245: Risto Siilasmaa: I realized I was practicing Paranoid Optimism

245: Risto Siilasmaa: I realized I was practicing Paranoid Optimism

Intro: Welcome to the Fast Leader podcast where we uncover the leadership life hacks that help you to experience, breakout performance faster and rocket to success and now here’s your host customer and employee engagement expert and certified emotional intelligence practitioner, Jim Rembach. 

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Jim Rembach:    Okay Fast Leader legion, today I am thrilled because I have somebody on the show today who’s going to talk about something that I think we all can learn from at all levels of an organization from the very top of the largest and even small organization all the way down to the frontline. Risto Siilasma was born and in Helsinki, Finland. He had a younger sister who taught him to manage stress by constantly giving him a hard time. He got acquainted with the first personal computers at school and soon determined that he needed one himself. After working odd jobs he managed to buy a Commodore 64 and learned how to code and become a teenage freelance journalist in the field of IT. He is a founder of F‐Secure Corporation, a Finnish cybersecurity company and served as the President and CEO of the company between 1988‐2006. Since then he has held the position of Chairman of the Board of Directors. He is chairman of the board of directors at Nokia Corporation. He joined the Nokia board in 2008 and became chairman of the board in 2012. Under his tenure Nokia has successfully transformed from the mobile phone manufacturer to a leading communication technology company.

He is also well known as a business angel investing in several technology startups. He is an active contributor in many European and Asian industry associations and public debate and distinguished speaker. His preferred topics are entrepreneurship, leadership and AI or artificial intelligence. He’s also the author of Transforming Nokia: The Power of Paranoid Optimism to Lead through Colossal Change. The book has been translated into several languages. His hobbies include CrossFit coding and studying Chinese. He aims to instill a spirit of entrepreneurship, accountability, openness for change and an appreciation for experimentation into both the society at large as well the companies he works for. He currently lives in Helsinki Finland and is married and has three children. Risto Siilasmaa, are you ready to help us get over the hump?

Risto Siilasmaa:    I’d love to do that.

Jim Rembach:    I’m glad you’re here. Now given my Legion a little about you, but can you tell us what your current passion is so that we can get to know you even better.

Risto Siilasmaa:    Well, my current passion is machine learning because I have experienced myself that as a leader you get to stand in front of an audience and talk about various topics to communicate the company message and oftentimes the topic that I’m talking about is not something I truly understand myself. I’m just like a parrot somebody has created a presentation for me I learn it by heart and I’m fairly convincing in repeating those statements I don’t even know if they are true especially if we talk about something complicated. Oftentimes leaders lose the ability to go back to school. And we don’t only lose the ability we lose the desire either because we feel that we are so high on the value chain and we don’t need to anymore so we delegate learning to others. Or we are afraid that will reveal how stupid we are. We’ll, reveal that we don’t know things that people assume we do so we lose the ability to learn. And I was doing that for machine learning is such an important transformational technology. So I was trying to encourage others to learn it and to use it for the company’s benefit without understanding. 

So then I woke up I had this entrepreneurial awakening and realized that I don’t need to have others do it I can do it myself. I started coding again after a break of 30 years and started doing different machine learning models and that has been so much fun. Maybe that’s the number one passion that I have at the moment.

Jim Rembach:    Well, as you’re explaining and talking about the passion and I start thinking about what you wrote about and really what you lived with Nokia as well as going back to you starting F-secure, which is a cybersecurity company that you’re chairman of as well, is that you have the ability to really focus in on doing what is necessary. Even in the book you talk about F-secure having to clean the restrooms whenever you need it to and you’re not afraid to do that. Also when you start thinking about bringing that to a larger organization you weren’t necessarily caught up in something that you talked about which is a toxicity of success. I think all of us at all different levels of an organization can really fall into the trap of that toxicity of success. I think it’s important that we talk about, what is that?

