There was much that needed updating at Nokia, but that would give me the chance to make changes there.
Of course I knew Nokia as a customer. I had studied the company, I had sold it financial services, and I had had frequent discussions with its finance people. I knew its strengths and weaknesses. One friend recalls me banging on about how Nokia could never hope to thrive while it had so many different divisions in such varied fields as mobile telephones and toilet paper. I knew that Nokia had to decide what it wanted to focus on. But that insight was essentially a banker’s theoretical musing – I really didn’t know what went on inside the company or what its top management thought.
In the early 1980s Nokia had grown to become Finland’s most important electronics company. It made televisions, telephone exchanges, mobile phones, and computers. I instinctively thought that its future should lie somewhere other than in making paper, rubber boots, or cables. I genuinely thought that Finns too could conquer the world with new products. And for my own part, which would not initially be a large role, I was ready to join this great adventure. I did not yet see the risks Nokia would later encounter. Nor did I see that Kari Kairamo himself would become a risk to the company. On the contrary: Kairamo was the most dynamic figure in Finnish business life. His company was the product of his international vision. He tried to fend off the power-hungry Finnish commercial banks. I agreed with him on practically every major issue. And he was regarded as an exceptionally inspiring leader, an assessment I found it easy to agree with after our first meeting.
The more I thought about it, the more attractive a move to Nokia seemed. I signed the contract between Christmas and the New Year. Before that I had told my boss at Citibank about it. I also rang John Quitter in London. John listened calmly, and then he politely but determinedly tried to persuade me to change my mind. He didn’t have much to offer, however. I didn’t want my future to be up for auction. John was sorry, but he wished me good luck. I promised to keep in touch.
My move from Citibank to Nokia made Nokia my life’s work. That move was partly a matter of chance and partly a planned operation. Nokia provided the chance element by getting in touch with me. It might just as easily have been a forestry company, a metals firm, or another conglomerate. But it was Nokia, where I was known because I had handled their account at Citibank. The fact that my friend Pentti Kouri sat on the boards of both Citibank and Nokia might also have had something to do with it, but I don’t really know.
Early in February 1985 I started at Nokia, on a journey that would last twenty-five years.
MY FIRST OFFICE AT NOKIA was in a rather shabby office block opposite Helsinki railway station. I was a young, new, and enthusiastic Nokia man. My fifth-floor room looked out over the station square, one of the largest open spaces in central Helsinki. My first task was to find a desk and chair from somewhere. My arrival seemed to come as a surprise, as the arrival of new workmates often does. “Who on earth is this guy and what on earth are we going to do with him?” seems to be a common reaction.
There were some at Nokia who made it clear that there was no red carpet for me. I must have seemed very fresh and eager, full of myself and what I’d learned at Citibank. As a newcomer I had to show I was useful; only then would I be accepted. There were weaknesses in my CV. I came from a bank, and Nokia had no particular fondness for banks. One of Kari Kairamo’s main goals in life had been to win Nokia’s independence from the banks, which had been among the company’s major shareholders and had thrown their weight around on the board.
In the 1980s Finland was a country governed by banks, and Nokia had declared its own uprising against this system. At least I had not come from either of the main Finnish banks, which were two of Nokia’s main shareholders. They kept a close eye on each other at Nokia. The only decisions made were those where the two banks agreed, so decision-making was onerous, complicated, and full of suspicion. The men who ran Finland’s banks had little understanding of what it meant to run an international technology company, for they had grown up in a regulated market where they could be confident of their power. For them the customer was servant, not king.
Most major Finnish companies belonged to one of the groups of big banks and insurance companies. This was very different from the United Kingdom or United States, where different financial institutions weren’t so closely linked. Perhaps it was more like Japan, which has also effectively been owned and run by financial conglomerates. It’s important to know that these groups were held together by more than just ownership. The major Finnish firms were debtors, and the financial groups guided them on the handling of their debt. Directors of banks and insurance companies sat on company boards and often made decisions without the necessary expertise. At the end of the 1980s the two banks where power was concentrated fought a bloody battle between themselves.
The banks naturally got into difficulty, and the whole system changed in the 1990s. The historical irony is that one of the two main banks collapsed and was forced to merge with the other. The merging of the two giants would have been utterly unthinkable in the 1980s.
Nokia’s chairman, Kari Kairamo, loathed the Finnish banking system and the banks’ power over industry. He thought industrialists should run industry themselves. He gave public speeches demanding laws to restrict the banks’ rights of ownership. Kairamo was right. In the Anglo-Saxon world it was industry that made the world go round. The bank’s job is to provide the finance, not to wield power within the company. Nevertheless there were many at Nokia who thought Kairamo was gambling. The banks wielded so much power that some of Nokia’s board feared the empire might strike back.
Another shortcoming in my CV was an absence of shop-floor experience at Nokia. I hadn’t set foot in a factory since my summer job in Vaasa at the end of my first year as a student. I was an engineer, but I didn’t design telecommunications networks, mobile phones, or new types of cables. And I had been very active in the field of student politics, which was another black mark. In Finland student politics was often a launch pad for a political career, and that was where my new colleagues thought my ambitions lay. But I’ve never really spent too long worrying about what other people think of me. I believe in getting things done, in achievements and results. Beyond those, people can think what they like about me.
I had learned how to analyze a company. In my previous job I’d had to assess whether it was worth lending, say, 100 million dollars to some Finnish forestry company. Would the company be able to repay the loan? What was the company’s real profitability? Did the managers know their jobs? At Citibank, companies were not analyzed solely on the basis of the figures – the company’s management and culture were also factored in. Nokia seemed to employ lots of good people, but the company’s management was hidebound and old-fashioned.
The Nokia I joined in 1985 claimed to be an international company. That was certainly the reputation it enjoyed in Finland. It could boast that it operated in twenty-four locations around the world.
Kari Kairamo’s stance as an internationalist certainly attracted many young and able people to Nokia, because at least the company wanted to be international. Of those who would be my closest collaborators in the coming years, Sari Baldauf had joined the firm in 1983; Pekka Ala-Pietilä joined in 1984, the same year Matti Alahuhta returned to the company after several years away; Pertti Korhonen joined the company in 1986; and Olli-Pekka Kallasvuo was already there, having started as a lawyer back in 1980.
The company was still dependent on its trade with the Soviet Union, as were many other Finnish