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Episode #38

Sanna Suvanto-Harsaae has been on the boards of over 20 Nordic companies like Finnair, Clas Ohlson, Posti, and Paulig. We talked about why strategies fail, how to build a high-performance culture, making tough decisions, and much more.

This post is based on our podcast episode with Sanna Suvanto-Harsaae. You can watch the entire conversation here.

1. Purpose and simplicity

Suvanto-Haarsae stresses the importance of having a purpose-driven strategy that is simple and easy for everyone in the organization to understand and align with. She highlights the necessity of this strategy fitting into a one-page format, ensuring it is concise and direct. This approach facilitates clearer communication and better execution across different levels of the organization.

2. Performance metrics

A recurring theme in the podcast is Suvanto-Haarsae’s belief in the power of numbers and performance metrics. She advocates for a focus on key performance indicators (KPIs), such as gross margin and employee engagement, to drive accountability and high performance within organizations. These measurable indicators help in making informed decisions and steer the company in the right direction.

3. Culture change and decision-making

Suvanto-Haarsae discusses the complexities involved in altering organizational culture and making tough decisions, particularly around personnel and structural changes. She emphasizes the need for transparency, consistent communication, and the distinction between being nice and being kind in leadership. Her approach underlines the importance of addressing issues head-on and ensuring decisions are made for the long-term benefit of the company and its employees.

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Watch episode:Sanna Suvanto-Haarsae: boardroom lessons from Finnair, Posti, Clas Ohlson & 20+ companies

 Sanna Suvanto-Haarsae: boardroom lessons – Youtube transcript

Today I’m joined by SRA Santo who’s currently serving as a chairwoman of the board at companies like finner posty group and Buu concept s has previously been on the board of a large number of noric companies including Anor group poig Claus wison SAS and harvia S welcome to the show thank you for the invitation so what I’m really excited to talk to you about is uh kind of getting Sanna’s transition to board roles the board level perspective on things like company building corporate strategy uh and all those things but I’d love first some background so what were you doing before you you kind of transitioned into these uh board level roles and um how what was the first board seat that you ever ever got let me tell you a very hopefully short story about how I got my first board I used to be a CMO on on a so of marketing Chief marketing officer and actually also strategy officer for a optical retail chain and I had a boss a CEO who once flow into the my one morning just flow into my office and says if you’re ever asked to have a board position take it it’s great and he just run out of my room it was typical to him and I was like what is this and if he had not done that I don’t think that about half a year later when I was contacted and asked if I were interested to have a board position I would have taken it because at that time I had three kids who the youngest was two years four years six years old and I had a more than full-time job but this triggering factor of him made me to you know get interested why why not and and then I said yes and my first position was at Doney which is a Swedish um tabletop producer kind of all kind of things for napkins paper uh high quality napkins and it was owned by a private equity and and it was a company in big trouble and um I was um interviewing for the for the board and I was selected because of my knowledge of turnarounds and European very wide knowledge of European Commerce so that was my first board and then since then there’s been many many many more um what was it like making that transition from an operational role to then being on the board and kind of taking I guess a more you know big picture view of the company was that a big transition was there something you had to learn or or rethink I think I was very very lucky to enter to a private Equity owned company where the board position is more of an advisor it’s a much more active position uh versus being a very um you know this kind of corporate governance old-fashioned as it was this was this was more than 20 years ago um so so in that sense I was very lucky I had been first on a board that was a you know uh a corporate governance oldfashioned um listed company I I think I would never have continued my board career so in that sense it was easier because what was asked for me is to bring my commercial knowledge and Rec and and bring my all all the knowledge I had of how do you turn around business to my board job so in that sense I was asked to be in kind of adviser but still it is a very very different job to be on your daily job and able to do and effect and really make things happen versus when you are what I would sometimes call this kind of advisor role in the board which which makes it much more difficult uh to to really get your points through so um luckily they were looking for what I could do and what I knew very well and that’s actually one of the key words when whenever I I choose a board is to ask you know is what I know something that’s useful for the company that I’m I’m I’m I’m I’m going the board at I Deciding which companies to join listed some of those companies that uh you’ve been serving currently or past previously been serving on it’s a huge list and I didn’t you know didn’t even list all of them um and they’re very operating very very different you know you got B2B you’ve got um consumer it’s a very wide range of companies so what are the things then that you add and and what are the criteria that you look for okay this is a company where it would make sense for me to go on the board um what what are the criteria that you use for selecting uh those kind of companies I think whenever I’m asked if I could be interested of joining a board my first question is what are you looking for uh because there has to be match with my background knowledge what I have done what I know I’m good at and versus what the company needs and if that match isn’t there I’m not going to join the board um uh there is no need they can find somebody else today luckily the board uh recruitment specific on the level that I’m involved where it’s a private equities bigger familyowned companies or listed companies it is quite similar as you would be looking for a C Level executive I.E you make a brief and you are very clear what you need is uh what kind of capabilities you need and then I just see is it something that I I I can match I think there’s a very very importance for me very important for me to be a good Port person that there is a match between this company’s need you Rel you know related to their strategic needs and then what I can bring to the table that makes sense uh you mentioned Being an effective board member that one of the big difference between board role and operational role is how you affect change um on the operational role you’re hands- on doing the things in board you kind of have to maybe nudge influence Inspire motivate are there any kind of like soft skills or meta skills overarching skills that you find are especially needed to become an effective uh either board member or or chair of the board I I think the first thing is that because it very often is it speciic your first board fa isn’t your full-time job what you really have