Latest / The Innovation Show / Everyone Thinks the iPhone Killed Nokia. They're Wrong!
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- 0:22Welcome to part two of this deep dive into Nokia and the 2016 paper
- 0:26by our guests Quy Huy and Timo Vuori, welcome back to the show.
- 0:31Thank You.
- 0:32Thanks.
- 0:33It's great to have you back.
- 0:34I'm gonna give a little bit of context, so it's 2007, the game has
- 0:39switched from hardware to software.
- 0:42And don't forget Nokia 1 billion customers.
- 0:44Can anyone catch the cell phone king?
- 0:46That was the front cover of re Forbes article featuring the CEO at the time.
- 0:52Nokia who had pulled away owning half the market share of the mobile phone industry.
- 0:58But at this stage, Apple and Google had moved fast.
- 1:01Don't forget, they had built operating systems all the time, and now all of a
- 1:06sudden they were just gonna do it on a different device, a different form factor.
- 1:10Samsung had adopted Android and Nokia had doubled down on Symbian and Meego
- 1:16even as consumers turned against them, was happening inside Nokia that made
- 1:21the company clinging to a losing path.
- 1:24That is what our authors today reveal.
- 1:27I read through this research many times and looked at the methods and pulled
- 1:32out a few lines that were telling, and I'd love you to comment on these.
- 1:36In your interviews, top managers told you they pressurized middle managers.
- 1:42For faster performance and middle managers in turn told you how they
- 1:47felt pressured by the top managers.
- 1:50You say "Several middle managers shared additional examples of how they felt
- 1:54fear or how fear had prevented them from reporting negative information up to the
- 1:59top, even though they knew it would have been the right thing to do. And in your
- 2:04findings, you write. "Various types of fear experienced by Nokia's top managers
- 2:10and middle managers caused a decoupling interaction pattern between two groups
- 2:15that harmed Nokia's innovation process.
- 2:18Two factors influenced top managers and middle managers fears.
- 2:21Nokia's structural distribution of attention produced differences in
- 2:26appraisals and shared fears among top and middle managers and top
- 2:30managers' past aggressive behaviours and widely shared stories about those
- 2:36past aggressive behaviours triggered intuitive fear reactions in middle
- 2:40managers because they had a lower position in the organizational hierarchy.
- 2:46So let's share how the organizational structure and where people focus their
- 2:51attention caused this fear and how it spread across the entire organization.
- 2:56in Nokia's structure, the top management had a rather a good view of the
- 3:02competition, and they had their internal strategy team consisting of 200 strategy
- 3:08experts and mar market intelligence experts and external consultants.
- 3:12So the top management was very aware of the.
- 3:17Customer demand in terms of what the mobile operators wanted.
- 3:21And they felt a lot of pressure from the iPhone and Android, even though
- 3:25they weren't able to it out loud.
- 3:28So top management had external focus, a lot of fear and even small
- 3:34panic about the external threats.
- 3:37But internally the middle management in software development was quite
- 3:42disconnected from the customer interface.
- 3:45So from middle manager's point of view, the things were going
- 3:50fine, but top management suddenly started giving them stronger and
- 3:55stronger pressure and more demands.
- 3:57And meal management couldn't understand where this is coming from.
- 4:01So instead of fearing the iPhone, they feared the top management.
- 4:07Because they felt that the requests from top management
- 4:11are unrealistic, but irrelevant.
- 4:14So the logical way out from this is to lie to them or mislead them.
- 4:20I would like to, to elaborate what Timo just said because when we
- 4:24explained that case some executives ask us, so why didn't top managers.
- 4:30Minimize the truth, to tell them that, they know that the, plans by
- 4:35the iPhone, that , the real threat so that they can get the reality.
- 4:39So therefore they become less complacent, but that's is the practical reality
- 4:43organizations, it's they know the secret, but they cannot tell the secret to middle
- 4:48managers because it will be late, and then the competitors will change their plans.
- 4:53So that's point number one.
- 4:54Point number two is that if they set that they are concerned about the Apple
- 4:57threat, how would investors react?
- 4:59They said that they, are they going to lose market share?
- 5:02Are they expressing some type of weaknesses?
- 5:05So top managers in a way.
- 5:09You can understand them.
- 5:10There are some kind of dilemma they have to kept, they keep the
- 5:12secret, they cannot tell to middle managers everything they knew.
- 5:16And at the same time, middle managers feel quite powerful because
- 5:20they said, where is the threat?
- 5:22Even if something come up, we have most of the patents, we process mostly of
- 5:28the technical patents that Samsung and Apple have been using or will be using.
- 5:33So we have absolute technical superiority.
- 5:36So that's extent also why they feel a little bit, even filter to
- 5:40feel as much as they should have.
- 5:42Third point, why top management felt taken, not openly communicate.
- 5:47The threat was really about this sustaining the moral.
- 5:51So the top management, I think, mistakenly believe that if they speak
- 5:56about the threat, it will destroy the motivation inside the organization.
- 6:02But with the caveat that Quy mentioned about the kind of external responses.
- 6:07So if you say, as a leader that our products are inferior, of course the
- 6:12external reaction is negative, but even more fundamentally related to
- 6:18the distribution of attention is that top management didn't necessarily
- 6:23understand how different perception of the external competition they had
- 6:28compared to the middle management.
- 6:31So top management would see this.
- 6:33McKinsey reports about the iPhone and its future prospects.
- 6:37While middle
- 6:40they would only buy competitors phones from the store and compare
- 6:44what they were developing against the old products from competition.
- 6:49So the middle managers also lived in a different reality without
- 6:53top managers fully realizing that.
- 6:56One of the things you say there is really interesting.
- 6:59So it wasn't just, this wasn't just about the hardware, which was the phones,
- 7:04but it was also about the software.
- 7:05So Symbian, and maybe we'll elaborate a little bit on what that
- 7:09is, the Symbian operating system.
- 7:11But one of the things from the interviews that you took was one of the top managers
- 7:15you interviewed was saying, why did you not call out how inadequate Symbian was?
- 7:20And to your point about they didn't want to damage morale.
- 7:24He said, when this is the only weapon you have to believe in that gun,
- 7:29though the gun might be inadequate because you don't want to reveal it
- 7:32and going, we're going to war here with pea shooters when the others
- 7:36have dramatically advanced technology.
- 7:39Maybe we'll elaborate a little bit on that difference.
- 7:41Yeah, that was, I think, the most fascinating part.
- 7:46I dunno, paradox or dilemma in the study that the CEO knew that Symbian
- 7:54was inadequate, but he felt that he cannot speak about its problems because
- 8:00they didn't have options to symbian.
