Nokia, Truth, and Lessons for Google

In 2010, Nokia – the world’s largest mobile device manufacturing company (at the time), convened a meeting to decide how to enhance their software to support third-party developers in creating apps for Nokia phones. This meeting was crucial because Nokia had fallen significantly behind in the mobile phone race. Apple’s iPhone had been a runaway success, and Google’s Andriod operating system was on a rocket ship trajectory when it came to enamoring developers and manufacturers. Given this background, you would have expected Nokia to respond strategically and ferociously. Most importantly, you would have expected the leadership team to have one single focus. Get Noika back on track.

However, the three-day event had the focus and finesse of a bull in a china shop. In most organizations, this meeting would have the company’s top 10 architects and software developers. This team would decide the standards that would be followed within and outside the organization. Instead, Nokia, which started in 1865 as a simple paper mill, was now so big and bloated that they invited more than 100 developers and product managers. Leaders from Symbian and Meego, Nokia’s two internal operating systems, were hell-bent on hijacking the meeting to suit their personal agenda and securing their own jobs. They ferociously competed for resources to become the dominating operating system across all Nokia phones.

It’s not that people working at Nokia did not have fantastic ideas. Here is an extract from a Wall Street Journal article written after exclusive interviews with Nokia Employees.

More than seven years before Apple Inc. rolled out the iPhone, the Nokia team showed a phone with a color touch screen set above a single button. The device was shown locating a restaurant, playing a racing game, and ordering lipstick. In the late 1990s, Nokia secretly developed another alluring product: a tablet computer with a wireless connection and touch screen—all features today of the hot-selling Apple iPad. Consumers never saw either device. The gadgets were casualties of a corporate culture that lavished funds on research but squandered opportunities to bring the innovations it produced to market.

How could Nokia have invented an IPAD like device seven years before apple and yet fall so far behind in the mobile phone industry? The answer lies in one simple word. TRUTH. A fascinating article in the INC magazine has highlighted three key questions you must answer truthfully to evaluate your business.

Q1. Are you being truthful about putting customers first? 

Every organization will tell you it’s about putting the customer’s interest ahead of everything else. However, as your company grows and gets institutional investors, they push hard for short-term returns at the cost of long-term strategic growth. The best example is the Ford Vs. Dodge case in 1919. Henry Ford was keen on reducing payments to shareholders so that he could use the money to offer cheaper cars to customers and better wages to the staff. Dodge brothers owned 10% of Ford and wanted the money to set up their own business. They took Henry Ford to court, won the case, and Ford had to drop this plan. Nokia faced similar pressures from shareholders used to fat returns. They decided to go down the route of building inexpensive feature phones and ignoring the smartphone market while stating that this was the best route for their customers.

Q2. Are you being truthful with yourself about your business?

When you work in large organizations, you will be intimately familiar with this information sourced from an Insead Case Study.

When companies grow in size quickly, every department becomes a kingdom, and every executive becomes an emperor. They are solely concerned with expanding their empire and couch their ambition by parroting how growing their domain will benefit the organization. Noika was full of such small and large empires. Middle and top managers overrepresented the success of their teams. They also underreported the severe challenges they faced in competing with Apple and Google. This meant that the senior management was completely unaware of the actual progress of the Symbian operating system and felt that it was only a matter of time before they caught up with Apple.

Even if leaders saw warning signs, they ignored them because it was too uncomfortable to deal with reality. Compare this to Steve Jobs’s behavior when he took over as the CEO of Apple for the second time. He asked his product managers a simple question. “Which products of Apple do I ask my friends to buy”? When he did not get a satisfactory answer, he slashed 70% of Apple’s products. He told Walter Isaacson, “Deciding what not to do is as important as deciding what to do. It’s true for companies, and it’s true for products.”

Q3. Are you being truthful with your co-workers and advisors when you’re stumped?

What do you do when you are lost? Some problems are really tough, and you may not always have the answers. If, like Nokia, you keep pretending that you will catch up one day, then the chances of losing everything are very high. Microsoft had missed the mobile phone revolution and wanted to capitalize on the shift to the cloud ecosystem. They bet big and took a risk by choosing Satya Nadella as the CEO. He was given the reigns and the freedom to gradually grow the cloud business even when it bought in significantly less revenue and margin than the Windows platform business. A few years later, they are the second largest cloud player and have a significant stake in Chat GPT, which could help them leapfrog Google in the search business.

