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A Timely Revision of Elop's "Burning Platform" Memo
Nerval's Lobster writes "Microsoft's purchase of Finnish phone-maker Nokia will enrich the latter's CEO, Stephen Elop, to the tune of roughly $25.4 million. That's a generous number, considering Nokia's much-publicized travails over the past few years — generous enough, certainly, to prod angry reactions from the Finnish media. As Elop came aboard Nokia in 2011, he wrote the infamous 'burning platform' memo, in which he suggested that radical moves would be necessary to halt the company's market-share declines. In light of these latest revelations, however, I offer an updated version of Elop's memo: ''
everyone know this was his goal from the beginning. You don't become CEO, and make a statement like that without the intention of selling.
The Kruger Dunning explains most post on
"So here’s what we’re going to do: first, I’m going to spend a lot of time publicly denigrating Symbian, even though we continue to sell millions of phones equipped with that operating system. That’s what successful CEOs do—insult their core product, even if it commands a healthy percentage of the world market. Then I’m going to chuck the software in favor of Microsoft’s Windows Phone, which has negligible market-share. By “chuck it,” I mean exactly that: a dwindling pipeline of new phones, and no assurance for anyone who’s supported the ecosystem that we’ll continue to meet their needs for the foreseeable future. Why, people won’t be angry about that at all! Trust me, our market-share won’t collapse in record time, and nor will our stock price. I don’t have any reason to see the stock price fall, believe me."
It'd be funny if it weren't true, and costing a whole lot of people their jobs in the long run.
Tomi Ahonen has the formula down perfectly, with explanations:
ELOP EFFECT = RATNER EFFECT + OSBORNE EFFECT
http://communities-dominate.blogs.com/brands/2013/09/the-do-it-yourself-elop-analysis.html
I deny that I have not avoided attaining the opposite of that which I do not want.
Anyone else think it was going to be a revision for where they are today? On the burning platform that is Windows Phone...
Seriously, I think they are a recoverable company. They gave Elop three years to destroy them... Why not give me three years?
What would be funny is if....
shareholders launched a court battle to prevent the takeover, and claim compensation and/or charges against Elop and while that dragged through the courts for years (as they do) the new CEO decided that actually, Windows phone isn't the profit thing he wants and changes the OS platform to Android across the board of Lumia phones, dropping Windows Phone completely.
Years later when the courts finally decide that "meh" is the answer to the charges, Microsoft can go ahead with the purchase for the manufacturing arm, if they still wanted to, and Elop could then find a new job - as I doubt even Microsoft would appoint him as CEO whilst he was fighting an active court case.
Could happen? hehehe. and you never know, Nokia could turn things around like Samsung did with Android.
(and yes, they could do Meego, but frankly this isn't about making a success of the company for Microsoft's benefit..)
On a related note there is a rumour that Nokia were about to switch to Android just before the buyout.
http://ibnlive.in.com/news/nokia-reportedly-considered-switching-to-android-before-microsoft-deal/421972-11.html
This leads some analysts to speculate that Microsoft bought Nokia to save Windows phone:
http://www.valuewalk.com/2013/09/microsoft-bought-nokia-to-save-windows-phone/
This is just situation normal: Disaster capital in the shape of corporate raiders sees something with value, figures, "How can I use this to make ME rich?" and comes up with a scheme to slash and burn a maximum payday in the shortest amount of time they can manage it.
The real question is how do you find, reward and control management so that it isn't looking for the opportunity to perform slash and burn treasure-hunting in the carcass of your dying company? Is there a way? Can a co-operative business structure (ownership by the bottom-rank employees) work or is that still too vulnerable to adversarial management?
Seriously. You have stock in Nokia or something? Because nobody fucking cares about your "updated" memo. And if they do, they should stop caring and get out more often.
-B
Ash and Hickory, straight-grained and true, make excellent bludgeons, dandy for the cudgeling of vegetarians.
I'd expected something funny or at least insightful.
Sadly it seems neither.
But then neither is the actual situation. It is sad to see Nokia essentially go (yes, the corporation lives on, but without what had become the heart). And it is hard to see how there is an upside for Microsoft in this. A lose-lose, with bad actors taking home lots of cash.
