Monday, September 23, 2013

The boy stood on the burning platform

When I read that Stephen Elop is to be paid $25 million for his three years architecting the downfall of Nokia, the outrage across the internet was palpable. And I must confess, I fell for it. As I considered how this once-proud brand had been brought so low, and now the architect of its downfall is to be so rewarded, I felt almost physically sick at the sheer injustice.

But, I wondered, where was the political angle? How could the government of Finland just stand by and watch this - pillaging of their national flagship? Where was the doomsaying, the demagoguery, the raging anti-Americanism that should have heralded the announcement of Microsoft's takeover?

Which led me to think that, just maybe, people who paid attention may know more about this story than random internet blowhards. Which prompted me to do a little - just a little, mind you - further research.

And looking at the record, I notice that when Elop became CEO of Nokia in September 2010, the firm was already in grim shape. Share price, market share and profitability were all dropping rapidly. True, the company still had its own distinctive platform, it still had an unrivalled reputation for quality, particularly in the low end of the market, and it still shipped more phones than anyone else on the planet. But all those positions were under strong attack, and it was rapidly running out of resources with which to defend them.

And while Elop's performance was, by the numbers, gruesome, it wasn't as bad as it's now routinely depicted on partisan blogs. The oft-quoted "87% share price decline", for instance, is based on measuring from peak (just after his arrival) to trough (July 2012), but it fails to consider that if you bought stock in July 2012, you'd be looking at a 250% return by now - the end-to-end drop is a mere 40%. Of course that's still not good - unless, that is, you compare it with the 3-year period before Elop's arrival, when that same stock dropped by an eyewatering 75%.

If Elop's job was to arrest the decline, then he failed. But if his job was to prepare Nokia for its only viable future, as part of a hideous multinational empire, then he's done it well. Rather than a "trojan horse" - the popular image right now - perhaps we should be seeing him as a port pilot - the guy who comes on board just before the ship enters a harbour, to steer her past the hidden shoals into a safe dock.

Viewed in that light, Elop's initial appointment makes a lot more sense.

Has he earned $25 million? I have conceptual problems with the thought that anyone can "earn" that sort of money in three years; but I can imagine it wasn't a fun three years. And so long as it's not my money, who am I to judge?

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