Twitter buddy Jonathan (@atmasphere) Greene alerted me to a Wall Street Journal post today that claims Nokia is actively shopping for a new chief executive officer. If true, this shouldn’t come to anyone as a surprising development. The current CEO, Olli-Pekka Kallasvuo (OPK), has been under fire for over a year now while Nokia has struggled against stiff competition, largely from Apple, RIM and various devices running Google’s Android.
OPK had been groomed by previous CEO Jorma Ollila for just that position, assuming the helm of the world’s largest cell phone manufacturer on 1 June, 2006. It seemed the right decision at the time: from there until 2008 Nokia’s stock value rose as innovative devices were released even while the company reinvented itself with extreme reorganizations.
But the first two years of a new regime typically benefit from residuals of the one prior. 2008 to 2010 can’t be credited or blamed back to Ollila’s term. Rather they provide the measurements for OPK’s performance, and the numbers aren’t good. To get an idea, check this chart comparing Nokia’s stock to Apple’s over the past 5 years. Or Nokia versus RIM. The divergence at 2008 is remarkable… and humbling for Nokia. And even though RIM hasn’t been exactly stellar, it’s still in the positive for the period.
Back in January of 2010 The Prodigal Guide posted an open letter to Kallasvuo, offering several suggestions to get Nokia on track in the high end. I don’t agree with every detail but in general the list is inarguable. I think the key recommendation was about focus, and it’s especially relevant given something OPK said to Nokia employees at a personal appearance in Texas in October 2008. When asked if launching dozens of unique devices every year made sense (over platforming them at a higher level), Kallasvuo defended the status quo. I remember feeling uncomfortable when I heard that. It was an indicator that he seemed out of touch with what was working best in the mobile space at the time.
In May of this year OPK assured investors that Ovi Store’s growing download numbers provided at least one indication that the company was doing the right things. I’m not convinced, and I don’t think too many other shareholders are either. A turnaround is going to take more than talk, and results the past couple of years have not supported the pledges.
I have a lot of respect for Mr. Kallasvuo even now. His professional background shows he’s no dummy. But I think that background, largely in legal and finance, isn’t the best to serve Nokia right now. Nokia needs a device fiend in that position. Someone with a background equally rich in technical and marketing would be ideal. I believe that person to be Anssi Vanjoki, named by BusinessWeek as one of the 25 most influential people on the web.
Sure, Anssi just got a promotion. I think he could use another one. If the rumors are true, though, Nokia is even talking to US candidates. While hiring someone from North America to run the Finnish company would certainly be revolutionary, I think going outside instead of bringing up a current executive is a mistake in general and a disservice to Mr. Vanjoki.
As a longtime Nokia stockholder, I am keenly interested in the company making some sort of uncharacteristically dramatic move to restore confidence. Is putting OPK out the best one? Or can Nokia correct course without a change of top leadership? Keep in mind that for now this is hearsay and speculation. On that note, reader thoughts highly encouraged!