the company, but management was below standard.
      The strategy of focusing on mobile phones and telecommunications networks emerged in 1994. Ollila had been at the helm of mobile phone operations for about two years before his appointment as CEO. Therefore, he knew where the field was developing.
     
As a manager Ollila was, and still is, very strict.
      However, he also has charisma, and a quality that inspires others. He brought "a feeling of the rising sun", says Yrjö Neuvo, who came to work at Nokia in 1993, and who retired as Senior Vice President last year.
      Neuvo was one of the members of the core group of people assembled by Ollila, which kept together until last year.
      Those who know Ollila say that he has the ability to listen and to collect information. He makes telephone calls, and thoroughly examines different points of view. He is ultimately very fast at making decisions, and does not delay in their implementation.
      "An analysis based on intuition, followed by rapid reaction", is how Ollila himself describes the Nokia way of doing things.
     
Ollila is leaving his post at a time when the mobile telephone branch is in transition. The new, more developed mobile phones are more like entertainment systems than mere communications devices.
      At the same time Nokia is confronting many new competitors in its battle for dominance of the world market.
      At the beginning of June Olli-Pekka Kallasvuo will take over as President and CEO. He and Ollila have been close partners in the Nokia management for 14 years. One can ask what the real significance of the change will be. The same two will stay on, and Ollila, who will remain the chairman of the board, will also continue to be Kallasvuo's boss.
      The question of who is to be Ollila's successor will be resolved when the pair leave the company.
      During the past year a number of highly intelligent forty-somethings have been taken onto the board of directors to grow. Kari Öistämö, Niklas Savander, and Tero Ojanperä are a group among whom the next CEO could well emerge.
     
Ollila himself will start work as chairman of the board of the oil giant Shell at the beginning of June. The work is "part time", but at least the early summer will be spent almost completely at Shell headquarters in The Hague, and visiting different Shell locations around the world.
      Initially Ollila had thought of taking a sabbatical of at least six months after the end of his day job at Nokia, but the new tasks got the better of the man who appreciates work and challenges.
      And there is no shortage of challenges waiting for him at Shell. Last year the company was forced to concede that its oil reserves were one fifth smaller than previously reported.
      The company has constant problems involving politics and human rights in its important production areas, especially Nigeria.
      On the other hand, in the autumn, the two companies that used to form Shell - Royal Dutch, and the British Shell - were merged. This gave the company more room to manoeuvre.
      It is here that a complete outsider, Ollila, was taken on as chairman of the board to get things moving in the Shell management.
      Ollila feels that it is "fantastic" to have the opportunity to learn a new field in which to solve great problems. Mobile phones have also changed the world, but they are still small change compared with the challenges of energy.
     
Many are expecting Ollila to take a greater role as a man of influence in Finnish society.
      He serves as chairman of the Finnish Business and Policy Forum EVA, and he also presides over the European Round Table of industrialists, a discussion club for European industrial bosses.
      However, Ollila plans to keep a low profile.
      In his view, European competitiveness can be improved more efficiently by leading successful European companies, such as Nokia and Shell, rather than by complaining.
      Perhaps Ollila is also fed up with publicity.
      He is clearly annoyed by the way the media has handles his speeches, and Nokia affairs in general. He has complained to journalists about articles they have written much more frequently than other managers of large Finnish companies.
      As a professional board member, Ollila does not have to appear in public at all, unless he wants to.
      Besides, Nokia's former President and CEO will have direct access to both Finnish and foreign politicians; the media is not needed as a mediator in this.
     
Helsingin Sanomat / First published in print 28.5.2005


Previously in HS International Edition:
  Nokia’s Ollila calls for more financial risk-taking in Finland (19.5.2006)
  Jorma Ollila presides over Nokia shareholders´ meeting for the last time (31.3.2006)
  Jorma Ollila to leave post as head of Nokia at end of May 2006 (2.8.2005)

ANNI LASSILA / Helsingin Sanomat
anni.lassila@hs.fi