Changing Culture?

After being back for a months or so now, a few things strikes me as common amongst all culture and that is the need of being local. I guess you all heard about the 80s and 90s theme about Think Global - Act Locally - basically build global solutions and localize them for each market's need. Very much the foundation of Nokia's world dominance (and now also Apple's) but more and more that is becoming more uncommon.

A few other companies have shown a different route to success, which is the reverse - Think Locally - Act Globally; in the sense where local market requirements, opportunities or skills can create global opportunities. Not totally different but creates a different mindset of how to operate and run a business.

But surprisingly in the industry where I now operate (software development/outsourcing), the need to think and act locally is far stronger than I expected. And it does not really differ from Finland, Stockholm, Malmö, Oslo or Copenhagen. Whoever I talk to, the need to speak local language and reside locally is equally important despite the obvious advantage of off-shoring test and development work. For example, in Oslo, there are no free IT resources. Unemployments is close to zero and the cost of hiring or sourcing consultants locally are amongst the highest in the world. Still, the thinking is to hire locally.

I would have thought that the ever-increasing globally competition would force companies to further drive cost-reductions, productivity enhancements and shorten time-to-market. In the case of Norway, productivity per hour are the highest in the world but the output is not that high, given the few hours worked, which slows down deliveries.

What are the change drivers? Will it ever change or?

Another reflection is the constant need to complain about how limited their local community is and the dream of how exciting other cities (read Beijing, Hong Kong) are in comparison. Amazingly actually as both Stockholm and Oslo are quite interesting, though a bit expensive, but the grass is always greener on the other side.

Essingeleden

After being in Beijing for most of my working life, I thought I was used to extreme trafic conditions - like 2 hours from Nokia's office in BDA (Yizhuang) to go home around Worker's Stadium. A ride of about 25 km. And with the car explosion, where in 2010 more than half million cars where added, it is tough to keep building out roads.

Another example was Terminal 2 that was completed in 2002 after 4 years, but when it was opened it almost already ran out of capacity, so the huge Terminal 3 was projected and ready 5 years later, in 2008. It was impossible to forecast that tremendous growth in travelling during such a short time period. That's what hyper growth can do to you.

But what is Stockholm's excuse? Essingeleden (E4) goes from south of Stockholm, passing Kungsholmen around downtown to Norrtull where it heads northbound. In 2009, long long due, Vägverket (Swedish Road ministry) started a re-construction of the 8 km 'long' road. And it will take a whopping 6 years! In Beijing a new airport is constructed in shorter time. When I came, 1997, 4th ring road in Beijing hadn't been started to be built. Now, there are both a 5th and 6th ringroad.

Now, I am not in civil engineer but why does it have to take 6 years?! The overall cost to society is probably far more than if the plans are forced to complete the road constructions in 3 years instead of 6. The pollution created during the rush hour, the time lost for the people spending all this extra time in trafic, day in and day out for 6 years. I doubt that it can be an overall benefit to spend more than 6 years.

And while I am on it, extending the Blue subway line to Nacka is probably a good idea (I have no opinions in the matter) but that it should take 10-12 years to complete? To do things too fast sometimes is not good, but why that it has to be slow? Note, I do not compare the decision process between Beijing and Stockholm only the implementation of decisions taken.

Back In Da Jing

Back in Beijing again and this post is not about technology, nor about my return to Sweden but rather about what really annoys me in Beijing and still really gets to me when I come back to Beijing after only five weeks. These things really bothers me and as time goes by, things will change and my memories fade, but still.

The smell and the smog - see the two pictures to the left - bothers me a great deal. First thing you feel when you get out of the plane is the "Beijing Smell" - the smell of burnt coal and the pollution is a combination of China still using 75% coal to fuel its energy needs, the tripled number of cars in four years paired with a dysfunctional public transportation and limited road infrastructure (in all fairness, who could have foreseen this tremendous growth in cars?) and a disability of understanding how to operate a car in order to drive smoothly. 

Clearly, this will improve - as public transports are being built out and roads improve and people's knowledge increase (often aligned with traffic tickets). And China has an ability to gets things done, when they get it.