- 8:03But then because he didn't bring it up, no one there to bring it up, and so they
- 8:08didn't develop those options and they got stuck in this collective denial of
- 8:14not addressing the elephant in the room.
- 8:17Quy, I thought it'd bring you in because one of the things we
- 8:19talked about on air was I, and I want our audience to realize this.
- 8:23It's easy to look at the Nokia story and kind of go, oh, idiots.
- 8:27I can't believe they've done that.
- 8:29But this is a template that plays out in every organization, and I mean here,
- 8:33organizations such as governments, even where people are afraid of telling the
- 8:37truth because of the repercussions.
- 8:39One of the examples, for example, you give in here is that a very senior
- 8:44software developer didn't report the truth because he said, look, I
- 8:48should have had more courage 'cause you interviewed them afterwards
- 8:51and like, why didn't you speak up?
- 8:53And he is like, I should have had more courage.
- 8:55It was a collective lie.
- 8:57But also I had a young children and I needed to keep my job because Nokia was
- 9:01like the gold standard job in Finland.
- 9:04And also most , people tend to say that if we need one or two whistleblower, that
- 9:09would have fixed the situation, right?
- 9:12But like in the case of Boeing or the case that we later on, other, the disasters,
- 9:17or in the case of Volkswagen Dieselgate is certainly not what happens if we have
- 9:22two or three whistle blowers, right?
- 9:24But in the case of Nokia, two or three whistleblowers might not have worked
- 9:29for the following reasons, right?
- 9:30A is that top managers as a Timo has I said, we have to listen to the majority.
- 9:35And the majority of senior executives told us that, we can do it.
- 9:38They give us the good news, so we can do it, do it know there's always a
- 9:42negative naysayers no matter what you do.
- 9:45And those whistle players are naysayers, so who we trust, so that
- 9:49is a real dilemma in organization.
- 9:51And two, back to the point that Timo just said, when you go to war, you have
- 9:56to display optimism, so you cannot let a few naysayers, bring down the morale of
- 10:02the whole troops that we, you cannot win.
- 10:04So even if they were a few whistleblowers, it might not have worked, so it's not
- 10:09as easy as as people may have thought.
- 10:14there was
- 10:25years,a senior
- 10:33did
- 10:51yeah.
- 10:53That's true.
- 10:54And they really had kind of options to choose from the senior leaders.
- 11:01But I think we should be understanding and empathic also towards the senior
- 11:07leaders that they were not necessarily naive, but under huge pressure.
- 11:13Nokia was like one of the top brands in the world and really dominating
- 11:17company and suddenly huge threats.
- 11:20They were personally under major pressure, so that made it more difficult for them
- 11:26to evaluate the situation objectively.
- 11:29And then
- 11:29Yeah.
- 11:30A lot of uncertainty.
- 11:31So in retrospect, we know that Symbian failed, but when you had
- 11:36multiple people coming to you that, Hey, we can make it work.
- 11:40And look, we did a successful phone last year, so this one will also succeed.
- 11:47It's difficult not to believe that.
- 11:51And then there's a handful of naysayers.
- 11:53You want to believe that they are wrong.
- 11:57And to elaborate on Timo's point, we met and interview , uh, Olli-Pekka
- 12:01Kallasvuo, which on YouTube you may want, you know, to listen to it.
- 12:05And then, when a senior executives are shown this videotape, and, one of their
- 12:11first reaction, what a stupid guy, you know what incompetent guy, how can
- 12:15he become the CEO of Nokia like this?
- 12:18And I cautioned this people not to judge with the hindsight of history.
- 12:23That if you put yourself under the fog of war, after all, he as, as famous as Elon
- 12:30Musk or bill Gates or Jensen Huang today, and people will say that he's fantastic.
- 12:35Let's not forget, he was elected as the number one CEO of the world by
- 12:40fellow CEOs back in 2008 to 2009, no number one is such agility, showcase
- 12:47for the world in such agility, and now you say, this is stupid.
- 12:50So let's not let's not make the mistake of judging people of the hands have
- 12:55history, and be empathic with the person and senior management team.
- 12:59So it's not the judgment of their incompetence, but more a lesson for
- 13:03us of humility, that as leaders, you have to be very humble.
- 13:08. And today, thinking about companies making AI investments.
- 13:13So let's take an insurance company.
- 13:16You have your traditional business model and you're making huge profit.
- 13:21Then you have AI coming in and people saying then that in a couple of years
- 13:27AI is gonna destroy your business.
- 13:29There will be new companies, new processes.
- 13:34do you invest in developing the traditional model where you have
- 13:38for the past 10 years, always made profit from your investments?
- 13:43Or do you put all in AI and hope for the best without knowing what will happen?
- 13:50Especially with the current data on AI today, to put things perspective,
- 13:53the data reveal that 90% of more of the companies invest AI did
- 13:58not make a cent that is the fact.
- 14:00So should you invest more and more, to, to bank for the future or do
- 14:05less and keep the current business?
- 14:07So I think it's the same type of uncertainty about innovation, that
- 14:11all executives and companies face, and then I think we have to be more
- 14:14humble in and more, have more emotional empathy to really see the full picture.
- 14:59Yeah.
- 14:59in senior.
- 15:56I spoke with the market intelligence people and they were the ones who got
- 16:00the information from the corporate spies or wherever and they really had
- 16:06detailed report, and it was exactly like you said, the day that iPhone was
- 16:11introduced, Nokia shared internally this extremely detailed analysis, so
- 16:17they had full understanding of what it's like and what's, what it's going to
- 16:23be in, in future, where it can evolve.
- 16:27But I think there is two kind of emotional dynamics that even if people
- 16:31saw the slides and heard that it has a touch screen and you can pinch and
- 16:35squeeze and download apps, they didn't feel the pressure that it would ease.
- 16:41It was easy to say in Finland, for instance, that the touch screen
- 16:44will freeze in the winter, so no one wants to use it and or no one
- 16:49wants to type with touch screen.
- 16:51And so there was this emotional denial in that sense.
- 16:57And then second part was I think many of them believed that it's easier to build
- 17:04a competing product and in two senses.
- 17:07So from a technological and usability point, how difficult it is to create
- 17:13this extremely smooth product.
- 17:17From middle management point of view, it was challenging that they had
- 17:20a plan how to build a new version of the Symbian operating system
- 17:26that would support the, that screen technology in the best possible way.
- 17:30But the top management ended up sabotaging the development with short
- 17:36term pressures and cost pressures.
- 17:39So one example was that the cutting edge stat screen would have required
- 17:45a bit more expensive memory chip.
- 17:47But top management decided that let's take the less expensive one, so we
- 17:52make more profit from this model.
- 17:54And then they had to compromise on some features.
