Good morning. As Sir George has said he has asked me to speak to you this morning about design and global competitiveness and I took the brief kind of broadly in some respects but at the same time quite narrowly.
So in one respect I have focused on it from an inside out perspective. How has Nokia, as a company, taken on design and also achieved success globally? And I wanted to reflect that back in terms of the experiences we’ve had, the things we’ve learnt over the last twenty years of being in business and I’ll tell you a little bit more about that and reflect that back on what it means to be a design-led organisation, which we are, and to be understanding of competitiveness, what it means to us, because I think it’s perhaps a little bit different from the discussions that we’ve been having in the UK and I have to say it is interesting to contrast Finland, which is the headquarters of Nokia, with the UK in the sense that this probably wouldn’t be a forum they would have there.
Not because they aren’t interested in competitiveness and economics but because, in some respects, they see their market not in a defence mode against threat from China and India, they are a small country on the edge of Northern European. They have a different outlook perhaps but that has also had an impact on us, so I am going to tell you a little bit more about that. But finally, as I say, I want to reflect that back and what does this mean for the UK? Why is Nokia here? Why have we made investments and continued to make investments here? So that is going to be a rounded shape of what I am going to cover and I hope that will be as relevant to you as hopefully it has been to our own success in Nokia.
So if we look at the situation across those three elements, I have called the first “Design on Board” and I think you’ll see more as to why I say that shortly as I explain more about designs role in the company. Then I want to talk, as I said, about the nature of competitiveness and finally back to Nokia in the UK and our perspective on that. But before I do that I would like to talk a little bit about just the context of Nokia.
I am not going to give you the full story, I’m sure some of you know it and those of you that don’t, it’s a long read so I won’t go through it all. But founded in 1865 in a timber-related industry, it has metamorphosed and changed and transformed over more than a hundred and fifty years almost now and in that sense it has always adapted to social, technological change in the world and in the home market to begin with and I think this adaptation, this ability to change when you live in a very cold climate that becomes a very warm climate you learn to change very rapidly and I think that adaptation has instilled an understanding of responding to change, responding to possibilities and creating and designing new opportunities for yourself and in some ways that is at the heart of this adaptive organisation that we’re in because in Nokia they have literally dispensed with the past to embrace the future.
By 1987 they had made a decision that mobile communications was going to be the future and they dispensed with everything that we had before and moved a very, very major risk investment to move forward in that way to take advantage of that and it took a further ten years almost, we would like to say less but it probably took us ten years more, to actually then be on the world stage with a success of delivering mobile communications.
It was the mid-90s when really our name was known around the globe and that competitiveness that we were so proud of was actually being manifest. But I think you also have to see that in that time the business has changed dramatically, it is not a Finnish conglomerate but now it is 58,000 people, one hundred and twenty eight nationalities throughout the organisation.
We have R&D centres around the world, a major one of those here in the UK, we have eleven globally. We also have production facilities all over the world and in many cases the Finnish base is almost a launch pad so nowadays we don’t make products in Finland but we first build them there sometimes or first develop them there and then those learnings are transferred around the world. But ironically the ideas for those products and services come from the world back into the business. They don’t come from Finland or from a singular place and I want to touch on that as well. But today that means that we are still successfully challenging ourselves, we still retain a very major market share in this business, 34 per cent is a very big chunk of any company to have in one industry and we see that this has been achieved but how has this been achieved?
Well people often ask this question, are you a design-led business or a brand led business? And the answer we generally give is we are a people-led business. It’s about people, we are about connecting people. It is our mission, it is the reason we exist. The design and the brand are implicit in that understanding but that is where we begin our journey from because if you understand human fundamentals and you can actually leverage them into your reason for being and you can understand what role that has then you have a sustainable idea.
It is, really therefore, about taking that and creating technology and solutions and products that respond to those understood needs, desires and so forth. But being people led has an impact on your business. It is about prioritising people above everything else you do. It is about letting them define the experiences that they want, the user experience of a product or the particular fulfilment of a certain need or desire and it is allowing that to then drive the brief for creativity and innovation and that is the way we approach the whole aspect of everything we do.
