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Nokia's leadership overhaul

Attendees to this year's Nokia World conference certainly have plenty to talk about over cocktails at the buffet line. The Finnish handset giant, the world's largest, named Microsoft executive Stephen Elop to be their new CEO Sept. 10, replacing Olli-Pekka Kallasvuo. On Monday, its smartphone head, Anssi Vanjoki, resigned from the company, likely connected to an outsider getting the top job. And today, the company's chairman, Jorma Olilla, announced he would resign in 2012.

Talk about a leadership overhaul. While Vanjoki's resignation may not have been part of a master plan, the company is clearly seeking new leadership to help rejuvenate the ailing giant. The company's stock price has dropped 70% over the last three years, as Apple's iPhone and Motorola's Droid became the standard bearers for the category, stealing Nokia's once-held crown. New CEO Elop will surely want to handpick his own man to run Nokia's smartphone unit.

But the most important change is the one that happened today. Analysts rightly fretted that Elop would not be able to make the changes needed if Olilla retained his current job. The chairman ran Nokia for 14 years, and was credited with turning the engineering conglomerate into the world's largest handset maker.

As one commenter on this blog entry wisely posted, Vanjoki, Kallasvuo--and one could argue, Olilla--"were like the old Generals fighting the last war." The game has changed in mobile phones, from great industrial design and low-cost manufacturing (Nokia's strength) to smartphone applications and mobile services (Apple's and Android's forte).

But even if Olilla and Elop were to see eye to eye on the right mobile strategy for the future, Olilla would likely need to go. All too often, veteran chairmen who were extremely successful in the CEO role remain an impediment to the new guy in charge. At best, they're experienced sounding boards who are consulted on key decisions, leaving a grateful but still hamstrung CEO. At worst, they become outright meddlers, reminders of the old way, and true obstacles to transforming the company.

Of course, if this was an ordinary succession with a company already on the right track, leaving the chairman in charge would make sense. But when it's one in as bad a need of transformation as Nokia, Olilla is doing the right thing to resign. My only question is why he plans to stick around until 2012. Elop will need to move fast to catch up to Apple and Motorola's lead, and he doesn't need the weight of the past dragging him down.

Read more from Jena McGregor:

* The great paradox of the great recession

* Reining in CEO pay

*
Falling victim to the tyranny of the moment

By Jena McGregor

 |  September 14, 2010; 11:51 AM ET |  Category:  Change management , Corporate leadership , Succession planning Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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The description of Elop as a Microsoft executive is a bit misleading. He has only worked for Microsoft for something like three years. I doubt that he has enough track record at Microsoft to impact his CV too much one way or the other. He came to Microsoft from Adobe. But I think most of his reputation comes from his role at Macromedia, the developer of Flash that Adobe bought.
The division of the business that I used to work for went through a decline driven by the large changes in computer technology and the businesses that are built around it. We had several cycles of leadership changes that gave people something to talk about. But they did little else and the division was eventually disbanded.
The times I listened to his Microsoft talks, Elop sounded good. He may well be a good choice. Leadership changes are generally required in times of major problems to at least give some hope of a change. But no leader can change major technology trends or quickly restructure the skills and culture of an organization that is failing to compete.
Another question that may have some interest is the degree to which Elop was motivated by the attraction of Nokia as compared to a push from the desire to leave Microsoft. The last year or two have not been that good to Microsoft. Being the head of its Office division may have lost some of the attraction that brought him to Redmond not too long ago.

Posted by: dnjake | September 15, 2010 7:25 AM

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