- 17:58And then another element was that when they changed the launch
- 18:02schedule and different products.
- 18:03They had to compromise on the cumulative development of the software platform
- 18:09to get the product out earlier.
- 18:11But that didn't only make the launch product worse, but all the subsequent
- 18:16products also, this also made the development ever more difficult.
- 18:22So it's both the understanding of how good the competition is.
- 18:26That was emotionally difficult to accept.
- 18:29then there was this double level overconfidence in own
- 18:34ability and top management ability to lead the development.
- 18:39So you have multiple uncertainties and you want to win, you end up
- 18:43believing all the optimistic versions.
- 18:47I think together all the groups have all the elements and all the
- 18:53technologies necessary to do anything to work right at the elemental level.
- 18:58But at the dialogue level, at the consensus coordination level, it was very
- 19:03weak because everybody has the piece, but nobody shared the whole element.
- 19:07So no, nobody has the full picture, right?
- 19:09So people working on part of the middle managers working on part of the, what
- 19:14they understood they got from top managers that also call the focused attention.
- 19:19The attention was there, but it was partial and limited.
- 19:23And so are top managers, they could have the whole picture but they
- 19:26chose not to for whatever, all the structural incentive reasons.
- 19:29So they have work with partial reality, and those two partial reality just clash.
- 19:34that one, the culture of fear, really complicated matters.
- 19:39'cause you remember the example they told how there was a meeting in front of top
- 19:45management, kind of several teams were presenting at top management at the same
- 19:49time and the first team knew that they are gonna be late in their part of the
- 19:55work and that probably all other groups are also gonna be late on their part.
- 20:01But no one wanted to be the first to say it out loud.
- 20:04So everyone pretended that things are on track and were waiting for the others
- 20:10to say it out first, like playing the game of chicken, that who will yield
- 20:14first and then it ended up in a crash.
- 20:17'cause no one did, but.
- 20:20But if they had this more open or less fearful culture, they could have in
- 20:26these moments, do this coordination that Quy mentioned that they could have set
- 20:30that because of these things and put all the pieces together, but this top
- 20:36management wasn't able to give this space for reflection 'cos they felt their own
- 20:41pressure that we need to deliver, that we need to get the results for this
- 20:47quarter, and we need to innovate faster.
- 20:49So don't give me problems, just tell me it's gonna work.
- 22:23Sales and strategy and business and strong kind of experience in
- 22:29the traditional radio technology.
- 22:32There were some people with PhD in the top management as well in, in
- 22:36at least partially relevant areas.
- 22:39But some of the top managers just didn't have the kind of depth, in
- 22:46depth knowledge of understanding that.
- 22:49And some of the rumors were like that.
- 22:52When a, some top manager got a new Nokia phone, the assistant would configure the
- 22:57email 'cause he wasn't able to do it.
- 23:01So I don't know if that was like really true, but in another book,
- 23:06there was an example of a board meeting where one of the board members
- 23:10phone started ringing and he didn't know how to switch off the sound.
- 23:15And those are extreme examples, but it's really about this ability to challenge
- 23:23employees on the technical aspects.
- 23:25But Nokia had never been a kind of a technology company, but a conglomerate
- 23:32with multiple different businesses.
- 23:34It divested everything else and focused on the phones, but the kind of
- 23:39management style remained from that era.
- 23:42I wish to cut the defense of Nokia senior executives in the following sense.
- 23:47It may be impractical, to expect top managers of a large organization
- 23:52to be technically highly competent.
- 23:56In inter products and I, and their defence I use the case of, let's say that people
- 24:01always compare OPK Kallasvuo to Steve jobs because Steve jobs apparently, he
- 24:07had a very deep understanding, at least from technical side, what can be done,
- 24:12what cannot be done unlike Olli-Pekka Kallasvuo or Nokia senior managers.
- 24:17But then they said, compare them against the senior managers
- 24:21of large pharmaceutical firms.
- 24:23Think of Pfizer, AstraZeneca, would you expect those CEOS to understand all the
- 24:27biomedical devices, all atoms of a hundred thousand research products that they are
- 24:32making, they are tens of thousands of PhDs working at different pharmaceutical
- 24:36products and drugs, treatments.
- 24:38Would you expect to see or understand any of those, let alone all of those, right?
- 24:43So it's not practical.
- 24:45So I think, if you're developing a single product then it may be it, it may be
- 24:50maybe it could be expected or maybe not.
- 24:53But if you're developing a lot of products, it's very difficult to
- 24:56expect the CEO to have a deep technical expertise, all these products, because
- 25:00none of the scientists in working ation, would have e even expertise.
- 25:06So that's my defense of Silk CO.
- 25:08I agree with you here in the sense that it's not possible to have deep expertise
- 25:14on all technologies, I guess in Nokia's case it was that they had been able to
- 25:21trust the radio engineers for 20 years.
- 25:25So they had learned that what they say is the truth.
- 25:29But when the technology moved to software and they hired a lot of new
- 25:33people the same kind of reliability of the knowledge was no longer there.
- 25:39So it would have required a bit different type of leadership.
- 25:43And I don't think it's always that you need to be inside the
- 25:47technology, but you need to have this sufficiently critical and curious
- 25:52attitude that how does it really work?
- 25:55And does, like now when we are taking an AI angle, so all the CEOs
- 26:00hear pitches about AI and how it's gonna replace something but they
- 26:05shouldn't naively believe that, okay, I trust you that let's go.
- 26:09But really double check that.
- 26:11Okay.
- 26:11What, how it'll replace the pros And what if this happens, what will happen?
- 26:16And maybe there is
- 26:19kind of curiosity, but even without deep technological expertise..
- 26:27Yeah.
- 26:28Just thought this was so important to say on this, that and I'll
- 26:32come back to a couple of things to build out this, because there's
- 26:34so much depth in this paper that you can see from doing two shows.
- 26:38We still won't get through it all, but you you talked about innovation
- 26:41under performance at Nokia.
- 26:43And as a result, they had an over optimistic capability perception.
- 26:48They thought they were better than they were.
- 26:49And this makes sense because you said that this had come from historically
- 26:53being the case inside Nokia, at Nokia pressure to introduce new phone models in
- 26:58the short term deprived the Symbian unit.
- 27:01So that's the software for those who don't know of the time they
- 27:05needed to make the OS more modular.
- 27:08And I wanted to point this out because this is the template
- 27:11that Quy talked about before.
- 27:12This is what happens everywhere.
- 27:13I suffered myself this, where you're talking to a leadership team or a
- 27:17board in some case who have no idea what's needed to create technology for
- 27:24those people who worked in digital.
- 27:26Say for example, in the late noughties, early, early 2010s, for
- 27:31example, building applications.