Oh well, perhaps someday someone will turn it into a great play. It has all the seeds of a classic Greek tragedy (Hubris, fate, etc.)
Elop took over, Nokia stock fell, and anybody with half a brain didn't lose too much. Any reasonably smart Nokia employee would also have seen the writing on the wall and left the sinking ship. Microsoft can now acquire a mostly useless shell of a company at a low price, and they are getting their money's worth. The capital that Nokia lost went to other companies that can make better use of it. That's the way markets work. I don't think it's a big deal either way.
Incidentally, switching to Android "after late 2014" would have been too late for Nokia anyway.
They've sold off MeeGo's crown jewels, Qt. Now Qt is powering the direct competition, from Jolla to Android, iOS and even WP.
I don't know why anyone is upset about this. It shouldn't be a surprise. Tech history is littered with the remains of corporate entities who once partnered with Microsoft. What part of "Embrace, Extend and Extinguish" did Nokia think did not apply to them?
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Elop seemed to hint in his memo that Nokia needed to save their burning platform to survive. With the benefit of hindsight, we can now see that he was actually foreshadowing a desperate panicked jump into icy unknown depths for Nokia—abandoning the platform for questionable benefit.
Elop didn't bother to mention what such a jump would mean for him personally for he had secured a secret golden parachute to kick in should the company happen to change hands. And Nokia would only change hands if that platform were indeed on fire.
Would Nokia really be worse off if they had embraced Android while continuing to evolve Symbian and MeeGo? Dumping everything for an unfinished and unused Windows platform was significantly more risky and came with a reduced best-case outcome!
Life is wonderful with hindsight. But look around. This market had an incredible shift happen to it in an amazingly short amount of time. Maybe Elop caused the cratering of Nokia. But then again, even companies that were, without a doubt, trying to survive cratered in the same time (Blackberry for instance).
There's more to be sour about than bad investments in this case. The whole nokia board and elop included should be dragged out into the street and shot for their extreme mismanagement of the company.
that the jump from a burning platform ended in an empty swimming pool.
You seem to confusing hindsight and foresight. Everyone knew what Elop and Microsoft were doing from the very beginning. This is definitely not a case of everyone figuring it out after the fall.
So many comments and nobody pointed out that the summary is completely wrong. Nokia wasn't sold. The D&S division of Nokia was sold. Nokia is still a huge networks solutions developer and provider. More than that, they run the largest or the second largest mapping business. And then finally, the still hold the largest patent portfolio in wireless communications from infrastructure to devices and protocols, etc. In this year's Nokia World invitation there's a dinghy, which is "Jolla" in Finnish, so there's that too for Oct 22..
Damn that strategy scales!
You seem to confusing hindsight and foresight. Everyone knew what Elop and Microsoft were doing from the very beginning. This is definitely not a case of everyone figuring it out after the fall.
So, since it was so obvious. What should Nokia done? Stick with their internal OSes that weren't competitive? Move to Android and be a me too? Started from scratch, again? Everyone seems to want to pretend Nokia was in a good place and THEN Elop came along. His memo was stupid (in that he should have known it would get out and would have horrible side effects). But it wasn't wrong. They were in a bad place and the projected trend numbers seemed likely at the time. So what did they do so wrong at the time? Or are you just saying because Elop is Elop it followed that it must have been M$' plan to take over Nokia, just cause. And that's the part I'm missing?
I still say the EU regulators will not let it happen. We'll find out come Jan/Feb.
The whole nokia board and elop included should be dragged out into the street and shot for their extreme mismanagement of the company.
Did you read TFA (yeah, I know)? It says there was a clause in his contract awarding him a bonus for making the company "saleable." It was sold to Microsoft. Success!
"Tongue tied and twisted, just an Earth bound misfit
That's the "Miracle of the Market Place" in action.
putting the 'B' in LGBTQ+
Stop your fucking crying. Don't tell me. You were some moron who though Symbian had a future? Nokia was as fucked and outdated as RIM. PERIOD
After reading this I feel nauseous
The original burning platform memo is worth a read. It was an acute analysis of Nokia's problems. http://blogs.wsj.com/tech-europe/2011/02/09/full-text-nokia-ceo-stephen-elops-burning-platform-memo/ All Elop did was state the obvious, that Nokia was in serious trouble.
