Killing Nokia. A Frank Confession of a Former Company President, Part Three

Hey.

The story of how Nokia was killed from the inside turned out to be long, but, for my taste, exciting. Intrigues, undercover struggle and moves are fully present here, which are not at all expected in companies with a worldwide reputation. We continue to review the chronology of how and with what tools Nokia was killed. For those who skipped the first two parts, it’s time to start reading with them.

We stopped in February 2011, when Stephen Elop, CEO of Nokia, publicly announced that the company had no chance with current products, and the salvation would be cooperation with Microsoft, an attempt to launch joint products in a short time. This caused a natural reaction in the market, Nokia shares went down, the company’s employees were outraged and considered it a betrayal of the company. But the cards were dealt, and the game continued.

The cooperation agreement with Microsoft was signed only on April 21, 2011, lawyers worked out the provisions of the agreement for a long time, for Stephen Elop it was a difficult time, he had to fend off attacks from all sides. Literally, every day he defended his position and the deal with Microsoft, obstacles surfaced from everywhere. We must pay tribute that Stephen Elop was able to hold out for two insane months when the pressure on him was at its maximum.

The ink on the contract did not have time to cool down, when the prepared plan immediately went into action: the company needs to abandon such a number of employees, there are too many of them, they are too expensive. Inside Nokia, a plan was drawn up, which was announced in May – the company officially announced the dismissal of 7 employees (000% of Nokia’s staff at that time), as well as that by the end of 12 several thousand more people will be laid off. The reason is obvious, all these people who worked on devices and operating systems for future products are not needed, since a different direction of development has been chosen and Microsoft will help with its own resources.

The Nokia cleanup began very zealously, Stephen Elop met with workers at the company’s factories, convinced that everyone would get a new job. Speaking at the company’s headquarters in Salo, he mentioned that he greatly appreciates the contribution of everyone and expects Meltemi to be a breakthrough. At that moment, he already knew for sure that he would destroy all R&D departments that are responsible for the development of promising platforms. Nokia created a special team of HR specialists to help those laid off in employment. At the same time, there was an unspoken rule that employees should be deterred from moving to direct competitors, for example, Apple or Samsung. There were no effective levers to keep people from such a transition, they were just trying to convince them of this. The hiring of former Nokia employees was in full swing, in 2013 they accumulated such a number that Samsung opened a research laboratory in Espoo, most of the employees came there from Nokia. This laboratory did not arise from scratch, since the transfer of Nokia employees was massive, thousands of engineers, developers, people of other specialties found work at Samsung. Thanks to them, we saw a rise in the quality of Samsung devices in many aspects, at one time the company received personnel that otherwise needed to be nurtured for decades, it was a gift of fate.

The first wave of layoffs swept across Nokia, yesterday the spaces filled with people were empty. Samsung decided to take advantage of the situation and offered to buy out unnecessary units, something that Nokia refused. For example, ditching 7 employees should have saved $ 000 billion in operating expenses, but those people needed to pay severance pay. The South Korean giant was ready not only to assume all costs, but also to pay for patents, existing developments in hardware and software. For Nokia, this was already a dead weight, but for all this the company could instantly receive billions of dollars, and this solved all financial problems. As far as I know, this proposal was never communicated to the board of directors of Nokia, and Samsung’s attempt to offer something was explained by rumors and nothing more. Samsung’s blunder was that the company did not dare to make a public offer, which would certainly have been accepted and it would have been impossible to hide it.

Huge departments were closed inside Nokia, but they left behind documentation, prototypes, developments that could potentially be used by someone. In the second half of 2011, Nokia’s security service received an order to begin the destruction of everything that was associated with projects for MeeGo, Meltemi and a number of other developments. No explanations were given, and they were not needed. Those who worked on these projects left the company, which means that traces of their work need to be destroyed.