- 27:33Building websites that somebody looking at it thinks it's just a picture.
- 27:36And all you have to do is move that picture over there.
- 27:39And it's just like designing a picture.
- 27:41you have to keep dropping innovative work.
- 27:45And no one cares about that because they don't get rewarded for that exploration.
- 27:50Nokia top managers, they had no idea of what it took to change an operating
- 27:55system or even to build apps to build up that app store enough to get
- 27:59people to use those new smartphones.
- 28:03And in Nokia's context, you say Here another problem.
- 28:07Another element of the problem was no, because structural arrangements
- 28:10did not prevent product units immediate needs from overwhelming the
- 28:15long-term needs of Symbian software.
- 28:18And in ambidextrous organizations, which many of our audience are familiar with,
- 28:22this idea of exploit and explore the unit focusing on long-term development
- 28:27should not have short-term pressures.
- 28:30That's an absolutely key point here is it's keep delivering the phones,
- 28:34keep delivering the phones, and meanwhile, whatever scraps of time you
- 28:37have, deliver this massive project, which is a whole new software.
- 28:41This was the fundamental problem and.
- 28:45I think in all the interviews, that was the most puzzling things.
- 28:49'cause everyone was saying, describing some version of this problem that the
- 28:55long-term development was constantly compromised by the short-term pressure.
- 28:59So why you didn't separate it or why you didn't it.
- 29:04And that led to the fear recognition and then the financial oppressors.
- 29:09And and ultimately they did separate it, but then it was too late.
- 29:13And what they emphasized and what Quy also mentioned, that the structural
- 29:18separation doesn't always work when you have a very integrated product line.
- 29:24So if they have completely separated symbian, what would have sold during
- 29:29the, those one or two years that it takes to develop the new of the software?
- 29:35In retrospect, probably they would now be selling phones still but in the fog of
- 29:41war, , that would be a very bad decision.
- 29:45Quy, can I bring you in
- 29:46Yeah.
- 29:47you said that off air when we were talking to off air, you said about this idea that
- 29:51and this is often the challenge between, say the Clayton Christensen School of
- 29:56thought was like, you need to get it away from the sucking sound of the core.
- 30:00Get away your innovation team versus Tushman O'Reilly is like, no, no, you need
- 30:04to in integrate it because you need it to
- 30:07Yeah.
- 30:08and not rejected like some type of organizational bad liver transplant.
- 30:13So I'd love you to elaborate on that because it's a key point.
- 30:17Yeah.
- 30:18Because today, as you mentioned, Aidan, one of the kind of solutions that
- 30:24people propose, to deal with the tension in the short and long term is about
- 30:29the issue of structural separation.
- 30:31Structural separation means that you have one unit that focus on the short
- 30:35term exploitation, current business, and another long term, which is
- 30:39essentially r and d that developed for the long term, and focus innovation.
- 30:43Now, the my research later suggests that it's not as easy as
- 30:49people will make to say no one is that the long term stock units.
- 30:55Tend to be the the envy and attack of the of the short term units to said that we
- 31:01are the ones who have to make the sales and make the money, for you guys to engage
- 31:06in some kind of fluffy r and d, which you never see, what are you guys developing?
- 31:11We never sure what you are developing.
- 31:13You guys are consuming a whole lot of money that we have painfully earned,
- 31:18and, do you know what it takes?
- 31:19So it's just, that is a butt of envy, you know, what call notion
- 31:23of inter or envy and that's envy is not, just doesn't stop there, right?
- 31:29It results in all kinds of bad sayings, lack of cooperation and so forth.
- 31:34So I have, for example I, I have met some that's say, I don't want to mention
- 31:39the industry but some hightech people who are in the, in, into the long term
- 31:44who wants to develop some prototype.
- 31:46And now they want to go and test it in the big banks and the financial industries.
- 31:51But the short term units we are dealing with, the banks
- 31:53will not allow them to do that.
- 31:55We setting down, because what happens if you, your product doesn't work?
- 31:59We will be jeopardizing our relationship with our customers, with the banks.
- 32:03We cannot afford that, you know, because, no, you guys are doing r
- 32:05and d, which you're not aware of, and we are not open the doors for you.
- 32:09So that is a real tension between this in the same organization between the
- 32:14short term sales unit and marketing and the long term engineers, r and d, right?
- 32:19So that's only one example.
- 32:21The other the other example is even if the product works, now, I think you, you
- 32:27wish to reintegrate the working product inside the model organization because
- 32:32make it into a core product, right?
- 32:34In order to scale it up.
- 32:36Because once you have the prototype that works.
- 32:39You have to bring back to the core organization to scale that up.
- 32:43And now, the organization who has never anything to do with it, do
- 32:46not feel the pride of ownership.
- 32:48They said, why should we take an orphan from somewhere, to integrate you.
- 32:52It's like you're bringing an immigrant, a landed immigrant from somewhere,
- 32:55which we never accepted anyway.
- 32:57Look at all the issue we have with migrant today.
- 32:59Said, why are we accepting some foreigners, a foreign product into our, in
- 33:03our country, in doesn't fit our culture?
- 33:05So all this anti-cultural, anti stuff very similar to the migrant anti
- 33:11narrative would surface, and people would do anything to sabotage to
- 33:16show that it doesn't work, so just from my real research, I constantly
- 33:20see, it happened so many times.
- 33:22It's not even funny.
- 33:22So yes.
- 33:23Yes, on the paper looks good.
- 33:26In practice, it's much more challenging than you think.
- 33:29And those are emotional treatment, right?
- 33:31And it's
- 33:31Yeah.
- 33:32frustrating for the innovator.
- 33:33So I worked in a team like that, and you get integrated
- 33:36and you they butcher your ideas.
- 33:39They try and they, that term again, Clayton Christensen used cramming.
- 33:43They try and cram your idea into an existing solution that just doesn't work
- 33:47for like we're seeing with AI today.
- 33:49But speaking of Clayton Christensen, I was looking on the shelf there for the book on
- 33:53the jacket in inside the cover jacket in the endorsements of Clayton Christensen's
- 33:59and Michael Rayner's 2003 book.
- 34:00The Innovator's Solution is an endorsement and it says have done a superb job of
- 34:08creating a framework for helping to understand industry dynamics and for
- 34:11planning your own growth alternatives.
- 34:14And that comment was written in 2003 by Pekka Ala-Pietilä,
- 34:18Hmm.
- 34:18Timo, I'm probably butchering his name there, but From 1999 to 2005,
- 34:24Pietilä, was the president of Nokia.
- 34:27And point, it doesn't mean that he was a bad president.
- 34:32It doesn't mean I, he was a bad CEO or anything like that.
