In an industry that is driven by scale, continuous innovation, intensive R&D investments and challenging markets, you need to have a strategy that enables you to play with the best possible assets and capabilities. The Board of Directors should take part in driving the evolution.
In 2015, Nokia decided to acquire Alcatel-Lucent to strengthen its own capabilities in line with the long-term intent of being an architect of the “programmable world”, where billions of people and devices are intelligently connected.
The integration of Alcatel-Lucent meant putting together two global and multicultural organizations of approximately 50,000 people each, with combined net sales of approximately 26 billion euros. Integrations of this magnitude are demanding. Based on our own extensive experience with M&A and integration, we knew that a successful acquisition and integration needs to be led with clear guidance.
We set three core principles for our work:
1) “Focus on value creation” – clear governance and a disciplined decision-making focus on what needs to be integrated.
2) “Prepare well” – a well-defined masterplan with a limited number of people involved in planning and preparation – and do not underestimate the importance of culture.
3) “Execute rigorously” – manage a proactive and assertive stakeholder interaction, track and measure and involve people, engage and over-communicate.
The plan and scope of culture
Integration management is vital for a successful M&A execution, and for enhancing performance and cohesion. We focused on a culture and change that enable the strong unity of people and respectfully address cultural aspects to ensure deal success.
Three key objectives for the pre-closing phase were set:
1) Do diagnostics on the current culture and key practices on both sides to understand where the cultures may differ. The diagnostics helped us to see our similarities and differences, which facilitated communication, leadership and defined the needed employee involvement.
2) Set clear expectations on the end-state of culture integration. We explained what is our culture vision, what is non-negotiable (e.g. Nokia values) and what areas will need to be co-created together to suit the new Nokia.
3) Help manage change and people’s transition into the new target operating model. A global plan – done in all businesses and key functions – was turned into practical and unit-specific actions to enable employees’ adoption of the new mode of operation and ways of working.
Why, what and how
After a successful Day 1, the new organization gradually took responsibility of the respective teams and the holistic management of employees. The 2016 culture integration plan reflected the fact that Nokia had significantly changed from what it was pre-acquisition, emphasizing collaboration and co-creation. The approach in culture integration focused on providing a continuous and ongoing direction of culture.
We needed to make sure that proactive communication on “why, what and how” was provided to the organization. Culture integration also requires the facilitation of employee involvement and co-creation, and must give the means and opportunities for people to raise their voice: Let them say what we are doing well, and where we need to improve.
We also wanted to give people opportunities to meet with their colleagues, new and old, so they could reflect on various topics and build relationships. Integration was done in collaboration with all business groups and functions through steering and input to the new culture agenda.
Voice of the employee
The new era of Nokia requires a healthy core culture that is shared by all, a core culture that keeps us true to our values, protects the brand and helps us to be the best we can be. At the same time, we also need differentiation, allowing for business-specific practices to emerge to facilitate high performance in a particular market or business context.
Today we have a very rich “voice of the employee” baseline, which is built on some 80,000 data points. The employee voice has clearly shown we are united in our belief in Nokia and our future. We have confidence in our strengths and the potential to succeed.
We have good decision making, clarity in our operational model and a sense of ”we”. There is an emotional connection with the brand, and there is observed evidence of employees acting in line with our values as well as highly endorsing integrity and ethical behavior.
This is a good position to take forward, to further evolve our core culture.
New Nokia core culture
Based on the discoveries and insights made from the rich voice of employee data, a plan for how to drive new Nokia core culture was put together with the CEO and Group leadership team. The plan for 2017 focuses on providing clarity and inspiration through meaningful operational principles that all employees can act on and thus directly influence our core culture. The Board of Directors have taken part in the insights we made in 2016 and the philosophy we follow to drive evolution further.
Hans-Jürgen Bill
Chief Human Resource Offier
Nokia