Jorma Ollila

Against All Odds


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the world map lots of little pins in all sorts of places. The company’s leaders had distinguished themselves by the competitive acquisition of large and small enterprises, but no one had ever assembled all the bits into a coherent whole. Some of them were insignificant sales firms – little more than corner shops – while others did sensible things.

      My first task at Nokia was to bring some order into this chaos. I sat in my room and collected files that told me about Nokia’s international subsidiaries. I tried to work out what they really did and why, and how they fit into the bigger picture. Some of them were complete catastrophes – for example, Nokia had an IT company in England whose losses greatly exceeded its revenue. I asked to see the papers on which Nokia’s investment decision had been based; reading them was so sad it was funny.

      Files and papers flooded my desk, and I tried to get rid of them as quickly and efficiently as possible. I didn’t really have anyone working for me, but I was at the center of power because I answered directly to the company CEO and the president. I was a staff officer whose job was to prepare the company’s international projects. I was also expected to consider how the company’s leadership structure should be developed. Developing the international side of Nokia’s operations was a further apprenticeship for me. In my discussions with Kari Kairamo and Simo Vuorilehto I had been promised a place at the company’s front line one day. This was important at Nokia – those who had managed an area of business and brought in money were regarded more highly than those who had stayed at headquarters. This ethos has prevailed at Nokia, and in many other companies, up until today. I lacked front line experience and passionately wished to gain it. I knew, too, that without it I wouldn’t get very far at Nokia.

       CHAPTER 19

       The Last Days of Drowsiness

      ONCE AGAIN FATE INTERVENED. When Nokia’s lightbulb subsidiary Airam became part of a management buyout, a vacancy for a finance director arose. Simo Vuorilehto wanted me to take it. I knew about finance from Citibank. I was a professional, and Nokia’s ambitious European plans demanded a new approach to finance. As well as looking after its acquisitions Nokia needed a higher profile on the stock markets and among investors. I took on this new role with enthusiasm.

      At this time – 1986 – Kari Kairamo embarked on a radical restructuring of the company’s governance. Powerful figures such as the chairman and deputy chairman of the board had to yield to Kairamo’s wishes. The board that had represented the shareholders became the supervisory board. In practice this meant that the actual owners of the company were moved further away from everyday activity.

      When this change was made it was stated that the supervisory board would retain the key responsibilities of the previous board. The firm’s leading executives would form the board of directors. Kari Kairamo would lead this body in his role as the chairman and CEO.

      Kairamo also established an executive committee to oversee Nokia’s day-to-day operations. I sat on this in my new capacity as finance director. It was presided over by Simo Vuorilehto, which gave him greater responsibility for operations. Kairamo used his role to concentrate more on making Nokia’s influence felt in Finland and more widely in Europe. His most important vehicle for this was the Confederation of Finnish Industry, where Kairamo was chairman from 1985 to 1987.

      Nokia’s complex governance model turned out to be a millstone around its neck at the end of the 1980s. The company couldn’t deal promptly or decisively with the many issues it was facing. The difficulties with this mixed-up management model were among the reasons Nokia’s management was made much simpler in the 1990s.

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