Honesty is a critical attribute for all great CEOs. The ability to sell a company’s vision to employees, customers, and investors is directly related to the credibility of the one who is delivering the message. This credibility cannot exist if there are doubts about the honesty of a CEO. My search for the winner of the “Honesty Award” has led me to Stephen Elop, the former CEO of Nokia and currently the Executive Vice President of Microsoft’s Devices and Services business unit.
Before an important analyst meeting in February of 2011, Stephen Elop wrote the famous “Burning Platform” memo and addressed it to Nokia’s senior management. Its message as brutally direct; Nokia’s business was going up in flames. This memo was released just before Nokia announced its new joint venture with Microsoft, where it exclusively adopted the Windows Phone Platform. Elop’s honesty did not make life easy for him as he received all sorts of criticism and skepticism both internally and externally. The ability to see beyond the short-term noise and look at the bigger picture is what makes this memo so powerful.
In 2013, Nokia was acquired by Microsoft for €5.4 billion. This merger was specifically designed to help Microsoft extend its Office suite to mobile devices and give Nokia access to the smartphone platform it desperately needed. Fast forward to 2014, when Microsoft’s quarterly results revealed a poor uptake of Windows Phone, fueling criticisms that the Nokia acquisition was a terrible idea. A few months ago, however, it was reported that Microsoft’s phone division “now contributes more than $2 billion in sales” as Lumia jumped 28% over the previous year. The pundits are no longer writing articles about the Nokia disaster.
While it is not fair to say that Stephen Elop is solely responsible for this turnaround, it is fair to say that it was his honesty and decisiveness that created the opportunity. When Elop jumped off of the oil platform into the invisible, icy waters below, there was no way to know what would happen upon impact. This leap of faith proved to be the right move as it is highly likely that Nokia would gone bankrupt without the Microsoft lifeline. The “Burning Platform” memo will go down in history as one of the best examples of honesty by a CEO, and for this Stephen Elop receives the “ Honesty Award.”
For more information on Leadership, please refer to the following articles:
Was Nokia worth it to Microsoft?, Tech Republic, Patrick Gray, July 28th, 2014
http://www.techrepublic.com/article/was-nokia-worth-it-to-microsoft/
Full Text: Nokia CEO Stephen Elop’s ‘Burning Platform’ Memo, February 9, 2011http://blogs.wsj.com/tech-europe/2011/02/09/full-text-nokia-ceo-stephen-elops-burning-platform-memo/
Microsoft gets hardware foothold as Surface, Lumia sales jump, CNET, Nick Statt, January 26th, 2015 http://www.cnet.com/news/microsoft-finds-foothold-in-hardware-as-surface-lumia-sales-soar/
Microsoft buys Nokia: Q&A, Telegraph, James Titcomb, September 3rd, 2013
http://www.telegraph.co.uk/technology/nokia/10282717/Microsoft-buys-Nokia-QandA.html
For more information about the Corvinus Global Business blogger, go to https://www.linkedin.com/in/kevinmjackson1.
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