The prototypes of the devices were destroyed physically, nothing was left of them except the inventory in the company’s papers. One of the former employees of Nokia told how it looked in practice. He was one of the last in the department, he got a job in marketing Nokia, so he just moved to another office. Having been in charge of products before, he saw many devices that were already ready to be launched on the market, as well as early prototypes. In the department, they were stored on special shelves, each project had its own set of devices.

Together with the security officer, they described each of the prototypes, indicated its number, code name. The list turned out to be large, on several A4 sheets. Then all these devices were collected in several buckets, and together they went to the basement floor, where there were garbage cans. One of the tanks was filled with shards of broken electronics, the destruction process was simple and straightforward. They put the phone on the workbench and immediately hit it with a big hammer. The fragments were swept into one pile and loaded into this container. It took a little over an hour to destroy prototypes from one department, then signatures were made that all phones were disposed of, and the story ended.

My friend is not sentimental, but read what he said: “I went up to the office, went into an empty room and realized that we had just destroyed the work of hundreds of people. With a sledgehammer. We created avante-garde, we were the first in many technologies, and before my eyes it all shattered into small pieces. For the first time I cried from impotence, it was the moment when I realized that Nokia was destroyed forever. Nobody is destroying technologies that are worth billions and that have been created for decades. It was unbearable to stay there. ”

A few days later, he accidentally ran into a security officer in the cafeteria who was destroying the prototypes. They exchanged a couple of phrases, one of them engraved in his memory: “I don’t like it myself – swinging a hammer and breaking what I had to keep. But it was entrusted only to me, I alone broke everything that you guys have created here. ”

I think that the reason for such a hasty destruction of all Nokia developments was that the company’s top management feared that Samsung, one way or another, would gain access to them. These developments were completely useless for Microsoft, they could be useful for both Samsung and other manufacturers, but Nokia decided that this should not happen. Information carriers, specifications and other technical documentation also went under the knife, they destroyed everything in such a way that there was not the slightest chance of recovering something.

There are a lot of amazing moments in this secret Nokia history. For example, engineers who left for other companies in 2011-2013 believed that many of their inventions remained the property of Nokia, patents were obtained for them, but in the confusion they were not warned about this. In the process of destroying all traces of development, many developments went under the knife, which were eventually restored in other companies. Many things were “invented” a second time. The barbaric destruction of intellectual property was an act of vandalism, otherwise it is impossible to characterize it.

Nokia sales disruption – legendary long-term construction Nokia N8

In early 2010, Nokia is preparing to launch Symbian 3 and the first smartphone based on this OS – Nokia N8. The company’s flagship should be the answer to Android, iPhone and Blackberry that everyone expects from the company. The world announcement of this device happened in passing at Spillikins, where I described my impressions of it, but rather of Nokia’s strategy, which was deeply flawed.

The smartphone has not yet been announced, I did not attach much importance to this text, inside Nokia they knew very well about my thoughts and about the fact that this note would appear. Since Nokia phones were leaked all the time, we had an agreement with Nokia’s PR-service – if I publish photos and some information on unannounced models, I am excluded from communications on these models. As for the rest, we continue to communicate, as always, there are no changes here. But Nokia N8 was painful for the company and top management, it was believed that the perception of this smartphone should be five-plus, and the first opinion that appeared was impartial. Nokia’s capitalization plunged several billions down that day, and the “review” of the unreleased model was replicated all over the world.

Killing Nokia. A Frank Confession of a Former Company President, Part Three

Fate is whimsical, and one day from a journalist with access to the holy of holies of the company, I suddenly turned into a persona non grata. The Nokia blog did not name me, but demanded to return the “stolen Finnish child”, the Russian representative office of the company tried to accuse me of theft and demand the return of a prototype, which I should not have had. It’s amazing that I received the device from one of the company’s top managers with a request to honestly say what I think of it. He didn’t get into the Nokia office under cover of darkness, didn’t pick locks and didn’t pretend to be a black cloak. By the time the note appeared, I no longer had a prototype, even if I wanted to return something to the company, it was impossible.

