That Nokia memo; How Nokia can still screw it up; and what I want to hear on Friday

I haven’t yet written about the Nokia Memo that’s been brilliantly leaked across the web today. I’ve had quite a few emails from people asking why not. I tweeted it. I scooped it (new tool I’ve been playing with). I figured those who were particularly interested had already found it on Engadget.

The memo is a brilliant piece of writing.

The leaking of the memo is a phenomenally good move for Nokia. The text accurately sums up precisely what the market has been thinking. It’s what almost ever Nokia staffer knew.

Oh, they knew the company was shifting a ton of Symbian handsets, they knew the ’10 year plan’ of focusing on the developing markets was a good one. It is. Nokia still makes a ton of money, even if things are pointing downward. The company has a huge cushion.

The problem was perception. Throughout last year the market lost faith. Benefit of the doubt gave way to skepticism. Even the Nokia faithful were finding it hard to keep a straight face.

The trouble is, there are still (senior) nutcases at Nokia — the ones I sometimes write about. Here’s an example from October last year.

This is me writing about trying to help the company with some advice:

I have sat in front of many [Nokia] executives and asked straight forward questions only to be met with total and complete ‘numbskullarity’ bordering on neolithic incompetence.

Witness, for example, me sitting in a meeting with one chap about 6 months ago explaining that Silicon Valley developers think the company is FU*KED. And they use that language. I attempted to explain why this was a problem, how it had come about and how precisely to deal with it. The arse of an executive responded that ‘there isn’t a problem’ and that he ‘couldn’t understand my viewpoint’. He even went on to explain that, ‘all the developers I speak to are delighted with Nokia.’ Utter tripe. The other executive — the smart one — who’d recognised the issue and asked me (and another chap) to propose a solution, had to sit in the corner with a pained look on his face, whilst this debacle ensued.

I had to laugh. I actually thanked the chap — after a meeting of perhaps 5 minutes — and admitted to him that he was right, ‘there is no problem.’ If he didn’t see a problem and wasn’t able to entertain my (and the rest of the market’s viewpoint), so be it. I did have to laugh. Because I knew — precisely — that I’d be able to write this text. And look like I’m a total flipping genius.

I am — it’s not difficult to look like a genius when you’re dealing with Nokia executives, is it?

Of course they’re not all dullards. The problem is a lot of the arses have been in side positions or haven’t had the authority to do anything beyond try and make their senior bosses understand just how bad the company’s reputation was — and what the substantial implications of this were — and were going to be.

I wrote that just over three months ago.

With today’s publication of the memo, followed by confirmation that it was genuine, the market has let out a collective sigh of relief. The nightmare is over. There’s been some speculation that the memo might have been taken out of context, especially given some of the figures used in the text. I don’t think that matters. Indeed, I think it needed a bit of exaggeration. The Nokia robot employees who haven’t noticed the perception issue needed a spectacular wake-up call.

And the market needed to know that — yes — Nokia’s back in the game. Perhaps that’s premature. What I mean to say is that clearly the senior people at Nokia get what the rest of the marketplace is thinking an are going to sort it all out.

The danger now is that Nokia doesn’t go far enough.

This is my concern.

The company’s complete inaction in the face of the rest of the industry — acknowledged by Elop himself — has left it with no choice whatsoever.

Let’s be clear here.

You read the memo, right? You read that section? Here it is again;

On Tuesday, Standard & Poor’s informed that they will put our A long term and A-1 short term ratings on negative credit watch. This is a similar rating action to the one that Moody’s took last week. Basically it means that during the next few weeks they will make an analysis of Nokia, and decide on a possible credit rating downgrade. Why are these credit agencies contemplating these changes? Because they are concerned about our competitiveness.

Shocking. A ratings downgrade is ultra serious stuff. Agree or disagree with the ratings agencies, that’s irrelevant. We’re here. We’re at this stage now.

The critical point is that Nokia cannot announce steady-as-she-goes. That option evapourated half way through last year. The company could have got MeeGo out the door in the summertime before iPhone 4 hit. They could have stamped their mark on the industry, said ‘THIS is how it’s going to be,’ and provided the UI looked good and the tech blew everyone else away, the market would have — grudgingly — left the company alone. A reasonably coherent strategy semi-consistent with what the market was thinking would have been acceptable, provided it addressed a few nice high-spec devices to the West.

But no.

That’s all gone now.

