Nokia: Is "burning platform" memo a Ratners' moment?
Today's coverage of the leaked memo from Nokia boss Stephen Elop ("We...are standing on a 'burning platform,' and we must decide how we are going to change our behaviour,") reminds me of the story of Gerald Ratner, former head of the British jewellery chain Ratners. The Ratner Group, which laid no claim to being at the high-end of jewellery retailing, was apparently well liked by the British public and the stores had a place in every high street. That was until Gerald make a joking comment in a speech to the Institute of Directors in 1991:
"We also do cut-glass sherry decanters complete with six glasses on a silver-plated tray that your butler can serve you drinks on, all for £4.95. People say, 'How can you sell this for such a low price?'. I say, because it's totally crap." He then went on to compound the gaffe by joking that some of Ratner's earrings were "cheaper than a Marks & Spencer prawn sandwich but probably wouldn't last as long."
Immediately after this speech the value of Ratners Group plunged by £500m and nearly led to the collapse of the company. Ratner himself resigned later in 1992 and the company changed its name to Signet in 1993.
Mr. Elop's memo was clearly no joke and was intended in all seriousness, but I cannot imagine it will do much good for Nokia except as a kick-in-the-pants wakeup. At least the share price is bearing up today.