CLIENT CASES PFIZER LEHTO GROUP
GROW T H TA L E N T V E C T I A 2 0 1 8 ________
DANSKE BANK METSÄ GROUP OUTOTEC KESKO VMP VIANOR OUTOKUMPU
GROWTH AND SUCCESS STORIES
NATURAL RESOURCES INSTITUTE FINLAND CITY OF TAMPERE THE ASSOCIATION OF FINNISH TECHNICAL TRADERS ILOQ
GROWTH GROW TH AND SU CCE SS S TORIE S
TALENT VECTIA GROWTH The latest Growth publication is a compilation of growth and success stories of our clients told in their own words. From market shaping to challenger sales and leading meaningfulness. Everything it takes to make growth happen. We hope you enjoy reading this, Talent Vectians
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16 E D ITOR S Tom Lindholm Satu Olkinuora Maria Sangder Risto Pennanen Thomas Freundlich
Contents
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6 Towards future 8 Driving growth 10 Accelerating growth of companies and society
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12 GROWTH IS A STRATEGIC CHOICE 14 16 20 24 28 32 36
58 © Talent Vectia 2018 Talent Vectia, PO Box 48, FI-02150 ESPOO, Finland ISBN: 978-952-9590-09-4 (Printed) ISBN: 978-952-9590-10-0 (Digital) Layout: Miller&Lean Photography: Pekka Hannila, Hannu Piirainen, R&V Paulsen, and Dietmar Hendricks Press: Origos Oy
Growth strategy determines the direction The Lehto Group case: Boots in a row The Association of Finnish Technical Traders case: A new take on the operating environment The great opportunities provided by the digitalization of business operations The VMP case: New growth from radical change The iLOQ case: Boost for internationalization Growth needs financing
40 GROWTH LEADERSHIP 42 46 50
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Growth with modern leadership The Kesko case: Turning managers into change makers The Outokumpu case: Renewing leadership to become a high-performing organization
54 58 62 64 68
Employee experience as a strategic priority The Pfizer case: Great changes with small actions The next 100 years of the Finnish public sector The City of Tampere case: The steps to empowering leadership The Natural Resources Institute Finland case: Raising services to a new level
72 GROWTH WITH CUSTOMER-ORIENTED OPERATIONAL MODELS 74 76 80 84 86 90 94 98
Does your sales culture destroy the chance of better profits? The Danske Bank case: Positive challenging is serving the client The Metsä Group case: From purchaser of timber to forest asset manager Customer experience – Your North Star? The Vianor case: The way to the customer’s heart is through better leadership LOGE - the future of true organizational transformation The Outotec case: License to Lead Sales Things will change – with or without the health and social services reform
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INTRODUCTION
TOM LINDHOLM INTRODUCTION
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Towards future
alent Vectia accelerates growth of companies and society. Lasting success cannot be created by rationalizing and economizing, but by investing in new business operations that bring growth. In order to maintain the modern welfare society, Finland requires growth. Talent Vectia wants to participate by driving growth for its clients.
In Finland, there is much discussion on competitiveness at the national economy level, but the discussion often revolves around efficiency. However, a functional growth strategy implemented in everyday operations bears more significance for competitiveness. When supportive and developing leadership is combined with this, companies have all the prerequisites to create a customer-oriented corporate culture. When the culture develops, so does competitiveness. In this rapidly changing world, the starting point for growth and development must be customer benefit and the resulting market potential. What products or services truly benefit the customer, and how can we create new markets around emerging demand? TALENT VECTIA
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People make change happen
Driving growth
Even a good growth strategy is worthless unless people implement it in their own work. As a society, we need new competences and new ways of working. When compared with the industrial revolution, the pace of the prevailing digital revolution is unbelievably fast. Studies show that the majority of current work will be partly digitalized over the next few years. Adopting new ways of working requires the constant learning of new things. If people are left behind due to changes in the market, the competence of the labour force will no longer meet the requirements of companies and the market, and growth will cease.
Talent Vectia is a strong operator in the field of leadership, customer experience, and strategy work. Via recruiting, we also invest heavily in our own growth and our renewable way of working. An example of this is LOGE, a new collective learning environment, which organizations can use to achieve true change. The user experiences of our clients are encouraging. Gamification engages the personnel in developing their own work and working environment.
The significance of the meaningfulness of work as a motivational factor will grow. People are searching for a greater meaning in their work, and they want to be part of a larger story. Fragmented organizational structures require even more self-management skills and networking from employees. It is up to the leadership to create the conditions in which the personnel can make change happen. These conditions can be generated by developing competence and creating functional processes as well as a corporate culture that encourages trying out new things.
We have the honour to work with hundreds of leading companies and public organizations annually. In this publication, we have compiled 13 growth and success stories from along the way. Hopefully they will provide you with inspiration for the growth path of your own company. Enjoy reading,
Tom Lindholm CEO TALENT VECTIA
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Driving growth
alent Vectia is an ambitious community of growth accelerators whose passion is to drive growth of companies and society. We base our work on our principles, and the backbone of all our operations is the desire to be a bold seer and doer, an opinion leader who creates customer value, and a productive team player. We work in project teams with our customers, that are compiled to be a combination of complementary skills and different experience and competence profiles to create a strong
entity that is tailored to the needs of the client. Our methods combine analytical consulting with a humane approach and coaching. Our clients are who we do all of this for and the source of our meaningfulness. We actively measure client satisfaction and customers willingness to recommend us. For all of us at Talent Vectia, continuous collaboration with our clients is often the highest praise for successful and meaningful work. This means not only individual projects, but a long-term partnership that ensures the success of our clients’ business.
Bold thought leader | Driver of customer value | Results-driven team player
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Accelerating growth of companies and society
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alent Vectia is driving growth. We build new earnings, accelerate growth and digitalize businesses. We are committed to our customers’ success. CLIENT VALUE – Markets are changing more rapidly than ever and it is important to be able to create value for clients. Customers and market must be the starting point for developing company’s operations.
TALENT VECTIA’S WAY OF WORKING
OUTSIDE-IN Customer and market driven reframing of business
ANALYSIS
ACCELERATING GROWTH OF COMPANIES AND SOCIETY
PEOPLE FIRST Purpose and people drive renewal in mindset of way of working
We create understanding around new legislative changes, the opportunities of technology, and future trends.
