February 11th

26. February 11th

Nokia’s announcements of February 11th, 2011, were the subject of avid attention within a group of Accenture Mobility personnel. A small number of us, including several ex-Symbian employees, had gathered for the day in Accenture’s Cambridge office on the Business Park, off Milton Road, to watch a live webcast of the announcements.

We did not yet know it, but the date of “February 11th” would come to be regarded as the blackest day in the history of Symbian – analogous (though in a much smaller setting) to the pivotal transformation in American public consciousness inflicted by the dreadful horrors of aircraft terrorism on September 11th, 2001.

Accenture Mobility had a lot of ongoing business with Nokia. That Accenture unit had been formed from an acquisition made in July 2009, in which the former “Symbian professional services operations” unit was transferred outside of Nokia. This unit was the descendent of the Symbian Technical Consulting department that I had headed from the formation of Symbian, in July 1998, up until handing over the reins of that department to Morgan Gillis in 2002. From 2005, Andy Brannan took over responsibility for the group, with Duncan Hogg as his lieutenant. When Nokia announced in mid-2008 its intention to acquire all of Symbian Ltd, the other Symbian licensees were uncomfortable about the Technical Consulting department becoming part of Nokia:

  • Personnel in that team knew too many details about confidential licensee projects
  • Personnel in that team were judged as being critically important to the well-being of these projects; they could not be left under the determination of Nokia management as to what their project assignments would be.

The solution was for the team to be offered to a range of existing consulting companies, who each had an interest in growing their capabilities in the mobile devices space. After a thorough bidding process, Accenture emerged as the winners. Accenture Mobility was therefore formed as a combination of:

  • The former Symbian Technical Consulting group
  • A smaller number of ex-Nokia personnel who had done similar work for S60 services
  • An existing set of Accenture teams who were already engaged in mobile services projects.

The unit had projects with handset manufacturers, semiconductor manufacturers, and enterprises throughout the world – providing assistance with all sorts of mobile platform technology. Many of the team soon became proficient in Android, iOS, and Windows Phone, finding that many of their Symbian skills transferred easily enough to different platforms. But many remained involved in ongoing Symbian implementation projects – including large numbers with Nokia.

The team therefore had an inside perspective on the troubles of various Nokia projects. They were often called upon to assist with software engineering tasks – optimisation, debugging, refactoring, reviewing designs, etc. But where they could provide less help was with the overall environment in which the projects took place. They saw that a major change in environment was needed, to enable the hard work of all the bright software engineers on the teams to be rewarded by timely product launch. Could Nokia’s new CEO, Stephen Elop, bring about that change?

The Burning Platform

Early signs from Stephen Elop’s tenure as Nokia CEO were encouraging. He consulted far and wide within the company, showing himself to be energetic, knowledgeable, and approachable.

Four months into the job, Elop had issued an impassioned memo, which soon ended up reprinted in full in the world’s leading newspapers. The memo started with a vivid account of someone standing on a “burning platform” on a North Sea oil terminal:

There is a pertinent story about a man who was working on an oil platform in the North Sea. He woke up one night from a loud explosion, which suddenly set his entire oil platform on fire. In mere moments, he was surrounded by flames. Through the smoke and heat, he barely made his way out of the chaos to the platform’s edge. When he looked down over the edge, all he could see were the dark, cold, foreboding Atlantic waters.

As the fire approached him, the man had mere seconds to react. He could stand on the platform, and inevitably be consumed by the burning flames. Or, he could plunge 30 meters in to the freezing waters. The man was standing upon a “burning platform,” and he needed to make a choice.

He decided to jump. It was unexpected. In ordinary circumstances, the man would never consider plunging into icy waters. But these were not ordinary times – his platform was on fire. The man survived the fall and the waters. After he was rescued, he noted that a “burning platform” caused a radical change in his behaviour.

Having grown up in Aberdeenshire, Scotland, I found that Elop’s account brought back memories. Some of my high-school classmates had built careers working on North Sea oil terminals. It was dangerous work. Some people from my high-school, indeed, had lost their lives in accidents in the North Sea. Here, Elop was suggesting that Nokia was facing a similar existential crisis:

We too, are standing on a “burning platform,” and we must decide how we are going to change our behaviour.

Over the past few months, I’ve shared with you what I’ve heard from our shareholders, operators, developers, suppliers and from you. Today, I’m going to share what I’ve learned and what I have come to believe.

I have learned that we are standing on a burning platform.

And, we have more than one explosion – we have multiple points of scorching heat that are fuelling a blazing fire around us.

For example, there is intense heat coming from our competitors, more rapidly than we ever expected. Apple disrupted the market by redefining the smartphone and attracting developers to a closed, but very powerful ecosystem.

In 2008, Apple’s market share in the $300+ price range was 25%; by 2010 it escalated to 61%. They are enjoying a tremendous growth trajectory with a 78% earnings growth year over year in Q4 2010. Apple demonstrated that if designed well, consumers would buy a high-priced phone with a great experience and developers would build applications. They changed the game, and today, Apple owns the high-end range.

And then, there is Android. In about two years, Android created a platform that attracts application developers, service providers and hardware manufacturers. Android came in at the high-end, they are now winning the mid-range, and quickly they are going downstream to phones under €100. Google has become a gravitational force, drawing much of the industry’s innovation to its core.

Let’s not forget about the low-end price range. In 2008, MediaTek supplied complete reference designs for phone chipsets, which enabled manufacturers in the Shenzhen region of China to produce phones at an unbelievable pace. By some accounts, this ecosystem now produces more than one third of the phones sold globally – taking share from us in emerging markets.

Elop’s memo reminded me of a similar rallying cry that had been issued by Nigel Clifford, Symbian’s third CEO, in what he called “Symbian’s 2012 world class programme”, developed with senior managers in 2007. That initiative, consciously modelled on the eight step change model of writer John Kotter, had taken as its starting point the imperative to “Develop a sense of urgency”. That urgency would prepare the company’s personnel for a significant change in culture. The programme had worked well at Symbian. In 2011, Stephen Elop was raising a similar sense of urgency within Nokia, as a prelude to a change in operations.

[ SNIP ]

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