- 34:35But it's so difficult to read the label when you're inside the jar when it's
- 34:39you who are the victim of disruption.
- 34:42It's so hard to see that.
- 34:43But I want to tie it to something else that's really important here.
- 34:47The history of aggression inside Nokia, because we hear this from
- 34:51the outside and other organizations.
- 34:53Say for example, Microsoft pre Nadela, very much dog eat, dog culture.
- 34:58And you say A second factor that triggered fear among Nokia's middle
- 35:02managers was its TE top manager's history of aggressive behaviours
- 35:07towards those middle managers, which was widely known inside the organization.
- 35:11And when conducting your interviews, you were struck how often informants
- 35:15referred to the aggressive behaviour of Nokia's top chairman, who
- 35:19was also CEO from 1992 to 2006.
- 35:22And he was described as extremely temperamental, shouting at people
- 35:26at the top of his lungs so hard that it was very difficult to tell him
- 35:31things that he did not want to hear.
- 35:33And those same informants described several other top
- 35:36managers as highly aggressive.
- 35:38And one of the EVPs told you about how he pounded the table so hard that
- 35:43pieces of fruit went flying everywhere and that same EVP had nothing but
- 35:47poison running through his veins.
- 35:50those type of characters used to do well.
- 35:52That whole idea of Gordon Gecko in Wall Street greed is good . While we
- 35:57hope it's gone, and we talked about this off air, that we hope younger
- 36:02generations are changing that culture.
- 36:04It still has echoes in many organizations today.
- 36:07I.
- 36:08Yeah, that, that's true.
- 36:10And think there are at least three angles to that.
- 36:14One is that it was those aggressive behaviours, but especially the
- 36:20stories about the aggressions.
- 36:23So the individuals, they were like most of the time very nice people.
- 36:29But then there were these moments where they exploded and and those stories
- 36:35spread really widely in the organization.
- 36:38And that generated even this like unrealistic or completely irrational fear.
- 36:44And even the new CEO who wasn't one of the aggressive people, he told how
- 36:50whenever he goes to the lunchroom, everyone is watching for his every
- 36:54expression that if he's not, which is a bit, there is immediately
- 36:59huge rumors about what's happening.
- 37:02as a CEO, you or top leader, it's huge impact.
- 37:07Then the second part is the huge pressure that they are under.
- 37:11So when, if you don't take care of yourself and manage your own stress
- 37:17and all this then you easily misbehave even if you are a good person.
- 37:22And then third, the young generation.
- 37:25At least in Finland.
- 37:27And we've been lucky in the sense that we have a lot of open discussion about
- 37:32the emotions in management and it feels that the younger generation is able
- 37:38to reflect on the emotions and accept that it's part of the leadership style.
- 37:44And obviously since they're all doing cognitive work, they also
- 37:48feel that impact more strongly.
- 37:51I would like to, to add to what Timo just said as a reflection, right?
- 37:56And I can see today, even today, even Nokia was 10 years ago now, but it's
- 38:01almost as if, it just repeats itself every day today in the following sense.
- 38:07There is a seeming paradox in society and in organizations.
- 38:13On one hand people said, we have to be nice at each other, more civil,
- 38:18more inclusive more respectful, right?
- 38:21So that is the that is the narrative.
- 38:24But there is a emerging narrative, that says that you cannot make omelette without
- 38:29breaking eggs and sometimes to make changes you have to be tough, so there
- 38:33is a very high cut of dictators, you know, either in nations, which I don't
- 38:39want to get into politics, which, what, can talk about without getting that one
- 38:44or, and it's situation of dictators in organizations, and although the stock
- 38:49market, on one hand they say they, they like to have inclusion, respect.
- 38:54On the other hand, they seem to reward equally well, those dictators
- 38:58and those rough, you know, and those uncivil people, right?
- 39:02So no wonder maybe that's why 40% of young people to 30 40, copped out, you said, I
- 39:08not haKyndryle this double talk, because working in organization was too tough.
- 39:13And in the end, we say one thing, but we reward, it's reward the
- 39:17dictatorship and, and the rough people.
- 39:20So I just want to say that you know that the not yesterday just present
- 39:23us with the same macro paradox and the same tensions that we have leading
- 39:27today, society and in organizations.
- 39:30And that actually reminds me of Quy's 2002 paper on emotional
- 39:35balancing people need both.
- 39:38When you are in change moment, you need both kind of validation and empathy.
- 39:43and you need direction and Quy found that in the best units.
- 39:47You have middle managers who provide the kind of empathy
- 39:50and others who push the chains.
- 39:53But what I think is behind this paradox now is that some
- 39:57people are really frustrated.
- 39:59About the lack of progress and being very careful about not insulting anyone.
- 40:05And then the counter reaction is that let's have someone who just
- 40:10tells everyone what to do and we get something done type of thing.
- 40:15so finding the balance between kind of hearing, listening on the
- 40:18one hand and then like driving progress on the other, it's not easy
- 40:24Yeah.
- 40:25And then, we have that to reflect society.
- 40:26You know, We have so-called extreme left and extreme right, you know, which has
- 40:30the old echo chambers and all, you know, all that we are right, you know, you know.
- 40:36So I think that that kind of uh, conflict in society and in
- 40:39politics also reflect and reflect in organization in a smaller way..
- 40:44That's a key point as a leadership team, , it's not just what you reward or
- 40:48recognize, it's also what you reprimand when you stand up against behaviours
- 40:53that you don't want in the organization.
- 40:54And as you said, this is not gone away.
- 40:56Even from my own perspective, I worked in an organization where I started the
- 41:01innovation show and I essentially had to leave that organization to keep it
- 41:04because they were like, going, we don't want you doing those type of things.
- 41:07And in other organizations there were bullies.
- 41:10And those bullies did well in the organization.
- 41:12'cause while the organization said they didn't want.
- 41:15Want those behaviours, those people got results, but they got results at
- 41:18huge costs to people's health, mental health and the, second order and third
- 41:23order effects of that where those people aren't present for their children.
- 41:27Maybe they're pressurized at home, maybe they're sick.
- 41:31There's so much that goes on behind this, which is why I
- 41:34think this paper is so important.
- 41:37Speaking of which, I thought about one of the important things in this paper
- 41:41you said about the fact that constant change inside Nokia, and I found that
- 41:47reflection really important because I know places like we mentioned, Satya
- 41:51Nadella and and the book title, his book.
- 41:55Hit refresh.