It ultimately means that we have a company that is built around the creative process not a creative process as applied to a business and that is a fundamental way has allowed this success to grow, as I said before, and I think this is really where we are constantly, constantly challenging. Are we close enough to people? Are we finding the right ways to work with them? Are we actually collaborating in an appropriate and innovative ways that allows us to move both our business and our fulfilment of people’s needs forward in the way that they expect? But it also has an impact on the organisation, design is at the heart of our organisation, it is why I called it “Design on Board” for this section.
Because the corporate head of design, Alistair Curtis, reports directly to the Group Executive Board of the whole corporation and he is fully championed by the CEO, Olli-Pekka Kallasvuo, so from that point forward design is at the very heart of our business. But it doesn’t stop there, every single operating company within the group, there are three of them, mobile phones, multimedia, which is new devices and media experiences that are being delivered through new areas of mobilising the internet, music, TV and then enterprise solutions which is all about corporate and business solutions. Those three business groups each have a head of design and I am responsible for multimedia and sit on the board of that organisation.
So we are taking it from the top into every single part of the business and this runs right through so the point is that we really have a situation where the decisions that we make as a company are equally influenced by the ideas that we are deploying and the business we want to build and that means that we are doing that from the very beginning of the journeys we take. But I also think it adds value beyond our own remit.
Clearly we are developing design strategies that will inform rather than just support the business objectives. So many ideas in the company about where we go next have come from within design and innovation process so we have seen opportunities to segment the market into different kinds of products to create new kinds of products which have defined new businesses.
The three business groups we have today exist because design and innovation identified that that would be a good way to build a business to succeed. In the same way we have a situation where we don’t just add value in the actual areas we are responsible for. I can be asked one week to help design a new systemic approach to improving professional development across all disciplines in the organisation.
At another management board meeting my view is as important about mergers and acquisitions on a massive scale. I’m not just there to provide some creative corner activity that is taken on board occasionally as and when required and I think this is a substantive difference in the way that the company’s culture exists and works and I think it is an important aspect to understand and I think the reason why, as I say here, is because I think designers ultimately embrace uncertainty but they like making sense of that uncertainty.
About turning that into real things that we can actually make use of that are actually really relevant to people and that is something that I think some parts of the organisation are afraid of. It is about taking risks but also about understanding that you have to have your head in the clouds and feet on the ground and I think Sir George said earlier, it is about being able to speak a number of languages, business, creativity, technology, people, remembering that we’re human, that’s a tough thing in business sometimes.
So if we then look at the situation we have in terms of the design function, I just want to quickly cover that. It is a broadly invested group of people, more than 280 staff around the world, we have three main design centres, in the United States, here in the UK and in Finland and we have satellite studios in China, Japan and Denmark. We also have what we call temporary studios which we run for different periods of time, associated to different institutions currently in India and Brazil. Those are infused with people from Nokia, not just from the design organisation which covers designers and engineers, anthropologists, researchers, technology experts as well, but also all functions from the organisation working together and what we are therefore doing is bringing our central core resources to the interfaces, to the edge of our business because it is at the interfaces that innovation happens between people, between functions, where the boundaries break down that is where the innovation happens and so that’s where we allow people in to help us co-create.
So we are bringing people in from outside of the company, people who will use our products to help us, not just focus groups, but actually creating products with us and in some ways that is a synopsis of how design lives, breathes inside the company and ultimately, as I said before, how it helped a small Finnish company on the northern margins of Europe achieve what it has achieved to date. But we can’t stop there. We know that there are future challenges and we have to face it again. Maybe now is the time that we have to, again, transform ourselves into the next kind of business that we need to become. I will touch on that, perhaps, at the end.
I want to move on now just to talk about competitiveness. I think that it is very important that we understand the context of this.
People often say business competitiveness, creative competitiveness, they tend to separate them out. They see them as maybe one is in conflict with the other but we cannot do that. In Nokia it is just almost impossible to separate the two. If we are not creative competitive we are not succeeding in business and if business is succeeding then our creativity is superb. They are so linked one to the other.
