CASE STUDY: NOKIA

Abstract

For some years, Nokia, with its headquarters in Finland, has been shifting towards e-HR, based fundamentally on a succ_
essful e-business model and its own enabling technologies.The evolutionary approach now comprises an HR intranet, expert platforms for HR processes, shared services and e-learning centres, though full implementation is expected to take approximately two more years. Nokia’s ultimate vision is to put self-service, personal choice and responsibility into an individual’s or manager’s hands. This case study details: ? the context within which e-HR is evolving and how it connects to the Nokia business model, values and culture ? how e-HR works in practice from the point of view of HR managers/pra_
ctitioners ? the e-HR model’s elements, along with some applications for internal customers ? the functional impacts of e-HR, especially on mindsets, roles and working practices. Insights are provided by the director, HR communications, Nokia, who has experienced significant technological change in her function and the business. Strategic/operational issues are reviewed, along with the need to balance dilemmas that technology can bring.

Context

Nokia, with three divisions for networks, mobile and ventures, epitomizes the e-business. In deploying its own voice, web and network technologies, it has become a virtual, matrixed organization with around 60,000 employees and a 24-hour global reach. Sales are generated from over 130 countries, R&D is represented in 14 countries and there are manufacturing faciliti_
es in ten. Operationally, the business is run, literally, through webs of interconnecting networks established for specialist/t_
echnical purposes, from production to customer segments and support functions like HR. Speed, interconnectivity, scalabi_
lity and continuous change are critical success factors, but the glue behind these virtual networks is culture. It is called The Nokia Way – strong values, attitudes and behaviours bind a dispersed workforce and form HR’s central purpose. Most of what its worldwide practitioners do aligns to these key words in some way, including e-HR developments.The values are simply stated: ? customer satisfaction ? respect for the individual ? achievement ? continuous learning.

Appreciably in this type of company, e-HR is multi-faceted.The ‘model’ being built is an internally designed HR intranet called the HR Jazz Café, with features such as Ask HR for employee communications, expert platforms for each core HR process, a shared services facility to administer HR transactions, and e-learning centres. Designing this approach is involving a complete rethinking of HR processes which tended to be ill-defined and duplicating. And by doing so, clearly configured processes will enable HR to measure the success of what it delivers – and, therefore, the effect of HR inve_
stments. Since HR operations attempt to mirror the Nokia business model, based as it is on customer relationships management and sourcing expertise for them as and when required, the final element of e-HR is the creation of an international network of HR business partners, deployed through the three divisions and geographic regions. As they are released from formerly time-consuming transactional work, they will be able to provide line management with increasing levels of strategic HR support. Lynn Rutter, director, HR communications at Nokia’s head office explains: “Our e-HR capabilities are not simply systems-related or driven.They are tied unequivocally to business issues, but should the cap_
abilities become peripheral at any time, they have no place in the organization. If HR cannot work this way, we don’t have a business.” Clearly, she adds, there are implications for a lean, global function. Practitioners will have to understand the business and its products, become skilled in managing relationships, act as customer-focused consultants and try to serve as a bridge across the organization’s specialist platforms. Most of all, HR people have to be ‘e-literate’: “HR staff will have to pioneer for the function’s own purposes the very technologies that Nokia is developing because we are remotely located and always on the move.WAP technologies will enable us to be accessible anywhere because people demand quick responses and instant information to make decisions.You could say we’ll be able to do HR over the phone.This will be a shock for many HR generalists used to traditional systems, but global companies nowadays simply cannot afford to have unwieldy HR functions.”

