How Lack of Exemplary Leadership Led to the Decline of Nokia Company
Leadership is not about personalities, but it is about behavior. These are the observable set of skills and abilities which determine the performance of a company. Nokia was a leading global market leader in 2000. However, that position was taken in 2008 when apple introduced the iPhone. In a sense, Nokia’s technological decision failed to display exemplary leadership, leading to their downfall. Exemplary leadership entails five elements, which are crucial for performance and maintaining the performance of a company. This discussion focuses on analyzing the downfall of Nokia Company with respect to the five elements of exemplary leadership.
In the early 1990s, Nokia company was faced with several crises. The company was forced to corporate turnaround and concentrated on Telkom lines, mobile phones, and other business lines by the mid-1990. (Lamberg et al., 2019). With time, mobile phones proved to be making more profits for the company. In essence, Nokia played a key role in the development and standardization of mobile networks. The mobile phone business was evolving rapidly in the 1990s, and Nokia had established itself as the global market leader. Nokia sales of mobile phone handset remained at the pick until the second quarter of 2008 when the company was faced with the biggest challenge, which led to the decline and eventual downfall of Nokia Company.
In the early 2000s, Nokia, Erickson, Motorola, and Psion had combined to form the Symbian operating system. (Lamberg et al., 2019). This was the leading technology that enabled the success of Nokia during the time. The Symbian operating system culminated in a huge success, especially for the Nokia company. For instance, in 2004, Nokia introduced 36 new mobile devices models. By the year 2005, Nokia had sold its billionth phone. Nokia Company made a miscalculated leap when they decided to own Symbian Company solely. It was during this time that Apple had introduced the iPhone in the market. Besides, Google had announced they had formed an open handset alliance to develop standards for mobile phone devices. (Lamberg et al., 2019). The market for mobile phone devices started shifting afterward. Nokia’s global market share dropped drastically, such that by 2011, the whole company was unprofitable. Nokia made several attempts to revive its products by introducing N8 to compete with iPhone, but to no avail. The situation worsened when Nokia announced a new software platform, which will support multiple hardware architectures. (Lamberg et al., 2019). Eventually, Nokia announced a strategic collaboration with Microsoft to act as a complementary source of strength and expertise for the failing company. The Nokia Corporation was later owned by Microsoft, leaving global market leadership to Microsoft.
The fall of Nokia Company is attributable to poor internal leadership. The leading of Nokia’s failure was the choices of their technology. Nokia decided to continue using the Symbian technology as well as abandoning the Maemo and start an alliance to build MeeGo. These can be concluded as bad decision making. This is because some decisions were made slowly while others were made too fast. These are sufficient factors explaining why Microsoft’s operating system was the only option in 2010 after Symbian was outdated, and MeeGo was not ready for commercial purposes. (Thompson, 2012). The above mentioned technological decision did not follow the elements of exemplary leadership. Conversely, using the five exemplary leadership skills, Nokia could have maintained their global position.
Exemplary leaders create standards for excellence for others to follow. It is the first element in exemplary leadership, referred to as modeling the way. (Noure Elahi, 2015). In the case of Nokia’s downfall, the company decided to focus on a value other than excellence. The company lagged regarding computations, which brought massive effects on the company’s high-end market segment’s features and functions. The management ought to have made development and performance as a feature-driven. Besides focusing on maintaining more software at the expense of hardware’s, the management should have made both aspects feature driven. This would mean balancing the costs of developing and maintaining both software and hardware.
The leadership at the Nokia company failed to have a shared vision. As a leader, it is paramount to believe that one can make a difference. Lack of envisioning how the company ought to be in the future brought Nokia down. Therefore, creating a shared vision is essential. During the development of Symbian OS, leaders should have envisioned how they would beat competitors in the future. There was a need to lay down strategies of advancing the technology to match Apple’s iPhone. Eventually, the leaders would share this vision with everyone since their magnetism would pull them.
Exemplary leaders always challenge the process. This means looking for opportunities by experimenting and risking. Essentially, they need to be prepared for failures. In the 2000s, Symbian was the leading and most advanced power-saving mobile operating system. (Lamberg et al., 2019). The management had an opportunity to change the mobile phone market forever. However, they should never have fastened the development of the platform when Nokia acquired full ownership. Lastly, exemplary leadership entails enabling others to act as well as encouraging others. In this dimension, the motivation of employees plays a significant role. As a leader of such a corporation, having the employees ever motivated is crucial. This will happen by giving them incentives and rewarding team efforts and individual abilities. Besides, it would be critical to allow them to contribute to the leadership of the company.
Overly, exemplary leadership entails five elements. These are; encouraging the heart, enabling others to act, challenging the process, inspiring a shared vision, and modeling the way. Nokia Company was a global market leader in the early 2000s. It was not until Apple introduced new technology in the market that Nokia’s market shared declined drastically. Nokia’s technological decision shows a lack of exemplary leadership. Therefore, exemplary leadership is not about individual personalities, but behaviors exhibited when performing better and when performing poorly.
Reference
Lamberg, J., Lubinaitė, S., Ojala, J., & Tikkanen, H. (2019). The agility curse: The Nokia Corporation and the loss of market dominance in mobile phones, 2003–2013. Business History, 1-47. https://doi.org/10.1080/00076791.2019.1593964
Noure Elahi, M. (2015). Elaborating the Five Practices of Exemplary Leadership. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2659768
Thompson, J. (2012). Transformational leadership can improve workforce competencies. Nursing Management, 18(10), 21-24. https://doi.org/10.7748/nm2012.03.18.10.21.c8958