Risto Siilasmaa:    Well, first of all I’m poisoned by as well and I don’t always realize what I’m doing wrong but I try to stop and sort of think about the wider picture, am I doing the right things? Am I thinking about the right topics? Am I thinking about those in the right way? And sometimes I see the light sometimes I don’t and with machine learning I’m very happy about going back to school. Actually encouraging a lot of our employees to start studying I’ve had so many conversations where people come to me, engineers, they are ashamed that their chairman knows more about their profession than they do and then they tell me that they’re spending nights and weekends study and that’s really music to my ears because that’s a cultural change. For the chairman to do something the chairman usually don’t do it wakes people up. And that’s a very powerful leadership action to do something that you’re not supposed to do. 

Toxicity of success means every time you feel that you are successful you have accomplished something especially if others tell you that it changes you. And that changes an insidious incremental change it’s like boiling frogs they don’t realize that the water is getting hotter and we don’t realize that we are being changed by the success that is attributed to us. Maybe deep inside we realize that it’s not you do my actions that we are successful but typically the face of the company, the CEO, is always given all the credit. Oftentimes it’s the predecessor who started things going in the right direction. Therefore the praise that you get the feeling that I’m not worthy but still I want to believe that leads you do you become afraid that you’ll be revealed so you may become less prone to taking risks less prone to experimentation more set on your ways because what used to work should still work. And I don’t know any other way and I don’t dare experiment because I might reveal that I’m not certain of what we do. So many powerful leaders have failed because of the toxicity of their own success. Many others are afraid of the change or they are aware of the change and therefore they can resist it and they can retain their desire to learn an experiment. The flexibility that is such an essential part of all leaders.

Jim Rembach:    Well, as you’re talking I start thinking about going through some of the transformations that was required and in the book you talk about just the history at the time and what was happening, there’s launches of competitors when you start talking about the device of business that Nokia was in at the time you start referring to also the economic climate, we’re talking about back in 2008 and how that was just had some global impacts, there was some significant changes. You had even said, I heard you mentioned before is that when you have a culture that doesn’t have some of the things that you’re talking about that are so critically important you either have to change the organization or you’re changing the people within the organization. When you start talking about the legacy aspects of that toxicity of success how many of those people do you have to get rid of you might ask and I think it’s important to talk about where you are now in Nokia in regards to how many employees are badged as Nokia employees versus what it used to be? 

Risto Siilasmaa:    Well, you don’t need to change the people because the people are bad. You just need to wake them up. And you can wake them up in many different ways. Typically explain to them what the problem is, what are we doing wrong? What will happen if we don’t change? And you need to tell them, in what way do we need to change? What would be good behavior? And then you need to start taking action. You need to lead from the front you need to show symbols of changing yourself and doing your part. 

I remember a story about a new CEO coming to a company that had an actual physical rule book and everybody in the company hated that book. They hated it from the bottom of their hearts. And this CEO learnt about that hatred and he wanted to change the way the company operated. So he took the book went into the parking lot where he had a big barrel, sort of named the old barrel, and he burnt the book in that barrel and it was videoed and translated to all the employees. It was such a powerful symbol to everybody, see I wanted to change the old behavior and there was no book anymore. But of course the leadership often is fairly ingrained in their old ways and you may need to change at least individuals at the top you ought to send a message that we are serious as well as to get people in who naturally believe in the new way of operating who leave that culture automatically they don’t have to learn it they leave it already. 

Jim Rembach:    To me and I think what you’re talking about going back and connecting it with the book and it’s part of the subtitle is you’re talking about really implementing a framework that you call paranoid optimism. Now, for me when I first saw paranoid optimism and I just really focusing in on the first word which means paranoid for most people they freaked out or freeze but that’s not what you’re talking about. Can you explain a little bit about what paranoid optimism means because I think all of us going back to what I had said previously is that we can learn that at all levels. 

