Nokia Brings Phones to the Billion at the Base of the Pyramid

It’s much easier for a company to demonstrate its commitment to sustainability in good times than in bad times. Yet, companies that don’t abandon sustainability when it gets tough not only demonstrate a truthful commitment, but also find that it can play an important role in transitional times. Take Nokia, for example. The company’s latest sustainability report for 2011 shows very clearly how Nokia uses sustainability to address very difficult challenges in one of the worst times in the company’s history.

“Nokia undertook a monumental shift in 2011, embarking upon a new strategy that reflected the sea change in the mobile industry and our intent to both stay ahead of, and capitalize on, the challenges facing us. I’m proud to say that even in a year of such big change, Nokia’s commitment to sustainability remained firm,” Nokia CEO Stephen Elop explains at the beginning of the report. And firm it was, especially in two main areas – helping employees that were directly influenced by Nokia’s massive layoffs and providing people at the base of the pyramid (BoP) with further access to mobile technology.

As part of its restructuring plan, Nokia announced last year the layoffs of more than 10,000 employees to help it face what Elop described as “greater than expected competitive challenges.” Unlike many other companies that took similar painful steps in the last couple of years, Nokia didn’t just say goodbye to all of these employees and wish them all the best in the future, but actually helped them succeed in their next phase of life. The company created the “Bridge program”, which aims to support employees that were laid off and offers a wide range of possibilities, from traditional individual re-employment support to investments that encourage entrepreneurship, re-training and innovation which can also fuel new growth for those communities impacted.

The highest priority of the program, Nokia explains in the report, is the reemployment of Nokia employees, either inside or outside the company, or by promoting the creation of new businesses. In Denmark, for example, thanks to the program, over 20 start-ups were created following Nokia’s announcement to close its facilities there, and the number is growing. In total, the company reports, more than 4,200 employees had participated in the Bridge program by the end of 2011.

It’s important to understand that this is not about philanthropy or even a morality issue, but a clear example of a sustainable capitalism, where risk mitigation and acting responsibly toward stakeholders mix together. Esko Aho, Executive Vice President of Corporate Relations Responsibility explained it:

“We recognized that Nokia’s transformation was going to be a tough call for individuals working for Nokia, for local communities where we were operating, and for the company itself as well. If we are not handling this well, the company itself is going to suffer and our brand will suffer. That’s why we decided that we had to do this in a different way, in a way which creates opportunities as much as possible, and we can mitigate all of the risks related with this transformation. And that whole thinking was based on shared value. The idea that we do things in a way that everyone is able to win.”

One of the pillars of Nokia’s efforts to regain its position is the mobile market is its focus on bringing Internet and information to the next billion people. This is a good example of shared value – the company believes on one hand that “access to communication and information has huge benefits for people, and by connecting the next billion to the Internet and information…we can bring those benefits to the ever-increasing number of people worldwide.” On the other hand, this low-end global market, or the BoP, is also a business opportunity for the company – it might be easier for Nokia to market its new low-price Asha handsets than its new premium Lumia 900, which is sold in developed markets and is facing a much more challenging competition.

Wouldn’t Nokia be able to figure out the opportunities the BoP offers even if without being a market leader in sustainability? It probably would. You don’t need to be a green rocket scientist to figure it out. The difference is that being a sustainability champion can help Nokia succeed where others might fail. You can find in the report many examples of the efforts Nokia is making to actually improve people’s lives at the BoP rather than just sell them more cell phones. One of them is Nokia Education Delivery, which sends high-quality educational material to mobile phones over mobile networks. Another one is the creation of software that can be adapted and sold to local customers by software developers – in doing so, Nokia is subsidizing the investment required to help those small businesses to grow, while creating a platform for local technology innovation.

The 137-page report (isn’t it time to make it a bit shorter?) provides many more details on the ways Nokia works to maximize the positive enabling effect of its mobile technology on people and planet while minimizing possible negative impact. However you look at it, Nokia has an impressive commitment to sustainability – it will be interesting to learn next year if it managed to leverage this commitment to get back on the track.

[Image credit: Nokia]

Raz Godelnik is the co-founder of Eco-Libris, a green company working to green up the book industry in the digital age. He is an adjunct faculty at the University of Delaware’s Department of Business Administration, CUNY and the New School, teaching courses in green business and new product development.

Raz Godelnik

Raz Godelnik is an Assistant Professor and the Co-Director of the MS in Strategic Design & Management program at Parsons School of Design in New York. Currently, his research projects focus on the impact of the sharing economy on traditional business, the sharing economy and cities’ resilience, the future of design thinking, and the integration of sustainability into Millennials’ lifestyles. Raz is the co-founder of two green startups – Hemper Jeans and Eco-Libris and holds an MBA from Tel Aviv University.

Leave a Reply