Many of you would be thinking it’s much easy for anyone to write a bunch of words on truth. It’s tough being truthful when you could lose everything in the process. My guru Om Swami often says it’s hard to be truthful when your paycheck depends on being otherwise (paraphrased). That’s why it helps to dive back into the ancient Indian scriptures and read about some individuals who lived established truth as the basis of their lives.

The Story of Raja Harishchandra

Indra, the king of the Devas, held court and asked people what they thought was the most important quality in a person. Bramharishi Vashishtha, the guru to the Ikshvaku lineage of kings, promptly answered that truth was the greatest virtue. Sage Vishwamitra, who had an ancient rivalry with Vashishta, disputed Vashishta’s claim and said no mortal could exhibit truthful conduct on all occasions. Vashishta smiled and said King Harishchandra, the present scion of the Ikshvaku line, was the perfect example, and Vishwamitra was free to test him.

Vishwamitra sent a pair of dancing girls to perform at Harishchandra’s court. When their performance was complete, the king asked them to claim a reward for demonstrating such proficiency in the art form. They asked the king to marry them. Harishchandra was mortified and sent them away. The girls returned with Sage Vishwamitra, who told the king that he would have to give up his kingdom if he could not marry the girls. The king donated his kingdom to Vishwamitra and walked away with only the clothes on his back. His wife and son accompanied him. The king had just reached the door when Vishwamitra called him back and told him he had forgotten to give a token dakshina (money) that accompanied his charitable act of giving away the kingdom. Harishchandra had no money and wandered from one house to another to beg for a loan. People refused to give him a single coin because they feared the wrath of Vishwamitra. Harishchandra finally sold his wife and son to get some money for Dakshina. Vishwamitra asked for more money, so Harishchandra sold himself to a chandala (the cremator of dead bodies) and gave Vishwamitra the balance amount. Life became extremely difficult for Harishchandra and his family, but he did his duties uncomplainingly. His wife barely got enough food to eat or feed her son, while Harishchandra slept on the cremation ground and ate leftovers thrown away by people. Vishwamitra kept waiting for Harishchandra to make a mistake, but he could never find fault in his conduct.

One day Harishchandra’s son went to the forest to get wood and was bitten by a snake. He died, and his mother, while crying bitterly, took his body to be cremated. When she was about to cremate him, Harishchandra came running to stop her because she had not paid them to use the facilities. When he saw her face lit up by a beam of moonlight, he groaned in agony because he realized it was his son on the pyre. His wife begged him to waive the fee and cremate his son, and he steadfastly refused to compromise on his principles. Finally, his wife tore off a piece of her garment and offered it as a fee. The whole cemetery lit up, and gods and sages surrounded Harishchandra and his wife. They revived his son, blessed them with the same youth and vitality they had before they left the palace, and Vishwamitra blessed Harishchandra with immortality.

Lessons for Google

If a king can give up his entire kingdom and suffer to stay on the path of truth, how difficult is it to speak truthfully at the workplace? Had Nokia built a culture of truth within its organization, it could have released an iPhone or a Tablet before Apple.

If you think Nokia’s story is a one-off and does not apply today just wait a year to see Google’s response to the challenge issued by Chat GPT.

Google has not faced competition for a long time, and Microsoft seems ferocious and hungry. When you read the stories of Google employees who were laid off, you can see that it’s currently not ready for such a brutal fight. They are clearly shocked and completely caught unaware. A growth company behaves very differently from one that has to fight for existence.

Google is going to face similar shareholder pressures that forced Noika to focus on short-term gains. The VC firm (TCI), which holds a $6 billion stake in Google-parent company Alphabet, has already publically asked for more headcount reduction. This means every single business unit will start looking for self-preservation, and employees will start feeling like they have suddenly landed inside the script of the Game of Thrones.

The only way out in such situations is for the senior leadership team to ask tough questions and built a culture of truth. Be truthful about:

• Putting customers first
• The current state of the business
• Your current limitations

We use search to find answers. Chat GPT is giving us answers instead of a bunch of links. That will fundamentally alter customer behavior. Google needs to embrace the truth and come out of the other side as a leader and meaner company. I hope it does because I love many of their products.