Killing Nokia. A Frank Confession of a Former Company President, Part Three

Top managers of Nokia in 2010 felt relaxed, they could afford anything. Why were they giving me prototypes and asking for my opinion? The answer lies in the fact that I rarely missed the mark in assessing the prospects of this or that apparatus. It was mutually beneficial, I got access to information, and it did not impose any restrictions on me. And Nokia could correct how they presented the models on the market, what they said about them, what kind of wrapping they were wrapped in.

In the absence of corpus delicti, a criminal case was not opened, repeated attempts to reopen it did not lead to anything. I confess that I didn’t like it when they call me, my relatives and “for your good” they offer to meet in order to settle all the issues. It was not Nokia employees who called, but those who introduced themselves as law enforcement officers. The answer was always the same – summon a summons and we will come with a lawyer. My stubbornness turned into the fact that they came to my house to talk informally, hinted in plain text that corpus delicti might appear if I did not meet halfway. But gradually the situation came to naught, although for several more years Nokia spent budgets to discredit my opinion about the company’s products. Bots constantly appeared on the forum that reported about my grievances against Nokia, about the fact that you can’t listen to me in this matter, and I’m thoroughly corrupt. In parallel, the agencies that dealt with this negative, offered to settle the issue peacefully: I forget about the existence of Nokia – they forget about the negative. And everyone lives in peace. I don’t know the official position of Nokia, since all this negative was created by someone else’s hands, I doubt that somewhere there are written instructions from that time. But the fact that Nokia tried to drink every last drop of my blood is a fact!

By November 2010, it became clear that new Symbian 3 smartphones were selling well, Nokia continued to love. The only problem was factory defects, the level of defects in these models turned out to be prohibitively high, we had a little investigation into this.

Before that, we encountered a defect in a number of other Nokia devices and always helped the company’s engineers, shared information. This time the sent letters just came back, I was surprised to learn that our mail domain was blocked inside Nokia. It made me smile, as it reminded me of the struggle between David and Goliath, a huge corporation behaving like a small frightened child.

After the article about the marriage in Nokia N8 / C7 was published, only the lazy did not scold me, working for readers and trying to give them information about problems in devices, I received tons of negativity. One of the people who successfully denigrated me on social networks and on our forum (more precisely, was behind this), admitted: “Old man, you yourself substituted your board for a volley of all the guns, now you are ogrebayu in full. Nokia is a brand, and even if they release a phone that won’t turn on, a person is more likely to believe that they are doing something wrong than that it is broken. ” The strength of the Nokia brand was such, there was no need to argue with it, especially in Russia.

Life teaches people patience, and I learned this lesson, let’s give the floor to Risto Siilasmaa, he describes the situation with Nokia N8: “We continued to fight for quality. The N8, our Symbian flagship, turned out to be a dummy. In January, 35.8% of products were returned. In February, 24.6% returned, i.e. every fourth phone was brought back to the store. It is believed that for cheap devices an acceptable percentage of returns is 2%, for expensive ones – from 5 to 10%. This is normal: we give the user a new device, it usually works, and everyone is happy. A share above 10% is already painful, it is expensive, and in addition, after a couple of such replacements, the buyer simply will not contact us the next time. ”

It’s nice when my point of view is supported by the words of a person from inside Nokia, even if there are ten years between them. This device turned out to be a dummy, it was returned all over the world, and Russia was a happy exception, here the returns did not exceed 10%. And this is again thanks to the love for Nokia, which was irrational and lives in Russia even today.

I hoped to tell this story as succinctly as possible, but this does not work, you need to step aside and talk about many events that happened then, and how they happened. This conveys the spirit of the times, allows you to feel the conditions in which the described unfolded.

In the next part (yes, there will be at least one, or even two more parts) I will tell you how the first Lumia 800 smartphone was created, why Nokia ignored all the alarm bells and did not even know what Microsoft engineers can do and what they are complete laymen … This will be a very detailed look at what was happening inside Nokia that year. Stay in touch!

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