Winning across Global Networks: How Nokia Creates Strategic Advantage in a Fast‐changing World

Citation

Curwen, P. (2010), "Winning across Global Networks: How Nokia Creates Strategic Advantage in a Fast‐changing World", info, Vol. 12 No. 5, pp. 79-80. https://doi.org/10.1108/14636691011071176

The cover blurb uses the term “groundbreaking” although there were similar books published by the same author in 2001 and 2002, the former of which was called The Nokia Revolution. According to the introduction, the book stands out because of the breadth of the interviews carried out during the period 2004/2009. In that respect it is helpful to note from the pre‐release brochure that the book “does not focus on technology or mobile communications. Rather, it is about global strategy in fast‐changing business environments”. However, it adds that the current strategy is about “preparing for the great smart phone rivalry” so what the book allegedly does not focus on is evidently of some relevance (and see chapter 7 onwards).

The introduction states that the purpose of the book is to show “how companies operating in technology‐intensive or marketing‐intensive industries, or both, can compete in order to win in a global marketplace”. According to Steinbock, whereas the strategic orthodoxy claims that a choice must be made between quality and cost advantage, the lesson from Nokia is that a company must excel at both “while also excelling in innovation”. He goes on to say that Nokia has achieved a “combination of strategy, organization, and values that is vital in the dynamic, increasingly global, and rapidly changing environment” and that “a global mindset is a must”. He states that Nokia has always been obliged to look outside its home market because the market is so small, in which respect it is almost unique as a multinational, and that this has taught Nokia “humility”. But, humble though it may be, “Nokia is the bellwether of multinationals in an increasingly multipolar world”, by which he appears to mean one with multiple power centers worldwide. Hence, in his opinion, its story is relevant to multinationals located in large and small countries and in advanced and emerging economies.

So, every multinational manager worth his salt must buy and read this book, but is the pudding a touch over‐egged?

The first chapter is a potted history of Nokia since 1865. People, countries, market segments, wars etc. whirl past at a rate of seven years per page. By the end of it, one is thoroughly confused, wishing desperately for some kind of schematic representation linking these factors through history and for some meaningful information on the relationship between the company's finances and its strategic choices.

Chapter 2 begins by noting the fact that, in 2008, Nokia depended upon the US for only 4 percent of its revenues, and this is compared favorably with the situation of its rivals although some readers might think that having a minor presence in the world's largest market for modern technology is not such a virtue. Then the text suddenly switches to the virtues of humility and the avoidance of a personality cult among top executives – the “we” rather than “I” approach. Yet in the late 1990s, a so‐called four‐man “dream team” was created at the top of the company and much is made of the contribution of certain other individuals. According to the then CEO, key people in the late 1990s “were always available. No exceptions, no compromises, no holidays.”

So what then is the secret of success? Sheer hard work or thinking outside the box? Having effectively advocated the former, the chapter then advocates the latter, noting Nokia's rejection of the prevalent resource‐based and market‐based strategy paradigms in favor of a market‐making strategy. This is based upon a combination of timing, speed and rhythm: crudely, wait for the emergence of a mass‐market and then scale up to supply it faster than rivals. By rhythm is meant the striking of a balance between bringing multiple products to market and improving each incrementally and bringing one blockbuster product to market with large gaps in time in‐between during which a company becomes uncompetitive.

On p. 52 (and e.g. on p. 64 where “courage”, meaning “perseverance”, is added for good measure) another quotation appears citing export orientation and humility, but why the need for constant repetition? On p. 53, Nokia Siemens Networks reappears, but if we want to know what the company does or why it was formed we have to wait until p. 188. Narrative links are so far not the book's strong point. The text also appears at times to be somewhat contradictory. Thus, chapter 3 extols the virtues of long service and communal decision‐making, yet the CEO “will listen, support and facilitate, but he will also make decisions, including difficult decisions”, when necessary. Is this not what happens in other multinationals? And do they not rotate executives? Evidently not as successfully as Nokia, but no comparisons are provided.

Chapter 3 emphasizes that whereas some companies are driven by their strategy and others by their organization, Nokia is driven by its people. It never set out to become particularly large, but then in 2006 along came Nokia Siemens Networks. Despite its enlargement, Nokia (and NSN) are based on values, trust, stretch and, yes, humility. The values do not change, unlike the strategy. They need to be shared so the rest of the chapter is a discussion of how to achieve this via human resource management.

Although Nokia is driven by its people, this appears to become driven by its “culture” in chapter 4, which may or may not be the same thing, and the chapter is all about Nokia's changing structure. Here again, one restructuring follows another in quick succession and one can easily lose track of the “how” and “why”. However, chapter 5, which is about R&D and innovation, and chapter 6, which is about such matters as supply chain management and branding, are much clearer and better organized. Chapter 7 opens by making the point that so far the discussion has been about preconditions for success and it becomes necessary henceforth to examine the “how was it done?”. The chapter is helpful but lacks detail as in the discussion of LTE. Chapter 8 on individual markets is far too brief, with no detailed reference to competitors. Chapter 9 summarizes the previous text but is poor on predicting the future – it is notable that Nokia has just reorganized for the second time in six months.

It is inevitably the case that if you interview everyone, you get a lot of repetition, so perhaps everyone did not need to be interviewed. Throughout, the thrust is that “Nokians” did things in this or that manner and it worked well. But it is never explained in any detail why other multinationals chose to do it differently or why they did it the same way but not as well. In practice, the recent history of Nokia is about mobile telephony, so comparisons with the likes of Motorola or Sony‐Ericsson (barely mentioned) would have been useful. It is also surprising that a crucial term such as “platform” is not indexed.

Parts of this book are difficult to follow and there are contradictory statements and a periodic lack of detail. At $28 for a hardback, the book appears to be good value. However, the core text is only roughly 60,000 words long and there are 54 pages of executive names, notes, acknowledgements and index.