Editor's Notes: Nokia and Alaska Airlines--a Tale of Two Snow Country-Based Companies

Oct. 3, 2013
Could the contrasting corporate fates of Nokia, the mobile phone manufacturer, and Alaska Airlines, the wildly successful air carrier, say something about the kinds of future-imagining skills that will be needed by those healthcare leaders plunging into population health management? Yes.

The Sept. 2 announcement by the Redmond, Wash.-based Microsoft and the Espoo, Finland-based Nokia that Microsoft was buying Nokia’s handset division as part of a $7.2 billion deal, came as a surprise to many, and forced a lot of people in the IT/telecom/mobility industry to ponder a corporate history filled with advances and defeats. Indeed, one clause in the Sept. 2 acquisition, which eliminated the marketing of mobile devices under the Nokia name, surely caused intense sadness among many Finns, as that country’s once-highest-flying corporation had crashed and burned under the failed leadership of Steven Elop, who was CEO from September 2010 through September 2013).

How did it all come to this for the once-proud Nokia? My mind turned back to my trip to Finland in the year 2000. At the invitation of a physician executive in Helsinki, I traveled to that capital city and interviewed Finnish health system leaders on topics ranging from Finnish healthcare policy to evidence-based medicine, care quality, and hospital-physician alignment. At that time, Nokia was flying very high indeed, and there was a lot of talk of all the “Nokia millionaires” who had invested in the company when it was a start-up and who were now buying lake houses and boats and driving very smart cars. Indeed, between 1996 and 2001, Nokia exploded in growth from 6.5 billion euros to 31 billion euros, and by 1998, it had become the largest mobile phone manufacturer in the world.

Fast-forward to 2013, and the reality is that, despite the amazing early successes of Nokia as a smartphone manufacturer, the company’s reliance on its Symbian operating system, the entry of Apple’s iPhone into the market in 2007, and Nokia’s refusal to switch from its Symbian system to Android, all hurt the company tremendously, with its stock eventually crashing through the floor and being relegated to junk status in June 2012 by Moody’s. Still, Nokia’s alliance with Microsoft has saved it, with Microsoft’s Windows phone operating system powering all of Nokia’s recent smartphone products, though the non-Nokia-branding clause in the agreement was surely a blow for the Finns, so many of whom had invested heavily in the company.

In contrast, Alaska Airlines, the SeaTac, Washington-based air carrier, received glowing coverage in a New York Times Sunday Business story in the March 3 edition of the Times. In contrast to the unfortunate Elop leadership at Nokia, under the leadership of John Kelly in the 1990s, retired pilot Doug Wahto pushed the company forward to develop satellite guidance, “a navigation technique that has transformed landing at Alaska’s tricky airports,” as reporter Jad Mouwad reported. What’s more, Mouwad noted, “Today, Alaska Airlines has the lowest costs among the major carriers… in part because it measures obsessively. The airline has established 50,000 points of data to improve its on-time performance.”

For both of these snow country-based companies, in different industries, the key challenge has been to anticipate the future; and one has clearly done far better than the other at that.

What about physician-group leaders? HCI's October cover story looks at the immense challenges and opportunities facing physicians in practice, as they try to climb the mountain called population health management. The challenges are myriad, and the solutions, as the leaders who spoke with me have noted, involve an intense interplay between overall strategic and strategic-IT issues.

So which physician organizations will end up with Nokia-type headaches heading into the new healthcare, and which will be Alaska Airlines types? Only time will tell. But skating to where the puck is headed, as they say in snowy lands, surely is going to be a part of any recipe for success going forward.

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