Elop Musnt' be Named Microsoft CEO

Can Stephen Elop still forcefully defend himself against accusations he was a “Trojan Horse” moved by Microsoft Corp. inside Nokia Corp. to deliver the Finnish mobile equipment manufacturer to Redmond, Wash.? I am not a conspiracy theorist but I didn’t accept the Nokia CEO’s defense the first time he offered them in February, 2011 and they sound even less believable now that he has engineered the sale of the company’s “devices and services business” to Microsoft. (See: Nokia CEO Defends Microsoft Deal: ‘I’m Not a Trojan Horse’.)

I wrote the report referenced above in 2011 for another website and concluded as follows: “Nokia’s future is murky; for Elop there’s always Microsoft.” Just as I predicted in a follow-up report -- The Nokia Era Is Over – Nokia had tripped badly in previous years by not anticipating the growth of the smartphone market and Microsoft was right to purchase its mobile handset business but Elop’s role in the entire transaction is unsavory and neither he nor Microsoft will ever be able to convince many that his goal from the beginning wasn’t to hand Nokia over to his former employer.

This is why I believe Microsoft should remove Elop from consideration as replacement for CEO Steven Ballmer when he retires as expected in one year. Even though I had previously argued that Microsoft should buy Nokia – and still believe it is a good move by Microsoft – Elop’s involvement raises numerous ethical questions that both companies should not ignore. If I was a Nokia investor I would be seriously considering suing Elop for violating his fiduciary duties to the company with some of the strategic actions taken that led Nokia further down an already slippery slope.

So far, the coverage of the latest Microsoft-Nokia deal has focused on whether it represents a smart or dumb move on the part of both enterprises but there are deeper questions that investors and regulators should ask. When Stephen Elop moved from Microsoft to the position of CEO at Nokia in September 2010 he was tasked with rejuvenating the company and moving it back to the top of the mobile handset market.

The opposite happened. True, Nokia had lost grounds in the smartphone market to Apple Inc., the newcomer to the mobile handset market, and companies like Samsung and HTC but it was still a leader in the industry. Elop made several strategic moves that, in my opinion, dug a deeper hole under Nokia and made it extremely difficult for the company to recover its footing. The decision to shutter Symbian, Nokia’s operating system, and instead embrace Microsoft’s Windows OS gave rivals the opportunity to advance their agenda at the expense of the Finnish company. Customers fled in droves and telecommunication services providers stepped aside, waiting until the company resolved its identity crisis.

In previous articles (see links below), I argued that Elop’s actions would not resolve Nokia’s problems and instead would exacerbate them by plunging the company into an identity crisis. It seemed to me Elop was a Trojan horse used to further weaken Nokia to facilitate the sale to Microsoft. It’s difficult to dispute that conclusion considering the current development. As part of the transaction, Microsoft will inherit a slate of Nokia executives, including Elop, who is now considered a potential replacement for Ballmer.

There’s something unseemly about this. Conspiracy theories bother me because they can be groundless but the appearance of shenanigans in corporate boardrooms can only fuel such beliefs. In the case of Microsoft, Nokia and Elop several questions pinch the mind. Why, for instance, did Ballmer unexpectedly announce his retirement one year from now just weeks before Microsoft reported it would buy Nokia; why is Elop returning to Nokia rather than staying at the company he was hired to revamp; what is the record of his achievement at Nokia that justifies his being retained by either company and; what exactly will he now do at Microsoft to make the company a stronger player in the mobile handset market that he wasn’t able to achieve at Nokia?

Finally – back to the conspiracy angle – can Microsoft and Elop really convince skeptics this man wasn’t thinking of his likely return (triumphantly) to Redmond even while he seemingly tried to lead Nokia out of its morass in Espoo, Finland? In other words, wasn’t he truly a modern-day Trojan horse?