Introduction to Nokia - Essay Example

Executive Summary: 2 Introduction: 3 Findings: 5 Ways to encourage creativity in an organization and Nokia: 7 Nokia’s Outcomes of Creativity: 9 Nokia HR Training for Creativity: 11 Gain a competitive edge 11 Investment in people 11 Nokia’s Small Teams Operations:- 13 Nokia Strategy for line managers: 17 Conclusion and Recommendations: 19 References: 20 Executive Summary: The main purpose of this report is to identify key practices of Organizational Learning in context to Nokia, worlds leading mobile manufacturer. Firstly brief concepts of Organization Behaviour are discussed with respect to innovation and creativity and how they are related to Nokia’s strategy. Secondly Nokia’s HR training strategies, small teams operation and line manager roles are discussed with respect to innovation and creativity and how Nokia fosters creativity in its employees’ daily job routine. The unique strategy of Nokia to break into several small Strategic Business Units (SBU’s) to promote new ideas and creativity is also discussed towards the end. This report discusses the main approaches and result of inducing creativity in an organization and the benefits of such changes. Introduction: “How an organization uses its collective ability to make sense of and respond to its surroundings. It includes individual learning as employees interact with the external environment or experiment to create new information or knowledge, the integration of new information or knowledge, the relation and collective interpretation of all available information, and action based on the interpretation. Organizational learning is more than the sum of the learning of all employees.” (Nancy Dixon, 1995) Nowadays organizations are in process of rapid changes due to drastic changes in technology. Managers are now more focusing on innovation and creativity of their products and services. For this they also need help of their employees (Metcalfe, 1995). Leading network service providers, distributors and enterprise Customers support and use all Nokia technology solutions. Introduction to Nokia: Nokia is the world leader in mobile communications. Nokia has a strong backing of its unmatched experience, innovative ideas, solution that are more secure than others, user friendly systems. It is right now the leading mobile supplier in the world with the overall market share of 33%. It also holds the award of leading supplier of IP and mobile networks. Nokia is a broadly held company with listings on six major exchanges. Findings: Three out of the Five Disciplines of Innovative Organizational Learning (Dixon, 1995) best explain the strategies followed by Nokia to invoke creativity and innovation in its employees. 1. Personal Mastery Learning to cultivate the tension between a new vision and to transform the new vision into reality can expand people’s capacity to make better choices, and to achieve more of the results that they have chosen (Dixon, 1995). According to Nokia ( Nokia Case Study, 2005), it always encourages its employees to present new ideas and support them by giving them the leverage to work hands-on, on their idea. 2. Mental Models By continually contemplating upon, talking about, and thinking about new ideas and designs, people can gain more capability in creative decision making and can more effectively govern decisions (Dixon, 1995). Nokia as explained by their HR department also, always encourage their employees to give new ideas and methods and to support their claim, Nokia gives performance appraisals to such employees who are constantly contributing towards new and creative ideas. 3. Team Learning This is a discipline of group interaction. Through techniques like dialogue and skilful discussion of new innovative ideas and practices, teams transform their collective thinking, learning to mobilize their energies and ability greater than the sum of individual members’ talents (Dixon, 1995). The HR team in Nokia explains such practices are a common practice at Nokia. Informal meetings are held on a weekly basis at all levels, so that the employees can discuss new ideas and methods among themselves. This enables the employees to interact with each other more productively and also inculcate new ideas. Creativity and way to encourage creativity is better described as (Bryan Smith, 1999) Creativity can provide original responses to problems ... and can present new problems. “Manufacturers of candles did not welcome the innovation of Tesla and Edison.” (Bryan Smith, 1999). “Few people are encouraged to use or develop their creative potential. The risks outweigh the advantages. True creativity has unforeseeable results. Good managers promote creativity among their employees; providing an environment conducive to creative participation to foster new ideas.” (McGrath, R. G. 1995) Ways to encourage creativity in an organization and Nokia: Nokia follows the following ways to encourage creativity (Cohen, W. M. and Levinthal, D. A. 1989): Actively respect for employees ideas Provide fair consideration and timely feedback Encourage free information flow Assign tasks requiring creativity to employees who show creative behaviour Provide time for creative employees to engage in creative work Provide constructive feedback for creative ideas and strategies Expect and participate in reasonable risk-taking Managers who develop creative environments reduce the risk that fear of ridicule will stifle creativity, and increase the likelihood of breakthroughs. Managers can also implement programs that encourage and coach creativity and manage creative people within an organization (McGrath, R. G. 1995). Another journal (Michael Kerr, 2000) identifies 30 ways to promote creativity, out of which some that are practiced by Nokia as told by the HR team are depicted here with respect to Nokia; 1. Hire for creativity – Nokia make it a mandatory qualification for every position. 2. Offer creativity, problem-solving and even humour training for staff. Nokia trains its staff in such a way that they are comfortable in contributing towards new ideas and problem solving. 