IMPACT We understand our client’s situation and recognize their current and future business opportunities.
PEOPLE – People implement strategy. Renewal and growth require changing the organizational culture and ways of working.
ACCELERATION
Collaboration with Talent Vectia generates rapid results and permanent capabilities. Our customers share a desire to grow and develop.
We create growth with the aid of quick pilot projects. Lean operational models enable agile development.
SCALING
Renewal strategies and disruptive growth acceleration programs
Leading in human and machine systems
Smart business design for superior customer value and efficiency
Future Foresight
Agile Organisation Model
Solution & Service Design
Business Model & Earnings Logic
Employee Experience Design
Customer Experience & Sales
Growth Opportunity Accelerators
Growth Culture in Digitalised Environment
End-to-End Value Streams
Successful Networks & Ecosystems
We extend new business opportunities and models to meet the growing demand.
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Growth is a strategic choice
LEHTO GROUP
Success requires the simultaneous mastery of two fields: the continuous development of current business and the recognition of new emerging business areas to create true growth. Particularly when accelerating entirely new ways of creating growth, new competences are required. Companies must learn how to shape markets and their role in them.
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STRATEGIC CHOICE
INSIGHT
bility and growth, companies that consider future opportunities systematically outperform their peers by 200% on growth and 33% on profitability. Traditional strategy work bound to an annual strategy clock model will gradually transform into continuous strategizing where the determination of direction and means will be more closely connected with realization, which enables an improved strategic agility. As for innovative growth, companies will be faced with a myriad of options, and hence it is increasingly important to be able to systematically determine, evaluate, and prioritize new growth opportunities and to ensure a balanced portfolio of opportunities for growth. When choosing a direction, it is important to ensure its purpose and guiding principle. According to the Kasvun esteet ja edistäjät (Obstacles to and incentives for growth) survey that we conducted, companies that have achieved significant growth are more often guided by a meaningful direction. It is difficult to engage an organization in the growth process solely for the sake of growth, and, without a greater purpose for doing something, the results will often fall short of the objectives. The growth opportunities selected as new starts are advanced via experiments and pilot projects. It is increasingly common that these are constructed in collaboration with selected clients and, in order to achieve a more extensive change in the market, in collaboration with other operators and even competitors. Particularly in industries undergoing significant changes, companies work together to form integrated processes and new ecosystems in order to solve market needs. These companies want to be pioneers, the designers of future markets. In strategy implementation, the importance of
Jarkko Pallasaho, Head of Growth Strategies Maria Sangder, Managing Consultant
Growth strategy determines the direction
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enerating growth requires succeeding in both the continuous improvement of current and the creation of new business. In addition, these have to be accomplished simultaneously. As the pace of change accelerates, the customary operational models may change in an instant, sector boundaries may disappear, and digitalization can solve customer needs in completely new ways. Because of this, companies can no longer solely rely on their current business even if they are still growing. Companies must actively search for new growth for their operations: they have to think about how they can respond to changing market needs and conditions more quickly. A solid growth strategy provides the organization with a meaningful direction for innovative growth and a clear foundation for the development of current business operations. Succeeding in truly
innovative growth and renewal enables significant results.
Tools for innovative growth In addition to boldness, accomplishing innovative growth also requires the ability to do many things differently than before. Emphasis is put on predicting the future, and the ability to construct alternative visions of the future supports success. According to a study on the effect of future awareness and future foresight in European companies on profita-
At its best, innovative growth is about the multiplication of business results. TALENT VECTIA
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Future-prepared companies outperform the average by a 200% higher growth and are 33% more profitable. establishing a meaningful direction and objectives is emphasized, as is the importance of laying out common principles and verifying progress instead of closely controlling all activities. Self-managing teams must be provided with the opportunity to find the best solutions by removing obstacles and roadblocks to progress.
Mastery of two fields The development of current business operations should not be forgotten in the euphoria of innovative growth. From a strategic point of view, the purpose of the company’s established business operations is to ensure a profitable foundation for as long a period as possible. In the continuous development of current business operations, customer value is increased by developing customer experience and streamlining operational models. When the organization has effective tools and operational models in use, the continuous improvement of operations becomes more effective and the new customer and market demand-oriented growth opportunities can be promoted in an agile way. In addition, in our experience, success achieved together lasts longer and generates a corporate culture of achieving goals. TALENT VECTIA
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STRATEGIC CHOICE
LEHTO GROUP LEHTO GROUP
Boots in a row Lehto Group created a growth strategy and management system to meet the future needs of the company, which is undergoing rapid growth.
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hen an entrepreneur-led growth company moves into a new size class over a period of a few years, straightforward operational models start to require support from a common strategic foundation and management system. One of the board members of Lehto Group, headquartered in Kempele, Finland, already recognized this matter a few years ago. ‘He said that you boys are going to fall flat on your face if you don’t create a structure for the company. At that point, we were skeptical, but as it turns out, he was completely right’, recalls the company’s CEO Hannu Lehto. The need for structure became even more evident when the company grew due to business acquisitions, along with which many corporate cultures were combined. Change of ownership automatically changes many things, but not corporate culture. The harmonizing of different corporate cultures with Lehto’s business acquisitions required quite some filing of rough edges, a process which was
HANNU LEHTO CEO LEHTO GROUP
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not completely painless. The company was now faced with a kind of acquirer’s dilemma. On the one hand, the aim was to keep the previous owners of the acquired companies in order to maintain the entrepreneurial attitude. On the other hand, being entrepreneur-led increased the risk of silo mentality. When the company introduced new operational models, this was met with some resistance in the entrepreneur-led world. ‘We entrepreneurs are people who take direct action, don’t care for bureaucracy, and are annoyed by sitting in meetings and pushing paper’ says Lehto with a twinkle in his eye.
