Finnish companies are powered by grit and democracy

The research group at CIRCMI Sanna Rytövuori (left), Mari Ainasoja and Marko Mäkipää analysed Finnish companies’ strengths and weaknesses, as compared with countries that lead the markets in Europe.

The research group at CIRCMI Sanna Rytövuori (left), Mari Ainasoja and Marko Mäkipää analysed Finnish companies’ strengths and weaknesses, as compared with countries that lead the markets in Europe.

However, companies could be better at setting bold growth goals.

In commerce and the technology industries, Finnish companies have typically Finnish strengths: grit and democracy.

Grit is evident in the persistent efforts to implement new ideas or to further develop new products regardless of small setbacks on the way. Another strength Finnish companies possess is a culture of co-operation.

“We are democratic when we hash out new ideas. An employee’s position or job title does not determine whose ideas are developed further,” says researcher Mari Ainasoja.

The research defined five important factors that have an effect on how well companies in these sectors can renew their business operations. They include customer orientation, market sensing, the managers’ enthusiasm and support for renewal, collective effort and an encouraging atmosphere, plus a clear concept of operation.

These results came from international research undertaken by the Research on Information, Customer and Innovation Management research unit CIRCMI at the School of Information Sciences of the University of Tampere. The research examined factors that support companies in the fields of commerce and technology industry to reform their business operations.

The research was conducted via an extensive large-scale Internet survey in Finland and the countries of comparison. In the part of the research that concerned the technology industry, Finland was compared with Sweden and Germany. In the case of the companies involved in commerce, Finland was compared with the United Kingdom and Sweden.

“The countries of comparison were chosen on the basis of what Finnish industry experts in the field recommended to us in the interviews and workshops we conducted,” says project manager Sanna Rytövuori.

In both cases, Finland came third after the countries of comparison.

A better sense of timing

In the case of commerce, Finland was weaker than Sweden and the United Kingdom in market sensing and planning clear concepts of operation.

However, Finland was the best of the three in terms of how democratically new ideas are processed.

Sweden resembles Finland in terms of the market environment, but there have been many success stories in Sweden, especially in commerce.

“The United Kingdom is regarded as being one step ahead of the rest in e-commerce, which has made it the flagship market in commerce,” states Rytövuori.

“Market sensing means that the companies look beyond their present clientele and try to predict what will happen in the future. Development ideas are sought in other branches or other countries,” comments Mari Ainasoja.

“This is what those Finnish companies engaged in commerce still have to develop.”

Bringing new ideas or products to the market requires an eye for the game. You must be able to recognise when the consumers are ready for something new.

“Getting the timing right requires a little luck, too, but competence can also be developed around it,” Rytövuori says.

The technology industry listens to its customers

Apart from grit and democracy, another strong point the Finnish technology industry possesses is customer orientation. Where companies plan operational changes, the customer perspective is brought in early in the process.

“It is a well-known fact that Finnish industrial companies, especially system suppliers, are very customer-oriented. This has happened even to the extent that companies have been criticised for not being willing to invest in expansion,” says senior researcher Marko Mäkipää.

“The companies have set such goals that they will grow together with their present customers. In those cases, the growth of the company always depends on how well the customers are doing.”

On the basis of this research, reluctance to grow was not just a problem for the system suppliers but was similarly evident, for example, in the case of the large original equipment manufacturers.

As with commerce, Finnish companies active in the technology industry should develop their market sensing and improve the clarity of their concepts of operation.

Clear concepts of operation mean that the company follows a systematic path when it develops its services and that it knows what it will cost to develop and implement the planned changes.

In the case of the technology industry, the countries of comparison were Sweden and Germany.

“The Economic Situation and Outlook reports published by the Federation of Finnish Technology Industries clearly show that Sweden and Germany have recovered from the depression much better than Finland, especially in exports,” states Mäkipää.

Dreams too modest?

All in all, the growth goals and dreams of Finnish companies were rather modest in comparison with the other countries. Finnish companies are not prepared to invest in high-risk development.

The researchers say that Finnish companies take longer to carry out development work and use more time to polish new ideas and products. The countries of comparison engage more often in quick experiments with new products.

“I have also wondered whether we in Finland are working on the basis of a professional rather than an entrepreneurial identity. A certain modesty can be seen in how the managers set their goals,” asserts Sanna Rytövuori.

According to Marko Mäkipää, the Finnish companies got the lowest scores for their development resources.

“Do the companies employ people who can concentrate on development only, or do people also have other tasks that take up all their time?”

Mäkipää believes that the lack of resources is at least partly caused by a lack of willingness to renew and develop.

“If the companies had big growth goals, they would undoubtedly allocate more resources to achieve them.”

The researchers hope that entrepreneurs can access and benefit from the research results in their development tasks. This is why accessible condensed versions of the research reports were written and uploaded to the internet.

The condensed research reports in Finnish

Text Tiina Lankinen
Photograph Jonne Renvall
Translation Laura Tohka

 

Finland was compared with Sweden and the United Kingdom in commerce and to Sweden and Germany in the technology industry. The figures are averages from a survey where company representatives estimated how accurately different statements describe their organisation on a scale of 1-7 (1=Describes us extremely poorly; 7=Describes us extremely well).

Finland was compared with Sweden and the United Kingdom in commerce and to Sweden and Germany in the technology industry. The figures are averages from a survey where company representatives estimated how accurately different statements describe their organisation on a scale of 1-7 (1=Describes us extremely poorly; 7=Describes us extremely well).