Secondly, though not right in my face, it is blatantly obvious that the only thing that matters is me, me and me and that I get more money, can show off my success and brag about all the money I get. This creates respect among equals and the less fortunated. Unfortunately, it comes at a price and the price is that nothing else matters. The China Law Blog reported (unscientifically) that the number of violent cases in business have tripled and the murder of Mike Hayward is just another example thereof. KIds that dies or gets seriously injured because milk is tainted with Melanin is another example. And the list just gets longer and longer day by day.

Thirdly, the foreign Beijingers.. I do not know what it is with them and it is not true for all of them (us) but some of us behave utterly arrogant and unpleasant and display a view of racism that "these low-level chinese uneducated creatures" can not read their mind, understand their winks and most of all, appreciated and learn their superior use of the English Language. A lot of times, and I must say I also apply a great deal prejudice here, most of these guys are not able to score the type of job and salary they have in Beijing; nor get access to the restaurants and clubs in their home towns; nor pick up the girls and crowds. What I can't understand is the lack of appreciation, being in the country of opportunities, where they can afford everyday's luxury and appreciate the struggle that all of us has here (locals, migrants and immigrants). You see bad-ass behaviors at bars, at work, in taxis, at restaurants. It can be good to remember who are the guests here. Even if I lived in Beijing more than half of the population has, I still realize I am an outsider, a guest and will also be, but I have had my lowlights as well (I am not a saint)

In Sinica's podcast, The End of the Expat Package, you can here a nice analysis about the situation but the truth is just because you speak chinese (hey, 1.3B does) and that you are foreigner (hey, you are not the only one) does not mean you have a great future in China. I may not agree upon all their thoughts, but insightful indeed. Maybe time to be humble and integrate into the society.

The good thing is that things are achange and only time will tell but I have good hopes of China's future development.

The End of a Saga - Nokia

The last couple of days really seems to have put yet another nail into the coffin that represents the of Nokia (and Europe)'s dominance of the mobile phone industry. The end is near.

Three significant points of data:

1. The quarterly result where Nokia has managed to turn around a €300M profit to 1.3 billion in losses, but where the emerging markets really suffers. Global sales drops 40% and China a whopping 70% decrease in (true, Windowsphone just started to sell but still) YoY! 

However, the huge losses comes from Nokia-Siemens Networks, who been demoted to #3 (overtaken by Huawei) with a billion euro operating loss! That leaves the devices with an operating loss at 5% (or -€230M and €3 per phone).

2. The exodus of Nokia executives - lately Colin Giles had to leave, EVP Sales, which is not surprising given the horrible sales results but in all fairness, is he to be blamed?

What is worse is that Nokia's management (aka NLT) is now left with 'stars' like Niklas Savander in charge of Sales, Marketing and Production. And he has yet to deliver anything, whereby his further strengthened position is really questionable. Moreover, the NLT is basically brand new and I fear that Nokia has lost its Finnish roots, which would have been the foundation for any rebound. Never underestimate the finnish Sisu! It has taken Nokia back from the brink of bankruptcy before and help a country fend of Soviet Union in the winterwar 1939-40 and 1941-44.

7 of 11 in the NLT has been there for less than 18 months and half is non-finns (which is not necessarily a negative thing) 

And Windowsphone? Well, a lot of positive comments about the UI/UX but it has not translated into sales and Microsoft is really gunning for Windows 8 with tablets and smartphones, not 7.x, which leaves Nokia in no-mans-land for another year.

3. India going Android, where Reliance's deal with Google on committing to Android for the next two years shows that Nokia has lost its grip even in the emerging market. Nokia has been too late in addressing the need of low-cost smartphones (and the latest marketing pundits effort to rename S40 into a smartphone platform doesn't fool consumers or the market), which is now clearly visible in sales performance in China, India and also Africa. 

The BRIICA markets abandons Nokia! And as those are at the foundation of Nokia's rebound - with solid sales, great branding and the target for "Internet for the next billion", the very strategy itself, though the right thing, may prove at great risk with Nokia doing too late and too late.

Problems Started 2006

But the decline started long time ago, long time ago. And it was highlighted when Jorma Ollila resigned and promoted a bean-counter, Olli-Pekka Kallesvuo (OPK), to CEO. Sad to say, and this is quite common by many charismatic and successful business leaders, the appointment of a CFO to be the CEO was not the smartest move (it seems difficult for them to accept the fact they need to appoint a smarter, bolder successor to take the company to the next level instead of preserving existing). And, like the new leadership in China in 16th century, OPK could only preserve the business and maintain the strategy but not be able to see (or understand) or change the company to reflect the momentous changes that happened between 2006-2009, with the rise of Asian vendors (Samsung, LG, Huawei, ZTE) and the clear change of user preferences, introduced by Apple.