- 41:57And inside Microsoft, by all accounts, it's a little bit like, you know when
- 42:01you're trying to get an elevator door to close and you're in a rush and you start
- 42:05hitting the button over and over, it's hit refresh to that extent where it's
- 42:09constantly going and it's exhausting for people because there also must be so much
- 42:14waste because they might be working on a initiative next thing they're assigned
- 42:19to a different team or have a different team to put together and they are lose
- 42:24all the progress that they've made.
- 42:25It's like being a politician.
- 42:27And then there's a change of government.
- 42:29But you wrote of Nokia's tendency to change its organizational structure
- 42:33frequently to ensure effective.
- 42:35Resource allocation made middle managers and product unit managers and the
- 42:40software organizations perceive heightened threats to their wellbeing inside the
- 42:44organization and low ability to cope with such uncertainty and reorganization.
- 42:50This is a quote from a manager, were difficult.
- 42:54People had to reapply for their jobs at Nokia.
- 42:57I sent my application, this is this middle manager speaking.
- 43:00Then you got an invitation to an interview and it was quite tough.
- 43:04He said at the po.
- 43:06At that point you started to wonder whether you were working at Nokia or
- 43:09not, and I felt like I wasn't because I didn't have a job or position.
- 43:13That is such a key point and I'd love you to elaborate on it.
- 43:17in theory, they wanted to be dynamic and assume that people are committed
- 43:23and motivated and behave rationally, but that created a short term incentive to
- 43:33only do stuff that will look good in the next job interview and don't care about
- 43:38any of the risks that happen afterwards.
- 43:43When it was done in such a huge scale, it really contributed to the
- 43:50tendency to fear, , about telling bad news or flag the long-term risks.
- 43:58And
- 44:00Nokia had this
- 44:03I idea that constant change is what keeps you going.
- 44:07And I agree on the theory, but there is this human element that wasn't resolved.
- 44:14And I think the management theory just swing from one extreme to the other one.
- 44:21In the sense that, we have this all cliche statement that we need constant
- 44:25change, and that's what Nokia was about.
- 44:28After all, it held the first place in the world in terms of strategic agility.
- 44:33We remember I said that, no, never forget that Nokia was held as the showcase, world
- 44:40showcase for strategic agility for 10, 15 years, much as a general electorate.
- 44:45Remember, Jack Welsh was the like business school case, for 10, 15
- 44:50years in terms of conglomerate.
- 44:51And, you have to be number one or number two or else, and
- 44:56that kind of cliche statement.
- 44:57And that was also went around for 15 years with G.E. then we have Nokia.
- 45:02And so my point is that strategy, agility, constant change is good for
- 45:09something and bad for other things.
- 45:11Not as now constant change is good for incremental innovation.
- 45:15Like in the case of Nokia, once you have a good product, a good paradigm,
- 45:19then you can do all kinds of tweaking, which much like Apple is doing today,
- 45:23by the way, you know you have iPhone 16, 15, more cameras, more memories, more
- 45:28cameras, a little bit more application, but those are incremental innovation
- 45:33and you can do a lot of incremental change and fast change this way.
- 45:37But if you have to do a fundamental change, what would be Apple's Next
- 45:42radical new product we have to see yet?
- 45:45See, what is it?
- 45:46We don't know yet, right?
- 45:48But that's not something that you can do.
- 45:50Fast change,
- 45:51you've actually reminded me of a piece, and this is in the footnotes.
- 45:54This is how in depth I read your work here, by the way.
- 45:57you have a counterfactual situation where, we.
- 46:02We talked about the fear inside.
- 46:05Inside Nokia, but also some, to your point, some of the top managers had high
- 46:12technological competence, but not all.
- 46:15you say, here, consider Steve Jobs influence on Apple, which seemed
- 46:19to have a somewhat similar, if, less extreme fear profile as Nokia.
- 46:23So by all accounts, jobs ruled by fear and he felt high external fear
- 46:29regarding Apple's long-term success.
- 46:31So he was constantly on the hunt for threats to that change.
- 46:35And he was very upset when Google announced Android and worried
- 46:39that it would destroy the iPhone.
- 46:41He even says that in his biography with Walter Isaacson, he was also notorious
- 46:46for instilling fear among middle managers and jobs seemed reasonably
- 46:51in touch with the technology he used, they used in the iPhone and was
- 46:56closely involved in its development.
- 46:58For example, he spent part of every day for six months
- 47:00helping the refine the display.
- 47:03Of the iPhone, according, again, to that biography, but was extremely
- 47:07demanding about technological quality.
- 47:10I thought that was an important contrast to show to Nokia.
- 47:13People always ask me about this question to contrast, Steve Jobs.
- 47:19And OPK (Olli-Pekka Kallasvuo) from Nokia.
- 47:21I said the professor after all you said that fear was bad, but Steve Jobs ruled
- 47:26by fear and he was quite successful.
- 47:29So what do you make of it?
- 47:31My answer was that Steve Jobs in, in fact, ruled by fear.
- 47:35He was very authoritative, but he had something else which Nokia did not have.
- 47:41And that's from emotional capital theory.
- 47:43Back to emotional balancing, which Timo was referring to.
- 47:47He was able to balance fear with thoughtful passion.
- 47:51What I mean by that, he was able to instill thoughtful passion
- 47:55among the engineers, the engineers.
- 47:57The engineers, because that we are going to develop the most coolest
- 48:01product, the game changing product.
- 48:03And you know what?
- 48:04You guys just bring you guys here.
- 48:06I will pay you guys almost anything.
- 48:09Everything you need to develop the product, you will have
- 48:13it, it does not matter.
- 48:15Go for excellence.
- 48:16And that's the narrative that most eng most research
- 48:19engineers would love to hear.
- 48:21Said that I could tolerate your, I could tolerate, your harassment, so to speak.
- 48:27Quote unquote.
- 48:27As long as you give me all the money I need, to fulfill my hobby.
- 48:32The engineers is the hobby, right?
- 48:33So I could hack it, I could handle it.
- 48:35So I think that's my hypothesis, he was able to balance the fear, the
- 48:40pressure with the thoughtful passion that we have to achieve the best.
- 48:44And, we give you all the resources to fulfill your passion.
- 48:48That's a huge distinction in that Jobs had this passion for superior product quality.
- 48:55While Nokia top management.
- 48:56It was more about the financial performance.
- 48:59And that reminds me of the N97 phone, which was NOKIA'S
- 49:05first supposed iPhone killer.
- 49:09it was thrust to the market it had serious bugs.
- 49:14So sometimes you just couldn't answer a phone call with that phone
- 49:18'cause the software is so glitchy.
- 49:21But Nokia top management debated and decided to launch the product even though
- 49:26they knew it had a lot of bugs, the short term financial result was more important
- 49:33than the kind of perfect product.
- 49:36I guess Steve Jobs, based on what I've read about him, would have really
- 49:41gotten angry at the engineers and wanted a better product before launching.
