re: FT Profiles Jorma Ollila
>> Nokia President Undeterred By New Challenges
Financial Times
Christopher Brown-Humes
January 15 2002
As celebrations go, it could hardly be more low-key. When Jorma Ollila marks ten years at the top of Nokia on Wednesday, there will be no big parties with colleagues or friends. "I will probably have a glass of wine with my wife in the evening," he says.
The company's shareholders would surely not begrudge Mr Ollila a glass of champagne. After all, during his tenure, Nokia's shares have risen 164-fold in euros and 108-fold in dollars. The group, one of Europe's great business success stories of the 1990s, has been transformed from a conglomerate that depended heavily on Finland to a global giant. Its share of the handset market has almost tripled from 13 per cent and its market capitalisation at around E126bn is only slightly smaller than Finland's GDP.
It all looked very different back on January 16 1992, when Mr Ollila became Nokia president. The group's consumer electronics division was bleeding heavily, a ragbag of other businesses were in poor shape and the Finnish economy was reeling from the collapse of the Soviet Union, "We were at the brink," says Mr Ollila.
The subsequent transformation owes much to a tightly-knit team of five senior executives, all of whom have been with the company for at least 15 years.
But, as the figurehead, it is Mr Ollila who has got most credit for the group's achievements. His skills have been tested during restructuring (1992-1996), rapid (almost explosive) growth (1996-2000), and in the industry's first downturn in 2001 when many of Nokia's main markets were hit by economic downturn and handset saturation. Last year he came 12th in a Financial Times/PriceWaterhouseCoopers survey of the world's most respected business leaders and was the third highest ranked in Europe.
Mr Ollila is a demanding leader, but, like most Finns, anything but flamboyant. He says he focuses on shareholder value, return on capital, and cash flow. He also attaches great importance to measuring annual growth in productivity per employee, which may explain why the group has a reputation for efficiency.
"It's one of the few companies that controlled costs during the boom times," says Susan Anthony, analyst at Credit Lyonnais in London.
Martti Haikio, author of a history of Nokia and someone who has had unrivalled access to the group's senior managers, pays tribute to Mr Ollila's "balanced" leadership qualities. "He's not just a numbers man, he can inspire young talented people to join Nokia," he says. Already one of Europe's longest-serving business leaders, Mr Ollila's contract was last year extended through to 2006. He has talked of keeping colleagues out of the "comfort zone," to keep them on their toes, partly by moving them around. But how does he keep himself out of the comfort zone? "It's partly to do with being mentally and physically fit, it's partly to do with curiosity, and it's attention to detail " he says. He is a keen tennis player and also fond of art and opera.
The final verdict on Mr Ollila will depend on how well Nokia makes the transition to third generation telephony at a time when there is still little evidence that must-have services have been developed to lure customers.
He is not deterred by evidence of a slow take-up of GPRS (2.5G) services. "I don't think it has taken off any more slowly than GSM did in 1992," he says.
But Mr Ollila says the company will have to work closely with operators and service providers to make 3G a success. "2003 will provide a significant clue as to who will be the key players and Nokia will be one of them," he predicts.
Jeffrey Schlesinger, analyst with UBS Warburg in New York, says the challenge for Nokia will be "to navigate the change in technology and the change in the competitive landscape successfully." He sees Microsoft, which has clear ambitions to bolster its position in consumer electronics, as one of the biggest threats.
But Mr Ollila is relaxed about challengers to Nokia. "I don't think there is any drama in terms of the competitive arena," he says. Nor does he see specific threats: "I don't think there's any single thing. We have tremendous strengths. We just have to keep implementing well." <<
- Eric - |
