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Rescuing Nokia? A former exec has a radical plan

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Ovi development has been outsourced to two London marketing and design agencies. “The development was made externally, but the governance was in Nokia. People who owned the concept, like Niklas Savander, don’t understand the mobile web – and it’s not like the web. It was disastrous for all designers at Nokia who know about the mobile web.”

Another feature of the modern Nokia bureaucracy, that wasn’t present 15 years ago, is the obsession with data gathering. I remarked that no other company spends us much on ethnography or focus groups, or market segmentation strategies. Turn to almost any page on the website, and you’re invited to fill in an questionnaire.

“Yes, that’s it - and Apple doesn’t do this,” Risku agrees. He highlights one in particular as an example.

“When you have a branded product, the marketing is merely information”

“There is a philosophy called Contextual Design, every designer at Nokia has been trained in it by the guru Karen Holtzblatt. Everybody has attended her courses and got her very expensive book signed. The idea is that you ask the users what they are doing, then design something. If you think about Apple, they don’t ask anybody. The idea of users as designers is a catastrophe!

“It’s only relevant to evolutionary products, it’s not relevant to blue-sky products.When you have a blue-sky product, there are no users, and so there are no users' opinions. We have to rely on what the desires of users are and trust the designers.”

Because the market decides what’s a hit and a flop?

“Yes.”

London’s design office gets short shrift – for producing “somewhat Robin Reliant level products,” in Risku’s words. The team is probably best known for producing the rather ambiguous icons – much criticized by bloggers and phone sites because isn’t clear what’s folder or application. But it does much more in the Strategy Boutique vein.

“It’s a trend office – they’re sniffing trends. They look at what T-shirts people are wearing and design phones according to the trend. They’ve had their time.”

Going to market

“It’s nice to compare Nokia and Apple’s segmentation strategies,” notes Risku.

“One big issue is take brand management away from the economists, and give it to real industrial and ‘drama’ designers. Compare this with wet macaronis. There are hundreds of companies that make wet macaronis, and you need to differentiate them by putting a Santa Claus on the tin. But when you have a Nikon Camera, they are brand things, and they are designed: the marketing is merely information.

This informs his recommendation that Nokia narrow its sprawling product portfolio – something Kallasvuo has already implemented, he explains. A smaller, more focused portfolio means higher prices, and higher margins:

“The average price of the phone (ASP) - better to sell high-end phones. Nokia's ASP has been going lower and lower over the years. The reason is that when you have a portfolio you make three, four or five "copy phones" - different categories. They are copies of each other, there are no real differences, they run the same.

“But when you have several phone candidates for the customer, they don't know which one fits them the best. So they choose the lowest risk, and that means the lowest price. When you have an iPhone, it's one model and that's it.”

Inertia

Another example of bureaucracy is inertia. Nokia needs to accelerate its processes in several ways, urges Risku. He cites two interesting examples.

“When the people and designers and product specialists get their own strategy it's first of all, a bit old. There’s a four month delay, so the strategy reflects the business situation four months ago. Then it takes some months to start new projects. During that time, you can't ramp down the old projects.

In the case of Maps following the €8bn Navteq acquisition, nothing happened for six months. Then Google made Maps free. More recently, it has made turn-by-turn navigation free. In another case, the bureaucracy implemented processes carelessly.

“One day, one of those people responsible for directing User Experience at Symbian came in and said - you can’t work anymore with the old process any more. Everyone asked what that new process is - and she didn't say what it was. So 200 people were doing nothing for six months.

"A strategy is devised, then it's delayed a bit, then delayed a bit more... then it's already old."

Branding: a Strategy Boutique playground

Risku also criticises Nokia's branding for becoming confused - like Yahoo!, and lacking the clarity of its heyday.

"Since 2006, Nokia brand development has been a playground for marketing people and some fashion designers based in Soho, London. At the same time external marketing offices from London have been creating campaigns and Web visuals for Nokia basically without no relevant definition or guidance from Nokia's side. Nokia brand directors, under SVPs and VPs, are from Coca-Cola, McDonalds, Disney and Nike, from companies without any connection to technology, gadgets, functional products or 'rocket science' visions - without competence, visions and customer understanding."

Ouch.

In the next part, we’ll look at the executives, the culture… and the cure.

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