e-HR in Practice

Nokia’s approach to e-HR connects to HR strategy and core processes and is guided by an executive project team under Hallstein Moerk, senior vice president, HR. Permanently assigned on a part-time basis, the ongoing agenda is to continuously review process integration and standardization around e-HR platforms and e-HR possibilities.The team’s work is ongoing since some innovations are still embryonic and will take time to introduce more widely. Historically, HR processes have differed immensely across business divisions and territories. For instance, in any country where Nokia had significant presence, it was not uncommon to have five separate payroll systems, provided by different vendors. Process rationalization and technological innovation is now helping to build one centralized HR information system and a helpline through the shared services unit. Says Rutter: “In this aspect of e-HR, we are beginning to achieve more systematic delivery and consistent quality. Apart from our own technologies driving developments, reduced costs and efficiencies have proved to be significant drivers.This brings us to the point where we will be able to start delivering value to the business.” However, she is keen to add a caveat to systems integration. Although overall HR strategy and policy are determined at corporate HR level and communicated through web means for local implementation, operating as a global company in so many countries raises cultural and legislative considerations: “It’s very difficult to try to impose the same systems on everyone. One of the benefits of working with a Finnish company is that they tend to be more aware of the need for true diversity than traditional organizations might be.” In giving a snapshot of how e-HR works in practice, Rutter explains that her official base is in the UK, with her boss in Finland and key contacts all over the world, interconnected as parts of global process teams.They constantly stay in touch with each other as Rutter explains: “In the not so distant past, it used to take a week to get a letter out and then another week to receive the reply. Now I can deal with Australia at the beginning of my workday, Brazil and the United States at the end, and anywhere else in between, constrained only by time zones. I have complete exchanges of correspondence in a matter of hours. My own vision is to have access to several databases for information, be involved in working groups, or sit in an airport lounge or the local park with a web-based training course on my WAP phone. Scenarios like these will enable most HR practitioners to manage and control their own working lives through technology.” That said, she comments that people cannot continue to work longer hours to cope – they have to use the ‘off’ button and learn to work smarter: “If we are able to update our own addresses with one piece of technology, it has the potential to be done instantly.This eliminates the frustration often resulting from the old method when people had to phone someone in HR. They may or may not have been in the office and there was no guarantee that action had been taken.” As another example down the line, so to speak, an HR manager in India will not have the time to chase sources of HR information or amendments to policies and regulations from traditional systems. So, access to one web address will have to provide these requirements, plus a discussion page for feedback or queries. Increasingly then, globalization and effective working are emerging as drivers of e-HR change. Rutter adds: “Considering Nokia’s technological leadership, it would be ridiculous to send

out bits of paper from HR.The function must be seen to be shifting towards world class performance in these areas if it is to have any credibility in the industry, and internally.”

Prospective employees and staff themselves are impacting on e-HR developments too. She notes that it would not be appropriate for HR to be at a trade fair and ask potential recruits to fill out an application form by hand, nor for the annual climate survey to be shipped in boxes worldwide for completion by ballpoint pen. Nokia people expect and, in some cases, will even demand web-based working. For instance, with on-line surveys, employees should be able to get responses quickly, access reports in a matter of days and ideally, print their own copies from a web source.

Internal Customer Applications

Broadly speaking for internal customers – employees, team leaders, line managers and senior management – e-HR provision is emerging as a mix of self-service, shared services and strategic partnering under the umbrella of an e-HR organization. And, following the thinking of HR guru Dave Ulrich, the HR emphasis is shifting to deliverables not ‘do-ables’.This approach is not perceived as a loose collection of initiatives or system developments but more of an electronic operating model. Nokia has e-HR elements for all core HR processes – resourcing, compensation/benefits, performance management, learning and development, workforce planning and employee relationships. As such, the company is evolving towards a ‘total e-HR solutions’ model which will take some years to realize. For example, a recent innovation is to improve the twice-a-year, paper-based performance management and review process with an electronic version in 2001, which is currently being trialled. It will comprise elements such as webenabled appraisal, skill evaluations, career mapping, personal development paths and learning opportunities.The idea is to support the more functional aspects of performance management by technology, but not lose sight of the importance of personal interaction and face-to-face feedback in reviews. Says Rutter: “The new system will help managers link and communicate an individual’s, their own and their unit’s objectives to business strategy more effectively by giving them access to real-time information. For employees, access to skill databases, as one benefit, will help them identify appropriate courses in relation to their personal objectives. But, we will always have to rely on personal interactions and relationships. It is, after all, an attribute of Finnish culture to establish relationships first and then build-in the electronics.” This perspective of balancing relationships and electronics applies to learning and development and specifically e-learning opportunities. Nokia has five regional learning centres – two in Europe, with the others in Asia-Pacific, China and Americas – which provide a mix of conventional and e-enabled opportunities, based around personal choice and guidance from an individual’s team leader or boss.

This way, Rutter suggests, power and authority is in the hands of employees and managers because they can easily access information, check availability, sign up for a course and work through programmes, all on-line. In this scenario, HR functions, such as collecting paper lists of people’s training needs, which are then analyzed by a relatively remote practitioner, are a thing of the past. “Personal interaction is still important, of course, so actually attending training courses will probably never disappear completely. But, the e-learning issue for HR is to develop more coaching skills, interactive systems and userbiased programmes that save people having to fly miles to sit in a classroom somewhere.” Recruitment is emerging as an e-HR strength at Nokia. By accessing the corporate website, people can file their CV and complete applications on-line. They are clearly guided on how to do this, supported by a dedicated careers portal, a helpline or by e-mailing HR direct. Personal details go straight into a global recruitment database which Nokia hiring managers scan.There is also an automatic matching system between CV details and current openings anywhere in the world. This enables HR to avoid the traditional procedure of putting an HR person between an applicant and the hiring manager when sourcing applications and shortlisting, since the manager is sent an e-mail every time a potential candidate with the skills he or she requires comes onto the database. HR input is confined to the ‘human angle’ of assessing the applicant’s interpersonal skills as technical abilities will have been evaluated by the manager concerned. Rutter explains: “From an HR perspective, the function learns to work smarter this way. I may receive a CV from an applicant and while not my top candidate, they may be a close second. I can’t then e-mail or fax the details to every Nokia HR manager across the world on the off chance there may be another vacancy – yet the database will enable this. So, building the centralized system and global access over time is not just desirable, it will be absolutely essential.”