to do is you have to get into the company I mean you have to do a similar kind of in schooling as you would be joining in the sea level on the company meaning you you you know I usually say that within the first year you need to spend about two weeks in effective time either visiting the company or company’s places as uh which you’re joining in so so that is just a prerequisite and sometimes I see people say oh but there’s a board position I’ll join in I’ll have the one or two days uh you know how and say introduction and then I’ll go in and and that doesn’t work you really have to spend extraordinary much time to be really good board member another thing that is really really very special is that you know you know you can’t come to the board you know I’ve seen very very many CEOs who’ve used specifically if you’ve been CEO very many years you’ve used to tell people what to do when come to the port position that’s not the way it works the key key uh personal competence you have to have in the port positions is to ask the right questions and it’s the ask the questions which is of course always the good thing also if you’re in any kind of active operating role but it’s asked the right questions and the combination of right questions and questions really comes to the fact that you learn how the company is working and what’s the company’s current challenges okay that that makes a lot of sense so is there any kind of typical questions that you like to ask let’s say you know you’re joining a new company as a on the board what are the first things that you start kind of pulling at or is is it going through just the financial data the p&l or do you want to be talking to people um who working inside the company like how do you go about this data Gathering Gathering um process to make sure that you get a good understanding of what’s actually going on the first thing is if you do paper research because that usually also should happen already before you accept the position so you understand what the company is so that very much is the financial data and you were slightly earlier asking why do I have so different boards but if you look from p&l perspective for example retail or airline companies or opposed logistics companies have very similar p&l which means there are some very big fixed costs and the bottom line is very very thin so so so so that is already one of the things you would do very early on it is clear I always ask where does the company’s cross margin come so so what’s that one and is that growing if there would be a one single most important number on any p&l is cross margin and then we can talk about if it’s cross margin level one two three or four preferably in all levels is to understand if the cross marging on that company is in all these levels growing or not growing because the companies that cross margin is not growing is in the end uh forever in a in a cost-saving thing so that would be the first thing you do even before you enter the business as such the second thing you do is much more about getting into people I I love to meet um the people on the floor whether it is you know whether it is in the posty it’s the people who are bringing the post out or bringing the packages out or if it’s in an airline company or the people who are really doing the work you need to really see the reality in order to get the perspective behind the numbers uh another thing that I SP spend an enormous amount of or I put my most focus is you know if you don’t understand where the money comes from and this I mean the whole customer the customer Journey NPS whatever is behind there uh the profitability of products if it’s a products on that sense I really go into the uh understanding the top line where does a Top Line come you can’t cost save a company to growth but you can build a company to growth if you understand where the money is coming from I think that was really um very practical like you said focus on on on gross margin making sure that that’s growing generally speaking do you think that there’s a lack of focus a lack of understanding of for instance just the importance of that single metric among companies and you know we’re dabbling and all the these different metrics and one of the things that you kind of bring as a a value ad is that you bring that Focus like okay let’s focus on this metric let’s improve that we can figure out the other things as we go I think that you are you using my favorite word which is word Focus uh and and that is exactly what is needed and and you know in today’s you can get so much distracted you can get distracted on the geopolitical things you can get distracted on you know what’s happening in the competitive base what’s happening this and that and wherever this’s whole disrupture discussion still going on I think you really understand what’s really important and to any company if they’re not growing in the cross cross margin level you know I usually come into companies which have some years behind them so so so bigger companies vers versus int very very startups and and and you really need to understand is this company growing for example if I work with a companies that have brands or or are delivering to grocery retail I have to understand are they growing with the the winners are you winning with the winners very very big U kind of catch word but you know it’s a big difference if you’re growing with somebody who’s losing market share on their own end if this distribution channel is is is is is is is not growing then you’ll have a problem because your customers are not growing whereas if you are playing and winning with the customers that themselves are winning you have a double wmy in the positive sense uh whereas otherwise you get a double wmy in the negative sense so so so I think understanding that one and in general if I would say this way in the board level there’s too little focus on how the top line is created um there’s too much focus on where the costs and the internal numbers are coming and too little focus on where does the money really come from uh who are the customers and consumers bring the money and and and how are we developing are we developing the right consumers and right customers if there’s too little focus on those uh things what are boards then typically focusing on that they How to run board meetings shouldn’t be what are the conversations that happen in board meetings and and how would you like them to see them changed I think it’s a question about balance I think that that if if I say sometimes the boards have a tendency to look historic data you know you very much focused on how to reporting go from last quarter or last month or whatever it is and that’s background that’s happened that’s all new use and and and and as any business also the board is struggling to have kpis and and how do you look forward where do where do you what are the kpis you have to watch which are predicting the future best even these kpis are likely to be uh you know they are leaning or leading kpos but they are likely to be something that is historic but they at least can give you an idea where we moving on this one so so so so one thing is just to organize your board work in such a manner that you don’t have you don’t leave too much time for the historic numbers of course you review the quarterly reports you review what’s happening historically but you review that on the context of what are we going to learn about these numbers and then you have to put most of your focus and most of your time and most of your effort and energy to the future you know how do we develop this business so one of the things I do when I run the run the boards is I always