Cohesion for the service areas Lehto Group had quickly grown into an entity with eight subsidiaries which all had their own operational methods. Even though the company harmonized its operations by forming four service areas (housing, business premises, building renovation, and social care and educational premises), the jungle of various operational models remained
unnecessarily verdant. That’s why, in the summer of 2016, the company began to construct growth strategies for the service areas with Talent Vectia. The aim of these strategies was to create a common strategic goal, to increase effectiveness with systematic operational models, and to make the company look even more unified in the eyes of its customers. During the project, new strategies were created for four service areas, after which the group strategy and management system were also updated. Even though an individual strategy was determined for each service area, their comparability and compatibility with the group’s strategic priorities was ensured with a common method. This meant, for instance, that eight key themes were systematically discussed while constructing the strategy of each service area. These themes were market development, vision 2020, strategic priorities and choices, success factors and development needs, group-level synergies and services, service area structure and management, phasing of strategy implementation and strategy roadmap, and notable risks. TALENT VECTIA
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STRATEGIC CHOICE
LEHTO GROUP
With the aid of these eight themes, the strategy remained closely connected to the practical business operations of each service area. This is important, since many group-level strategy descriptions may feel distant at the business operation level. If that is the case, they guide operations poorly. At Lehto Group, the service areas play a key role in other respects, as well. ‘The service areas have a lot of power and the responsibility over their own business operations. This helps to maintain the needed entrepreneurial straightforwardness.’ In addition to strategic objectives, it was also important to create a common vision of future opportunities and the most important priorities and deselections.
Unity supports the innovation of tomorrow At the group level, the key issues for Lehto Group are the principles of performance-guided construction, such as industrial production, design management, repeated concepts, and having the most skilled workers. With these in place, it is possible to make customer promises consisting of one agreement, a fixed price, and an agreed move-in date. In the development of the management system, it was important to determine the level at which each matter should be taken care of. For instance, acquisitions are now carried out in a centralized manner in each service area, whereas earlier the subsidiaries had made acquisitions on their own. The new strategy and management system were not, however, created to solve the problems of yesterday, but to meet the challenges brought about by the modernization of tomorrow. In the future, great changes lie ahead, and the first of them is the continuation of growth. In 2016 alone,
over 300 people joined the company, which meant an increase of over 50%. The need to develop productivity and digital solutions are also driving forces for innovation. The development of productivity is the greatest challenge of the entire industry. ‘When it comes to the development of productivity, construction has been the second least successful industrial sector. The least successful one has been our industrial cousin, building maintenance’, says Lehto. Learning together and adopting common practices are crucial to the development of productivity. In the construction business, learning is too slow. That’s why too much time is spent in this industry on things that do not produce value for the customer. In Lean process thinking, that period is called Muda. ‘In construction, 50–70% of the working consists of Muda. When the amount of Muda is reduced by even a little, much more cost-effectiveness and quality is gained’, says Lehto. Muda also occurs in construction because the industry is constantly creating unique products. Lehto points out that before the actual deliveries, the car factory in Uusikaupunki made a hundred cars for learning purposes and then crushed them all. ‘Repetition leads to learning and has a great effect on the failure rate. Even in construction, one must dare to repeat things and not always start from the beginning by designing new kinds of doors and windows’, states Lehto.
Getting rid of Muda with digital solutions
fects almost everything, from acquisitions to production and customer experience. It is one of our most significant opportunities, and it improves all our processes.’ Lehto takes the journey to digitalization seriously. The company has hired a digital director, who has two years to concentrate solely on the digitalization of operations. Muscles are used as much as necessary within the limits of possibility. ‘I have said that if someone needs 50 people to carry out a task, they will get the 50 people.’ Digitalization is a key instrument in the reduction of Muda. For instance, designers should have more standard components, whose prices are known due to annual agreements, at their disposal than they have at the moment. So that there would be no need to put each component out to tender separately in each phase of construction. Lehto insists that some degree of standardization would not result in a monotonous urban landscape. ‘The purpose is not to mimic the architecture of East Germany. Even LEGO bricks can be used to create all kinds of things despite the fact that many of them are standard pieces.’ The modernization of the management system also plays an important role in this development process, as it improves the conditions for moving forward in the development of both productivity and digitalization. ‘We probably wouldn’t be able to move forward with such efficiency if we didn’t agree on the how the strategy is to be realized’, says Lehto.
The development of digital solutions is the most important development activity that has been centralized in the group, since there is no point in developing digital solutions separately in each service area. ‘In our company, digitalization afTALENT VECTIA
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EXTENSIVE PARTICIPATION CREATES ENGAGEMENT IN CHANGE Approximately 50 people in total participated in the creation of Lehto Group’s service area strategies. Hannu Lehto said that at first he was doubtful if it would be advisable to tie so many people to such a project. ‘Now I can say that the implementation phase feels easier when the people are committed and know the reasons for the change’, says Lehto. Extensive participation also guarantees that the understanding of everyday situations is reflected in the decisions made. In addition, the risk of being branded ‘made to order for the management’ is decreased when the people involved in the process have been the ones to search for the most functional operational models. The extensive process required a lot from the participants, but Talent Vectia’s consultants kept the process alive so that the development work didn’t get smothered by everyday tasks. ‘We received very good feedback from the participants about having an outsider to support the process. We probably would not have been able to get this done on our own.’
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GROWTH STRATEGY
THE ASSOCIATION OF FINNISH TECHNICAL TRADERS THE ASSOCIATION OF FINNISH TECHNICAL TRADERS
A new take on the operating environment When the Association of Finnish Technical Traders wanted a new strategy, Talent Vectia and Futures Platform helped it fine-tune its visions and turn them into a strategy.
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his new way of conceptualizing the changes in the operating environment was met with unreserved positive feedback for providing new impulses and making people think about the effects of different phenomena’, says Markku Uitto, Managing Director at the Association of Finnish Technical Traders. At the beginning of this year, the Association of Finnish Technical Traders (TKL), which represents over 350 technical traders, carried out an extensive strategy process, which is something it does every four years. The aim was to gain a comprehensive overview of the driving forces in the environment, of how the environment is changing because of them, and how they affect the member companies and their customers, and to use it as the basis of the strategy work.
