Monday, April 22, 2019

Paranoidi Optimisti by Risto Siilasmaa

Risto Siilasmaa is one of the few business people in Finland, who is also a public figure. His predecessor at Nokia, Jorma Ollila, is another. "The Paranoid Optimist" recounts how Siilasmaa saved Nokia from certain bankruptcy by selling off key business and changing the company down to its core. It also, somewhat inadvertently, pits the two icons against each other.

In the time span of a few years, Nokia went from being the largest mobile phone manufacturer in the world to being a side note in trade magazines. When smartphones were new, it produced more than half of all units in the world. At its peak, the company employed tens of thousands of people in Finland alone and accounted for over one percent of national GDP. It was a national icon in the same way that IKEA is for Sweden. Finns could say that it was acceptable that foreigners didn't know Finland as long as they knew Nokia. The speed with which that changed gripped the entire country. After a few catastrophic years, Nokia sold its mobile phone division to Microsoft in a deal that, at the time, felt like the end of a hegemony.

Siilasmaa was at the center of the fight, first as a board member, then as the chairman and later as interim CEO. When he joined the company, Ollila embodied the soul of the company as its chairman and the person most credited with building it into a juggernaut during his time as CEO. Siilasmaa criticizes Ollila mercilessly and, at least in part, this seems to be justified. Ollila ruled the board rigidly and with little discussion or discovery to explore changes in the industry. Even if you control for the hindsightedness - it's easy to see the rise of Apple and the iPhone after the fact - Ollila did go against most management doctrines by limiting board members' exposure to what was actually happening in the company and the industry. His officious approach obstructed genuine discussion and prevented management from seeing serious problems until it was too late.

The Paranoid Optimist is in no way the definitive history of Nokia - a history, which spans over 150 years and products from rubber boots to toilet paper - but it is an excellent opinion piece on a critical part of that history. Siilasmaa stretches the reader's interest a bit by introducing the Alcatel-Lucent acquisition, which seems a little shoehorned in. For most of the book, however, he is able to hold the reader's interest. His management views follow Richard Rumelt more than Michael Porter, and provide nice anecdotes for director-level discussion. Hopefully his unassuming tone and clarity of thought are taken up in the business world. With The Paranoid Optimist, Siilasmaa shows that he is, not only, one of the foremost management thinkers in Finland, but also relatively grounded and sensible in his writing.