Functional Impacts

As indicated above, e-HR developments have brought changes to the HR function at Nokia.While emphasizing that HR should not lose its human face or interpersonal skills, Rutter believes technology creates the need for different skills as people shift from administrative work to the service delivery model and more business-focused ‘products’. From experience, she notes that some imbalance between remote service and personal interaction is inevitable. HR staff are often considered as ‘faceless’ people at the end of a telephone and, if employee expectations are high, there will always be some frustration because of a lack of personal contact: “However, if expectations are changed through better quality self-service, frustration is reduced and HR professionals will be able to concentrate on providing an efficient, highly-skilled service and strong relationship

management which is what the business requires. I have also experienced a certain amount of nervousness in the HR function about future roles. People sometimes wonder if they will become redundant with line managers and employees being given the empowering tool of self-service.What we are trying to convey is that HR will have even more important and valuable roles to play beyond the purely administrative one that some professionals have positioned themselves for in the past.”

Rutter adds that changing HR’s role will only be successful if internal customers accept it. At Nokia, where people are very technology-minded, staff are embracing the use of computers and mobile telephones as a way of working, so they will tend to accept that HR is changing too: “But, some reservations still exist, so getting people to buy into the change may require some marketing by HR. Part of HR’s work is to identify and explain who does what in the organization and I suspect that not enough companies do this effectively.They try to measure satisfaction from line managers or staff about HR services, but they don’t actually contract with these internal customers about the deliverables and what exactly the HR role involves.” There is also the issue of the mindset of HR people themselves, considering the shift from HR generalists in a more conventional function towards rethinking roles and taking on more specialist work. Rutter says: “The HR vision of having services delivered as a consultant or expert provider is very different from previous work, requiring professionals to develop indepth specialisms over time rather than trying to handle everything as in the past. Unfortunately, some HR staff may see this as a loss of power.They find it difficult to accept and adapt to the fact that they might have to buy specialist services from other people within, or external to, the organization if they cannot be provided themselves.”

Balancing the Issues

Rutter takes the view that, for most companies, the shift towards e-HR is still in its infancy, especially since technologies are still being developed, and not everyone has access to them. Hence the use of the word ‘embryonic’ to describe Nokia’s own e-HR evolution. So, major changes to most people’s working patterns, preferences and work-life balance probably will not happen quickly. Comments Rutter: “In the short term, technologies can be quite threatening, as people feel overwhelmed by all the possibilities and changes. Many are being driven by them rather than using those possibilities to control their work and lifestyle.” Technology brings ‘pain’ for most organizations during the set-up stage, she believes.This requires considerable input from HR people to plan, design and implement systems more effectively and to determine how each part of the system works:

“There always seems to be this short-term pain barrier of more work before you get to the stage of better quality of work. If the data isn’t there in the first place, you can’t ask people to update it, so there’s much to be done in terms of verifying, updating, designing and accessing information at the outset.”

Accepting technological change also requires confidence from HR. All too often, HR complains that no one tells them anything, they are not involved in the business decision-making process, or they do not know what the corporate strategy is. In this respect, the web helps enormously, Rutter says, not only for communicating HR information, but also more general business information: “There’s no excuse for anyone in Nokia not to know what the annual report says, or what the strategic intent of the company is.They’re all available on the web, so HR must not fall into the trap of becoming isolationist by accessing only HR-related information.The function also has an obligation to build company knowledge by using the technology that is available to us. “I am always appalled when I see HR people who have no idea about the corporate environment in which they are operating.This information is freely available to external parties on the web, yet the company’s own people are not making use of it. I believe in e-HR, the technologies that go with it and the applications. But as an HR manager, my main concern is how it affects our people. If I were to be given one wish, I would like to see it all working overnight. If we could get everyone past the next two years of implementation and the necessary changes to their mindsets, then I’d click my fingers and do it tomorrow.”