Nokia CEO’s Letter to his Employees

Finland-based Nokia faces a key test this week when chief executive Stephen Elop finally unveils a plan to reverse a sharp slide in the fortunes of the world’s number one mobile phone maker.

Nokia holds a strategy and financial briefing in London on Friday, two weeks after it reported a 21 percent slump in fourth quarter earnings and Elop promised: “The industry’s changed and now it’s time for Nokia to change faster.”

Engadget has reprinted a copy of the text from an internal Nokia memo from the CEO Elop to the company’s employees. Here’s over to the letter which several analysts have termed ‘brutually honest’.

Hello there,

There is a pertinent story about a man who was working on an oil platform in the North Sea. He woke up one night from a loud explosion, which suddenly set his entire oil platform on fire. In mere moments, he was surrounded by flames.

Through the smoke and heat, he barely made his way out of the chaos to the platform’s edge. When he looked down over the edge, all he could see were the dark, cold, foreboding Atlantic waters.

As the fire approached him, the man had mere seconds to react. He could stand on the platform, and inevitably be consumed by the burning flames. Or, he could plunge 30 meters in to the freezing waters. The man was standing upon a “burning platform,” and he needed to make a choice.

He decided to jump. It was unexpected. In ordinary circumstances, the man would never consider plunging into icy waters. But these were not ordinary times – his platform was on fire. The man survived the fall and the waters. After he was rescued, he noted that a “burning platform” caused a radical change in his behaviour.

We too, are standing on a “burning platform” and we must decide how we are. going to change our behaviour.

Over the past few months, I’ve shared with you what I’ve heard from our shareholders, operators, developers, suppliers and from you. Today, I’m going to share what I’ve learned and what have come to believe.

I have learned that we are standing on a burning platform.

And, we have more than one explosion – we have multiple points of scorching heat that are fuelling a blazing fire around us.

For example, there is intense heat coming from our competitors, more rapidly than we ever expected. Apple disrupted the market by redefining the smartphone and attracting developers to a closed, but very powerful ecosystem.

In 2008, Apple’s market share in the $300+ price range was 25 percent; by 2010 it escalated to 61 percent. They are enjoying a tremendous growth trajectory with a 78 percent earnings growth year over year in Q4 2010. Apple demonstrated that if designed well, consumers would buy a high-priced phone with a great experience and developers would build applications. They changed the game, and today, Apple owns the high-end range.

And then, there is Android. In about two years, Android created a platform that attracts application developers, service providers and hardware manufacturers.

Android came in at the high-end, they are now winning the mid-range, and quickly they are going downstream to phones under €100. Google has become a gravitational force, drawing much of the industry’s innovation to its core.

Let’s not forget about the low-end price range. In 2008, MediaTek supplied complete reference designs for phone chipsets, which enabled manufacturers in the Shenzhen region of China to produce phones at an unbelievable pace. By some accounts, this ecosystem now produces more than one third of the phones sold globally – taking share from us in emerging markets.

While competitors poured flames on our market share, what happened at Nokia? We fell behind, we missed big trends, and we lost time. At that time, we thought we were making the right decisions; but, with the benefit of hindsight, we now find ourselves years behind.

The first iPhone shipped in 2007, and we still don’t have a product that is close to their experience. Android came on the scene just over 2 years ago, and this week they took our leadership position in smartphone volumes. Unbelievable.

We have some brilliant sources of innovation inside Nokia, but we are not bringing it to market fast enough. We thought MeeGo would be a platform for winning high-end smartphones. However, at this rate, by the end of 2011, we might have only one MeeGo product in the market.

At the midrange, we have Symbian. It has proven to be non-competitive in leading markets like North America. Additionally, Symbian is proving to be an increasingly difficult environment in which to develop to meet the continuously expanding consumer requirements, leading to slowness in product development and also creating a disadvantage when we seek to take advantage of new hardware platforms. As a result, if we continue like before, we will get further and further behind, while our competitors advance further and further ahead.

At the lower-end price range, Chinese OEMs are cranking out a device much faster than, as one Nokia employee said only partially in jest, “the time that it takes us to polish a PowerPoint presentation.” They are fast, they are cheap, and they are challenging us.

And the truly perplexing aspect is that we’re not even fighting with the right weapons. We are still too often trying to approach each price range on a device-to-device basis.

The battle of devices has now become a war of ecosystems, where ecosystems include not only the hardware and software of the device, but developers, applications, ecommerce, advertising, search, social applications, location-based services, unified communications and many other things. Our competitors aren’t taking our market share with devices; they are taking our market share with an entire ecosystem. This means we’re going to have to decide how we either build, catalyse or join an ecosystem.

This is one of the decisions we need to make. In the meantime, we’ve lost market share, we’ve lost mind share and we’ve lost time.

On Tuesday, Standard & Poor’s informed that they will put our A long term and A-1 short term ratings on negative credit watch. This is a similar rating action to the one that Moody’s took last week. Basically it means that during the next few weeks they will make an analysis of Nokia, and decide on a possible credit
rating downgrade. Why are these credit agencies contemplating these changes?

Because they are concerned about our competitiveness.

Consumer preference for Nokia declined worldwide. In the UK, our brand preference has slipped to 20 percent, which is 8 percent lower than last year. That means only 1 out of 5 people in the UK prefer Nokia to other brands. It’s also down in the other markets, which are traditionally our strongholds: Russia, Germany, Indonesia, UAE, and on and on and on.

How did we get to this point? Why did we fall behind when the world around us evolved?

This is what I have been trying to understand. I believe at least some of it has been due to our attitude inside Nokia. We poured gasoline on our own burning platform. I believe we have lacked accountability and leadership to align and direct the company through these disruptive times. We had a series of misses. We haven’t been delivering innovation fast enough. We’re not collaborating internally.