divide the agenda you know it’s a one day agenda I divide the agenda which is called running the business which basically the historical data uh and historical numbers and historical Focus you know what it is and then it said thinking is building the business which is a forward-looking are we talking about right things are we talking about the Strategic key elements that we need to have to grow and keep the company healthy so so so so uh you know as a chair I have a responsibility to ensure that we have a balance between how I say seeing how the company is performing at the moment versus building the future of the company and and and and that balance is H is easy to spend time asking about questions why did this and that kpi look whatever way did historically versus putting an action to how to improve things so that things will look better in the future I think that makes a lot of sense because I I definitely have personal experience from meetings where you know they kind of derail into this you know you’re presented with all these metrics and then one metric change can derail the whole meeting and everyone’s talking about this minc thing so I I guess you make it really clear that okay you know fine we have we could spend hours and hours on these past historical variations but we need to talk about the future now and there as a chair you have the major responsibility of saying if you realize that the discussion is detailing as you put it or or you you’re going to an effect on small things you have say this is very important that’s very great but let’s conclude either we ask the management to come with more information next time or we conclude we need to figure out why this happened because the whole Focus needs to be you know asking why was the cross margin low last month is a useless question uh the key question is to ask okay guys H what are we going to do to get the cross margin back where it should be and that’s that’s the same it’s asking it’s basing on the same data but the one question is forward looking and the other question is is is a backwards looking and the backwards looking why was it low will get everybody on defensive mode whereas the question how do we ensure we improve the key kpis um you know when they are failing or we not failing is putting the focus on the forward-looking and that for me is both asking good questions but it also putting the questions on the future future uh perspective as you said that small change um shifts the the The importance of focus focus from defensiveness and blame putting to you know collabora collaborative problem solving is there when you’re thinking about running a board um is there typically are you a kind of a management by numbers you like to have like let’s say 5 kpis we’re tracking those every quarter or or how do you think about it this it vary from company to company I I think goes back to your your question earlier about Focus you know if you you know the issue is that if you in a board level have let’s say 20 kpis you can follow by the time you go three levels down to the company you have whatever 128 kpis and that doesn’t work that way so you need to in the in order you know in the perfect world you have one kpi which is like top of the pyramid and you look at that and then if it that doesn’t work you look the second level and second level and second level and second level so you kind of have the Pyramid of kpis and it’s it’s a very few companies you can find this one Miracle kpi but but we been there we had a very I had I was involved in a very very big international company was all the ways in clobal and we end up finding and I’m not going to talk about now which it was but it was a cross marching related number which was a simple traffic light uh versus a year ago I’ll be improving how are we improving the number of versus year ago and that became the one traffic light on top of the pyramid and then if that was green then you didn’t even have to go to the other other kpis in most of the companies you should try to limit yourself to in the Border level on the kpis you know in optimal world no more than six but it depends about the complexity of the business what it is you know in a perfect time you have three six nine if you start to have more than 10 kpis uhuh in the board level you’re in trouble because you just conf using the organization because they then have to every level has to like double the amount of kpis that they are following yeah I think I mean the power of Simplicity is so uh so incredible it goes back to what you’re talking about with with Focus I want to talk you mentioned the importance of future improving kpi obviously then the question of strategy comes into play I personally think strategy is kind of a bad word it says everything and nothing at the same time but how do you think about then setting the strategy uh is there any kind of Frameworks that you have have any typical process that you go through to to figure out what what the company’s strategy should be I think this again is very dependent about the company because you know depending about the company’s needs uh the the framework could be very different I do have some rules if the strategy including the purpose and the values takes more than one page it’s not a strategy it’s a ramble or a a history or a story has to fit on one page and and and then I tend to say if you bring it to the lowest level in the organization and they can at least understand May part of the strategy by reading that one page then you’re there you know and so Simplicity again I’m a very very you know uh fixed on the fact it has to be that way um I think the other thing that I mentioned there I do not believe on a company strategy without a purpose uh I am very purpose focused I am seen how amazingly quick you can for example do a turnarounds in company if the company gets a purpose that is relevant for all the employees and they can relate to which tells you how are you playing you know it’s in the end the purpose is why the hell are they we here what’s going to lack on this world if we don’t have this company and and if you get that right then the strategy falls under that one and in the bottom you know it’s like bit like a burger you have the value on the top and the purpose on the top and value in the bottom and then the strategy is in the middle um and and and in that sense I always say the simpler the better uh and sometimes if you bring really intellectual consultants in there who bring to your strategy I you know I’m you know the people can’t say I’m a Blonde and I just sometimes say listen guys if I can’t understand the strategy I don’t think nobody else can and it’s not saying that that I’m so good but but but I’m saying it has to be so simple the people in the organization have to you know you know 3 minutes of talk figure out what’s expected from the company what’s expected from them from the strategy so so so I’m a big believer on strategy but I’m big believer on having a strategy that actually makes sense is understandable and and and makes a difference you know what are we Choosing by choosing this strategy uh sometimes you say oh we have to improve on everything all these kind of wubbly wubbly things which which absolutely helps nothing but but you have to be choiceful of which strategies you you choose to get to the purpose and the goals you want to get into one thing that I feel like I’ve seen among on companies is the strategy becomes a wish Creating a good strategy list of like this is what we want to achieve but it’s not necessarily of a plan of how we’re going to get there and how our competitors going to respond because you know obviously they want