Risto Siilasmaa:    Yeah, having been an entrepreneur for well since I was 22 and I of course faced a lot of challenges and made a lot of mistakes and failed time after time. After about 15 years of being a CEO and growing up to be a CEO I finally realized that actually need to stop and think about how do I lead and how do I want to lead? What has worked for me and what hasn’t worked for me? And I realized that the way I had somehow learned to think is best expressed by those words paranoid optimism. I believe that that’s part of entrepreneurship it’s part of the feeling of ownership and accountability for everything the company does. The founder of a company can never hide we cannot run away because we are accountable. If we didn’t decide something ourselves at least we recruited the people who decided that or we recruited the people who recruited the people who decided that, we are accountable. Therefore we can when we see a problem somewhere anywhere we can tackle that we feel that it’s our responsibility. And in order to preempt these challenges you need to think, what can go wrong? And when you think about what can go wrong you can take action to prevent it. And that actually leads you to be optimistic. I have seen the width of the different alternatives that face to come and I’m prepared we are prepared we know what to do to prevent the bad ones and execute the ones that we want to happen. So basically, what I’m talking about is scenario planning paranoid optimism is automatically leads to scenario planning. 

In the kind of marketplace where most companies are at the moment it’s a combination of complexity something that is unpredictable and very, very complicated. When things are unpredictable you just cannot have a single plan you have to have multiple plans because you don’t know what will happen and because it’s complicated you need to plan ahead. So somehow you need to combine the stability to plan because you don’t know and the fact that if it’s sufficiently complicated and you don’t have a plan you will not succeed, therefore, scenario planning and that’s paranoid optimism for me. It starts from the sense of ownership which leads you to think about what bad can happen. You preempt those you think, what do I want to happen? You work to make that happen. And therefore you sort of have a map in front of you where you have different paths through the future. Some of those paths are not great some of them lead to a disaster some of them are really, really good. And every day you can look at you forward-looking indicators and try to figure out on which path are you. When you feel that there’s sort of a probability cloud which you can shape because every action you take will have an impact on those probabilities and you want to shift them as much as possible towards the good paths and as much as possible away from the negative paths.

Jim Rembach:    One of the core elements and characteristics in emotional intelligence is called perspective-taking and I think that’s what you’re talking about is taking a different perspectives that aren’t the most ideal because we have to deal with them and people call it a VUCA world with a lot of uncertainty and all of that, volatility. But when I start thinking about that whole particular process because I’ve been involved with some of that sometimes in certain people they’ll just continue to scenario base and do what ifs what ifs what ifs what ifs what ifs and it’s like it never ends. It’s like, okay, we kind of have to start stop this creative thinking process because it’s just going way on too long and we have to start actually executing because one of the biggest problems in organizations is really execution getting things done. So how do you actually put some parameters on that whole scenario-based component so that you’re just not doing that and never taking action?

Risto Siilasmaa:    Well, the idea is that you take action every day. If there’s a scenario at that to which you cannot come up with good actions and it’s not a good scenario it’s not a real scenario. Let’s take an example, back in the days when the iPhone was new and Android was just coming to the market and Nokia Symbian ecosystem was going down the drain under the pressure of the iPhone mostly but also Android devices and we were wondering what can we do and we had partnered with Microsoft on the Windows phone in an exclusive relationship our market share remained very, very low and we couldn’t really see Windows phone winning against Android and iPhone. So what are the scenarios that could happen? Microsoft had announced that they want to become a devices and services company. So maybe they wanted to start making their own smartphones that was a scenario a disastrous scenario for Nokia because we had an exclusive relationship with Microsoft and if they become our competitor we would still have an exclusive relationship with them and we couldn’t get out of that relationship. So how could Microsoft start making mobile phones or smartphones? They could acquire somebody. Okay, who could they acquire? They could acquire HTC. So how do we know if they are in the process of acquiring? What can we do? We can talk to the investment bankers who often slip something by. We can go and meet with the HTC CEO not asking him whether he is in discussions with Microsoft but exploring strategic partnerships exploring if there’s some way we can do more with them and we can sense if there’s something going on. Just as an example down a tree of multiple scenarios we end up at a sort of a leaf in that tree which is HTC and Microsoft. 

What actions can we take? Well we can go and meet the CEO. We can talk to investment bankers. We can put our feelers out at least something we can do. And then of course we can plan ahead if they would decide to announce such an acquisition, what would we do? We would sue Microsoft so let’s do a study in advance based on what could we sue them. And maybe we can even do some preparatory work in order to sue them the same day they announce we are not caught by surprise. It’s not under our control where the Microsoft buys HTC or not we can try to influence it but in the end those two companies will make their own decisions. So almost anything you think about you can dress up in scenarios and it soon becomes a tree but you don’t want it to become a hedge cause then it’s just too much work to do and you get buried under the different scenarios. And that’s of course the typical challenge where you have to find the balance and there’s no one way of doing that you just have to figure out your own way in your own situation how many scenarios is reasonable. 