MARKKU UITTO MANAGING DIRECTOR THE ASSOCIATION OF FINNISH TECHNICAL TRADERS
MARKKU HÄMÄLÄINEN BOARD MEMBER THE ASSOCIATION OF FINNISH TECHNICAL TRADERS
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The association chose Talent Vectia to support it in the process, and Futures Platform, whose facilitators and foresight programme help to make predictions about the future, was brought along due to Talent Vectia’s recommendation. ‘The key objective was to include the member companies as extensively as possible in the process of considering the driving forces’, says Uitto. The inclusion was indeed successful, as approximately 60 executives, i.e., every sixth member company, took part in the process.
A versatile take on the operating environment At the first stage of the process, the participants identified the changes in the operating environment. They utilized Futures Platform’s strategic
foresight tool, for which essential change phenomena, such as artificial intelligence, the sharing economy, and global warming, had been preselected. The company’s future team has written descriptions for over 300 phenomena in total, in addition to which background material has been provided for the phenomena. The electronic tool can be used by a large number of people, who vote for the further consideration of the driving forces they find most essential. For the members of an association like TKL, the foresight tool provided an opportunity to analyze the environment with their colleagues in a way that is not possible in the course of normal everyday operations. ‘The discussions were exceptionally productive and captivating. At the same time, they continuously encouraged the participants to think about the strategy of their own company’, TALENT VECTIA
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THE ASSOCIATION OF FINNISH TECHNICAL TRADERS
says the Group CEO of Oy Otto Brandt Ab, Markku Hämäläinen, who also sits on the board of TKL. The process broadened thinking outside the box. When working in a traditional way, large megatrends, such as digitalization and climate change, are often brought up, but now less obvious trends also emerged in the discussions. The fact that many executives also wanted the material for their own strategy work, even though the project was conducted for the association, illustrates the level of enthusiasm. IN THE END, THESE WERE SELECTED AS THE KEY DRIVING FORCES:
• Ageing of the population and urbanization • Growth of the sharing economy followed by centralization of ownership • Emphasis on the ecosystem • Digitalization (e.g., robotics, IoT, and machine intelligence) • Agile operational models • Re-emergence of the manufacturing industry • Responsibility and environmental friendliness At the end of the first stage, industry group-specific visions of the future were formed on the basis of the scenario analysis. These help in sharing a common vision of the future and the measures required to support favourable market growth.
Trends became strategy At the second stage of the process, a strategy was constructed for the association. Now the group of participants was smaller, as it consisted of the
board and personnel of TKL and the representatives of Talent Vectia. The second stage was somewhat more challenging, since it required creating a vision of what the challenges and opportunities, which emerged during the first stage, would mean for the strategy. Every executive knows how difficult it is to foresee the changes brought about by, e.g., the combination of digitalization and globalization. ‘When an opportunity to shape the progress of the entire industry is presented, there is always the risk of taking the wrong path and having to change direction. Some time may pass before it all pays off’, reflects Hämäläinen. What made the task even more challenging for an association like TKL was the fact that the needs of the heterogeneous membership were not aligned on all issues. ‘The project also left a good impression in the sense that with the support of Talent Vectia, we were almost certainly able to get much further than we would have working only with the association and the member companies’, says Hämäläinen.
The new strategy emphasizes foresight Foresight also became a key theme in the association’s new strategy. The new goal is to make the association ‘the most valued networking partner and vision provider in technical trading’. ‘Our members expressed a strong wish for us to provide even more forecasting on the operating environment’, says Markku Uitto. The members want the association to be like an antenna that identifies trends, radical market changes, and regulation. New phenomena also re-
THE ASSOCIATION OF FINNISH TECHNICAL TRADERS
sult in a natural wish for the association to identify the consequences of the phenomena. ‘Companies may feel, for instance, that they lack some competence that is required in the new world. In that case, the association can suggest networks via which it would be possible to acquire such competence’, says Uitto. In addition to information provision, the association is expected to promote the significance of the industry and to provide effective supervision of interests that includes, e.g., work that boosts the market and advances reasonable regulation. In addition to these, the association is also expected to conduct pilot projects for the development of new services. Such a service could be related to, e.g., the counselling of small businesses in HR matters.
TKL IN BRIEF • Over 350 member companies • Five member associations (the Finnish Electrotechnical Trade Association, the Finnish Hydraulics & Pneumatics Association, the Suppliers of Electronic Instruments and Components Association (ELKOMIT), the Finnish HVAC Technical Traders’ Association, and the European Portable Battery Association) The member companies have over 20,000 employees • Covers 85% of the technical trading sector
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The project also left a good impression in the sense that with the support of Talent Vectia, we were certainly able to get much further than we would have working with only the association and the member companies.
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STRATEGIC CHOICE
INSIGHT
The great opportunities provided by the digitalization of business operations Krista Korelin, Head of Digitalization
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igitalization is perhaps one of the most often used terms in business literature and change discussions today. There is a magical that digitalization will solve the problems related to both the labour shortage and unemployment, productivity challenges, and opposition to change, as well as provide businesses with means for exponential growth and people with opportunities to learn new things. If I were to list all the service providers whose service selection is affected by the opportunities of digitalization, not many companies would be excluded. What, then, are the most important business-related aspects of digitalization? It revolutionizes business operations in many ways and changes the earning model in many industries. Technological development provides opportunities for a better customer experience, higher productivity, more productive business models, new products or services, and a more modern way of working. These opportunities are continuously increasing, and finding the digitalization path that
best suits each company may be a journey of trial and error. One company wants to find suitable tools, the other a new earning logic, and the third a new service for its customers. There is no single correct path for utilizing the opportunities of digitalization. Every company has to consider two questions when faced with the challenges brought about by the digital revolution: what should we do, and how can we achieve the desired change?
WHAT? When constructing digital services, the work starts with asking the question of what problem the service solves for the customer. What does the user wish to accomplish with the service and how can they achieve it in the most practical way possible? Similarly, when considering company strategy, one should ask which of the challenges faced by the company can be solved with the aid of digitalization. How can we utilize digitalization so that it benefits our customers, and how can we achieve that in the most practical way possible? TALENT VECTIA
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”
What if every move, work task, and event that is related to the port operations were saved in the cloud?
