Nokia’s $200M Secret Shows The Rot Goes Way, Way Back

Nokia CEO Stephen Elop at D9Nokia CEO Stephen Elop

Photo: AllThingsD

There have been plenty of attempts to pinpoint where Nokia, the struggling Finnish mobile company, really started to go wrong. Some think it was when the iPhone launched and left it in the dust; some would suggest it was when the board, panicking, hired Microsoft man Stephen Elop. Plenty of people think that it’s all the result of a culture that has spent several years failing to turn great ideas into great products.But could the rot go back even further than anyone recognises?

That’s the argument put forward by Finnish newspaper Helsingen Sanomat (the Helsinki Dispatch), which is running an expose today that paints a damning picture of how life inside the company has been tainted for an entire generation, costing the company hundreds of millions of dollars.

The paper, known as HS, has documents that show how the company has been paying through the nose to stop senior talent leaving as far back as 14 years ago — paying way over the odds to retain their top staff at the same time as the company was, apparently, reaching the peak of its powers.

Their story centres on a rebellion staged in 1997 by Nokia product developer Jyrki Hallikainen. Hallikainen convinced 44 other engineers from the business to join him at a new manufacturing outfit, which was to be set up under the auspices of Dutch electronics giant Philips. The team resigned en masse, sending shockwaves throughout Nokia’s senior management. They were taken by surprise by the move, and desperate to stop the collapse happening — particularly since it would rip the heart out of their main research and development team.

Read the rest of this story on GigaOm.

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