Jim Rembach:    Talking about the whole scenario components and I think it’s a tactic that I think is critically important that again all of us at all levels could really focus in on. You talked about three questions that reveal the right facts, are we discussing the right things? Because when we start looking at the scenario components, thinking about just own internal meetings I think we can always start asking these questions. And they are, are we discussing the right things? Are we discussing the right things in the right way? And are we comfortable challenging the leaders opinions? There’s several components in the book and you finally start talking about it is this trust element and having that freedom and security and not feeling like there’s going to be  repercussions when you actually do all of that challenging and so some of those values and components have to be there. And you talk about that in entrepreneurial leadership and there’s 10 things that you talk about, we’ll get to that in a second, but when you start talking about these three questions to me it’s not just that you’re asking them internally I think you’re also kind of taking that outside the organization and starting getting to the customer start getting to maybe suppliers and you’re continually asking those types of questions to see if you’re focusing on the right things which will feed the scenario based planning. So when you start looking at those three questions would you do something different when I start thinking about those forward thinking indicators and where we’re going? And how would that particularly change or it still be the same thing for everyone? 

Risto Siilasmaa:    I think those three questions work really well if you’re a new leader in a new situation. I’d say you’re hired as the CEO you’re hired as a project manager in a company you haven’t worked for before. And you get to your team and you want to know whether the team culture is a good one. So you observe in your own team also in your manager’s team as part of a department leadership team or the company leadership team. And you want to ask yourself those three questions, are we talking about the right topics? Is there something that we are missing? Are we only talking about a single plan without any alternatives? Are we at all thinking about how things could go wrong? Are we just optimists and not at all paranoid? And then you want to think about are we talking about things in the right way? Therefore is it okay to challenge others with respect? Is it okay to voice concerns? Is it okay to for example ask the team, hey, what’s the big thing we will miss next? Most technology companies have missed a big generational shift at some time. Nokia definitely has and it almost killed the company. 

Just half a year ago our new head of mobile networks sent not an email but a social media message in the company social media platform to all employees asking them, what’s the next big thing we will miss? And I think asking such a question is a great cultural message it means that the leaders can ask questions about failing of course, in order to prevent that failure. 

The third one can we challenge the leader? If we can’t then we have an Emperor without clothes at this possibly because when the leader starts failing we will not be able to challenge the leader. It’s better to start challenging the leader under good times because then it will not be such a surprise when the leader is challenged during bad times, we will learn how to do that with respect and probably we prevent from those bad times from happening.

Jim Rembach:    What you’re talking about there as you mentioned in the book something about the shattering complacency and that is we always have to be unsettled to a certain degree. I think ultimately from a cultural perspective and you’ve kind of said this yourself is it you’re creating a culture of continuous learning it never ends it’s a daily element. For you when you even start talking about going back and learning into code oftentimes when you start even thinking about like for example the differences between machine learning and AI those are two different things but oftentimes they get lumped together if you don’t know that and you’re talking about that in a modern business environment like you said you could have a whole lot of trust issues that result because you don’t quite know. So that learning component and humility are critical core values that today’s organization must have otherwise they fall into that same toxicity of success and comes a never ending cycle and downward spiral. And in the book you even mentioned and you talked about rim and all of them that essentially just went away because they could not break the cycle, the downward spiral. But again I think we’re talking about—and in the book I see it over and over that you’re really talking about building high-performing teams and I had the opportunity to have Douglas Gerber on the show, he’s episode 223, talks about measuring your opportunities to be able to build that high-performing team. If  I’m talking about building the high-performing teams I think it goes into what you had talked about is that entrepreneurial leadership and that’s why I said I wanted to get to and hit those 10 points because again I think all of us can leverage these things. Now I’m not going to put you on the spot and say name all 10 but I would like to kind of hit on a couple of these. I’m going to read them real quick because I want you to talk about some that are critically important that without fail we have to make sure that we’re executing upon.