Constructing a digital agenda for the company’s strategy requires a thorough examination of opportunities brought by technology. Some of the new technology, e.g., software robotics, is primarily a tool for creating a better customer experience and seeking higher profitability. If an insurance company decides to partly automate their insurance processing, the turnaround times for claim compensation processes will be reduced and the customer will be more satisfied. The personnel, who have previously made many compensation decisions, can concentrate on processing the more challenging cases while the robot takes care of the routine tasks – and accomplishes them more quickly and with less errors. In some industries, the increase in computing power combined with cloud technology provides completely new business opportunities. Large industrial companies for whom heavy investing and striving towards as high a utilization rate as possible for the investment targets is part of business operations, may obtain a new earning logic with the aid of advanced analytics. Let’s think about a
company that produces port equipment and supplies cranes for container traffic. What if every move, action, and event that is related to the port operations were saved in the cloud? Due to the drop in sensor prices, massive amounts of sensor data is transferred to the cloud daily, and with a sufficient amount of data, conclusions can be drawn on the port operations. Are the work tasks performed efficiently and in the optimal order? How could the port operations be streamlined, and how could the utilization rate be increased further? Suddenly the company that produces port equipment has access to a valuable source of information, and this provides them with the opportunity to help their port operator clients – not only by supplying equipment, but also by improving their business operations. A new business model, a new earning opportunity. The port operator’s customer experience is another factor that is related to the improvement of business operations. If the operations related to the maintenance and downtime of the port equipment can be predicted, the utilization rate
can be increased and the operations streamlined. Advanced predictive analytics provide new opportunities for the manufacturers of almost all kinds of devices due to the Internet of Things.
HOW? Sometimes you hear people say that the ‘what’ questions are easy and the implementation is where the real challenges begin. This is partly true for digitalization, since bringing about a change in an organization is often a slower and more demanding task than first thought. Digital transformation is a term that has perhaps become as mundane a term as digitalization itself. Many use them interchangeably, and no wonder, since they are often used to depict the same thing, the utilization of the opportunities of technology in business operations. What does digital transformation then mean? Due to digitalization, three factors are undergoing a great change in companies: the people, business operations, and technology. All of us have come TALENT VECTIA
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INSIGHT
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The Dimensions of Business Digitalization
In this triangle formed by people, technology, and business operations lie the greatest opportunities and challenges of digitalization.
Digital Transformation
Smart Analytics | Robotics | AI
Agile methods
Data-driven operations
Data-driven decisions BUSINESS DESIGN
across a situation where the customer experience of using a digital service is excellent. The service is easy to use, it accomplishes what it is supposed to, and the transaction is quick and smooth. In that case, the digital service is well designed and constructed, and it solves the customer’s problem in a practical way. There are numerous similar examples, and what they all have in common are the processes and operational methods of the company. The operational methods must also support the digital service experience or digital business operations outside the immediate customer interface. The digital service channel is a drop in the ocean when considering the ability of companies to utilize the opportunities of digitalization. Processes need to be scrutinized throughout the organization. The same degree of transparency the customers require from the company is reflected in what the employees require. The same degree of agility the customers require from the company is reflected in the employees’ requirements concerning the operational models used to run the company and
its operations. Knowledge-based decision making, i.e., the way data is utilized not only to better serve customers but also to streamline the internal operations of the company, becomes a key enabler of success in digital transformation. Every person wants to do their job as well as possible and provide good experiences for their interest groups. Organizations can support this by offering the data it has collected on its customers or collaboration partners for its employees to use. Efficient utilization of data may, however, be difficult, as there are few companies whose data architecture has been constructed from scratch with agile methods. In most cases, the current system rests on older systems, dating back decades, from which the data needs to be dug up. It takes time, patience, and investments, but usually it is worth the effort. When the data-related requirements are met, the utilization of new technology, and all the opportunities brought with it, can begin. AI-assisted knowledge-based decision making is possible when the information is in the right form and place and ready to be utilized in
decision making. In most cases, digital transformation is primarily connected with operational methods and management. Technology is an enabler, and commercial models are the drivers of the earning logic and service offering. In order for the organizational change to be possible, the operational methods must become more customer-oriented and agile, and the people working in the organization must be able to identify with them. In this triangle formed by people, technology, and business operations lie the greatest opportunities and challenges of digitalization. All these three factors are required in order for the company to survive amidst the turmoil of digitalization. All these three factors must also be great successes if we want to be pioneers in addition to being survivors.
PROCESSES & DATA
LEADERSHIP
DIGITAL BUSINESS
DIGITAL CAPABILITIES PEOPLE
TECHNOLOGY
Customer Engagement
Data architecture
Omni-channel Experience
Data-intensive business systems Business intelligence Digital Maturity Transparency
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STRATEGIC CHOICE
VMP VMP
New growth from radical change
T
The VMP personnel service company is in the throes of great societal change. VMP is identifying opportunities in the changes.
his line of business is in a similar situation as the banks. The core business is changing radically, and every operator is supplementing it with new services’, says Heimo Hakkarainen, the Group CEO of VMP Group, which offers personnel services. At least VMP has succeeded in supplementing its offering, as the group’s turnover has doubled in five years to over 180 million euros. One of VMP’s growth impulses was the strategy which was constructed with Talent Vectia more than five years ago and which produced preliminary growth plans that have since been realized. The industry is undergoing several radical changes, of which digitalization, the change in the nature of work, and the health and social services reform are the most prominent. Digitalization is a global driving force that affects all industries in both the private and public sector. That is why VMP is not under any false impressions that the industry is somehow protected. Digitalization changes the processes, the purchase behaviour
JUHA PESOLA MANAGING DIRECTOR VMP VARAMIESPALVELU
HEIMO HAKKARAINEN GROUP CEO VMP GROUP
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of customers, and the competition. When digitalization opens the doors to competition, it also opens opportunities for VMP. The company is now offering its clients more extensive service packages than before. It possesses an enormous amount of information on both its client companies and its mobile employees. ‘Analyzing information improves our client understanding, on the basis of which we can develop new services’, says Juha Pesola, the CEO of VMP Varamiespalvelu. The fact that the company leases robot employees to its clients also reflects the level of digital enthusiasm at VMP. Due to the collaboration with Most Digital, VMP is also part of a project that provided the personnel of a pension insurance company with a digital co-worker called Tarmo. Tarmo has been assigned routine tasks in background processes and customer communication.