3. Nokia encourages diverse training programs & opportunities for staff to broaden their Perspectives. 4. Nokia gives its staff the permission to be creative 5. Nokia puts creativity in staff goals 6. Circulate an idea file to collect ideas from ALL staff. This practice is common in Nokia also. Nokia’s team believe that by this practice they can have new ideas from the staff more effectively. 7. Nokia commonly holds contests for new ideas and gives rewards to the staff members on the basis of their ideas. 8. Nokia always tries to establish a creative/fun physical environment and ambience. 9. Nokia believes on: "no sacred cows allowed" policy i.e. Challenge ALL rules, assumptions and outdated thinking. 10. According to Nokia, being less autocratic and delegating responsibility and trusting the staffs certainly inculcates creativity and innovation within the employees. 11. Nokia always tries to reward smart risks and dont punish failure 12. Regular brainstorm meetings are held in Nokia with quantity rules, no blocking, and no judging principles in mind to make them the most effective Nokia’s Outcomes of Creativity: Innovation is the spark that makes good companies great. Its not just invention but a style of corporate behaviour comfortable with new ideas and risk...Companies that know how to innovate dont necessarily throw money into R&D. Instead they cultivate a new style of corporate behaviour thats comfortable with new ideas, change, risk, and even failure. (Fortune, March 3rd1997). Nokia believes that by developing an environment of creativity and innovation is also fruitful for the organization. Some of them are (John McGee, Howard Thomas, Mark Pruett, 1995): Improved ability to generated creative solutions, both internally and for clients; An effective innovation process that leads to more good ideas being successfully implemented; Improved ability and willingness for staff to be intrapreneurial (i.e. make new ideas happen in the public service) ; Improved systems, processes and behaviours that foster intrapreneurship in the public service; Increase in motivation and decrease in de-motivation to achieve the organisations goals; A humming energy reflecting the joy that staff have in being at work; The ability to attract and retain innovative staff; Strengthened organisation culture to ensure incremental innovation is embedded and ongoing. Nokia HR Training for Creativity: Nokia takes several proactive measures which include trainings, certifications, reengineering etc. These activities help Nokia to achieve the following (Christopher, 2006): Gain a competitive edge In today’s dynamic business environment, product knowledge is the key to formulate a successful sales strategy. Knowledge that the customers’ needs are cater quickly and effectively (Metcalfe, 1995). Nokia Training program helps to provide specialized sales force training designed to ensure to give all its employees the elementary technical understanding of all Nokia solutions. By training the employees to think creatively and by enabling them to communicated any innovative idea they have helps Nokia to build a solid solution foundation for all those people who are in positions to influence business decisions, providing the knowledge required to recommend, implement successful customer network solutions. Investment in people Another thing that Nokia focuses on is the training of technical personnel. One of the greatest challenges that Nokia and other network providers or networked enterprise face is the gap in the demand of qualified personnel and the supply of such personnel. Prospective employees can attain a technical ability in the full collection of Nokia technologies and solutions, through the technical training programs which are being offered by Nokia. While meeting with the human resource people especially to their HR manager, it was told that at Nokia its employees are considered as their major asset and to retain Nokia’s culture to always be the first!, it invests and trains its employees to be creative and innovative. After all these innovative ideas are Nokia’s keys to success. Nokia technical training ensures: Understanding of the full functionality of Nokia products to ensure the highest return on technology investments Contribution in real world circumstances to provide hands on experience in the implementation and use of Nokia products Insight into the effective use of Nokia products to increase network productivity and security. Nokia’s Small Teams Operations:- Edward de Bono, 2001 in his article “Thinking of small business ideas can make it easier to access bigger ideas in the future” describes creativity as: “If people get themselves into the habit of small ideas, then they will be more willing and more able to apply their minds creatively to large ideas. If the only time you are asked to think creatively is the once a year creative session, you are not likely to be very creative.” According to the HR manager, Nokia has divided its work force into small teams to better manage their resources. He says, “Far too many people continue to believe that the main purpose of thinking is problem-solving. This can mean that something is not doing what is expected, so there is a problem that needs fixing. We at Nokia broadened this term to include tasks that need to be achieved or improvements in a desired direction.” He explains that Nokia’s main focus to divide its work force into small teams is to inculcate creativity in its employees’ daily job routines. Nokia can focus on making mobile phone, for example, in general. But Nokia’s main focus is to make mobile phones better than the previous model and add more features to it. For this Nokia requires a constant “thinking tank” which gives them new ideas and features. This thinking tank is its employees. He further adds that Nokia encourages all its employees to think creatively and give innovative ideas which can help Nokia to improve or make new products more effective and efficient. Nokia claims that 40% of its employees are some how or the other involved in research and development. Nokia claims the if the end goal is innovation, the raw material