The ratings agencies have tired. Some might say they’ve bought the Android and Apple spin. I think there’s an element to that. The ratings agencies wouldn’t know how to make a device ecosystem at all — what do they know? That’s fine. They’re just measuring sentiment. Measuring the sentiment across the West and also taking a close look at Nokia’s balance sheet, which, alas, doesn’t quite look as good as it should.

It certainly doesn’t stop and end with the ratings agencies. They’re the last warning before it gets really, really bad. Before words like ‘beleagured’, ‘struggling,’ ‘misguided’ and so on start appearing with alarming frequency in the Financial Times and the Wall Street Journal. That’s a one-way road to investor melt-down and real, real trouble.

We’ve not been far off that across last year.

Elop’s message has been expertly timed for the wider market. Everyone has bought it. Even Google is worried — enough to make their ‘two turkeys don’t make an eagle‘ unofficial statement. Everyone has bought that Nokia’s top man gets the problem and has described it perfectly.

The challenge on Friday and across Mobile World Congress week is to manage expectations.

Nothing short of BIG NEWS will work.

The announcements, the vision, the thinking, the logic — it needs to be enough to cause half the market to call same-day emergency board meetings — such as what often happens when Google and Apple step up to the plate with their announcements.

A limp-wristed, ‘we’re going to make one Windows Phone 7 device which will be out next year,’ will not work. No. If you’re going to do a partnership with Microsoft, you need to own that. You need to shift the market. You need people to change their strategies because of you. To be afraid of you. To start worrying. Anything less and the market will pounce. It’ll be far too easy for the quiet spinners working behind the scenes on behalf of Google, Apple, Samsung and RIM to bury the announcement as irrelevant.

Make no mistake, the 800lb gorilla in the mobile industry is still most definitely Nokia. Or could definitely be Nokia. A super-smart strategy announcing the complete integration of WP7, a raft of devices, worldwide carrier support, WP7.5 arriving (with complete ground-level Ovi integration) by June, WP8 arriving in October, plans to ship 50 million units by Christmas with advance orders of 25 million units already in the bag. Now we’re paying attention. Now the developers Nokia has been chasing for so long will be knocking on their doors. Because those same board directors who’ve been urging their teams to focus on iPhone and Android will all of a sudden start asking about Windows’n’Nokia.

Statements from Elop like, ‘We let you down, we took our eye off the ball, but we’re back — and by 2012, Nokia will ship 150m smartphone units,’ will start to get people rather hot.

Then remind the market that Nokia has sold half a billion handsets a year for the last five years. Yes. Let’s add in some slightly outrageous Apple-esque semi-accurate stats, shall we? Remind the market that, although the ball was dropped on the high end, fixing that is a piece of cake. The real work is getting your technology to scale into the billions of units and developing the developing markets. Let’s have some nice throw-away lines from Elop at this point. Something like, “And you know, we reckon that — right now — 670 million people will use a Nokia phone. Today. Tooo-day.”

That will get people thinking.

“And my message to you is that we’re working super-hard to make sure that those 670 million customers go out next year and buy a new Nokia. Within 2 years, we fully expect 70% of those customers to be smartphone customers.”

Yup. Bring on the Jobsian ego.

“Our plan is simple, ladies and gentlemen. We catch them with Symbian — the most efficient and powerful operating system on-the-planet today — and then we migrate them to NOKWP7. I know we’ve all been impressed with Microsoft’s clean UI and attention to experience. But, ladies and gentlemen, let me tell you, you haven’t seen anything yet.”

And then start showing some screenshots.

Start spinning the wheel, showing the joy. Show us what it COULD be. Show us what the world COULD look like.

A nice explanation of where MeeGo fits into the on-going strategy will be important, too. Mobile computing, tablets, netbooks, the whole shebang.

The important thing is to talk up WP7. That’s what the market wants to hear. HOW are you going to make my wife, my brother, my sister-in-law, all want a Nokia phone again?

I’ll stop there.

Let’s go back to the real world.

On Friday we need big, big thinking, big news, big market-moving strategy, confidence, mixed with some tub-thumping rallying cries to remind the world just how good Nokia was, is and can be.

The next problem after that will be managing the internal organisation. Right now, it’s all about the external message though.

If Friday’s news gives the market an ‘oh, right… well…‘ reaction, it’s game over. It’ll be a long and painful to watch.

This week Nokia was given a break by the market. The negativity has stopped, temporarily. Get stuck in there Nokia, get stuck right in.

Let’s have you back to your best.