James (2011) defined operations management as the management of the processes that transform the organization’s inputs into finished goods and/or services. This transformation may involve transforming resources, such as facility and staff, as well as materials, information, and customers. In the Burning Platform memo, the former CEO of Nokia, Stephen Elop, described Nokia’s situation on the verge of the acquisition by Microsoft, which was portrayed as a burning oil rig on the cold Atlantic Ocean.
While many elements of resource transformation above were mentioned in the memo, the main issue of Nokia was the failure to catch up with the disruption in the industry. The competitors swiftly adapt to the change by reshaping their operations to the new ecosystem, while Nokia seemed to be enjoying the status quo, unaware of the flame that will quickly set its platform on fire.
Competitors had transformed their operations to meet the disruption. The transformed resources for the cell phone industry were rapidly changing as the new ecosystem required an almost new business model. It was no longer the war on the device level. Companies’ operations were no longer as simple as transforming materials to become a great device, but transforming all of the resources to provide the best ecosystem for users, developers, advertisers, and many other parts of the ecosystem.
Manufacturers in China were evolving fast in providing materials for the new ecosystem. Developers and applications were quick in providing services on the best ecosystem, which would draw more users and advertisers, transforming information and customers. These are the new quick-paced game in the industry.
All of it happened so fast under the nose of Nokia. The facility and the staff, as the transforming resources, failed to be aligned in the right direction. Lack of accountability and leadership was one of the main points of the memo. They were too late in delivering innovation and they failed to collaborate.
Framework for Operations Strategy within the Burning Platform Memo
The Nokia situation can be analyzed from the memo using the Framework for Operations Strategy Formulation proposed by Hill (2005). The framework describes five steps that tied up the corporate objectives, the marketing strategy, and the operations strategy.
The first step is to determine the corporate objectives. This aspect was mentioned in the memo as the failure of the company in aligning and directing their operations to meet the right objectives, due to a lack of accountability and leadership. Blinded by the status quo, Nokia failed to grasp the urgency to align its objectives to the disruption of the industry. This lack of purpose leads to the deficiency of the next four steps, which involves marketing strategy and operation strategy.
The marketing strategy, the failure in the second step, was clearly depicted by the declining market share and customers’ preference for Nokia in many countries. Nokia should have realized sooner that its usual marketing strategy was not working, but then the disruption happened so fast that the company struggled to catch up.
The third step is to assess how certain products win against competitors. The memo exhaustively described this part as competitors pouring gasoline on the burning platform. How they took the battle to a greater ecosystem war which Nokia was not ready for it. However, this step should be done as a formulation, not as a confession of defeat where everything is too late to be saved.
The fourth step is to build the most suitable mode to deliver the products, which was the next wrong step for Nokia. The memo mentioned the failure of MeeGo and the mistake of clinging to Symbian when other companies race for the market leadership of the new ecosystem.
The last step is to provide an infrastructure which can support the operations. In this case, the infrastructure was already on a terrible fire and the man had no other choice than to take a brave step of jumping out of the platform.
Internal and external factors
As Elop described, the scorching fire came from multiple points of their operations. External factors, such as competitors and suppliers, were mentioned. The swift rise of Apple and Android, supported by the suppliers of cheaper and faster components from China, was one of the main points of heat that set their platform ablaze.
Another scorching fire came from the inside. Internal factors, such as lack of accountability and leadership, were one of the main points of the memo. The internal team was too late in delivering innovation and they failed to collaborate effectively in facing the disruption.
Commentary on the CEO’s motivational tool
Like any dramatic war cry, the CEO’s Burning Platform memo was a double-edged sword, it had pros and cons. On one hand, it can easily illustrate the crisis happening in the company and rally the employees to fight together despite the circumstances. On the other hand, employees with a low sense of belonging to the company could easily be demotivated, and could easily choose to save themselves first instead of fighting together to face the uncertain future.
However, I am sure that the CEO was well aware of this when he sent his memo to all of his employees. He must have realized that the use of the dramatic analogy could backfire, but the fire in front of him must have been so disastrous that he could take the risk of backfire. In a desperate situation, generals might want to depend only on a handful of trusted and motivated subordinates and leave those who are unwilling to fight in the first place.
References Edwards, J. (2013). All Microsoft employees should read Stephen Elop's 'Burning Platform' memo right now. Business Insider. Retrieved from: http://www.businessinsider.com/stephen-elops-burning-platform-memo-2013-9 James, T. (2011). Operations Strategy. Bookboon.com Hill, T. (2005). Operations Management (2nd ed.). Palgrave Macmillan.
