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At the same time, the importance of application ecosystems was becoming apparent, but as dominant industry leader Nokia lacked the skills, and inclination to engage with this new way of working.By 2010, the limitations of Symbian had become painfully obvious and it was clear Nokia had missed the shift toward apps pioneered by Apple.
At Nokia,which had been acccustomed to decentralised initiatives, this new way of working proved an anathema.
Mid-level executives had neither the experience nor training in the subtle integrative negotiations fundamental in a successful matrix. And so reorganisations will be ineffective without paying attention to resource allocation processes, product policy and product management, sales priorities and providing the right incentives for well-prepared managers to support these processes. NMP became locked into an increasingly conflicted product development matrix between product line executives with P&L responsibility and common “horizontal resource platforms” whose managers were struggling to allocate scarce resources.
By this stage, Nokia was trapped by a reliance on its unwieldy operating system called Symbian.
While Symbian had given Nokia an early advantage, it was a device-centric system in what was becoming a platform- and application-centric world.
This led to the departure of vital members of the executive team, which led to the deterioration of strategic thinking.
Tensions within matrix organisations are common as different groups with different priorities and performance criteria are required to work collaboratively.
Between 20, a number of decisions were made to attempt to rekindle Nokia’s earlier drive and energy but, far from reinvigorating Nokia, they actually set up the beginning of the decline.
Key amongst these decisions was the reallocation of important leadership roles and the poorly implemented 2004 reorganisation into a matrix structure.
Early success With a young, united and energetic leadership team at the helm, Nokia’s early success was primarily the result of visionary and courageous management choices that leveraged the firm’s innovative technologies as digitalisation and deregulation of telecom networks quickly spread across Europe.
But in the mid-1990s, the near collapse of its supply chain meant Nokia was on the precipice of being a victim of its success.