is their talent and the team having the best people wins when it come to new ideas. Although Nokia have cut their R&D cost considerably making it just under 10% of sales but still Nokia keeps making new products with efficiency without any stop. One of the reasons is Nokia’s extraordinary resources at its disposal: both technical and intellectual. With the company’s overall R&D budget of $ 3 billion Nokia claims that 20800 of its employees are involved in research and development (Cordon, Carlos; Vollmann, Thomas E, 1999). Nokia initially divided its business into several SBU’s (strategic business units) with each unit having at least three research and development sites. These units are located across 15 countries with their R&D usually adjacent to leading universities and relevant industry clusters (Li Weitao, 2005). Nokia makes a healthy habit of assigning its employees fresh challenges in completely new areas. Job rotation is routine, even for senior managers. There is no border line for promotions and no criteria for holding a position with lawyers becoming country managers, network engineers moving into handset design. Nokia states its goal as to bring new thinking to familiar problems (Cordon, Carlos; Vollmann, Thomas E, 1999). Nokia have acquired the following techniques in 5 main phases that characterise the idea generation process. These phases according to http://www.diegm.uniud.it/create/main.htm is similar to what Nokia is practicing and are briefly described below: Predisposition: In this phase Nokia aims to create a work environment that allows the employees to free their creativity in order to to indulge creativity into groups, to identify the people that will act in the group as creativity facilitators External mapping: It mainly deals with the analysis of the environment that is external to the company in order to understand the "outskirts" of companys business and to find new opportunities. Internal mapping: Nokia focuses on the internal analysis of the company, giving particular attention not only to the financial, productive and commercial problems, but above all to the organisational climate and to the human resources capacity and skills. Idea generation: Nokia hold properly structured, procedural creative sessions to generate new ideas and methods. Evaluation: Nokia focuses on the gathering of the results coming out from the creative sessions and the related evaluation. Nokia Strategy for line managers: Nokia claims that it is a company that refuses to grow big, old or slow. They have a simple idea to have small and creative units which are much more likely to give much needed new ideas Nokia require every now and then. Nokias structural approach is to propagate through every SBU (strategic business unit) and back them with cost-effective services. In other words, build innovation into the companys organization (Cordon, Carlos; Vollmann, Thomas E, 1999). Lately Nokia Mobile Producers divided itself into nine small, strategic business units autonomous in nature, to enhance its ability by redeploying its people into totally new areas, such as entertainment. Each unit takes basic technology and product design from Nokia and hands over end products to a shared operations and logistics group. In spite of such dependence on technology each unit is controlled by a line manager, has its own profit and loss issues and has the autonomy to create its own business model, conduct its own research and development and even marketing strategies, and draft its own product road maps (Li Weitao, 2005). "By allowing teams the space they need to dig deeper into their area of interest, weve enabled them to create a big business and do it fast," says Matti Alahuhta, president of NMP and principal architect of the changes there. "Big companies lose sensitivity. People need to feel that they can make a difference. And they need to have the power to make their ideas happen. Weve created a small-company soul inside a big-company body." According to Nokia any sound approach to innovation includes a change both internally and externally in all its venturing activities, therefore Nokia has tried to work and improve on both practices (Li Weitao, 2005). In an effort to find innovative thinking brains from sources which are outside the company, Nokias Insight as well as Foresight teams seeks out new business models, fruitful entrepreneurs and disruptive technologies beyond the companies’ scope or boundaries . “Innovent”, one of Nokia’s U.S. team, goes a step further and strives to identify young entrepreneurs, buying options in their work, and introducing them to the Nokia team at its headquarters (Cordon, Carlos; Vollmann, Thomas E, 1999). Internal venturing technique on one hand prevents good ideas from ending up on the scrap heap or in the hands of competitors by keeping a strict look out on the ideas and keeping “Nokias finger on the pulse” strategy as far as innovation is concerned. Nokia also has a separate unit, The New Growth Businesses Unit, which helps to develop autonomous stand alone businesses that perform activities which are closely linked to Nokias core activities (Li Weitao, 2005). Also in the race of digital mobiles, Nokia wins the race by practicing continuous improvement and emphasizing on renewal. Conclusion and Recommendations: Nokia success in the mobile industry is the result of its continuous efforts to promote creativity among its employees. Promoting creative thinking and problem solving among the employees not only fosters innovations in products or even services but also increases employee loyalty to the organization. Nokia knowing such significance has taken a proactive approach and already practicing frequently within its workforce. However Nokia still maintains a hierarchy of decision making bodies. New ideas are propagated to the higher decision making authority before it is implemented organization wide. I believe that decisions should be taken on the basis of a general consensus of ideas to improve further creativity. References: Argyris, C. and Schön, Organizational Learning. 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