they want to grow too so how do you make sure that the strategy does not get into this wishy-washy um High flly in disconnected from reality kind of wish list and it’s more so about actually concrete actions or or tradeoffs that we’re going to take to reach whatever goal we’ve Set uh first of all the strategy process is is a very very important to get it right and you know I sometimes say that the best pro is is a kind of like number eight with number eight I mean there’s the top management is in the middle of the number eight and then they do interations with the board and they do interations with the with the with the organization below them and then you do these eight couple of times and by that you actually get everybody on board and you also ensure everybody understands and has their input in the strategy that’s that’s one way of putting it other thing that I’m I I I think it’s a very very different and I absolutely i i people who work with me go Apes if I see a strategy to 2030 strategy if there is a year on the strategy it’s not a strategy it’s a to-do list or a business plan we cannot have a year on a strategy a strategy works until it works and it might only work a couple of years if the company is changing radically or it might work for 10 years I know companies you know I come from a big uh American branded companies you know they’ve had more or less the same strategy or purpose for you know 20 30 years and then they changeed some of the parts of it or or they add on it but but but but it has to be something which is a continuous strategy um if it has a year it’s a business plan and and and and business plan and strategy are mixed very often um not to mention as you said to-do list or wishful thinking um and strategy has to be a choice as I said and and very often if you then you know I would say also about if you have more than six key strategies you are um you’re not focusing you’re not choosing you’re not choiceful what’s needed and those six strategies you have to be very key and a uh what did you choose choose what what is the thing you did not choose when you choose this strategy is number one and number two is very much so what does that actually look like in the reality uh because it’s the look like in the reality the execution that actually is something that makes you to win uh or lose versus your competition it’s not the one pager perfect strategy that makes you win or lose it’s the execution of that strategy that makes you win or lose so speaking then of execution because you’ve seen so many strategies being implemented um at at Implementing the strategy various type you know various different companies what are the common patterns in terms of the kind of implementation that fail or succeed is there something that you know from like you already know that okay we’re you know this team is not going to be able to pull this off there’s something completely wrong in the setup or or yeah how how do you think about common patterns I think the first thing is uh if it doesn’t fit for the one page sorry to repeat that one but it’s so important it isn’t simplistic the second thing is I had an old old boss in in in the big Pro and gamble world who said the best strategy is the one you can implement it doesn’t mean it’s the strategy which is the most perfect but the most perfect strategy is actually the one you can Implement and execute and when I see when things are not working uh it is about do you have a you know the famous elevator speeech do you know what’s the 30 second strategy spe you’re going to give to this person who’s like in fin posy who’s delivering the the mail you know can you then tell explain them to in 30 seconds what the company’s key purpose and strategy are if you can it’s going to work if you can’t it’s not going to work um so that that’s one of the thing is to keep it simple the second thing is repeat repeat repeat it’s like it’s like strategy by Maggie and the issue with this is sometimes that by the time the the management is sick and tired of strategy you know the people in the organization have maybe heard it once and you just have to keep repeat repeat repeat and it it sounds very boring and they will get tired of them themselves specifically as they most likely have worked it a year before it actually gets to reality but but changing strategy too often is per se a mistake and if you think you have a strategy implementation which is one year you failed you have to have a strategy impl implementation plan which is at least 3 years and if you don’t think three years ahead you either going to try to push it too quickly to the organization uh or you actually have don’t have a right strategy because in no strategy should be able to be done within the year of course you can do some parts of the strategy within the year but the whole strategy cannot be implemented within with with it within the year so so those things would be and if if I then hear and also to understand what are we what we are measuring to show if this strategy is starting to work and that those are these leaning indicators you don’t you might not even be able to measure the kpi in the end that might not not nudge first but you might start to see the first indicators that what you’re trying to do is getting through that could be with your customer data that could be with your employee data uh and whatever it is and and you you kind of have to put those together so if you don’t have a strategy which has a clear measures both the final kpis but also the initial kpis then I can also see this is going to this is not going to be working out um uh so so it’s it’s there are um these kind of things that are the common mistakes too complex Too Short implementation and you just don’t repeat repeat repeat repeat and lack of purpose I honestly don’t believe anymore that you can do any strategy implementation successfully if it’s not very well fixed to a purpose how have you find any kind of Communicating to the entire organization tactics that have been particularly effective or or ways of communicating presenting the strategy and I’m thinking here for instance taking something that you know on the board level people are comfortable um okay I’ll take you something as simple as the fact that you know on a board level everyone knows what ebit is or management level hopefully and so they may have those F Financial kpis in the strategy um they may have some other buzzword they may have some reference as to how the market is changing but if you’re trying to get this message across in let’s say company like or organization like posy you have tons of people many of them working part-time you know coming in joining the company and leaving etc etc so is there anything you found as a way to package the strategy in a way that it actually is received throughout the organization how how do you think about that going through that process I think there is several ways of that one the number eight I was thinking of you know standing number eight one of the great things that companies I’ve seen who’ve done a good new re re strategy is that they in the before they launch it they do kind of a pre-launch where they send to an organization maybe not to the whole organization to to maturity of organization saying this is these are some you know some strategies we’re thinking how how how do they what do you read on these because it’s very much sometimes just the wording you just read different things of the wording so if you send these out and today’s World well luckily it’s it’s a very simple to do this service so you do these internal service and saying okay if we going to say it’s about let’s take a terrible b word