Nokia chairman Jorma Ollila said the company’s management is fully supported by the board
In my assessment of Nokia’s competitive response to the mobile computing disruption I had anticipated an effective re-organziation to begin in 2013, so it came as no surprise that a stay-the-course plan is still being supported at this stage.
This is to be expected because a disruption, by definition, discourages a symmetric response from the incumbents. Indeed, management would face serious scrutiny and probable dismissal if they did address the challenge head on. A symmetric response would begin with a declaration that the entire asset base of the company is a sunk cost to be written off. That would include its products, distribution network, development processes, resources and priorities. Such a response can only come about from a near-death experience.
You can certainly see the dilemma: It would be absurd for management to declare that their top rank position in the mobile phone market is an undesirable situation to be in. It would be even more absurd if they suggested scrapping their entire world-leading volume business to re-focus on a new business–doing basically what Motorola has done when they were facing oblivion. The chances are, however, that this is precisely what needs to be done, and the sooner the better.
So being sensible is the path always chosen. Being bat-shit crazy is not an endorsable strategy.
Essentially, management is paid and incentivized to protect an eroding asset, not to destroy and replace it.