Nokia has reinvented itself over the last 150 years several times. During the last 20 years it has faced couple major crisis. When we read about the problems and solutions, there can be seen some clear patterns.
Going from the worlds leading mobile phone producer to not being in the market has been studied. One of the core reasons, as identified by researchers and in house leaders, was the culture of fear. The latest developments of Nokia story have the most powerful lesson to share. The contemporary development in the world is challenging their solutions. The reason why they are in this situation, is in not learning and doing the real change. Nokia survived the tough situation after mobile phone business, because the crisis got people to adapt. Adapting is important, but unless it causes true change, then the real root cause will not be solved.
The ear of mobile phone came to an end because people were accepting things they should have fixed. The culture was more of hiding problems, because the big picture still looked good. The reason for hiding problems was twofold; the leadership and money. Leadership was not showing adequate interest in the root causes and was accepting delays and failures. Money flowing in to leaders and upper management made them reluctant to challenge the existing culture. This kind of behaviour is pretty easy to notice, if the leader of the organization is willing to. This kind of sub-level culture can be changed. It is not easy, as Nokia shows us. The place where I see Nokia failing was the lack of true organization wide development process. You can avoid that!
At the end of mobile phone era in Nokia, there were made some significant changes. We all can read of those from the book “Paranoid Optimist” by Risto Siilasmaa. I strongly recommend to read the book. It is a good book and gives great lessons on forecasting and working with scenarios. But it also shows the path chosen for implementing the change. The new culture was implemented by Siilasmaa using the “be the change you want” process. Unfortunately in every organization, when a bit bigger, the leader cannot be a true example to every employee. This is the reason, why Nokia is today having problems.
Executive leaders learnt to act and live the culture of openness and challenging. The lack of not training the entire personnel on that caused dilution of the effect within the organization. Leading by example only works on 15 to 20 people. If those people are not well trained to spread the culture, they all do it in their own way. In bigger organizations (with about 100 employees or more) this means that the culture will not reach the wanted level throughout the organization. At the end organizations results and success are defined by the culture, not by products or services. This is one lesson we all can learn from Nokia.
Even the best organizations can fall in the trap of satisfaction. Culture, which is not supporting responsibility and raising problems to be discussed in the early phase, is the root cause for failure. Nokia has survived multiple radical changes. But at the same time, it has made those changes mostly because of failing in leading the change. That is the second lesson, if you don’t prepare and lead the change, you will not be successful in the long run. If you want to build lasting competitiveness, then you need to ensure that your culture does support learning and challenging the status quo.
Emotions and beliefs are in the heart of every culture. Managing behaviour helps, but it is not enough in organizations with a 100 people or more. An example of well lead culture in international organization is Konecranes. Their approach and the commitment the boardroom has shown to building, maintaining and nurturing culture has also paid of in business. There are thousands of small enterprises and start-ups, which have the right kind of culture. There can be different kinds of leaders and even leadership styles, if the culture still allows open and early learning of mistakes and customers.
There are multiple studies showing, that the investment on leadership culture pays of well. The best figures show that for 1 € invested, the payback can be up to 12 € in the first year. When we study successful organizations, the one thing they have in common is a clear culture, where people don’t have to be afraid of mistakes, where problems are seen as opportunities to improve, not to punish.
If you want to create a winning culture, or to ensure that your ways of nurturing what you have, there is a way to do it. First you need to learn, what the management team is like. What kind of personalities and behaviour is natural for them. Then you need to create a training program, which rolls out the wanted culture and repeats it over and over again. Your Key Performance Indicators need to be built in the way, that they support the wanted culture.
Good culture with trust is good business with profits. When you want to reach this, get in touch. Lets have a discussion of what and how in your organization should and can be done.
Your partner in making success happen, Kari I. Mattila, emotional intelligence advisor