The last decade has been changing the way Finnish companies have cultivated international leadership in their organizations. More talents from abroad have been recruited and retained to participate in leadership and decision making today.

René Graichen works as a COO at Plugit Finland and is a Boardman Member.

Back in 2004 when I came to Finland, I was the only foreigner in the management team of our company. It was necessary to speak Finnish to be able to lead companies back then.

Today, companies recognize the power of diversity more and create purposely multinational leadership teams. I have been working in US, German, Chinese, and Finnish listed companies for the last 20+ years and recognize a pattern that all successful organizations have in common, which Finnish and global companies can learn from.

To change or to be changed?

Change Management is more essential than ever for success in international companies. Disruptions in supply chain, political stability, demand patterns and technology are present challenges organizations must adapt to. Even though the basic business model may not change, the boundaries for new companies entering the business logic and participating in the market is lower than ever.

New services based on knowledge and data can transform the value creation process substantially. For example, digital twins of factories enable faster decision-making processes and support agile changes to demand patterns or resource constraints.

To create digital twins, you need to have new skills in your organization that are on top of the technology development and are mostly found in different industries and cultural backgrounds.

The classic example in Finland is the collapse of market leaders such as telecommunication giant Nokia in the early 2000. A company producing 20% of the GDP of Finland was not able to adopt to market trends and too stiff in its organization of creating new business models. The positive result was that lots of talented people moved into other industries using their state-of-the-art technology knowledge to create start-ups for machine learning and software power houses.

Finland’s economy offers vast opportunities for international development

While working since 2016 as Business Ambassador for the city of Tampere, I noticed many local startups are getting international recognition. To fully tap the potential serving global customers, companies need to include expertise in creating route to markets by having local knowledge of market conditions and cultural differences. To have such experience in executive management or at the board is not only a plus but a must!

The other way around; international companies are interested in learning from the digitalization journey of Finnish companies being under the top of their peers ranking number eight worldwide. Commonly discussed as “twin transition”, Finnish companies are not only leading the digital transformation but furthermore are ranked number one in international comparison in sustainability. No wonder that many international companies are actively investing in Finland to establish research entities in conjunction with its state-of-the art universities and industry clusters.

Another fun fact is that looking at the world happiness report Finland has been ranked seventh consecutive time number one in the world. Those are only a few recognized facts that Finnish economy is on top and has lots to offer for international development.

Yet another example of leading by change is the legacy business of industrial long-heritage companies. During the last decade companies had to find ways to balance their business cyclicity by inventing new business models. For example, service as a recurring revenue stream has been growing from a low-profile business to a major part of the value creation. Full product life cycle management is key in any business today.

Change management’s three key pillars – Make it stick!

There are three key pillars of change management in any company:

The first is a vision and direction. A company should have a longer-term vision with key breakthrough targets how to achieve the vision. Ideally those breakthroughs need to be measurable and clearly defined with a current state and aspired future state. The direction needs to be understood by all employees and it needs to be broken down into smaller timed milestones.

The second is inspired people. You need to have the right expertise in the right position in the company to drive the change. Especially for fast growing companies’ right people are essential to build and foster key processes. When implementing ambitious strategies, skills like motivation, empowerment and positive attitude are essential to drive change and keep focused on the main objectives. Frequent communication about the “Why?” aspect and “How?” will eventually turn all company layers in to thinking of “What?” can I do to participate in the successful implementation.

Change starts with small things and will have impact on everyone in the company. That means when an employee is aware and empowered to make right choices towards the strategy the likelihood your company will succeed in the journey is much bigger.

The third aspect is transparency and ownership. A company needs to be open and transparent with its performance results. The habit of reporting key performance indicators (KPI’s) daily, weekly, and monthly, creates credibility and result driven activities. Those KPI´s need to be clearly defined and owned by responsible people. Ownership means that you have the power to make decisions and drive change towards improving processes that have impact to the KPI´s. In case your performance is consecutively not according to plan, a cross functional focus team should perform a proper root cause analysis and define new activities that will help you getting back on-track.

Overall, the adaptation for change or widely used as “agility” of companies need to be anchored deep in the DNA of the organization and starts with the leadership team by casting the shadow. In today’s world those companies that are re-evaluating their performance towards the vision continuously and acting in an agile way to adjust their offering will have the best chances to participate in new opportunities to outgrow their peers.

Author

René Graichen is the COO of Plugit Finland and a Boardman member. He is an operational expert who creates high-performing organizations and enables strategy implementation. As a Digital Ambassador, he uses disruptive technologies as an opportunity to reinvent business models. He is holding keynotes on several international events about operations and digitalization.

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