customer centricity so what do you read about customer centricity how does it translate to you is this the customer centricity at all the right right name or or or should we do something else um so so using these kind of feedback tools which are so easy today to do and for some reason we do that with customers we just or consumers we just don’t do it internally so that’s already before so you kind of do this kind of pre-selling by asking questions clarifying and getting them to get feedback to you and when you do this they actually come part of the whole project so so they have to be feeling that they’ve been heard and they’ve been part of the project usually in a bit of lat later Fates because there’s no way the floor will know what the company needs in five 10 years but they can be part of ensuring that the way you word that strategy is is actually um is actually uh kind of uh uh clear to them so so that’s one thing the second thing is is is using the same tactic for example if you do have a quarterly meetings and you always you know talk about the results and you should then repeat one part of the strategy and you ensure get a feedback and you ensure that that feedback F you know you can see whoa that’s not what we meant to say that’s what we wanted to say and this is what they are hearing we need to go back and so you choose to follow your whole communication internally and say did what I thought I was telling was that what was heard and if not restart repeat and you know what any strategy there will be I I don’t have the statistics but I would dare if you’re really really good you get 70% of the strategy communicated in a such a way that people under you will hear to say well you meant it and then you are excellent most of the cases I think 40% is maxing you get right first time and and rest gets wrong one or the other way um and that’s just because people who might be there 20 years they hear a word blue and they hear something completely different that you meant and it’s a very human thing on this communication part so so ensure you measure if your communication is is is heard as you want it to to be heard and when it’s not and prepare it will not be then restate go back rework until they hear what you want them to hear and they also can play back you know not exactly the same words but that that whatever the intention was is played back on their own words does that make sense to you what I’m trying to tell that one yeah I think I guess then the the way I’m I’m hearing it is that you know to play back as you mentioned um is that there’s no single format there’s no single Silver Bullet it’s constant communication checking in and and and kind going through pushing the message down to all parts of the the organization and there’s no easy way to do it no there is no there is no Silver Bullet there is no Silver Bullet it is a simply repeat re resay restate simple and keep doing that for a good while you’ve talked about purpose um and said that you know it’s it’s impossible to have a good strategy now without purpose so how do you go about creating a purpose that isn’t this again this very wishful thinking maybe something that sounds very good maybe May it’s highlight some of the things that are being discussed in contemporary society and how does it how do you translate that into something that the employees throughout the organization actually can relate to you know oh yes of course this is I can see how what I’m do by what I’m doing in my everyday job that contributes this overall purchase uh purpose I feel good about that purpose it motivates me it creates alignment how do you how do you go about creating that kind of purpose in a in a company I think a good purpose is is first of all it’s not this Wishy woly oh for the betters of the life of the people in the Earth for God’s sake you know that is not what what’s purpose is that that is a rubbish H the purpose needs to be as a the key way of saying is is the start what would the world Miss if this company wouldn’t be around what would be missing from the society and you know uh it’s a very few companies who can say whoa It’s You know the wor will go under or the people in the earth will will feel terrible if we are not around usually it’s much more concrete and we need to be concrete and we need to be truthful for what we are so in that sense I said it has to be related to the company uh and what the company is doing so so that’s one part of it so so be down to earth versus wishy-washy too high flying uh um rubbish perfectly lastic and the second thing that I think is it needs to be something that you are not yet doing so there needs to be an aspiration you know is something which is a stretch let me let me give you an example um you know when I was cheering Alia and that’s the Anora nowadays the the Branded Spirit manufacturer the ntic bigest B one when I entered there uh we were into this is 10 years ago it was a bring of a turnaround and we have to really do things and it was a multi Scandinavian organization and here’s where the swedes come very good on hand they can not work in my opinion if they don’t have a purpose because if you try to get the switch to strategy they will always one way or the other try to drive the question yeah but what are we really trying to do and that’s the purpose so this was alcohol company very much based on vodka and very much based on volumes and and you know uh the monopolies on on the on the company countries and and and uh you know when I entered the board the the first discussion was usually how many Lees cin Cora did we do last month which was a ridiculous question to ask um but you know so it was very much of a volume gain it was about manufacturing enough things and when they changed and when we changed the purpose and I can come back to you how we got in there uh and it was by the management the board was not involved on on the on creating it it was all about this simple and it’s a fantastic because not very often do you get this simple purpose but Al as a branded alcohol company ended up with the purpose let’s drink better so that sounds very simple let’s drink better but there’s a key words there the word better you know it’s it’s a l actually tells you we are drinking together not that somebody drinks enormous amount of alcohol than myself let’s involves people drink says we are still an alcohol company you know we can’t hide away from it let’s not do it let’s drink better not more but better and that for example immediately left in that the whole Innovation process was about better higher value costs more but still delivers the better drinking experience versus just a drinking experience and that I think what is one of the most perfect um the perfect uh um um purposes I’ve seen because of the fact that it’s so simply changed the way the company was working from volume to Value to just drinking to social drinking which also in the estg world gives you the responsibility that you’re trying to reach responsibly versus not just just drinking and and that for me you know it’s not often you get to this kind of perfect uh nearly a slogan type of of of purposes but it’s such a good example to give what it is and it was created literally in six eight weeks time by the management team alone initially and then it came to the eight it went to the board there’s a lot of more you know meat on how how does that then translate to a lot of things uh it’s not just a slogan there’s a lot of you know things under it uh and then same way the eight went to the organization the next level and you got feedback and you Chang something and and it was really working perfectly and and uh and and the same