It seemed like a gamble at the time. Matti Alahuhta, president of Nokia Corp.'s (NOK) network business, had no experience in consumer electronics. Yet in mid-1998, he agreed to switch jobs to head the Finnish company's booming cell-phone business. Could the self-effacing engineer adjust to the glitz and glamour of mobile phones?
Could he ever. With Alahuhta in charge, Nokia's mobile-handset business has nearly tripled its sales in three years, to $22 billion in 2000. Now Nokia rules in cell phones, and Alahuhta, 48, is running a consumer-electronics powerhouse: His unit will produce more than 150 million phones this year.
With the industry facing slower growth, Alahuhta is turning up the heat. He's ready to sacrifice a point or two from his 20% margins--practically the only profits in the industry--to grab market share. This year, Nokia has gained four percentage points in the market, giving it a 35% slice of the business. Rather than falling, profits rose 4% in the first quarter, to $1.1 billion on sales of $5.2 billion.
That's a strong reflection of Alahuhta's no-nonsense management style. He cuts to the chase at meetings and delegates much of the razzmatazz of design and branding to others. But the nine factories he oversees run like clockwork, even as they churn out new models every three weeks. Looks like that job change wasn't so risky after all.