Nokia announced yesterday a management reshuffle:
* Splits phone business into three
* Former CFO Rick Simonson to head core phone businesses
* Jo Harlow named head of smartphones
* Apple’s John Martin to head high-end mobile computers unit
* Sales chief Timo Ihamuotila to take over as CFO
Now get ready for the story behind the story. I discussed this with some of my friends and the synopsis of it all is that Nokia top management (Olli-Pekka Kallasvuo) fails to see the fundamental strategic weaknesses and the needed strategy shift at a very fundamental level.
Things are not what they seem. The real reorg happened last summer when the R&D org was shuffled around. R&D was, is, and always will be the only power base at Nokia. That mafia, 14,000 strong, decides everything and it now has more autonomy than ever. It’s been carved out as a separate entity out of devices with the new “phone businesses” becoming nothing more than product marketing (what used to be called in Nokia-speak “category management”). Now, in a normal organization, product marketing “owns” the product and commissions R&D on implementation. This is the textbook case in most organizations. But not at Nokia. These new Americans have zero power to do anything. R&D will, as always, decide what to build. Any deviation from their agenda will simply be vetoed before it takes its first steps. Which means the new positions are just academic.
As in academia however, these nominal positions are defined by politics. Although “Mobile Phones” and “Smartphones” are separate marketing arms of “Devices” which is headed by Kai Ostamo, Simonson (heading the MP half) reports directly to OPK. Furthermore, the head of “Solutions” group (Torres) which is supposed to coordinate Services and Devices as a holistic whole (and has Design under it), has to report to one half of the co-CEO box in Services (Savander) leaving him with no logical incentive to do the right thing. It is a complete meaningless puree. But it should be if it has no underlying value.
This ex-Apple John Martin is actually working in Solutions (under Torres, under Savander) and has no product portfolio. He is just press headline bait.
Which brings me to the story of OPK. As it happens (and as we have predicted) he has the authority but not the ability to drive this org process. The management prima donnas under him are all playing musical chairs and there is nothing he can do about it. The tail wags this dog.