slogan now even if we joined with our competition competitor and became a bigger company they changed it very little because they realized that was the most powerful purpose there was for a Nordic branded alcohol company so so so the purpose has to be down to Earth but it has to require something that the company is not yet delivering that’s a that’s a fantastic uh fantastic Benchmark or case study rather I’d love if we could quickly talk about um let’s say for instance fer company that’s close to the heart of of all All Fins I would say so can you quickly talk about like you know the strategy and and and purpose for them uh the airline industry is notoriously difficult I would say uh very unprofitable very risky um so how you been kind of been thinking about that at fer I think you know I’ve been shairing fer now for six seven months I think that uh to perfectly honest uh I’ll take the discussion you in a year’s time because we because finer very much giving the change that it has to to face where the uh over Russia Edge to traveling to Asia you know the gateway to Asia which was the old purpose is definitely not livable as per se lonely anymore so finire is is is has updated its strategy uh during the summer when things now are much more better we still need to work on these pieces uh exactly on on finire so so finire let’s talk in years time post where been three years which is the The Finnish postal logistics company I think there we are beyond that and there we did exactly that within the first year that uh me and the new new C CEO came into the board we went through the strategy proes H the purpose proaches and and I think that uh there we are further down so so with Fin’s case um I think you need to come back to me on this one that’s a that’s a perfect excuse to to do a follow-up episode uh next here so I’ll take you up on that offer let’s talk a little bit about some some kind of um culture leadership uh style uh questions Building a high-performance team and culture I I mentioned off air that I uh you spoke at a Google uncover event here in Helsinki in May that’s where I I I I I was there and I um my key takea away from from your kind of keynote was uh well this was very kind of clear uh bold um messaging that that I think we we we need to hear in the corporate world and it kind of stood out that the or the impression that I got was there’s a definitely a need to make tough decisions and um as a leader you can’t shy away from that so um I’d love to hear about kind of your general thoughts about first of all how do you build a culture of accountability transparency and kind of let’s say call it high performance and how do you think about your role as a board member or chair in in in affecting that kind of cultural change if it’s needed a fantastic question um there’s actually two things that I give you a question one is to how do we build an high performing performance focused organization and the second thing is if we need to change the culture of the company how do you do that uh let let me trying to get to the high performance first um I think you asked me before without me really answering it but I think I did answer without stating it I’m a number believer I’m very much believing in numbers numbers don’t lie numbers are what they are and any company that has been able to to to improve their results have been focusing on the very few kpis numbers that everybody in the organization you know it might you know go different but it’s still the same number you know just let’s stay on our cross margin example if that’s the number then depending about your area of of of responsibility it’s the cross margin on on on your business where is the top mentioned that one so it’s about finding the numbers and why am I so number oriented I I I think there is um you know the most of the companies I’m chairing there is absolutely no uh you know um intive initiative plans bonus plans initiative plans that has any wishy-washy uh you know kind of what would you call phe correlation or or or or how do you do things it’s all about numbers and and numbers don’t have to be Financial numbers they can be things done certain date is a is is a number they can be improvements you know how well do you improve some to improve the brand uh uh the brand awareness the the the the the brand standing um theps so Employee Engagement numbers there’s a huge amount of numbers but for me it’s a key it’s a number because numbers don’t lie and and and and then you can’t Wiggly wuggly out of yourself with those things of course when things like Corona or whatever happens that’s a different story but let’s just assume about normal year when when when you when you don’t have to do these changes you basically know you measured and you know that that’s what your responsibility is to get to that number that’s what you will be measured on and if the number doesn’t come too bad so sad my friend uh you know of course you have a you know you never have one number it’s hit or not hit it’s it’s it’s usually a scale that you have to you know something start somewhere and something ends there and as you can hear I’m also believing that incentives steam should be uh focused on these kpis and that for me brings a cultural kind B out account accountability a performance uh you know it forces everybody to look where we try to get and on that yes for me also right number is always an index versus year ago uh it’s not necessarily the absolute number only but index versus yearo Improvement number is key for me the Delta so that’s about the accountability and and and high performance and how do you ensure and then the board can play much bigger role because usually agree these numbers on a top level and again they should scale down as a pyramid for a lower level when it comes to culture I think the first thing you have to understand a culture that it is a very very difficult to figure out what really is a culture in the company it usually has nothing to do with the values written on a piece of paper or put on the put on the wall you know if you’re lucky if you have good values you only have three of them uh and you know if you’re really lucky two of them are the real values and then there is a third one always which is more about the what I call painting in the wall or just the way things are and any company that’s older than three years will have their own painting in the wall and it’s not always what you want to do and the biggest difficulty there for the board is to figure out what is the real culture and and what how do we find out what is the real culture and and and there’s two ways of getting there none of them are perfect um one is to look for numbers again uh employee opinion service um sickly uh sickly on different place in the organization I can tell you from retail before we figure out that there is a bad store manager somewhere we can see that the sickness rate goes up happens every time uh by the way uh and then there is in the other hand just going to the organization and asking questions uh and actually even better asking the organization to ask you questions one of the things that I do when I only can is to meet with the employee represent Representatives you know the union members and I tell them I have nothing to tell you but I’m here to listen to you and if they start to ask you a question which you’re thinking wow why are they asking me this question there is usually a reason for that one and you have to be very very carefully listening understanding if that’s what they are asking and you think they should not ask that then there’s something Wishy Wishy going on and usually it it goes back on the cultural way of of