At the same time people talk about global and local competitiveness. We don’t believe in that in Nokia. We don’t think about the boundaries of states in terms of creation and innovation. You may have to come back and measure success by a country or by a particular market share or by the way you look at actually accruing what you have achieved but in terms of creativity we have to look across the boundaries. That is why working in the interfaces is so important. Because ultimately our markets are about relevancy and about shared mindset, about shared needs and they can appear across different continents and different countries.
They are about needs within people and it is about that fulfilment of those needs and aspirations that we are really trying to drive to deliver and then we deploy our solutions to markets and countries and so forth. I think the other aspect of competitiveness which I think needs to be addressed is the idea that it is a singular race. That you are out there on your own, that you have got to beat the other people, that they are a threat that we have to crush them. I think the reality here is that it is about partnering, it is about participating and it is about being in the places, it is about going beyond just the cost and convenience of exploiting opportunities wherever because you have a legacy if you want to be in business sustainably and you have to live with what you do.
So we think it is more about the quality of thinking, the collaboration and finding shared values and that means we will do it with whoever, wherever to achieve that and I think that is another important aspect that we need to address because for the UK you need to think, I feel, more and more about what is our role in the wider world rather than what is our defensive position against the wider world. I think one thing that we learnt a long time ago and not just recently with China, India and Brazil but looking over our shoulder doesn’t help us as a company. It doesn’t help us when we look at our competitors. We lose speed and agility when we start watching our competition and I feel that this is not new. This has been around before.
I look at these countries and think of the countries ten years ago that were the new countries, the places that we were exploiting into providing the “how” for the rest of the world. How do we get stuff made that we want? And I think we see this country as taking advantage of their ability to deliver on that but also I think we stereotype them, we treat them as national stereotypes of the type of business they do, and oh they won’t get very far. They’ll only get as far as creation and they’ll never get to innovation or they won’t get as far as really big ideas, big brands. I disagree completely. They will and they will do it quicker than we have.
So I think we need to look at that and really understand that that is where they are at the moment but where do we go to next? Well I think often we like to think that we’re in the “what”. We are the people with the ideas, we come up with the “what” we need to create, what we need to make and I think that we see that. Different countries had their time, they would say, when we look back at Italy or Germany or Japan that was when they were at their highest point of development in terms of innovation and creativity.
But actually what is most interesting about this is that this is breaking down now and actually it is becoming a phenomena which is not based on countries but based on people, places, cities, ideas that are shared across them. So in a way this doesn’t mean that these places, that we aren’t here in the UK, creating wonderful new innovation but it is connecting it up with other innovations around the world and how that then can be deployed to the benefit of us all. And I think that this is really where we need to understand that that is our stepping stone into the next step of what we need to do. Because there have always been these cycles. This hasn’t just appeared in the last few years and we have always had to respond to them. So ultimately it is really for me that the one thing that is critical of all this is “why”.
Why do we make these products? Why do we come up with these ideas that we then want to deliver, services or otherwise? And the only reason that we have a really clear understanding is because we focus completely on people. People allow us to understand what they want, why they want it, how they want it and by staying close to them we have learnt that we can almost draw a new design map for the world. It is not defined by the old maps and it means that we are integrating and bringing together different people and allowing them to inform and direct still the ability to use the advantages of other countries or other companies or other people to produce the ideas or to manufacture the products but actually at the heart of it, it is the people that are bringing together this ability for us to answer that question. Why do you want it? Why do you need it? Why do you desire it? And that drives us to the point where really if you can get this right and that is our everyday struggle in Nokia, to get this right every day, then you can add value beyond purely profit.
So if our mission is connecting people I always feel that our purpose beyond profit is social cohesion. That is the business we are in. That is what we are creating our products to deliver. Now it is a higher mission but without that you cannot actually invent the future for yourself or even provide the benefits that you are promising to the people. So ultimately I think that competitiveness for Nokia and I would advocate is a successful approach is investing in a point of view.
And I think that is where we started our journey in terms of competitiveness and it is what we try and hold true to. I think you need to see if this has relevance to your businesses, to your educational establishments or even to this country, but I think a point of view is more important and that’s what we need to look for. So just to close, I wanted to talk a little bit about Nokia in the UK. Why are we here?
