Home5GTransformation is in our DNA – Risto Siilasmaa, Nokia chairman

Transformation is in our DNA – Risto Siilasmaa, Nokia chairman

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Nokia’s transformation under Chairman Risto Siilasmaa is one of the most significant corporate turnarounds in recent history

Nokia’s transformation from industry laggard to technology leader over the past 5 years is one of the most significant corporate turnarounds in recent history.  While traveling across Europe this summer engaging with technology leaders, I met with Risto Siilasmaa, Nokia chairman, to discuss the future of 5G and IoT as well as the key drivers associated with Nokia’s change in fortune, which has helped fueled Finland’s transformation from “Sick Man of Europe” to “Nordic Tiger”.

Below is the first in a series of Q&A discussions with Siilasmaa, who I had met years ago, just after he moved into the role of Nokia Chairman.  Please see Nokia transformation timeline under Risto Siilasmaa’s leadership.

Jeff Mucci: Risto, please tell us about the history of Nokia starting with the name.

Risto Siilasmaa: Well, Nokia is the name of a river in central Finland, along the banks of which the first Nokia factory was built 152 years ago. It was an example of some leading-edge technology discovered in Germany being copied with pride in Finland by the founder of the company, who visited a factory in Germany, saw this amazing machine, and created a similar one. And that’s how Nokia got started.

Nokia has been in multiple businesses over the years, and as we went through this last transformation, I really felt that somehow in our DNA, in people’s minds, this history of the company with these multiple turnarounds and reversals and transitions from one industry to another, people knew about that and they got faith from that. And even if we are now in the midst of another transformation, we’ll manage that, because we always have and we have done it so many times. Even if people today hadn’t personally been there previously, they knew that the company had done it.

And it’s sort of a funny, sort of a philosophical thing, but I really feel that a company has an identity and a soul which is independent of the people. It’s what people know about the company, and that knowledge gives us an obligation to do things in a certain way. And I have never before experienced that, but I really felt that during this transformation.

And over the last four or five years, we have really transformed to the extent that out of our 100,000-plus employees today, less than 1% carried a Nokia badge in 2013. It is a huge transformation. Of course, a lot of these people worked with Nokia earlier. Then they moved to NSN and started on their path to go to an IPO with their own identity. Since 2013, only a very small fraction remains of that group of Nokia employees, and that’s a sad thing, but I know a lot of those people, and they have done well. A huge number of new companies, for example, have been started in Finland by people who left Nokia during those years or who then, later on, left Microsoft.

Jeff Mucci: What is your vision for Nokia?

Risto Siilasmaa: Well, what we had was the ultimate luxury. It was a very painful luxury, to be honest, but as we had sold-off the mobile handset business, we basically didn’t have a business anymore. We had a lot of cash, and then we had ownership of certain businesses, half of an ownership of NSN, and complete ownership of HERE, which was the digital-mapping business which we acquired in 2007. But the Nokia business we had known didn’t exist anymore. So, we had sort of a double disaster in front of us. We had to reinvent the company. And that’s a rare opportunity for a large company.

And, of course, the only  right way to do that is to try to think much further into the future: what kind of world do we live in, in 10, 20 years, and what kind of a company, with the heritage that we have, could be successful in that kind of a world, because we can’t go into something completely different. Again, this legacy weighs on our shoulders and people have an expectation of what Nokia could do. So, there are some boundaries around what we can do.

And we believe that the world will become a programmable world. Basically, everything will be programmable. And, of course, more and more of that control will be implemented by AI, but the world will be programmable in the sense that we can very clearly define, based on the input, what the output in the real world should be. And that means more efficiency. It means less waste. It means, basically, better life conditions for people. It has to mean a safer environment, a cleaner environment. It has to mean that we can get rid of the carbon-based energy. We can basically use solar energy in various ways in a much more direct fashion.

So, basically, we are, as many good technology companies are, all about certain fundamental challenges that humankind faces and helping solve those challenges. In this programmable world, there are many things that are mandatory. And efficient, digital communications is absolutely one of the key things. In that world where tolerances will be much lower, everything will be much more fast-paced and you have to have certain reliability and security underlying everything. That we don’t yet have.

We believe that a company based in Finland is uniquely positioned to be a trusted partner for large customers across the globe, from China to the U.S. and everything in between. And that truly is an opportunity for us that we will pursue. So, for Nokia, it is about being the digital nervous system of the world, and providing certain higher-level services for verticals much higher on the stack, as well. Digital health is one of the new areas that we have embarked on, and it connects to this digital nervous system of the world in a very direct way and it very much connects to one of the existentialist challenges that we face as a humankind – to give everybody a life that is worth living and create  a healthcare system that is fundable, as well.

 

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