Microsoft’s purchase of Finnish phone-maker Nokia will enrich the latter’s CEO, Stephen Elop, to the tune of roughly $25.4 million. That’s a generous number, considering Nokia’s much-publicized travails over the past few years—generous enough, certainly, to prod angry reactions from the Finnish media.
Big paydays for CEOs (deserved or undeserved) are nothing new. But Elop’s payout carries a faint whiff of scandal: according to the BBC, Nokia chairman Risto Siilasmaa has apologized for his earlier claims that Elop’s contract mirrored that of his predecessors, when in fact it offered cash incentives for selling off the firm. “This is a very unfortunate thing about the case, which, moreover, raises a lot of emotions,” Siilasmaa told Finnish newspaper Helsingin Sanomat.
As Elop came aboard Nokia in 2011, he wrote the infamous “burning platform” memo, in which he suggested that radical moves would be necessary to halt the company’s market-share declines. Elop subsequently abandoned Nokia’s homegrown operating systems—most notably Symbian—in favor of Windows Phone, before selling the bulk of the firm to Microsoft. That proved an excellent move for Elop, who made a lot of money as a result, but maybe not so great a development for Finland, where Nokia was a crown economic jewel.
In light of all that, maybe it’s time to revisit Elop’s “burning platform” memo and give it a rewrite:
There is a pertinent story about a man who was working on an oil platform in the North Sea. He woke up one night from a loud explosion, which suddenly set his entire oil platform on fire. In mere moments, he was surrounded by flames. Through the smoke and heat, he barely made his way out of the chaos to the platform’s edge. When he looked down over the edge, all he could see were the dark, cold, foreboding Atlantic waters.
As the fire approached him, the man had mere seconds to react. He could stand on the platform, and inevitably be consumed by the burning flames. Or, he could plunge 30 meters in to the freezing waters. The man was standing upon a “burning platform,” and he needed to make a choice.
He decided to jump. It was unexpected. In ordinary circumstances, the man would never consider plunging into icy waters. But these were not ordinary times—his platform was on fire. The man survived the fall and the waters. After he was rescued, he noted that a “burning platform” caused a radical change in his behaviour.
We too, are standing on a “burning platform,” and we must decide how we are going to change our behaviour.
Over the past few months, I’ve shared with you what I’ve heard from our shareholders, operators, developers, suppliers and from you. Today, I’m going to share what I’ve learned and what I have come to believe.
I have learned that we are standing on a burning platform.
And, we have more than one explosion—we have multiple points of scorching heat that are fuelling a blazing fire around us.
For example, there is intense heat coming from our competitors, more rapidly than we ever expected. Apple disrupted the market by redefining the smartphone and attracting developers to a closed, but very powerful ecosystem…
[The original memo continues on with multiple paragraphs of ‘Why We’re Doomed.’]
…This is what I have been trying to understand. I believe at least some of it has been due to our attitude inside Nokia. We poured gasoline on our own burning platform. I believe we have lacked accountability and leadership to align and direct the company through these disruptive times. We had a series of misses. We haven’t been delivering innovation fast enough. We’re not collaborating internally.
Nokia, our platform is burning.
So here’s what we’re going to do: first, I’m going to spend a lot of time publicly denigrating Symbian, even though we continue to sell millions of phones equipped with that operating system. That’s what successful CEOs do—insult their core product, even if it commands a healthy percentage of the world market. Then I’m going to chuck the software in favor of Microsoft’s Windows Phone, which has negligible market-share. By “chuck it,” I mean exactly that: a dwindling pipeline of new phones, and no assurance for anyone who’s supported the ecosystem that we’ll continue to meet their needs for the foreseeable future. Why, people won’t be angry about that at all! Trust me, our market-share won’t collapse in record time, and nor will our stock price. I don’t have any reason to see the stock price fall, believe me.
And Meego? Sorry, we gotta drown that baby. Sometimes that’s what being CEO is all about: drowning babies.
As our market-share continues to not-crash, we’ll release a couple phones running Windows Phone. Those devices will sell pretty well, mostly because Microsoft and various carriers will throw millions of dollars into marketing them, but they won’t make a dent in Apple’s or Samsung’s overall market-share. They won’t really loosen Google Android’s hold on the midrange of the smartphone market, either, come to think of it.
As a result of our efforts, Windows Phone will gain a couple points’ worth of market share, even as Nokia continues to bleed cash. But that’s okay, because my old friends at Microsoft—realizing that Windows Phone is basically dead without Nokia’s full commitment to the platform—will swoop in and purchase our long-storied company, turning it into a glorified hardware-manufacturing arm.
In exchange for so drastically affecting Nokia’s market-share and stock price and selling its hardware unit, I’ll be given $25 million, none of which I’ll give back, because I might be going through a divorce and need the cash. Oh yeah, and in recognition of this sterling performance, Microsoft might actually make me CEO. Isn’t that awesome? For me, I mean?
But the Finns are a resourceful people, and I’m sure you’ll handle all this with your usual aplomb. Think about all the stories you’ll tell, years from now, about how Nokia was once a European powerhouse with the mobile world at its feet! Your children will be impressed.
Let’s send this platform to the bottom! This will be fun!