Chairman and chief executive officer, Nokia
Born: August 15, 1950, in Seinājoki, Finland.
Education: Atlantic College; University of Helsinki, MS, 1976; London School of Economics, MS, 1978; Helsinki University of Technology, MS, 1981.
Family: Married Liisa Annikki Metsola; children: three.
Career: Citibank, 1978–1980, account manager at N. A. Corporate Bank; 1980–1982, account executive; 1982–1985, member of management board; Nokia, 1985–1986, vice president of international operations; 1986–1989, senior vice president of finances; 1989–1990, deputy board of directors; 1990–1992, president of Nokia Mobile Phones; 1992–, chairman and CEO.
Awards: Order of the White Star, Estonia, 1995; Order of Merit, Hungarian Republic, 1996; Order of Merit, Federal Republic of Germany, 1997; Commander's Cross of the Order of Merit, Republic of Poland; Commander of the Order of Orange-Nassau and Commander, First Class, of the Order of the White Rose, Finland; CEO of the Year, Industry Week , 2000; 9th Most Powerful Business Leader Outside the United States, Fortune , 2003.
Address: Nokia, PO Box 226, Espoo, Finland 00045; http://www.nokia.com.
■ When Jorma Ollila went to work for Nokia in 1985 the company manufactured a diverse line of products that included televisions, toilet paper, and rubber fishing boots; mobile telephones made up only a small portion of the business. After taking over as president and CEO in January 1992, Ollila extricated Nokia from debt and transformed the company into one of the world's leading manufacturers of cellular telephones. His daring, unorthodox, innovative management not only saved Nokia but revived the Finnish economy, which had fallen into a severe recession during the early 1990s after the collapse of the Soviet Union. Known for taking risks and tolerating mistakes, Ollila insisted that maximum flexibility and continuous adaptation to both market conditions and consumer needs should govern research and development, manufacturing, and sales.
Born in the Finnish coastal town of Seinājoki on August 15, 1950, Ollila earned a scholarship to Atlantic College in Wales in 1967. He earned a master's degree in political science from Helsinki University in 1976, a second master's in economics from the London School of Economics in 1978, and a third master's in engineering from the Helsinki University of Technology in 1981.
Between 1978 and 1980 Ollila worked as an account manager for the Citibank N. A. Corporate Bank in London before transferring to Helsinki, where he served as an account officer from 1980 to 1982. Ollila rose quickly though the corporate hierarchy, joining Citibank's board of management in 1982, a position that he occupied for three years; in 1985 he accepted an offer to become vice president for international operations at Nokia.
Founded in 1865 as a lumber mill, in time Nokia came to diversify its activities. The company entered the manufacture of paper products and after merging with Finnish Cable Works and Finnish Rubber Works in 1967 turned out phone lines, power-transmission cables, radio telephones, televisions, personal computers, tires, and fishing boots.
In 1988, three years after Ollila had come to Nokia, Kari Kairamo, the company's capable and ambitious but erratic CEO, committed suicide. Kairamo's death was the first in a series of misfortunes to befall the company. The 1991 collapse of the Soviet Union had a disastrous effect on the Finnish economy, as the USSR had provided a market for 25 percent of Finnish exports. As a consequence Finland's gross domestic product declined 6.1 percent while a staggering 13 percent of the workforce became unemployed. Like virtually every other Finnish company Nokia soon felt the impact of the recession, reporting an annual net loss of 211 million markka. Nokia teetered on the abyss of financial ruin.
Following a prolonged and bitter struggle, the board of directors ousted Kairamo's successor Simo Vuorilehto as well as his heir apparent Kalle Isokallio and appointed Ollila president and CEO. Ollila had garnered a reputation for efficiency by reviving the troubled mobile-phone division, of which he had taken control in February 1990. Once he had transformed the mobile phone division into a profitable enterprise, against all advice and common business opinion Ollila insisted that Nokia retain it. His affection for the division he had salvaged was no mere expression of sentiment; Ollila foresaw that as cellular telephones became less expensive to manufacture and sell, they would become more popular among consumers. He set out to make cell phones not only useful tools but also fashionable accessories.
As president and CEO Ollila thus concentrated his efforts on expanding the company's business in mobile telecommunications. Much to the chagrin of stockholders, executives, and employees past and present, Ollila sold other company assets and interests as quickly as possible. While his strategy may have been unpopular, it paid off. In 1993, before Nokia turned exclusively to the manufacture of cell phones and related products, profits totaled $2 billion. By 1999 profits topped $10 billion, a 57 percent increase over 1998, and total revenues totaled nearly $20 billion. Gains in 2000 were even more impressive: operating profits soared 56 percent to $3.45 billion and net sales jumped 57 percent to nearly $18 billion. Growth was slower but solid in 2001, when Nokia registered operating profits of $4.8 billion. Between 1995 and 2000 the price of Nokia shares traded on the New York Stock Exchange rose 2,000 percent. As early as the mid-1990s Nokia was positioned to challenge the industry leaders Ericsson and Motorola for the lead in the worldwide cell-phone market.
Nokia sold 140 million cell phones in 2001 and controlled 37 percent of a nearly saturated and highly competitive market. Anticipating and even creating trends was critical to Nokia's success; the Finnish company preceded Ericsson and Motorola in adapting digital technology to mobile communication, marketing a dual-function personal organizer and telephone, producing phones specifically designed for Asian customers, using changeable cover plates, and incorporating text messaging. The Communicator 9210, a combination mobile telephone and handheld personal computer, proved to be an especially popular item.
