Poor Financial Results Usher in Quick Management Changes

Nokia NOK (NYSE) the once indomitable Finnish based wireless phone company just announced some management changes. Nokia who has found itself with an uphill battle in today’s smartphone era is battling Apple and many of the others. So far, its results have been nothing to brag about. In a story hat appeared on Newsvine,

The company said Timo Ihamuotila, head of global sales, will replace Rick Simonson as the chief financial officer on Nov. 1. Simonson will head the mobile phones sector in the devices unit.

Simonson has been CFO since 2004 and will continue to be on the executive board, Chief Executive Officer Olli-Pekka Kallasvuo said.

“After six successful years as CFO, it is great to have Rick move to such an important operational role,” Kallasvuo said. “Rick Simonson’s deep knowledge of the business and its financials will be valuable

for the significant part mobile phones play in Nokia’s business.”

These changes are surely not the end of the problems facing the company.

For more:

Barrons Tech Trader

Wall Street Journal

Bloomberg

BusinessWeek

Recommended Reading - Sir Stuart Rose reshuffles his team at Marks and; Spencer, Times Online

Marcus Leroux wrote a story in the U.K.’s Times Online that examined the dramatic management changes Sir Stuart Rose, the head of troubled retailer Marks and Spencer, has taken to try and turn the retailer around.

The M&S executive chairman effectively promoted two of his lieutenants and announced the imminent departure of a third, as part of measures that he said would accelerate a change in fortunes for the 125-year-old retailer.

…The reshuffle came as the company reported a 40 per cent plunge in profits and a 33 per cent cut in the final dividend.

Carl Leaver, who had led the international division, homewares and e-commerce businesses, is to leave by mutual agreement in the next three months, removing another potential successor to Sir Stuart…

… Steve Rowe is to be put in charge of the online business, while Kate Bostock, head of fashion, has been given additional responsibility for homewares.

Ian Dyson, the finance and operations director, is to be placed in overall charge of the latest initiative to reinvigorate the retailer, called Doing The Right Thing…

… The shake-up suggests that Mr Dyson and Ms Bostock have pulled ahead in the race to succeed Sir Stuart. It is understood the retailer would prefer an internal candidate.

If interested in retailing or what executives sometimes do to try and turn things around check out the story. I have discussed Marks and Spencer and its current Executive Chairman, Sir Stuart Rose, for sometime and believe his moves are worth watching.

Recommended Reading - The Smart Execs Leave Before The Fall, TechCrunch

TechCrunch’s Michael Arrington wrote a brief blog today examining what executive exodus’ might mean for a company. He points out,

When a smart, ambitious executive who isn’t the CEO leaves a company, it isn’t necessarily a sign of trouble…

…But when bunches of them leave, watch out. With obvious exceptions, like a sale that results in a lot of liquidity being sloshed around the founder ranks, fleeing talent is an indication that a company is about to go sideways, or worse. There’s a reason why most of Yahoo’s executive talent bailed out in 2007 and 2008. And that’s just a high profile example… 

I refer to this article because it specifically reaffirms a conviction Liberum Research maintains on the importance of monitoring executive changes at companies.  Arrington wrote this piece as a direct consequence of news that a number of top executives were leaving MySpace to start a new company.    The real significance of the story is the importance that management change could mean for a company.  Check it out for yourself. 

Motorola Continues to Re-shape Management

Motorola continues to re-shape its management team and the direction of the firm. Greg Brown the new CEO appointed back in October 2007 has continued his efforts to develop a new management team and overall strategy. Just today more executive changes came to light. According to a piece by Douglas McIntyre in Bloggingstocks,

The company (Motorola) is bringing in a private equity executive to be treasurer. It is also replacing the head of its Europe, Middle East and Africa cell phone operations. According to The Wall Street Journal the company said "the leadership changes are part of an overall plan to swiftly transform the senior executive team."

Motorola has been trying, unsuccessfully, to sell its handset division, probably to a rival like Samsung. It now appears that the firm will have to work its way out of trouble. That means that executives in areas where the company is doing poorly could all be out in the next several months.

It is difficult to assess what all these changes will mean for the company going forward.

For more:

Chicago Tribune
EDN
Wireless Week
CNET News Blog
Endgadget