Creating Culture

While this focus on NSN's culture may seem academic or merely a matter of internal importance, culture had a very real effect on the hard issues of NSN's merger, said Juergen Walter, the former strategy chief for Siemens Communications who headed up NSN's integration planning efforts. NSN's competitors were looking to capitalize on any dysfunction or disorganization in NSN's ranks. Its customers were wary about who their new contacts would be at the combined vendor and whether their products would continue to be supported. Any miscues on defining NSN's internal culture would have had strong repercussions on its operations and external relations, Walter said. Product decisions would be delayed, sales teams would be uncoordinated, and marketing messages would be muddled.

Walter said that a strong indication of NSN's success in internal cultural integration could be seen in how customers reacted when sales and support teams paid them visits. “They couldn't recognize who was a Siemens person and who was a Nokia person,” said Walter, who has since taken over NSN's converged core business. “Of course if there was a Finn or a German in the room, there is a good probability they would know,” he added, laughing. “But if you looked at other regions, dealing with Americans or Latin Americans or Chinese, they just didn't recognize who was from where. That was very important in making our customers comfortable in staying with us.”

HERE AND NOW

More than two years have passed since NSN was formed, and so far its executives feel the cultural integration has been a success. Novak said there are some lingering cultural traits that have taken him by surprise. Text messaging, for instance, was ingrained in Nokia's mobile phone-centric worldview, which led to former Nokia employees using short message service for the most immediate and important communications. Meanwhile if a former Siemens employee had an important message it invariably went through e-mail. The result was an almost comical cross-communication with employees from either background disregarding one another's missives due to their format.

Those are issues easily resolved with time, said Novak, who recently gave up the HR mantle to become head of customer and market operations. The important issue — acceptance of the broader cultural mind-set — has largely been achieved. Employees still identify themselves as ex-Nokia and ex-Siemens, while embracing the overall NSN culture, but that's to be expected, he added.

“It's a good thing,” Novak said. “It shows that both legacy companies have a very strong corporate culture and were able to engage with their people. At the same time it reinforces the need to change, to invest in bringing people over the line into this new entity. It's not just about learning the new, but unlearning the past.”

The fact that NSN was a much smaller company and a much different company than its two parents didn't sit well with some employees, and many of them left. “I would hear, ‘I joined Siemens and that's where my heart is; I'm going back,’” Novak said. The amount of loyalist defections back to Nokia and Siemens wasn't large — certainly not numbering in thousands — but they were substantial enough to have an impact, Novak said.

Those losses, however, had an interesting byproduct: To hire replacements, NSN brought in new people who brought no cultural baggage from Siemens or Nokia. Through redundancy layoffs, attrition and employees returning to the two parents, NSN has lost 10,000 employees since it first emerged in 2007, but it has hired 15,000 new employees, all of whom come into the new NSN culture. A sizable of chunk of NSN's 65,000 employees now only know the culture of NSN, but Novak believes the remainder have either readily made the cultural transition or are firmly in the process.

“There is a very strong rational understanding of the logic of the merger: being part of a company that has an opportunity to become a winner because of scale, being able to fund R&D, being able to pay for channel costs and support all technical fields,” Novak said.

But Novak also hinted at an underlying current of adolescent rebellion against NSN's corporate parents, which is helping to make NSN's culture distinct. “We're trying to create a new company,” he said. “Now we have a possibility to do things the way we think they should be done, instead of the ways our parents told us to do them.”