- 49:46But then second aspect is how close he was to the product development.
- 49:50Also physically.
- 49:51Apple's product development happened in the same building where jobs office
- 49:56was, but in Finland, the closest R&D was like one and a half hour
- 50:01drive away from the headquarters.
- 50:04And when I interviewed the design engineers, they told a story
- 50:09how someone asked them that.
- 50:11How often do you think Steve Jobs visits the designers at Apple
- 50:15and the Nokia designer was like maybe once a month, once a week.
- 50:20And then the answer was four times per day.
- 50:23So the kind of product organized sales and then closeness between
- 50:28management and the product development was just very different.
- 50:32And of course, apple had just one phone, so Nokia had 20 or 30, so the
- 50:38whole structural setup was different.
- 50:41And the CEO mentioned how Nokia was one of the first truly global
- 50:45companies with development in 60 different countries versus Apple having
- 50:51everything in one campus in California
- 50:55There, there's another thing there.
- 50:56And was it, was that in tamper?
- 50:58that how you say it?
- 50:59The r and d center.
- 51:01Tamper
- 51:01there was tempera is one,
- 51:03the reason I say that is you reminded me of a piece from the
- 51:06paper, and I'm gonna read this out.
- 51:07You said The atmosphere of fear was created also through speech.
- 51:11The worst one was the presentation by the chairman who gave this
- 51:15presentation in Tampera a city in Finland, about R&D expenses.
- 51:19He said that his only mistake had been to give us, this is
- 51:24their R&D people too much money.
- 51:26And that despite that our products were still not good enough and we
- 51:30weren't making them fast enough.
- 51:31And on top of that, he said if things continued as they were, 15% of the
- 51:35people in the seminar hall would be gone.
- 51:38By the time he came back next year, and that was this guy, this middle manager's
- 51:43first encounter with the chairman.
- 51:45I thought about that as a contrast to what you just said.
- 51:48so what is it the case of, so you can think of a case of Steve Jobs and Apple,
- 51:53very tight emotional coupling, emotional engagement with the developers, right.
- 51:59You know, but through his behaviours, meeting very often, putting pressure on
- 52:03them, but also taking care of them by giving you, how much help you need, how
- 52:06much resources, how much money you need.
- 52:08Money is flowing right, compared to the other behaviours, which
- 52:12is more threatening and limiting and constraining and decoupling.
- 52:15So you can see that a very different manager approach for
- 52:18innovation, which, you can explain part of the success or failure.
- 52:23I thought one last thing we might touch on was the
- 52:27low
- 52:28external threat.
- 52:29So.
- 52:30I have to counter this with the fact that we, we saw the document that
- 52:34was passed around inside and it was extremely detailed and it predicted the
- 52:39future very accurately about how the market would play out, price wars that
- 52:44would play out, et cetera, et cetera.
- 52:46But.
- 52:47I had interviewed, I did a long term form series with Gary Hamill for the Innovation
- 52:52Show, and Gary was also a consultant for Nokia, and he worked for with them on
- 52:57an early prototype of the mobile phone.
- 52:59But later on he said, guys, you know what?
- 53:01We need to revisit this.
- 53:02I don't think it's gonna carry you all the way through the future.
- 53:05And they were like, at this stage, they were all multimillionaires
- 53:07like, oh no, no, we're okay.
- 53:09Thanks a million, Gary, you're just looking for more business.
- 53:12But in your paper, you say Here, a senior strategy consultant explained that Nokia's
- 53:17middle managers had little external fear, other firms were better because they
- 53:22believed Nokia had superior capabilities relative to those other organizations.
- 53:26They were overconfident in those abilities.
- 53:30From a consultant's point of view, it showed in how they
- 53:33treated the consultants, whatever function you were in at Nokia.
- 53:37Talk about like, Hey, have you thought about this issue?
- 53:41And you say, Nokia has always been one of the most arrogant
- 53:44companies towards colleagues.
- 53:46This is the person, the co consultants saying this, who were partners
- 53:49back then, and it showed up in how everything was always perfect.
- 53:53Nokians were the best in class, and they didn't even want to hear how
- 53:58you thought about things differently because they felt that they were
- 54:01inside a cocoon, and they were padded in some way from the external view.
- 54:06I thought that was an interesting thing, given the contrast of there
- 54:10were some people who were aware of the competitive threat, but at the
- 54:14same time there was this internal confidence that was somewhat unfounded.
- 54:19One of the people who wrote the report that you are mentioning, said
- 54:24something like that where the number of people who really knew the pain
- 54:30or felt the pain was way too small.
- 54:33So it was this market intelligence unit where they really analyzed the iPhone
- 54:39that felt the pain, and even some of them said that they only like truly felt
- 54:46it after they started using the iPhone.
- 54:48So even after writing the report, they didn't fully believe it emotionally,
- 54:54but then people working in r and d or other areas in middle management where.
- 55:00They were mainly looking at their own products and benchmarking them
- 55:04against Ericson and Sony and other products, and seeing how they do better.
- 55:09They just didn't see the difference.
- 55:13And then, especially in Finland, Nokia was having a kind of way
- 55:19disproportionate success and stages.
- 55:23So at one point Nokia did don't remember the exact numbers, but like third of
- 55:28the Finn exports and substantially contributed to the cross domestic product.
- 55:33So if you worked in Nokia, you were treated as a hero in the grocery store
- 55:40and that all contributed to the must have contributed to the arrogance.
- 55:46I think I was told some story like that, even if you are the president
- 55:49of China, Nokia at that time that the Nokia products of India account for a
- 55:55significant percentage of the export of the country, not the Nokia product.
- 56:01So you are, you are a big cheese even in those countries at tar time,
- 56:05you know, because they have a huge manufacturing base out for Nokia.
- 56:08So I guess that given that few success, it's it's difficult not to feel a
- 56:14little bit complacent, isn't it?
- 56:15And then on top of it, they to, again, to middle manage defense.
- 56:20They believe that they had utmost technical superiority
- 56:24in terms of the patents, right?
- 56:26That the Samsung and Apple was used that time.
- 56:28So I said, no matter what happens, we will have the the bottlenecks, quote
- 56:33unquote, better use the patents anyway, so we'll be able to catch up fairly quickly.
- 56:38So I think all of those perceptions contributed to
- 56:41that sense of invincibility.
- 56:44Yeah.
- 56:44And it's really this kind of natural that had built this fantastic
- 56:51technology and they had given like 1 billion phones to the world.
- 56:56Like one fifth of the world population was using Nokia phone
- 57:02and they had done that in 10 years.