Nokia, our platform is burning.

We are working on a path forward — a path to rebuild our market leadership. When we share the new strategy on February 11, it will be a huge effort to transform our company. But, I believe that together, we can face the challenges ahead of us. Together, we can choose to define our future.

The burning platform, upon which the man found himself, caused the man to shift his behaviour, and take a bold and brave step into an uncertain future. He was able to tell his story. Now, we have a great opportunity to do the same.


CEO LifeStyle’09 Outcome

As an outcome of visiting CEO LifeStyle’09 I got more inclined to; 

  • Buying a Yacht. The way it was displayed carried me away and I immediately enquired the price. An base model of Yacht costs Rs.15,00,000/- and the maintenance is only Rs50,000/- PA. Also the dealers will take care of getting clearance from all regulators. Now I’ve set an additional goal of buying a Yacht within next 5 years.
  • Buying an in-house Golf course. Even this was displayed in the stall and I might buy it by next month. The entire Kit costs Rs.10,000/-
  • Then I came across a cigar stall. Thought I don’t smoke I like to collect and I got the address of the store so that I can start my collection.
  • Other thing is to set a swimming pool in my terrace. I came across a stall where they help to build swimming pools. And they said setting a pool in terrace is feasible. Again new goal is to set a swimming pool in my terrace within a year. 

For now these are the only things which have been in my long list of goals and I think I must work hard & smart to achieve these goals.

Heart Filling Visit to CEO Lifestyle’09

I’ve been invited by the organizers of CEO LifeStyle’09 which happened at Chennai Trade Center. It was a fair for High Net Individuals. It was filled with products / services which come at a premium. 

Some of the products that attracted me were; 

  • Rolls Royce Car
  • Voles Wagen Car
  • Yachts
  • Cycles
  • Spa’s
  • Cigars
  • Golf Kits
  • Swimming Pools
  • Leather Items 

And there were more things but I was not inclined to them. Also I was happier that I was able to network with few individuals which made worth attending the event. 

Over all I came across to know things that were enjoyed by some Elite Clubs and has added a couple of things to the list of things I must achieve in my life. 

Over all it is a thumbs up for the event. And I thank the organizers for organizing such a great event.

Peak of Confidence!!!

A hypothetical situation where 20 CEOs board an airplane and are told that the flight that they are about to take is the first-ever to feature pilotless  technology: 
It is an un-crewed aircraft. Each one of the CEOs is then told, privately, that their company’s software is running the aircraft’s automatic pilot system. 
Nineteen of the CEOs promptly leave the aircraft, each offering a different type of excuse. 
One CEO alone remains on board the jet, seeming very calm indeed. Asked why he is so confident in this first un-crewed flight, he replie: 
“If it is the same software that’s developed by my company’s IT systems department, this plane won’t even take off.” !!!! 
That is called Confidence!!! 

Opportunity to network with 100 CEOs

Confederation of Indian Industry (CII)  and MPower Business Facilitators Limited present the National Conference on “Survival & Growth Strategies in Changing Business Scenario” on April 11, 2009 at Coimbatore. We are expecting around 400 delegates including 100 CEOs (of that 62 are already registered as of now), 150 senior managers, 50 academicians of premier instituties and 100 students.   And above all, the CEOs of leading companies of India who are making good business even in the recession will be there to share their success stories.


We will be glad to offer you the following sponsorship options:


Associate Partner


Investment: Rs.25,000 only


Benefits: We will benefit  you with the facility of displaying  your company’s name in our official website. We will put your companies literature as a part of Delegates Kit and at the last of the conference, we will also announce your Companies name as a thanking to be our associate partners with recognition of sponsorship on a sign at the entrance to the function.


Event Partner


Investment: Rs.3,00,000 only



Benefits: We will benefit you with the facility of your company with the logo of your company on the backdrop which will be visible in main conference hall.


Your company’s name and logo will be visible on the delegate kits cover which will be provided to delegates as materials to refer in conference.


A banner of your company is displayed at venue and we will display your company’s name in our official website.


Your company also receives the chance of prominent visibility throughout the conference with the opportunity to nominate speaker for the session.


With this your company’s literature will be put in delegate’s kit.


We will also be providing you with the facility to put stall of your company in the place around where the conference will be held.


At last of the conference we will also announce your company’s name as thanking to be our Event partners with recognition of sponsorship on a sign at the entrance to the function.


Kiosk/Stall Partner


Investment: Rs.1,50,000 only


Benefits: We will benefit you with the facility of a placing your company logo & name in the banner which will be displayed at venue


We will display your company’s name on our official website through this our delegates get to know about your partnership in the event.


We will be providing you with the space to put stall of your company in the place around where the conference will be held and this will give your company a chance to exhibit your product and services.


At last of the conference we will also announce your company’s name as thanking to be our Kiosk partners with recognition of sponsorship on a sign at the entrance to the function.



Session sponsor


Investment: Rs.1,00,000 only


Benefits: We will benefit you with the facility in which we will display your name in our official website.


Your company being a session partner will also get an opportunity to nominate speaker for the session you will be sponsoring who will be speaking on the topic of session.


With this your company’s literature will be put in delegate’s kit.


At last of the conference we will also announce your company’s name as thanking to be our event partners with recognition of sponsorship on a sign at the entrance to the function.


For more details contact;


Aparna Raman

Executive- Corporate Learning Solutions.


MPower Business Facilitators Limited

B 204, Pratik Indl Estate,

Near Wockhardt Hospital,

Mulund-Goregoan Link Road,

Mumbai – 78.

Tel: 022-25662656/5726