working together that would be my kind of on the accountability other hand on the on the culture and changing a culture takes at least three years uh and again it’s a one by one by one way of doing it but but culture change is under three years are not possible and even if you do it in a three years your Masterpiece I would say n no normally takes about five plus years obviously I think cultures at least on the surface level will look very different depending on the companies companies are so so different but is there anything kind of U common denominators that you always focus on is it again like that focus on numbers and letting the numbers Drive the business and and uh the the incentives uh are the kind kind of common patterns that you always try to make sure are found in that culture I I I’m very much usually looking and if there first of all I I I’m a big believer of of of um of employee opinion service but the number I’m looking is engagement um it’s not about emps because that’s about to a recommend it for outside and and sometimes there are companies where people really like to work but they don’t want to tell it to Outsiders that I’m working there uh which is quite funny uh but that case the engagement am I engaged to my work is the key number for me um uh and that the first thing of that engagement number is how many people responded to an employee opinion survey and and just recently I was working with a much smaller company and they were so proud it was our first employee opinion survey and we got a 68% respond rate as it rubbish you know I have a company with several thousand employees with people located all over the world and I get an you know if I get a rate which is under 7075 you know they have to just basically redo it because the fact that people are not even engaged enough to fill the survey it tells you a lot about engagement um so so it’s these kind of things you learn uh while being involved in so many companies that you have to watch very much about the the the real top numbers U on that sense uh then I think the most difficult thing is that is to measure is a trust and trust is the key thing in there and usually you cannot measure trust per se for a whole company because you know it’s sometimes really funny you might see that you trust your closest management but you don’t trust the company or the top management and in the end it’s the closest management that counts however if that’s the case then you also have an issue so so anything that can uh tell you about the trust and you you can’t you can’t kind of ask do you trust people do you trust your management but there is a ways of working and and seeing you know do do do do you believe your management is doing everything you they should to ensure the uh you know um happiness in the workplace or or or things like these and those kind of questions will tell you uh a lot about the management uh pure trust no trust doesn’t work same way as I always say if people don’t answer to the question am I paid not which word no then there’s too much stupid people in the organization uh and and thus you have to read these numbers sometimes with a with a with a with with the perspective that you learn that that they should always been if the if everybody says great I’m well paid oh then you’re most likely paying too much yeah that’s uh I I completely completely agree um it I was just so interesting because a lot of the things that you are talking about are things that I would think are not very obvious or intuitive so it really requires that experience you have to have been in a number of organizations and seen the same thing and and being like Oh there’s a pattern How to make hard decisions I want to go back to the hard decisions because I feel like that’s something that’s really important I’ll put two things two things out there for you uh number one was I found one of your favorite political quotes it’s from Sean CLA junker uh says quote we all know what to do but we don’t know how to get reelected once we have done it it’s number one the number second thing is a story I remember reading about Carl icon the famous activist investor uh who goes on boards and shakes things up he he he was on a boorder I forget some kind of company uh the CEO came in the board meeting presented this acquisition that he wanted to do um the other board members were kind of nodding off and everyone no one spoke up everyone was gonna gonna vote it through so Carl speaks up last he says this is the wor worst deal I’ve ever seen and if you board members um you know approve this deal you’re all going to get sued because it’s you basically a breach of your fiduciary responsibility so the board shuts it down um but he had he not been there the CEO would have made the acquisition of this terrible business that was unprofitable and so on and so forth how do you go about actually creating creating that kind of culture that takes those hard decisions is it a matter of incentives is it a matter of personality if it’s a matter of Personality how do you develop it that’s a broad question it’s it’s no no no it’s it’s a very broad question it’s it’s a very good question it’s a difficult question also because because in the end um you know uh I I think the toughest discussions are or the decisions are not about money I tend to to say because you know if you see this kind of if you take the second example you had about buying something usually you very seldom a board would not to a purchase which is of strategy what usually happens is you either are paying too much for the thing which in that case comes a shitty thing because you paid too much for whatever you were buying or you haven’t been thinking about through the what happens afterwards you know you know people get sometimes so excited of buying a company that they don’t really think about then what in Earth happens when we have both it how does the new company look like and you have to think that before you end up buying the company because that might be the biggest reason you don’t buy the company is you just say whoa this will not work together and and and you know 60% of the m&as and this is another question of of just learning by doing too many things of too many times these things 60% of the m&as don’t bring any any value for the company so reason he was most likely saying it because he had the knowledge 60% cases is not and then that helps bringing that kind of data into the board helps the boards to say is this going to be one of it’s going to be the 60% or 40% case and what what does it need to be to make it a 40% I.E the successful case versus the unsuccessful case so some of is just purely br you know bringing up and saying um saying what do we do on on m&as I’ll come back to you on the other part on m&as actually the best tool I have is a premortem and every time we do an investment in the companies I’m chairing we have a postmortem which means 18 months after the investment have be done we look whether it actually lived up to the discussion or on ended up lived up to the initial investment um uh investment uh um proposal uh and what you’ll do then for while you learn that all the companies have a habit either being too enthusiastic or too pessimistic and then you just learn that and you can bring it into your new new new things but if you do a premortem that actually means okay guys if we’re going to buy this and we’re going to do this acquisition if we’re going to do any big moves what will it look like when we on the other side and what can go wrong and and keeping that kind of discussion opens you to not do this do we buy or not to buy but it actually opens you to discussions which then might