As for moving away from Symbian... Nokia is a business. Business exist to make money. Anyone who takes about share and not profits is in lala land.
Just look at RIM. Their platform is literally crashing and burning as you read this. Nokia's best play was to stick with Windows Phone and get bought by Microsoft. Sure they could have made Android phones, but its not like HTC and LG and Sony are moving product. Maybe Nokia could do better, but at least with Microsoft they had a partner to push help push through technical hurdles and to contribute to marketing.
MeeGo had a core problem. It was designed to fulfill two contradictory roles:
a) Be a modern phone OS
b) Be a smooth migration path for Symbian applications.
During development of MeeGo (a) and (b) constantly conflicted. The N9 reflects that had Nokia picked path (a) and mostly ignored (b) they might very well have had an OS better than Android. But that was not the MeeGo project as it existed in Nokia at the time Elop killed it.
TFA is crap, horrible blog-level amateur writing.
It does, however, have a point. If this wasn't a hostile takeover from the start then it sure looks a lot like one. In other words: If MS had planned to acquire Nokia on the cheap long ago, something like what happened would've been a good plan to come up with.
And it should really teach people to not get into bed with MS. But then again, so should've the last dozen or so victims they left behind.
Assorted stuff I do sometimes: Lemuria.org
I like the way you and Elop could both tell the N9 was guaranteed to be a failure, not only before the N9 was released, but before the decision was made to not advertise it, and to not offer it in their biggest European markets (e.g. DE) nor in the US market where they were losing badly in and wanted to turn that trend around. It must be great having psychics like you and Elop around. You'll have to pardon the rest of us for refusing to write off an unreleased phone altogether, though, and to interpret its limited success as being a product of the systematic sabotage described above, rather than of its inherent unworth.
This would make my day. My year. This. This is my one wish for 2013. I don't care if I lose my job, I don't care if my girlfriend dumps me, I don't care if my new Xeon I just ordered from newegg is DOA and they scam me on the RMA, and I don't care if I find out that spot is cancer. Well, I do care. I care a lot. But I care about justice more. I'll give up everything, if I can just see that. It would make me feel like, maybe, the world isn't so bad, ya know?
What Elop won't tell you is that Microsoft provided the accelerant and the orders to use it. It's quite hard to make Nokia a Windows Phone company if you have viable platforms that compete with it
Twitter supports and protects racists - by smearing their critics with the "Hate Speech" label.
RIM stuck to their guns with BlackBerry, didn't save it and are circling the drain ever faster.
The Nokia stuff was old, Meego was not remotely close to ready (I worked in a shared office with someone contracted to help fix it and from his description a lot was still left when they shelved the product) so they had to make a change. Many of us questioned the exclusive WP choice but we'll never know if they'd chosen a split model or exclusively Android whether they could have convinced carriers to sell their phones. (For all we know discussions happened and carriers rejected them and MS tossed some cash around).
They bought one division, not the entire company.
When did MS exactly extend Nokia? The Windows Phone adventure has been a complete disaster, even Steve Ballmer has to admit recently their market share went from very small to very small. And they been trying for over a decade. HTC only survived by escaping the stigma off making Windows phones.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
It wasn't Elop specifically. It was that fact that a previous Microsoft executive was made CEO, and his first move was to make the company completely beholden to Microsoft. There is no reason that Nokia could not have hedged their bets and made Android phones as well. The could have also continued on the the N9 line. The thing about Android is that even as a 'me too', it was clear that they would sell more phones than they would with Windows Phone. They didn't even need to make different phones. They could have easily put Windows Phone and Android on the same hardware. At worst, they would need to change the case to make the phones appear to be different.
Of course, you clearly know that I am correct about the plan being obvious from the start. Comments like "Or are you just saying because Elop is Elop it followed that it must have been M$' plan to take over Nokia, just cause." make that clear.
Damn it people, so much emotional attachment to a company because it once had the distinction to cock up an OSS-based project.
Please get it through your heads: Nokia shareholders' objectives do not include supporting the cause of Linux, or Qt, or whatever. It is, plainly, to make money. They are fucking happy to see something sellworthy made out of the dysfunctional wreck that Nokia was in 2010.
My exception safety is -fno-exceptions.