You talk about holding yourself accountable, facing facts, being persistent, managing risks, be a learning addict, maintain an unwavering focus, look to the horizon, build a team of people you like in respect, ask why and never stop dreaming. Now obviously they’re all important but when you start looking at some that are without fail we must have in your opinion what are they?

Risto Siilasmaa:    At the core of entrepreneurship as I mentioned before is the idea that you are accountable and you can get that feeling of ownership and accountability regardless of the job you hold. As a young teenager while I was coding during the night in the evenings I worked in a butcher’s shop and the team that worked there selling meat to customers and such pride in what they did they wanted to be the best in that. When there was a dirty spot somewhere the first person who saw that clean it up. It was not that I’m here to sell it’s not my job to clean that it’s all hands on deck all the time so that we can have pride in what we do. So that sense of ownership how do you beat that to others? How do you help others to feel that? I’ve often said that in a way a job could be compared to a car. 

Most people don’t wash their rental cars. Why don’t they wash it? Even if they had rented it for two weeks they typically never wash it even if it’s good it’s really dirty because they don’t have that sense of ownership. If it’s your own car you have more of a sense of pride for the car and you take good care of that. For people who think of their job as a rental car I think it is an unfair situation they deserve better the company deserves better and the people deserve better. If you feel that way find a new job something that you feel that pride for and then you can have that sense of ownership and that’s accountability. And the company as well they need to take action in order for as many as possible of their people to feel that sense of ownership. So that’s at the core of everything. Maybe I’ll mention another one from your list which is giving me a lot of trouble and that’s partially about the trust that permeate and that has to permeate everything but it’s about hiring a team that you genuinely like and respect. 

There are so many very, very successful tech companies where the top leader is not a nice person we all know many examples and some of our most respected tech leaders exhibit this behavior and it bothers me deeply. I sort of have to believe that you can be more successful if you take good care of your people. If you are not prone to getting really angry really quickly without reason without cause if you treat people with respect you need to always have respect for your people in order to create trust and that sense of camaraderie. I struggle with what’s going on in this industry and maybe you have some consolation for me maybe you can explain how come? But I have to believe that being a good leader in the way that I define good leadership actually increases the probability for your business to be truly successful. 

Jim Rembach:    For me I think what you had said a while back in this interview is critically important then you talked about leading and modeling from up front. I think if you start looking at people who are in positions of power that you know aren’t really focusing in on the employee experience and the human experience internally ultimately are going to pay the price because it’s going to affect the external experience that’s one of the things that we talk about a lot. Things take care of themselves in the world ultimately rights itself. Sometimes it just takes a little while but those companies will have the same downward spiral because they do have that toxic environment and nature just kind of weeds those out after a while because they become less agile, less adaptable and it’s what you even talk about in the book to me it was all. Like you said sometimes it was the environment I was in I’m not really that type of person but I’m stuck in it and really when they get the opportunity those people they become your champions in the transformation. 

Risto Siilasmaa:     They sort of become your environment.

Jim Rembach:    Absolutely. I know I’m a victim that I tell my kids that all the time and so that’s why I said, am I going to essentially tell you who your friends or supposed to be? Yes I will because I know it’s going to impact your behavior. You’ve actually shared a lot of your stories, and on the show we talked about getting over the hump and you actually get three or more and so I appreciate you telling those stories. The book is actually loaded with a lot of situations that you came across that you had to do things differently and you therefore got over the hump and obviously it became a positive outcome as a whole because now Nokia is really leading the way in in 5G infrastructure and what we’re going to be seeing as a huge impact and effect to our lives with the Internet and things and all of that. I know that you’re going to continue to have significant amounts of success. But when we start going through all of this one of the things that we need is that inspiration in order to have some of the resilience and transformation. One the show one of the things that we like to focus in on are quotes. So is there a quote or two that you like that you can share?

Risto Siilasmaa:    One of my favorite quotes in my opinion defines entrepreneurship in a perfect way and the quote goes something like this, there are those among us who see things as they are and they ask why and there are those that dream of things that never where and ask why not. In that first part people who observe the environment they ask why they are curious they’re like scientists they want to understand how things work. But then people who dream of things that never where and ask, hey, why not? They are entrepreneurs they change things they build things that never where. I think that’s a beautifully said and a great definition for entrepreneurship even if it was not originally meant that way.