Many steps towards innovation The selection of new services already began to expand a few years ago when VMP noticed that it was the perfect moment to offer its clients something
more than just traditional personnel leasing. The core need of the clients is not to rent personnel but to get the right kind of personnel for the right need. Leasing is one way to meet the need, but there are many other ways, as well, and VMP has been searching for them with an open mind. Now VMP Group is a group of six companies that also provides, in addition to personnel leasing, personnel development services, aptitude assessment, and care services. And the progress will not stop here. ‘The change cycles in the labour market are shorter than before. New demand and supply is established so quickly that it is difficult to predict what will happen a year later’, reflects Hakkarainen. The rapid economic fluctuation in the shipyard and car industry on the west coast are examples of quick changes. Anyone who has worked for long in those industries has experienced the strong alternation between celebration and unemployment. Great changes require quick reactions from personnel service companies. VMP demonstrated quickness when it launched a service pilot project to help the unemployed become employed during the great regional reform in the TALENT VECTIA
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VMP
”
We don’t wait for the clients to send us quote requests but search for targeted solutions for the client.
area of the 11 ELY Centres (Centres for Economic Development, Transport and the Environment). During the pilot project, VMP does not cherry-pick the best candidates, but rather refers people whose employment has been assessed as very challenging to the service. The agreement encourages VMP to succeed, since the amount of compensation has been strongly tied to the employment rate. This pilot project is only one example of how the established arrangements in working life are changing. ‘There is no need to argue about who provides employment and who gets the credit for it. Both the private and public operators have their own role’, says Hakkarainen. The pace of change forces the operators to be flexible about some qualification requirements, since the educational system cannot react to the changes quickly enough. ‘When companies suffer from a serious employee shortage, they don’t have three years to wait for the studies of suitable employees to be completed. For instance, the employers in the hotel and restaurant sector in the north have stated in unison that the right attitude is more important than a degree’, says Pesola.
Predictive selling VMP has conducted several development projects with Talent Vectia in which strategy has been constructed and new services have been searched for. One of the most important projects has been the development of predictive and proactive selling and the client experi-
ence. ‘We don’t wait for the clients to send us quote requests, but search for targeted solutions which benefit precisely the client in question’, says Pesola. Digitalization is an excellent aid in predictive selling. For instance, by analyzing financial statement data, we can find many challenges for a company like VMP to solve. When it comes to data analysis, the effectiveness of a machine is unparallelled. ‘While robots are taking care of basic tasks, the personnel can spend more time with the clients. This also improves the client experience’, summarizes Pesola. A robot does not, however, negate the need for human interaction, since listening is an integral part of predictive selling. Even though the salesperson prepares for the client meeting, the final solution will be developed on the basis of the client understanding that is generated during the discussion. It is also important that the entire organization, and not only the so-called client interface, possesses client insight. That’s why VMP has also involved personnel who do not engage in actual client work in client experience training. The entire organization must understand what the sales department is doing. Similarly, the salespersons must understand what the others are doing, so that they will not make unreasonable promises to clients on behalf of others. ‘Although the training courses are fruitful, they are also hard for people who have never sold anything. Everybody just has to realize that in the future, the entire personnel will be working even more closely with the clients’, states Pesola.
STEAL WITH PRIDE VMP GROUP IN BRIEF • Turnover in 2017: MEUR 183 • Personnel: 330 employees • Personnel leasing and recruiting are VMP Varamiespalvelu’s core competencies • Romana Management specializes in the development of management, organizations, and human resources • Personnel is an expert company in the field of aptitude assessments and organizational development • Alina Hoivatiimi specializes in producing care services for persons who live at home • Staff Plus Oy is a personnel service company operating in the Helsinki region which focuses on the restaurant sector • Invoicing service Eezy Osk offers the opportunity to work independently in an entrepreneurial way without the need to start a business
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Providing us with experience from other industries was an essential contribution by Talent Vectia to our development projects. ‘When issues are only discussed inside the company, the view often remains narrow. That’s why it pays off to listen to the experiences of others and apply them intelligently. The "stealing with pride" principle is a good one to follow in this matter’, says Heimo Hakkarainen, the Group CEO of VMP. The personnel of Talent Vectia also garner praise for their humane systematism. The operational models are systematic, but the work is performed in a pleasant manner. ‘That is why the co-operation has been so smooth. In addition, new projects have proceeded quickly because they know us so well’, says CEO Juha Pesola. Heimo Hakkarainen has a piece of advice for those who are planning similar development projects, and it applies to both companies and the entire society. ‘Dare to think about how things have been done and how they could be done. One must have the courage to be bold throughout the entire process.’
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STRATEGIC CHOICE
iLOQ iLOQ
Accelerating internationalization
T HEIKKI HILTUNEN MANAGING DIRECTOR ILOQ
‘I believe that a company cannot succeed without a good strategy’, says Heikki Hiltunen, CEO at iLOQ.
iLOQ, which produces digital locking systems, shifted into a new gear in its internationalization process.
he foundation on which iLOQ is developing the company is in a condition that many other companies could rightly be envious of. ‘When it comes to self-powered systems, we have a 10-year head start over others. Everyone else still utilizes batteries or another kind of external voltage supply’, says the company’s CEO Heikki Hiltunen. The several-year lead on the competition is a rare treat, particularly in a market that is growing rapidly. Digitality is pushing its way into the lock business in the same way as all other industries. The reason for this is that digitality brings many benefits when compared with mechanical locking. Copying mechanical keys is easy, particularly now that 3D printers are becoming increasingly popular. When someone loses the mechanical universal key of a building, all the locks have to be changed or the risk of burglary must be accepted. The digital system, on the other hand, is easy to reprogram. Another great benefit of digitality is access control. For instance, the fact that home deliveries of
food and the provision of care services at home are growing in popularity sets new requirements for access control. Providing the services becomes easier when the service personnel can be offered easy access to the flat in a way that also leaves a trace. In the digital world, this is possible. Of course iLOQ has competition in the field of digital locking systems, but what makes the company’s products completely unique is that the locks are not equipped with any kind of external power source. When the key is put in the lock, enough power is produced for identification and the lock opens.