The results are bluntly obvious today, where Nokia has been kicked down from its #1 position both in terms of revenue and units shipped, posting a horrible billion euro quarterly loss. The mentality of being an underdog has to be reinforced but probably also a much needed adjustment of the organization will be required, quite similar to the steel-bath Ericsson undertook 10 years ago, shrinking for 150,000 employees to a mere 50,000 in one year.

Given what has happened and the state of the company, windowsphone and the competition, Nokia are destined to follow the route of Sony Ericsson and become a niche player, posting 10-15% market share in 2012 and maybe €10-12B revenues (please note, I am not a financial analysts, so revenues are just for wild guesses).

I have a real problem seeing what could make Nokia rebound into being a significant mobile phone player again, given the lack of strategy beyond mobile phones per se. The only good thing is that Nokia spotted the problems before it had a solid financial effect. Compared to Motorola and RIM, Nokia has already taken decisive measures to change strategy, reduce headcount and have a path to success. Let's see if that path leads to glory or misery.

Ericsson..

just quickly going to touch upon Ericsson.. the first industrial employer I had after graduating and spending 2 years as journalist and producer. Ericsson is one of these amazing companies that has a tremendous impact on the local countries development and efforts. In Finland, you have Nokia. In Gothenburg area, you have Volvo and in Stockholm (actually Sweden), you have Ericsson with all its spin-offs.

In Lund, we have a global centre of talents for baseband modem, which can be seen in the spin-offs from Ericsson: ST-Ericsson and Sony Mobile, where the of the R&D for these companies are base-band and radio in Lund. Huawei recently setup an R&D Center, headed by the former Ericsson-exec, Tord Wingren. Guess where? Lund...

The impact that Ericsson has in the Swedish industry and the world's telecommunications can not be under-estimated. The close co-operation with the former Televerket, with their genius chief engineer, late Östen Mäkitalo (whom I had the honor to meet just short time before his unexpected death), have led to today's revolutionary changes in how we communicate through the mobile phone. It was the 70's and 80's joint R&D between the two companies that commercialized the mobile phone telephony - first with NMT and later with GSM.

Silicon Alley in Stockholm, Kista has numerous R&D centers, university programs and is probably the largest concentration of skilled wireless engineers in the world.

I hope to get back more to Ericsson given the monumental impact they have on today's wireless industry and the local businesses in Sweden.

MyNewsDesk

Sweden, and Stockholm, has a lot of interesting startups. One of them is Mynewsdesk, which I never heard about before I became the Managing Director of Symbio Sweden. Well, I heard of them and noted the name but was not sure what it was until I started to investigate PR strategies to make Symbio more known in the Swedish market.

Mynewsdesk is one of these innovative cool Swedish startups, this time the serial entrepreneur is Kristofer Björkman, who has created a PR channel that makes it easier for both brands and journalist to follow what is relevant, sort of a closed social network.  Started in 2003, they got acquired 2008 by NHST (a norwegian publishing house) and now have offices in Sweden, Norway, Finland, UK and Singapore (soon US).

A good example of a Swedish startup. It will be interesting to see what Kristofer has in the pipe as a next startup (after MrJet and SF-Anytime)

The Return to Scandinavia

As of a month, I am back to Sweden, more precisely Stockholm and it will be quite a change. From being based in city/country that hosts the world's largest operators and service providers (China Mobile soon 700M subs, Tencent/QQ with a billion accounts and more than a half billion active accounts, Sina Weibo with more than 300 millions users for their twitter-like service) to Nordic countries with the same population of Beijing only and Stockholm, the home of Spotify, Ericsson, Investor, Electrolux and now me.

But the dynamics of the start-up community and the creative arising from the proximity to Royal University of Technology and Ericsson is quite amazing. There are a lot of interesting things happening that has global reach and attraction - Spotify, Wrapp, Videoplaza and many more - it makes me hope that the time I will spend supporting these types of companies and the all the others in Sweden through my role at Symbio Sweden will be quite exciting - though probably on a different scale of what was going on in China.