- 57:05So I think that's like almost like a miracle, like how fast they were able
- 57:11to grow and natural that they got a bit overconfident or arrogant after that.
- 57:19I think the lesson we can learn from that is that even if we have like successful
- 57:25years as innovators, we should remain curious and keep learning , but it's
- 57:31easy to just settle in your own success.
- 57:36As I mentioned, to remain humble is easier said than done!
- 57:40. Absolutely.
- 57:40And Satya Nadella's things be a learn it all, not a know-it-all,
- 57:44you know is very relevant.
- 57:45A couple of just quotes here, this is from the CEO who downplayed Android
- 57:50strategy publicly in 2008, November, 2008.
- 57:53"We have had that and applications for 10 years. He said definitely we're
- 57:58ahead. an EVP stated publicly that the iPhone is an interesting product, but
- 58:03it is lacking a few essential features such as 3G, which would enable fast
- 58:08data connections." So it, it's such an important point to actually go.
- 58:14You as an organization, you as a leader, where are you not being humble?
- 58:18Where are you saying these things about Some competitor, and this is
- 58:23the thing about disruptive innovation, it always appears as a lesser product
- 58:27and then they build up capability.
- 58:29We see this a lot, say for example, a bank that a bank often relies on
- 58:34regulation to protect it, to insulate it from the outside world, but there's
- 58:38huge changes coming, and they'll dismiss those changes and dismiss the opportunity
- 58:43to build capabilities for the future
- 58:45I've also had very similar conversations about the role of regulation so it's
- 58:51always easy to find some dimension where you are better than the other one.
- 58:56As a teenager, I used to say that I'm stronger than Wayne Gretzky,
- 59:02the ice hockey player, and more flexible than Arnold Schwarzenegger.
- 59:08So I think we all do that.
- 59:10But in Nokia, guys, the top management was also a huge dilemma.
- 59:13So they had to keep speaking confidently to investors.
- 59:18when they did that, they also, as a side effect, created arrogance and
- 59:24lack of humility in the organization.
- 59:28And we even have a counterfactual.
- 59:30So when Nokia replaced the CEO in 2010, and he gave a new speech in 2000, early
- 59:362011, he said that our products are bad.
- 59:40We are far behind from competition.
- 59:42And the immediate stock market reaction was very negative, and all the orders
- 59:48were canceled by all the customers.
- 59:50So yeah, that case, the reality, but it also didn't work.
- 59:55there's a quote I have to finish, but I'd love your finale, your final words
- 59:59on this paper, and we're gonna come back 'cause there's a, an interesting
- 1:00:02thing many of our audience won't know is that Nokia back, everybody,
- 1:00:05they've reinvented themselves and they used all the lessons from this paper
- 1:00:10to actually drive that reinvention.
- 1:00:12It was the fuel for that reinvention.
- 1:00:14But I love this quote, and it was towards the end of the paper, you
- 1:00:17said top managers were not just passive recipients of information.
- 1:00:22They actively shaped what would be communicated to them by influencing
- 1:00:26their subordinates emotions, both directly through their directives and
- 1:00:30indirectly through structural choices.
- 1:00:33This suggests that one predictor of the accuracy of top managers mental models
- 1:00:38could be their ability to influence the quality of their interaction with
- 1:00:41middle managers by managing their own and middle managers emotions.
- 1:00:46This goes to your point about you have to be able to control your emotions in a way.
- 1:00:51Then you need to be a corporate athlete.
- 1:00:53You need to be able to look after your stress levels so you don't bring them to
- 1:00:58the organization, like you said, Timo, where they're not looking and going,
- 1:01:01what kind of mood is Aiden in today?
- 1:01:04as a result, behaving appropriately towards my emotions, where I'll
- 1:01:08direct almost like a, a, an the of an organization, which
- 1:01:13is a terrible place to be in.
- 1:01:15I just thought that was a key point because that applies to everything.
- 1:01:18That applies to being in a family, in a relationship, in an
- 1:01:21organization no matter where you are.
- 1:01:23But I'd love your final thoughts each gentleman on this paper before
- 1:01:28we move on to the next paper.
- 1:01:30My final thought is that it allows us to really go deep into how paying attention
- 1:01:38to emotions or not paying attention to emotions and how you regulate emotions
- 1:01:44can have significant consequences for the welfare of an organization.
- 1:01:48I once I did research emotion even 30 years ago senior executives
- 1:01:53always challenge me, said, Quy, how much money were we lost if we
- 1:01:59didn't pay attention to emotion?
- 1:02:02And I was little bit always dumbfounded.
- 1:02:04It's almost like how much question that you can apply.
- 1:02:07The same question about R&D, right?
- 1:02:08How much question we lost, how have you quantified it?
- 1:02:11And the case of Nokia, what allows me said, sir, it would
- 1:02:14only cost you $100 billion.
- 1:02:18Give or take.
- 1:02:19I don't know whether the $1 billion give or take would
- 1:02:21matter enough for you or not.
- 1:02:24That's my answer.
- 1:02:25it.
- 1:02:25I love it.
- 1:02:26It's a good point though, Quy, it's very hard to quantify this,
- 1:02:29but you can feel it and there's a different energy in an organization
- 1:02:33like that.
- 1:02:34Timo.
- 1:02:34Your closing thoughts.
- 1:02:35When we make strategy, we are super comprehensive about
- 1:02:45validating our assumptions.
- 1:02:48But then when we, this paper shows that when we do the implementation
- 1:02:55of the strategy we make overly simplistic assumptions about how
- 1:03:01people in the organization feel and behave and therefore the.
- 1:03:07All the work that went on that checking the external assumptions is irrelevant
- 1:03:12because the bigger assumptions are the emotions that we completely ignore.
- 1:03:17Beautiful think we've done a good job.
- 1:03:21Yeah, I think you know, congratulations.
- 1:03:23Aidan you really read our papers.
- 1:03:25Great.
- 1:03:27very careful.
- 1:03:28I think you are the most careful reader I have ever come across.
- 1:03:31Oh, you have no idea, man.
- 1:03:32The rabbit holes I go down 'cause because I don't just read the paper,
- 1:03:35then I start googling and reading paper.
- 1:03:38I actually, anyway I'll finish this episode because I know
- 1:03:41you guys need to head off.
- 1:03:42It's been an absolute pleasure though, authors of this paper and Nokia, which is
- 1:03:46an absolute brilliant read and I really hope people do take time to read it.
- 1:03:51Get in touch if you want to copy of that.
- 1:03:53The guys have kndly let me share that to people who really deal with strategy
- 1:03:57and change inside organizations.
- 1:03:59'cause they really want to make a big difference.
- 1:04:01Quy Huy and Timo Vuori thank you for joining us.
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