Everybody must lay their own export path Market growth and good products alone do not create business. The competitors are conducting their own development work and catching up with iLOQ. That’s why the company must develop something new and conquer the market more quickly than it is now. This is the situation in which iLOQ started to
construct a growth-oriented strategy. The company chose Talent Vectia to assist it in the strategy work. In addition to Finland, iLOQ has already established a strong presence in, e.g., Sweden, Germany, and Benelux. In 2017, approximately 45% of the 40-million-euro turnover was from export. Thus, the company is familiar with export, but the aim of the new strategy was to construct more systematic operational models than before. ‘Previously our operations were based more on products and technology. In connection with the new strategy, we have approached our business operations in a more comprehensive way by examining them from the perspective of the market’, says Hiltunen. The difference in perspective seems small, but, in practice, it may become enormous. When the approach is product oriented, many client perspectives may go unnoticed. In the worst case, the company may think that ‘this is the product and all we have to do now is find a market for it.’ When the strategy is customer oriented, the company may be presented with surprising opportunities but also with new investment needs. TALENT VECTIA
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iLOQ
Questions about, e.g., what kind of competence the company requires in order to be able to implement the strategy will become more prominent.
Systematic growth model In accordance with the new strategy, iLOQ will establish several sales offices in Central Europe over the next few years. For that purpose, the company developed a coherent model, which it will use in proceeding to new markets. ‘Now we determine, for instance, the market’s potential, target segments, and the competitive situation in more detail than before. It is also very important to reflect upon what kind of competence is needed on the new markets’, says Hiltunen. It is essential to examine the markets carefully, since the lock market has become fragmented. Local companies and solutions dominate the market, and, since the industry concentrates on safety, new solutions may not necessarily evoke enthusiasm right away. ‘In many industries, it is vital to realize that cultural differences, different educational systems, and a different history may extinguish growth unless the exporter has deep knowledge of the market’, says Hiltunen. The expansion was also one reason why the company deemed it necessary to hire an HR director. ‘Particularly in the case of a new country, each recruitment is critical. Hiring the wrong person may lead to us losing a few years’, asserts Hiltunen. The management group is expanding due to the reform in other respects, as well, as the company also hired a chief marketing officer, whose responsibility is the development of new business operations. Hiltunen encourages all of Finland to make an effort in marketing. ‘Strategic marketing should be
held in as high regard as product development, for which it is easier to obtain public aid.’
A STRATEGY FOR THE COMPANY’S EVERYDAY OPERATIONS
Continuous development When iLOQ reached one hundred employees, it started to require more systematic operational models on several fronts. A culture that provides guidance in the right direction is an important part of systematism. ‘The strategy is part of the process of creating a new leadership culture, since, with the aid of it, we can convey our objectives to the interest groups’, states Hiltunen, who was also hired last year when the company decided that it needed new competence in addition to the entrepreneur-led operational model. This means, among other things, the challenging culture and operational methods of internationalization. The strategy that was just created is a roadmap, with the aid of which the company can proceed for a few years. Clear numerical objectives have been specified in the strategy. In addition, it has also been recorded that over the next few years, the company will invest the majority of its proceeds in new growth. No one, however, will follow the roadmap blindly without paying attention to the changes in the market. ‘The strategy will also constantly be updated as the company and the market change’, says Hiltunen. Continuous development will also take place in connection with products. The latest project at iLOQ is the development of a lock that functions using mobile technology. Physical keys will continue to be of use, even though the solutions that utilize mobile phones may be useful in many cases. While developing the mobile technology, iLOQ is already devising a business strategy for the new solution, which is also being accomplished with Talent Vectia as the partner.
iLOQ IN BRIEF • • • • •
Developer of digital locking systems Turnover in 2017 approx. MEUR 40 Export share of the turnover approx. 45% Number of personnel in 2017: 100 Manufacturing has been outsourced to a contract manufacturer
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CEO Heikki Hiltunen found it important that significant number of management group members and key persons from the operative level participated in the creation of iLOQ’s new strategy. If the strategy is constructed by only a few people, the view often remains too narrow. ‘Since a sufficiently large group of people participated in the construction of the strategy, the group was able to create a common vision about what the company will be striving for.’ In a growth company of a hundred persons, creating a strategy is a considerable effort already because everybody has their hands with work. Managing that effort was made significantly easier by the fact that the consultants from Talent Vectia had a systematic way of working on the strategy and kept the strategy train on track. ‘I have collaborated with many kinds of strategy companies. Talent Vectia based its thinking more on real life and not some distant framework’, comments Hiltunen.
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INSIGHT STRATEGIC CHOICE
”
If traditional financiers do not take responsibility for promoting Finnish employment to the extent their risk-bearing capacity permits, the responsibility will fall even more heavily on public funding.
N
o company has become large, without being small first. There are as many unique growth stories and journeys as there are companies that have grown. As these smaller companies have been on their growth path, each of them has created both work and growth for Finland as a whole. Finnish growth companies are the real drivers for growth in the Finnish economy. Nonetheless, if we do not have a functional finance market for growth, we do not have the necessary fundaments in place to ensure growth in our economy.
Pasi Kämäri, Head of Talent Vectia Finance
Growth needs financing
Finland will rise and grow along with its small and medium-sized companies. Nearly all of, 99.8% to be exact, of Finland’s corporate structure are SMEs. They employ 66% of the Finnish workforce. The key issue here is that between 2001 and 2015 the number of those employed in large companies has decreased while the number employed in small and medium-sized companies has increased by 200,663 people. The significance of these small and medium-sized companies seems undisputed, yet, in our opinion, bottlenecks in the system financing growth companies have not been addressed sufficiently.