Well, let’s be clear. When we first arrived it was because there was an acquisition of businesses. We bought a British company called Technophone who happened to have a very good innovation in a mobile cellular device that was smaller than the one that Nokia had. So we bought that company for that, we bought it for the wireless technologists that were here because of defence industry spending, particularly during the cold war. There was this knowledge base. There was creativity and designers that we wanted to hire to bring into the organisation. But I have to say that isn’t why we are still here. Because actually there is no more exclusive talent pool in the UK from other parts of the world and I think that that has changed and we have to understand that that competitiveness is there for us all.
The reason we are here is because yes there are still good places, there are still good people but more importantly because this is a fantastic cross over point for ideas, people, resources. It is a place where the world wants to meet, not all the time and not all of the people sadly, but it wants to meet and I guess that is an issue which we take to our heart because that is why we are in the many places we are in because they are all nodes on a network or a new network.
So what we are talking about is an international hub. That is what the UK represents to us. A place from where we can reach out and learn and discover and leverage the strengths that have required Nokia to invest in this business in this country. But we have had to do a lot of the work ourselves. We have had to create a lot of the infrastructure, we have had to find the nodes that we want to connect to, we have had to build the network beyond and I think that is something that we have recognised from the beginning and continue to do. So now we are investing in a brand new design centre here in London. It is going to be one of the three global facilities and it will be a place where we can bring and apply the best talent, as I say, from around the world and from the UK and create the solutions we all really want, both locally and globally, because we don’t see that separation in that respect as I said before. But this is really the major key investment that we are going to be making and will continue to support.
So it demonstrates that for all of the questions and the items I am raising about the way we look at this. This is still a place that we want to be and it is still a place that we want to participate in. But there are some observations and these are just my final two slides. There are some questions we ask ourselves regularly. Why is there not better joined up design representation in the UK? Why do we have professional development, student promotion? But why do we not have these joined up? Why do we have competing? You talk about competitiveness, for goodness sake, lets stop competing.
I’ve said this before and I’m probably like a stuck record on this one so I will say no more, but it is an issue which I think coming from a business that is investing more in the country, we would like to see that happen better and be clearer about it. I think also, it’s fantastic what’s happening in terms of the resources and the investment in Britain but I think the navigation of the networks of education, research, institutes, libraries, galleries, how they work together is not easy always to navigate when you are almost looking from the outside in at all of that and I think that is an area where we see some opportunities to really make that a stronger point for the UK competitiveness let’s say.
And I guess the other issues that really came to mind that we have talked about before, is really focusing on design quality over quantity. There are some great establishments but have we got too many design students? Are there too many courses? Are there too many schools of design? These are questions we are asking openly. We haven’t concluded anything but we have questions on that and ultimately it is also about setting a culture of example in education, in business and in government and one or two things I just want to pick on really.
I have talked about “Design on Board”, it is not often that I meet peers of mine in the UK who have similar experiences to the way that design operates in Nokia. They often talk about a different environment, a different culture, a different way that they are used or that they work. Why is that? I know it has been brought out in the Cox report very clearly but I would like to see some, when will the action come? I also recognise that you talk about non-executive design roles. Three of my management team have non-executive design roles on other companies outside Nokia, Sweden, Argentina, Japan, not in the UK.
Alumni programmes: I have never been asked back by my university or my college to come and speak to them. When I lived in America I was tapped for money, come and talk, can you run a conference, can you sponsor something. Never here. You can read my CV to see who is responsible. And then finally I think design networks for inward investment because inward investment is important and I think that we need to look at how we can encourage, because I know there are four other companies who are going to set up design studios in London in the next twelve months. Do we know how we are going to take advantage of that? Do we even know who they are?
So those are the things I think could be better served and in that sense we are in full support, I think, of many of the recommendations in the Cox report. But I just wanted to make that point from our perspective looking at it from a Nokia lens.
So finally, my comment earlier, I think design has a new map. This is a digital map created by only eight or nine people using GPS signals over three weeks in London. So this is a digital map of a city that shows its frequency, its use, its shape, but it is not prescribed. It’s found, it’s discovered, it’s learnt. For me it is a metaphor for the way we should look at the global competitiveness map that we need to play a part in and where does the UK want to be on this map? That’s my question to everyone here.
Thank you.