Secret Diary Of A CEO 2017

"A crisis should never be wasted"

Secret Diary of D Shivakumar Part-2

Photograph by Vishal Koul

Leaving HLL for Philips and then Nokia was emotionally draining because you put so much into a company and then you leave behind all these wonderful relationships. In India, we derive our identity from our company. For many people, the name of the company and designation is very important. So leaving a company is not easy if you have had a long innings and have invested a lot. But you need to move on. I had a serious disagreement on the strategy. Like a good soldier, I followed what the board wanted even though I could sense that this will not work. After it didn’t work, we went back to the strategy we had originally proposed and that grew volume and the business back again. I had always worked 24x7 thinking this was my company and I did what was right for the company. This experience just didn’t sit with my deep belief and hence I moved on.

I moved to Philips to run consumer electronics and the technology sector is a huge learning on cost management, on technology obsolescence and opening up new categories. And being the boss, you had no one else to pass anything to. The lonely days had arrived in my life.

Nokia interviewed me to death — I was interviewed by 13 people! But when I met the CEO, Olli-Pekka Kallasvuo, and the HR head, I liked their humility and their focus on India. The final interview with Mr Kallasvuo was scheduled to last an hour. But after 15 minutes he said, “I’m giving you the job. Now, for the next 45 minutes let’s discuss how you are going to do your job.”

HLL shaped me for the future. I always wanted to do things very well and never wanted to be a run-of-the-mill manager. Carrying the team with me and ensuring you get things right is extremely crucial for me. Many people criticise me saying, I have a long fuse but that’s fine — it’s better than having a short fuse. If the situation warrants it, you should be tough and get the right message across, but if you are permanently on a short fuse, nobody will tell you the truth. In fact, that is one of the dangers of being a senior manager — people don’t tell you stuff just when it is crucial that you know what’s happening; otherwise, you can be isolated and do all the wrong things. To succeed, any CEO needs to have DEF : discipline, energy and focus. In my career, I have seen that less than 5% of senior managers are disciplined. They ignore time management or are unprepared for meetings and thus fail to honour and respect other people’s time.

Nokia gave me the platform to be a CEO in an industry that was extremely volatile and constantly changing. At Nokia’s core was frugality and humility. Never did I see the board members travel first class nor did I see anyone in Nokia talking ill of competitors. Their review meetings included deliberations for a couple of hours over a page or two pages. The emphasis was on knowing your business as opposed to presenting it. So, if you didn’t know your stuff you couldn’t answer the Nokia CEO. You had to have every single detail of your company at your fingertips. That was a very big shift and a lesson I learnt over there.

At Nokia, it was quite okay to go to the next level, if you had been refused something by your immediate superior because of company constraints. In 2007 we had lost about 8% of our market share to Motorola after it launched Razr. We had the 6300 model lined up but that was scheduled for a launch closer to the end of the year. Worse, we had no money and our marketing team had completely blown up its budget. We needed at least $15 million to launch this new phone. I called my boss in Singapore and told him I need this budget. He said, “No, we can’t give it to you; the books are closed. However, you can take your case higher to the head office in Finland.”

I had to go to Helsinki in about three days for my regular update on how we were doing. After the usual briefing on the business, the economy and the competition, Mr Kallasvuo asked me as a matter of course whether there was anything he could help with. I immediately said,“I need $15 million for three months.” He asked me who I had talked to and I explained that my boss and the business unit head had already declined the request. He then asked me if I was sure that I needed that kind of money. I said yes, adding that if things didn’t work out, I would leave. He called my boss in Singapore and said, “Give the money to India; we will figure it out later on.” That paid off handsomely, and the 6300 was one of the bestselling phones Nokia had. In the coming years, both these bosses would use this incident as an example, saying, “If you don’t find an answer on the first level, go to the next one. That is what Shiv did and it worked, because he was not doing it for himself, but for the company.”

It wasn’t always good news. The same year, we had a battery crisis due to which the entire media was after us. For us, it was a product advisory, not such a big deal, but it taught me how to deal with a crisis. At such times, it is not only about you but also your ecosystem partners. We always had Pankaj Mohindroo, the then-president of the Indian Cellular Association, or a battery expert or a scientist with us during interviews. When you have two people, the other person can come into the frame and add necessary information.

Nokia was a big brand in India and I learnt again how much trust matters. As a result of handling that crisis, Nokia became a very trusted name. Never had a tech brand broken into the list of the most-trusted brands post crisis. Nokia moved from No.44 to No.4 to No.1 and stayed there for four years. My lesson was that a crisis is a big opportunity to build on something, and a crisis should never be wasted. Sometimes, you might not know what it is. We never handled the crisis thinking that we would become the most trusted brand. That was not our intention; we always wanted to do the right thing for the consumer and the ecosystem but, in the process, we got several other benefits we had not accounted for. Bottomline: don’t run away from a crisis; handle it with utmost honesty instead.

Nokia’s success was about dependent growth. We would have never succeeded but for the support of the ecosystem. We wanted to put 1,000 vans into rural India and decided to share the cost equally with Airtel. After the execution, we realised that 60% of the value was coming to us and 40% was going to Airtel. I told Manoj Kohli (CEO, Bharti Aitel) that. He told me not to worry, saying Airtel would get new subscriptions every month [as a result of the vans]. All through my years with Nokia I never signed an agreement with Airtel or Vodafone or Idea; the relationship was entirely based on trust.

In hindsight, I think Nokia not choosing Android was a big mistake. We were losing the battle in the consumer’s mind and the phone had moved from being just a phone to a device that had content. Developers were not creating apps for us because Nokia was on the Symbian and Windows platform. It was very niche and their ability to monetise was a big challenge. Sometimes it’s better to cut your losses and move on.
One of the worst day of my life was 3rd September 2013, when Nokia was sold off. I had already moved on. But I wrote a piece on its culture and it was up on all walls in Finland.
You have to be resilient and willing to accept that nothing in life is permanent. Your job, your company, your contacts… nothing is permanent. So, never get carried away by success or depressed by failure. Nokia taught me that more than any other brand.

This is the second of a three-part series. You can read part one here and part three here.