Jim Rembach:    I think that’s a great and really value statement when you start thinking about it. Also when I start looking at where you are and things that you’re doing with coding you talked about machine learning, I know artificial intelligence is also important to you, being able to create a culture of high performing teams you talked about a lot of different things associated with transformation all of that but when I start thinking about goals I’m sure you have several but I’d like you to focus in on one, so could you share with us what is one goal that you have?

Risto Siilasmaa:    Be a good human being. Because in the end when we think back about our lives I don’t think we will be thinking about money or titles or medals or we think about our family we think about our friends we think about our colleagues who hopefully are also friends. And with all these people we want to feel a sense of trust they trust me I’m trustworthy I can trust them because they want to do right by me and we respect each other. I believe that my life is a long search for people that I really like to have close to me. There aren’t that many people who really you can trust unfortunately. But when you find one grab on to him or her do what you can spare no effort in keeping that person close to you because it’s rare to find these people.

Jim Rembach:    And the Fast Leader Legion wishes you their very best. Now before we move on let’s get a quick word from our sponsor.

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Alright, here we go Fast Leader legion it’s time for the Hump Day Hoedown. Okay, Risto, the Hump Day Hoedown is the part of our show where you give us good insights fast. So I’m going to ask you several questions and your job is to give us a robust yet rapid responses that are going to help us move onward and upward faster. 

Risto Siilasmaa:    I’m a thin. I’m usually not fast because I like to think things through. 

Jim Rembach:    Oh, that’s just find but are you ready to hoedown? 

Risto Siilasmaa:    Yeah.

Jim Rembach:    Alright. What is holding you back from being an even better leader today?

Risto Siilasmaa:    I am.

Jim Rembach:    What is the best leadership advice you have ever received?

Risto Siilasmaa:   As you can see ‘m not really quick here because I want to find the absolute best advice that I have received. Probably be openly who you are with your failures and weaknesses don’t try to hide. 

Jim Rembach:    What is one of your secrets that you believe contributes to your success?

Risto Siilasmaa:    I really love learning.

Jim Rembach:    What do you feel is one of your best tools that helps you lead in business or life?

Risto Siilasmaa:    Scenario planning.

Jim Rembach:    What would be one book that you’d recommend to our legion it could be from any genre and of course we’re going to put a link to Transforming Nokia, on your show notes page as well. 

Risto Siilasmaa:    Probably the book, There’s a Strategy for your Strategy. Because I’m intellectually drawn to that concept. It asks you to think about things at a higher abstraction level. Don’t just work on your strategy but actually realize that you have to have a strategy for creating your strategy.

Jim Rembach:    Okay Fast Leader legion you can find links to that and other bonus information from today’s show by going to fastleader.net/Risto Siilasmaa. Okay, Risto, this is my last Hump Day Hoedown question: Imagine you were given the opportunity go back to the age of 25 and you can take all the knowledge and skills that you have now back with you but you can’t take every single thing you can only choose one. So what skill or piece of knowledge would you take back with you and why?

Risto Siilasmaa:    I would probably take the self-knowledge because that would have helped me be open to who I am without trying to pretend that I know more or I’m better than I actually were. That would have helped me learning faster and it’s the core piece of self-confidence. Because if you really can be who you are you are self-confident enough to be weak and not know things and that helps you learn.

Jim Rembach:    Risto, it’s an honor to spend time with you today can you please share the Fast Leader Legion how they can connect with you?

Risto Siilasmaa:    I’m very active on Linkedin, very active on Twitter and I can be easily reach through both. 

Jim Rembach:    Risto Siilasmaa, thank you for sharing your knowledge and wisdom the Fast Leader Legion honors you and thanks you for helping us get over the hump. Woot! Woot!

Thank you for joining me on the Fast Leader show today. Tor recaps, links from every show special offers and access to download and subscribe, if you haven’t already, head on over the fastleader.net so we can help you move onward and upward faster.

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