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> Case in point: Nokia was enormously successful in the ‘90s with Jorma Ollila as CEO. In 1999 he was also named Chairman of the Board. That is essentially when

by bald 8y ago

> Case in point: Nokia was enormously successful in the ‘90s with Jorma Ollila as CEO. In 1999 he was also named Chairman of the Board. That is essentially when Nokia started its downward slide of coasting on past successes. sample size 1 Correlation != causality

pavlov 8y ago
Thanks for your service, Pointless Statistics Bot. Nokia is an example of a corporation where concentrating power at the highest level led to the undesirable outcome of suppressing criticism and innovation. Ollila has basically admitted as much.
- zxcmx 8y ago
  I think part of the difference in perspective is that many people would say that it didn’t matter who the CEO was; Nokia didn’t have the DNA to do smartphones. In the same way that Motorola didn’t. I think any possible governance issues are really overshadowed by the intrinsic difficulty of dealing with paradigm shift. Expertise in radio, hardware, baseband and all sorts of other great stuff didn’t translate well into phones getting bigger than computers used to be and managing the software complexity that came along with it. They did the old school engineering super well but it wasn’t enough. Yes there’s enormous history there and they did a bunch of things that presaged the modern smartphone but it needed a different kind of company and a different engineering culture to build the things that took over the market. Maybe they could have done it with a visionary type CEO but it would take an extraordinary person to have turned that ship around. In retrospect the iceberg and the flaws in the ship are obvious but Nokia was a very successful company and those are the hardest to change. In any case this is why I would argue that comparing Nokia with Tesla is wrong; Tesla has its flaws but it seems likely that it’s on the right side of the paradigm shift.
braythwayt 8y ago
The expression "case in point," like the expression "exempli gratia," explicitly offers that a certain thing is an example of a phenomenon, not justification for it. Therefore, while it is extremely interesting to ask if concentrating power is a cause or consequence of institutional rot, I don't think we can complain about a sample size of 1 if the argument doesn't say that this one case proves the effect. But yes, it is extremely interesting to ask whether removal of oversight causes rot, or if it is a consequence of rot. In other words, if we randomly appoint certain successful CEOs to chair their own boards, will their companies do worse than a control group that retain separate governance? Hard to conduct that experiment, but it would be interesting. Thanks for the suggestion.

by bald 8y ago

pavlov 8y ago

Thanks for your service, Pointless Statistics Bot. Nokia is an example of a corporation where concentrating power at the highest level led to the undesirable outcome of suppressing criticism and innovation. Ollila has basically admitted as much.

zxcmx 8y ago
I think part of the difference in perspective is that many people would say that it didn’t matter who the CEO was; Nokia didn’t have the DNA to do smartphones. In the same way that Motorola didn’t. I think any possible governance issues are really overshadowed by the intrinsic difficulty of dealing with paradigm shift. Expertise in radio, hardware, baseband and all sorts of other great stuff didn’t translate well into phones getting bigger than computers used to be and managing the software complexity that came along with it. They did the old school engineering super well but it wasn’t enough. Yes there’s enormous history there and they did a bunch of things that presaged the modern smartphone but it needed a different kind of company and a different engineering culture to build the things that took over the market. Maybe they could have done it with a visionary type CEO but it would take an extraordinary person to have turned that ship around. In retrospect the iceberg and the flaws in the ship are obvious but Nokia was a very successful company and those are the hardest to change. In any case this is why I would argue that comparing Nokia with Tesla is wrong; Tesla has its flaws but it seems likely that it’s on the right side of the paradigm shift.

braythwayt 8y ago

The expression "case in point," like the expression "exempli gratia," explicitly offers that a certain thing is an example of a phenomenon, not justification for it. Therefore, while it is extremely interesting to ask if concentrating power is a cause or consequence of institutional rot, I don't think we can complain about a sample size of 1 if the argument doesn't say that this one case proves the effect. But yes, it is extremely interesting to ask whether removal of oversight causes rot, or if it is a consequence of rot. In other words, if we randomly appoint certain successful CEOs to chair their own boards, will their companies do worse than a control group that retain separate governance? Hard to conduct that experiment, but it would be interesting. Thanks for the suggestion.