I have been repeatedly asked that what killed Nokia. I thought I'd better do the analysis now, when I still remember something about it. Tomi Ahonen writes exhaustively how incompetent formal Microsoft executive ruined it all, but I have to disagree with Ahonen that much, that there were also other reasons than just Elop.
Accusations on the burning platform memo are valid, but Symbian had already been burning for years. It was like a fireplace that keeps the house warm, but must be watched. More or less the memo peaked the crisis both externally and internally. Despite the crisis, the issue of what was the pothole that caused the decline of the competitiveness and consumed majority of the R&D resources, has not been discussed. Here I name a factor that hasn't been accused before: middle management.
I have several posts where you can find me reflecting this very topic, but in very general level. Now to be more concrete, I'll list few major reasons why Nokia among other big organizations failed:
Culture of finding problems, risks and saying no.
Engineers are taught to find problems. Under pressure, stress can create impossible obstacles out of ordinary challenges. If company culture does not support positive approach of accepting both the challenges And the cruel facts which might follow, the Culture of No get's into speed and managers prefer to make anticipated setbacks easy for their teams and themselves.
Culture to support innovation.
Despite Elop accused his employees of failing to deliver innovation, good proposals never stopped flowing despite repeated setbacks. What explains these contradicting views could be explained by having a highly innovative employees and a middle management cutting the wings of the proposals. According to Johtopätkii, creativity consists of competence, motivation and commitment which were in order thanks to the good reputation of the company among earlier recruits.
Making good work.
Everybody wants to make a good work. It's a matter of what you measure. If project has multiple stakeholders, everyone of them wants to optimize their part of the project. Abstract example; if sourcing, project manager and finance do magnificent work, the result can be poor hardware, hasty design and lousy experience. The need to make good work is also connected to fear of mistakes and to the pressure of getting good results to keep your job.
Pressure and fear.
Before starting in Nokia I had experienced two lay offs and been part of terminating two contracts, but I still thought that it was a unusual situation. Lay off waves in Nokia came more often than once a year. Even a single wave has a huge effect to the motivation, self esteem and effectivity - and repeated more so. Also reorganizing, replanning and the mistakes along with the corrective actions consume a huge amount of time and resources. Further if management anticipates new waves, they try to do extra good work and to say often no, which leads paralyzing the other half of the company.
Lack of vision.
Before Nokia seemed to know what was it and where it was going. But during the great rush Nokia had around the time first iPhone launched, they had focused on money and productivity. When readjusting the organization and portfolio to face the new challenge, mission and vision was replaced by an internal disputes about whether to rely on it's true competences. (Competencies that had already producticed the first touch screen smartphone four years before Apple, but was cancelled due the lack of managerial trust.) Or to make fast correction move and glue the touch onto the existing platform and rely on the ridiculous services agenda.
After that the vision has been jumping from side to side, which enabled the next point.
Rise of the career opportunists.
The questionable character in humans is that when things seem hopeless, they face up and hope that some extraordinary force turns everything good again. In Nokia this meant getting new talent to lead things. Positions started to slide outside of Finland due to the appeal of London and Silicon Valley. What happened was that new people started repeating old stupid mistakes, but now their accent was sexy and their designs rocked - at least on paper. Unfortunately when the faith is strong and you made the hire, seeing the truth takes usually way too long.