Much of the credit for reviving Nokia belonged to Ollila, whose extraordinary business acumen brought him international renown. The number of awards he received were legion; among them were the Order of the White Star from Estonia (1995), the Order of Merit of the Hungarian Republic (1996), and the Order of Merit of the Federal Republic of Germany (1997). He also held the Commander's Cross of the Order of Merit of the Republic of Poland, was an honorary citizen of Beijing, and was Commander of the Order of Orange-Nassau and Commander, First Class, of the Order of the White Rose of Finland. Industry Week magazine named him CEO of the Year in 2000, and in 2003 Fortune listed him ninth among the 12 most powerful business leaders outside the United States.
Along with president and CEO, Ollila added the title chairman of the board of directors to his résumé in 1999. Fearing complacency as the fatal weakness of successful companies, Ollila consistently encouraged Nokia employees to think independently and to take chances. He welcomed and seemed to thrive on multiple points of view and a diversity of opinions. In promoting creativity and innovation, he was willing to live with mistakes and to accept the occasional failure. He also wanted employees at all levels and in all divisions to work as an integrated team; cooperation rather than competition defined the corporate culture at Nokia during Ollila's tenure. He regularly shifted the jobs and responsibilities of his senior executives, so that they could not only acquire a comprehensive overview of company operations but also understand the work that other positions entailed.
Generous and tolerant, Ollila sought to empower workers but was not afraid of making hard and even unpopular decisions. Ollila did not permit the company, its employees and executives, or himself to become self-satisfied, lazy, careless, arrogant, or to rest on the laurels of past achievements. To survive, Nokia had to adapt to constantly changing economic circumstances; Ollila believed that the company had to perennially move forward, exploring, creating, and taking advantage of new trends, new markets, new partnerships, and new opportunities. Unlike the CEOs of other corporations, Ollila eagerly allied with such rivals as AT&T and IBM, pursuing joint ventures that were mutually beneficial. Ollila told Janet Guyon of Fortune magazine, "This isn't a business where you do one, big strategic thing right and you're set for the next five years. It's a big orchestration task" (March 4, 2002).
Part of the remarkable success that Nokia enjoyed during the second half of the 1990s rested on the steadfast loyalty displayed by customers to the company's products. Manufacturing sleek, stylish phones that were easy to use, Nokia succeeded in wedding form to function. By 2002 approximately 32 percent of the 930 million cell-phone subscribers in the world relied on Nokia phones. Industry research suggested that between 80 and 90 percent of those clients would return to Nokia when they needed to replace their phones.
Ollila's overall approach continued to work well into the 2000s, but the future was by no means assured. Ollila admitted that Nokia faced new challenges in the saturated global telecommunications market; prices, profits, and sales had begun to decline as early as 2001. Especially disappointing was consumer response to wireless access protocol phones. By 2001 an estimated 40 companies, including the established electronics giants Samsung, Siemens, Panasonic, and Alcatel, had the technological capacity to produce cell phones. A market saturated with so many competitors meant lower shares and diminished profits all around, and Nokia clearly felt the strain of the increased competition. In June 2000 Nokia stock was valued at $62.50 per share, and at $290 billion the company had the largest market capitalization in Europe; by March 2001 stock values had plummeted 70 percent, or $190 billion in total.
As always Ollila came out fighting. Nokia flooded the market with a record 40 new products in 2003 and launched a similar number in 2004. In an article published in the Nordic Business Report Ollila noted, "Our product portfolio will continue to be very competitive and will offer mobile devices that change the way we work, play, and stay connected to the people and information that matter to us" (March 25, 2004). Ollila's announced goal for Nokia was to capture a full 40 percent of the mobile-phone market, although the research firm Gartner calculated that Nokia's share had diminished to 28.9 percent by the first quarter of 2004. Still Nokia remained the market leader, and most analysts agreed with Janet Guyon of Fortune magazine, who stated, "If any cell-phone maker can thrive in this new world, Nokia can" (March 4, 2002). Thanks to Jorma Ollila, Nokia had reinvented itself once before, and the company certainly had the potential to do so again.
See also entry on Nokia Corporation in International Directory of Company Histories .
"Biography of Jorma Ollila," Nokia Company Web site, June 1, 2004, http://www.nokia.com/nokia/0,,53691,00.html .
"CEO of Nokia Outlines Company Strategy for 2004," Nordic Business Report , March 25, 2004, online: http://web5.infotrac.galegroup.com/itw/infomark/26/562/51595805w5/purl=rc1_ITOF_0_A114602959&dyn=18!xrn_1_0_A114602959?sw_aep=va0036_011 .
"CEO of Nokia to Leave His Position in 2006," Nordic Business Report , April 8, 2003, online: http://web5.infotrac.galegroup.com/itw/infomark/26/562/51595805w5/purl=rc1_ITOF_0_A99748926&dyn=20!xrn_1_0_A99748926?sw_aep=va0036_011 .
"A Finnish Fable," The Economist , October 14, 2000, p. 83+.
Guyon, Janet, "Nokia Rocks Its Rivals," Fortune , March 4, 2002, p. 115+.
"Jorma Ollila," Current Biography Yearbook 2002 , pp. 441–445.
"Making the Call: How Nokia's Chief Turned Cell Phones into a Necessity—and Took the Market," Time , May 29, 2000, pp. 64–65.
Mason, Joanne, "The Labours of Ollila," International Management , July–August 1992, pp. 52–54.
McClenahen, John, "CEO of the Year," Industry Week , November 20, 2000, p. 38+.
Morais, Richard C., "Damn the Torpedoes," Forbes , May 14, 2001, p. 100.
"Nokia Unveils Five New Phones," Forbes.com , June 14, 2004, http://www.forbes.com/technology/feeds/infoimaging/2004/06/14/infoimaging01087224062397-20040614-074500.html .