Emergic: Rajesh Jain's Blog

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Nokia’s Innovation Factory

August 10th, 2002 · No Comments

Writes Business 2.0:

Nokia’s RD apparatus is unlike anything in multinational corporate history. Most large-scale RD operations are centralized, hierarchical, no-nonsense — science as brute force. Nokia’s 18,000 engineers, designers, and sociologists are scattered across the globe and form a kind of federation of rule-breaking, risk-taking hackers. Most of them answer not to countless layers of managers but to Neuvo, who considers it his missionary duty to break down his people’s mental inhibitions, freeing their minds to roam toward the next big breakthrough. “We operate the way a great jazz band plays,” Neuvo says. “There is a leader, and each member is playing the same piece, but they can improvise on the theme.”

That approach has made some beautiful music for Nokia. Since Neuvo took over Nokia RD, its engineers have churned out an unmatched string of technical firsts: the first mass-market cell phone with the antenna on the inside, the first one-chip phone, the first compact battery with long-lasting power. Breakthrough features mean hot phones, and no competitor has come close to equaling Nokia’s record of monster product hits — it has had half a dozen models that sold as much as 50 times the company’s own internal projections. That run has enabled Nokia to amass a 38 percent share of the cell-phone market, roughly equal to that of its four biggest competitors combined. A decade ago, Nokia was close to bankruptcy; now it’s closing in on $30 billion in annual sales. It makes the vast majority of the profits generated by the entire mobile-phone industry.

Tags: Management

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