Jorma Ollila feels grief over sale of Nokia phones – admits to mistakes

Former CEO sees no single cause, event, or culprit behind company's problems, expects Nokia to rise again

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Heidi Piiroinen HS
"One reason why I have survived and remained healthy is not lamenting the past”, Jorma Ollila says.
"One reason why I have survived and remained healthy is not lamenting the past”, Jorma Ollila says. Kuva: Heidi Piiroinen HS

On Tuesday morning, September 3rd at 6:00 AM Nokia announced that it had sold its Mobile Phones unit to Microsoft. The problems with the company's mobile telephones operations were common knowledge, but Finland nevertheless was startled by the news.

Nokia was once like a miracle that shone light on Finland in the midst of the depression of the 1990s. The company staked out a position for Finland in the global economy.

Nokia former CEO Jorma Ollila 's telephone rang late the previous evening. The company's Chairman of the Board Risto Siilasmaa told him about the news that was to be announced on Tuesday. "The emotional reaction was certainly the same as with many other Finns and Nokia people: sadness and shock", Ollila says.

Dealing with the grief has taken some time: "Nokia's mobile phones were a part of my life for nearly 30 years."

Ollila resigned from Nokia in late May 2006. He stayed on as Chairman of the Board, somewhat reluctantly he says, until May 2012.

The company's exceptional success is personified in Ollila, and consequently, Ollila was hounded by the media for comments after the Microsoft deal was announced. Ollila remained silent. Many television viewers remember the image of Ollila fleeing journalists in the corridors of Parliament.

"Based on my experience I can say that former CEOs should not give advice or make public comments. It would be quite improper, and would harm the company. The same goes for former chairmen of the board."

Ollila is now speaking publicly for the first time since the events. What exactly went wrong?

Ollila sighs. The coffee cup on his table shakes.

In his view there is no single cause, event, or culprit behind the problems of the company's mobile phone business. Many things link up with each other.

But if some ultimate cause needed to be named, Ollila says that it would be the problems that Nokia experienced in software know-how. The problem was recognised already in the 1990s. There were plans to fix them, but they were not implemented.

"The Mobile Phones Unit once had 1000 people in Silicon Valley, with the task of picking up on new trends of software development. But we were not successful in the way that Google and Apple were later. This is the key failure for Nokia."

The alarm bells started clanging at Nokia in the summer of 2007. Apple introduced its iPhone, and people spent nights queuing for it.

When Apple entered the market, its starting point was different from the one that Nokia had. It developed the software first, and the telephone later. Apple also had little to do with telecommunications operators.

For Nokia, the telecoms operators were important customers, and they had soundly criticised the company already in 2004. The operators said that Nokia did not sufficiently tailor its telephones to their needs. The operators cut back on purchases.

"Apple concentrated exclusively on expensive telephones. At Nokia we had thought of doing the same, but the operators wanted inexpensive models instead."

In 2007 it was recognised at Nokia that the Symbian operating system that it was using in its smartphones was growing obsolete. Planning had started a couple of years earlier on an operating system based on an open source code already. In 2010 it was given the name Meego.

An operating system is software that guides the most important functions of a telephone. It is visible to the consumer on the telephone's display, and is a central factor affecting what can be done with the telephone.

As an executive Ollila has always emphasised values, and the significance of the company's own operations model. According to Ollila, a key value was trust. Another was the right to fail as long as the same mistake is not made twice.

According to Ollila, there were assurances from different parts of the organisation in 2008 and 2009 that Symbian could be upgraded, and made competitive.

"On the Board we had to trust that the messages coming from the organisation were accurate. After all, they had been accurate before. But suddenly the old confidence in the organisation was no longer there. The products started coming in behind schedule."

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