One recent Saturday, Stephen Elop went to his office overlooking the ice-bound Baltic Sea at Nokia’s headquarters in Espoo, Finland, and started writing. “Hello there,” he began, in the cheery manner of corporate missives from chief executive to employees. But there was nothing ordinary about the 1,200 words that followed.
Mr Elop’s “burning platform” memo, in which he likened Nokia to a man caught between a blazing oil rig and a dangerous leap into icy waters, caused a sensation when it leaked just days before he was due to unveil a new strategy for turning round the troubled phonemaker. The shock factor was precisely what Mr Elop intended, as he laid the ground for his radical decision to forge an alliance with Microsoft. “The one thing I’ve emphasised throughout my career is transparency – to be as open and honest as possible,” Mr Elop told the Financial Times. The 47-year-old Canadian took charge last September, but it was only with his recent moment of frankness that he took full ownership of one of the toughest jobs in global business. At stake is both the survival of the world’s biggest phonemaker, and Europe’s ability to compete against America and Asia at the cutting edge of consumer technology. Mr Elop was recruited because of his software background: as a trained computer engineer, he had more than a decade of experience with American companies including Adobe Systems and, most recently, Microsoft. His mission was to help Nokia’s phones to match the sleek interfaces of Apple’s iPhone and devices using Google’s Android operating system. Yet when Mr Elop announced Nokia’s strategy last week it sounded to critics like an admission of defeat. Nokia still sells almost two-thirds more phones than its nearest rival, yet it is losing market share at an alarming rate. Known for its un-glitzy “candy bar” handsets, it has struggled to adapt to a world in which phones are increasingly used as minicomputers, and viewed as luxury fashion accessories. In Finland, where Nokia remains a symbol of economic virility, Mr Elop has already been labelled a “Trojan horse” for his former employer, with analysts arguing that Microsoft is the winner from the deal. By adopting its Windows Phone operating system for future high-end Nokia handsets, he has all but abandoned the company’s own software platforms, in an era when the value of mobile devices increasingly comes from the applications they support rather than their hardware. Mr Elop insists Nokia and Microsoft together stand a better chance of creating a “three horse race” with Apple and Google. The decision came after weeks of intense deliberations with his top team over future options, including an alliance with Google. “I said to them very clearly: once we get to a decision, we’re all going to stand behind it.” To his admirers, Mr Elop’s willingness to take decisive action is just what Nokia had been missing. As the first non-Finn to lead the company, his appointment was intended to shake-up a bureaucratic, Finnish-dominated culture that had fallen behind its freewheeling US west coast rivals. Mr Elop disputes that Nokia’s problems have much do with its Finnishness, which served the company well enough in the past. But he casts light on the kind of workplace it had become by remarking that his practice of encouraging e-mails from staff and writing an internal blog represented a “cultural revolution”. As a Canadian, Mr Elop says he has a natural empathy for his new home, stemming from his experiences of dark, frigid winters and living in the shadow of a mighty neighbour – in Finland’s case, Russia. Ice hockey is another source of bonding, with the Vancouver Canucks fan developing a new passion for Nokia’s local team, the Espoo Blues. “Ice hockey is one of the best places to meet people in Finland,” he says. Another hobby – flying – has been on hold, with his Cessna Turbo 182 left in its hangar in America. Instead, Mr Elop has been criss-crossing the world on business flights – nearly 60 since starting the job – as he gets to know a company that still has by far the industry’s widest global reach. Not everyone at Nokia is happy with the new regime. Hundreds of research and development workers in Finland walked out in protest when the Microsoft deal was announced; many are likely to lose their jobs. Yet, even union leaders admit radical surgery was required, and praise Mr Elop’s strong communication skills. Some of the speeches he has given the workforce “have been quite inspiring,” says Juha Raudaskoski, a Finnish workers’ representative. An engineer more than a visionary, Mr Elop lacks the charisma of Apple’s Steve Jobs, or even Steve Ballmer, the exuberant Microsoft chief executive. But it was Mr Ballmer who saw his potential, hiring Mr Elop in 2008 to lead Microsoft’s business division, where he also had to defend a market leader against upstart competition – at the time Microsoft’s flagship Office software was coming under attack from Google. Rob Helm, an analyst who follows Microsoft, said Mr Elop’s approach, and his lack of razzmatazz, were refreshing. “He is someone who doesn’t surround himself with a lot of fog. He’s very straightforward.” Even so, Mr Elop is unlikely to find a direct route to success in this, his most difficult task. Nokia’s share price is down by a fifth since the Microsoft deal, signalling investor scepticism with the turnround. Known for his steely confidence and determination, Mr Elop must now prove them wrong. It is a task he will have to undertake alone, at least initially, having left his wife and five school-age children – including triplets – on the other side of the Atlantic until the job settles down. “It’s difficult but technology helps,” he says. “There are a lot of Nokia phones in my family.” The challenge for Mr Elop is to make sure his children’s Finnish handsets become a source of envy in the schoolyard,?rather?than ridicule.