might kind of come back to you and saying whoa we didn’t think about that one but if we buy that the competition do that whoa you know sometimes it ends up you’re not going to buy and sometimes it just ends up we’re going to buy differently or with different price or whatever it is so so this experience and bringing the different perspective and and specifically this back to F future and back you know this future and back plan how does it look like what’s the premortem how does it how does the future look like is a very effective way of of of of of changing the the the discussion on that sense but the biggest as I said to you the most difficult questions and decisions are about people it’s about changing people it’s about uh changing organization it’s about closing factories because closing factories is not about closing the site physical site it’s about letting you know changing a lot of uh lives of a lot of people these are the most difficult discussions and and and usually on these ones a bit similar method works but in the end you have to I think the key thing on those decision is you have to put yourself a a back end and let me put this way very often when I talk with the CEOs they might see that somebody is not performing and then they say ah but it’s not going performing and the first discussion you have is about how do we improve this person’s performance or how do we improve that Factory’s performance and after a while the biggest mistake you make is you keep you you stay on this can we improve the person or the factory or the unit discussion whereas you should yourself you say in people usually I say let’s give us ourselves maximum nine months and in nine months we have to decide if this person is in or out uh and and and and that discussion is something that a I’ve never been in a situation when somebody says oh we fired somebody too early that has never happened uh and that is actually the key thing is to be timely and and and and understand the bottlenecks and they these might be a persons who’ve been perfect in the organization for the last five years but while the organization grows they simply don’t have it what it takes to take the next five years and these discussions um happen very often between the chair and the CEO and CEO is the lonliest place in the world as a position and there a chair that you can take this very difficult discussion is key and then the same way of escalating through the organization that everybody has somebody in the organization that they can take these difficult discussions because this difficult discussion happens in every level I don’t know if I was answered your question but that’s what I get out of these two things no you answered it perfectly and I think that it feels to me that this is actually the most needed thing it’s not about we talked a lot about strategy ultimately I feel like strategy is relatively easy but it becomes impossible if you’re not willing to have hard conversations or make hard decisions then strategy I mean it doesn’t matter the you could have the best strategy in the world but it’s not going to be implemented it’s a la la land strategy and La La Land strategy you know the the the the the the fair fair tale world everything is possible and everybody can improved but in reality I think one of the biggest mistakes people make is they try to be nice and you should not be nice you should be kind and and being a kind for example in the personal reviews is to ensure you’re truthful to the person’s performance because nobody feels good staying too long in the position where they don’t fulfill what they were supposed to do it’s better it’s more it’s it’s Kinder it’s it’s it’s a better to take the tough discussion and ensure that you both go to your ways that’s kind to the person you’re doing you actually taking care of the person by being kind by being nice you very often avoid the the tough discussion I love that I completely agree um I could continue for forever but you know it’s we’re running out of time so uh final question uh a bit of a selfish one do you have any recommendations in terms Sanna’s surprising book recommendations of books or resources that you found especially effective when it comes to learning um how to effectively manage all these different types of businesses I think you are you’re now talking to a huge AA fan here so there is this book which is called why do we sleep uh I TR believe that sleep uh it was actually also advice I was giving to one of my bosses and let me maybe tell that story to the end he said to me I’m not going to give you when when we stop working together I said no I’m not going to give you an advice and I know you’re gonna get angry to me when I give you that advice like whoa that’s a way to introduce a a a a a a a last words but but he said listen sleep on it and and and his point was and he said to me very well some you’re very quick you can do the analysis but sometimes you need to sleep on it in order to find a way to do that analysis or explain that analysis to rest of the organization in such a way that they can actually be with you so his point was sleep on it and he was so right I first got annoyed I’m saying what do you think am I stupid do I have to sleep on things but he was so right uh usually very few things there are things that require immediate action today but those are urgent things something is in fire somebody’s life is in danger or something really bad has happened most of the thing in the business world can wait until tomorrow morning and on that one why do we sleep is one of the best books that I have read for several several years H it talks about it’s it’s a it talks about the importance of sleep and it talks about why sleep is a very important both solving problems but also versus the huge m mental problem we have at the moment with world with people not feeling very good it’s a mental sickness it’s not breaking the legs or bags which is the problem now it’s it’s breaking the head which is a problem so that would be one thing the second thing that I would say um uh I’m not a big believer on all the business books because sometimes or very often it’s the same wine in a new bottle or even worse the same bottle but it’s it’s really in that sense I think that all the business people do very well op ing some non uh fiction preferably historical non-fiction um I also say that my favorite um Business book ever all time is Winnie the Pooh read the first page of Winnie the Pooh and you’ll get an answer to a lot of lot of questions and problems in the world it’s a good takeaway um we’ve covered everything from corporate strategy to win the Poo so I um it’s it’s been a son it’s been a real real real pleasure to talk to you uh thank you so much for sharing your wisdom so transparently uh I will will take you up on that offer to do a a follow-up uh follow-up conversation because I’ve got uh tons more questions um but yeah thank you so much and uh for people who want to follow you um is it the LinkedIn are you active on Twitter both both but more active in linked nowadays than Twitter and Twitter more following nowadays but but link it link it in is I think the best way of figuring out what’s going on and occasionally uh I know that there’s uh interviews coming out articles um where you you share some of your perspectives so so again people can look out for that as well but um yes I’ll put those links in in in the show notes s thank you so much have a great rest of the day and uh yeah thank you you’re welcome thank you for listening you can find all episodes of the growth pod on Spotify YouTube and apple [Music]

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