Nokia Rollercoaster Experience

Topics: Mobile phone, Strategic management, Nokia Pages: 39 (11205 words) Published: November 13, 2009
The Dynamics of Strategic Agility:

Yves Doz Mikko Kosonen

o CEOs, strategic agility is a conundrum. Being strategic evokes peering far into the future, making strong choices and holding firm commitments, unwaveringly deploying resources to implement them, and having every senior executive single-mindedly and individually dedicated to achieving them. In contrast, being agile evokes staying nimble and flexible, open to new evidence, always ready to reassess past choices and change direction in light of new developments, and willing and able to turn on a dime. In an agile company, top management constantly adjusts courses of action and development trajectories and does not satisfy itself with periodic strategy reviews. Agility is at an increasing premium. A former president of Nokia captured the point succinctly: “Five to ten years ago, you would set your vision and strategy and then start following it. That does not work any more. Now you have to be alert every day, week, and month to renew your strategy.”1


Indeed, strategic agility has become a real-life, hard-to-resolve contradiction for corporate leaders and their executive teams. Strong strategic commitments may help companies gain momentum toward ambitious objectives, but paradoxically may also lead a company to develop inertia or to be wrong-footed when technological disruptions occur, market circumstances change, or unexpected competitors appear. They are vulnerable to discontinuities.2 Some fade away, some are acquired or disappear (Digital, Polaroid, and Wang), others go through massive downsizing, extensive turmoil, and transformation (IBM, The authors are indebted to José Santos for comments on an earlier draft and helpful suggestions about how to develop our argument. They are also grateful to Dominique Héau and Muriel Larvaron for their helpful comments and to two anonymous California Management Review reviewers for an insightful critique and very valuable suggestions.





The Dynamics of Strategic Agility: Nokia’s Rollercoaster Experience

Kodak, and Ericsson). In this article, we focus on how to prevent stagnation and painful transformations so that companies do not become elephants that need to learn to dance.3 Yet maintaining flexibility may well prevent companies from making the kind of commitments that build strong strategic advantage, and may relegate them to permanent mediocrity and decline.4 That’s the strategic agility conundrum. In the rich context provided by a detailed longitudinal analysis of the experience of Nokia in mobile communications over the past decades, we examine the foundations of strategic agility and the dynamics of maintaining strategic agility. Strategic agility results from the combination over time of three major meta-capabilities that provide its foundations:5 ▪ Strategic Sensitivity (both the sharpness of perception and the intensity of awareness and attention) combines early and keen awareness of incipient trends and converging forces with intense real-time sense-making in strategic situations as they develop and evolve. Strategic sensitivity is fostered by the combination of a strong externally oriented and internally participative strategy process, a high level of tension and attentiveness, and a rich, intense, and open internal dialogue. ▪ Leadership Unity involves the ability of the top team to make bold decisions fast, without being bogged down in “win-lose” politics at the top. The leadership team’s unity allows decisions to be reached at lightning speed once a strategic situation has been understood and the choices it opens or closes have been intellectually grasped. These decisions stick. Commitments are not delayed by personal insecurities and political stalemates at the top; nor is their implementation subject to personal agendas and private disagreements that would slow down or scuttle...
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