The financiers’ role and how they have succeeded in it Traditional financiers, i.e., banks and insurance companies, have an excellent risk-bearing capacity TALENT VECTIA
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despite regulation. They have liquidity that could be increasingly allocated to growth companies. In principle, the availability of SME funding is good in Finland. The set-up, however, changes radically if we look at it from the point-of-view of rapidly growing and internationalizing companies. Growth companies need the traditional operators to be genuinely willing to take risks and have the competence to assess the chances of internationalizing growth companies. The truth can no longer be found corporate analysis based solely on historical data, instead competence is needed to assess business possibilities of the future. Rapidly growing companies in particular require a significant increase in financiers’ growth company competence, solution-oriented opportunity thinking, and diversification of forms of financing. This development is off to a good start, but unfortunately it has only just begun. The challenge with today’s new forms of growth financing, such as crowdfunding and bond markets, is unfamiliarity, the creation of an image of reliability, and above all, the investment behaviour of Finnish consumers and companies. A significant part of the assets of Finnish households still rests in deposit accounts, and Finns are just beginning to learn about fund investment. Approximately 200 billion euros of households financial assets are tied to these two forms of investment. If we truly want to allow for a real opportunity for Finnish growth companies to break free from the grip of traditional investors,
Finnish households need to alter their investment habits and start investing directly in growth companies. Fortunately Finland has functional public funding channels for growth companies, such as Finnvera, Business Finland, and EIB. Without these, there would probably not be as many growth companies in Finland as there are now. However, one could also argue that the fact that the public sector occupies such a central role in this is actually a sign of the inefficiency of the growth financing market. If traditional financiers do not take responsibility for promoting Finnish employment and economic growth to the extent that their risk-bearing capacity permits, the responsibility will fall even more heavily on public funding. Growth companies need the willingness to take risks, as well as an understanding of the global operating environment and the shift in Finnish society from mechanical workshops to the service sector. The real question, however, is how the traditional financiers can be made interested in growth companies and get them to start competing for them like they do for housing loan customers.
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STRATEGIC CHOICE
A growth company’s test for financing
Preparing for financing negotiations
A company does not have to face the financiers alone. There are independent growth financing professionals, who can make the financing required for business growth possible for the company. Please take a moment to think about the questions below. Evaluate, at each step, your readiness for a financing round on a scale of -2…+2.
4
1
Financing negotiations and decisions
Clarification of goal and story
Growth 3 Contacting financiers
2 Growth plan and financing memorandum
1
2
3
4
What is the goal of your company – what do you want to achieve? What does the company have, and what do you want to do with it?
Are the earning logic and business model articulated clearly enough so that they can be understood by an outsider? What has been proved on the market and can be repeated to generate growth? Is the offering easy to sell and deliver?
Is the growth programme (incl. service development, sales, international growth, competence development, organic growth, and business acquisitions) understandable and clear?
How well have you described the size of the investment required, and what is the return on that investment?
5
6
7
Have the economic projections from P&L through cash flow statement been described in a coherent and understandable way, and are the figures consistent regardless of which part of the projections is being examined?
What is the proportion of the growth rate to the risk, the possible dilution of ownership, and the possible relinquishment of ownership?
Considering the goal, is it clear to you what would be the best possible financing solution and the best possible financing instruments and financing partners?
8
9
Is the team (the Board of directors, management group, and key personnel) ready, and does the team contain the right kind of competence to generate growth?
Are you moving early enough to acquire the financing? Are you prepared to be put in the financiers’ black box where it feels like nothing is moving forward?
AFTER THIS, DETERMINE THE KEY TASKS TO TURN THE NEGATIVE GRADES INTO POSSIBILITIES. The better you are prepared and the better you have constructed your story, the better your chances to succeed with the financiers are. The most important thing is to create an inspiring story that is easy for the financiers to understand. TALENT VECTIA
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Growth leadership
KESKO OUTOKUMPU
The success of an organization is enabled by its innovation capability. Growth mindset and employee experience lie at the heart of capability. Is employee experience already a strategic priority in your organization?
PFIZER CITY OF TAMPERE NATURAL RESOURCES INSTITUTE FINLAND
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GROWTH LEADERSHIP
INSIGHT
Sini Takatalo, Head of Employee Experience & Leadership
Growth with modern leadership
W
ork life and people’s attitude towards working is changing. Phenomena, such as the diversity of the labour force and different expectations about work, the polarization of groups and values, the change in competition, multi-locality, network-type operations and diverse earning logics, and, on the other hand, the opportunities created by digitalization and automatization are constantly shaping our operational environment. Previously, the nature of work was more routine and repetitive and therefore easier to teach, control, and monitor. Now creative expertise and independent decision making are emphasized in many fields. Routine work performed by people is disappearing. According to a study by McKinsey (5/2017), 5% of work roles can be fully (100%) automated, and, in the case of over half of the professions (60%), 30% of the work can
�
Genuine joint development is based on the courage to provide personnel with the freedom and authorization for development. In future, innovation will be an even more intensive process in which the collective intelligence of the work community is utilized. Prerequisites for innovation
be automated. This change, which may feel like a threat at first, is actually a great opportunity. Particularly experts expect their work to be meaningful, and so the meaning of freedom, responsibility, and occupational well-being is increasing. Work is performed through encounters, collaboration, and networks, and modern technology enables decentralized structures which would be challenging to maintain without it. Talent Vectia wanted to explore how the matters that are currently bringing about a considerable competitive advantage, i.e., the meaningfulness of work, the ability to innovate, and network-type operations, are realized in Finnish companies and organizations. The results are encouraging, and they also show that leadership and leadership competence are issues worth working on in future, as well. A MEANINGFUL DIRECTION. What was notable about the survey was that 95% of the respondents felt that their work had some greater meaning and
a clear purpose. The meaningfulness of work is a key factor for occupational well-being and motivation, and in this light the results of the survey are very positive. Experiencing meaningfulness in what you do correlates strongly with employee and client experience. However, meaningfulness alone is not enough. It is critical for the success of the organization that each employee has understood their own role in implementing strategy. The results suggested that this is an area that still requires work, as 30% of the respondents felt that not all employees in their organization had internalized their own role regarding strategy. Similarly, 20% of the respondents felt that not all the employees in their organization knew what the expectations regarding their own role and work were. Whether the employees regard the strategy as meaningful and whether they have internalized their own role strongly correlates with the profitability of the organization. Ongoing dialogue is, in fact, a critical tool in ensuring the profitability of organizations.
are meaningfulness, an agile pro-growth attitude, and network-type operations
Creating value through networks and ecosystems Agile organization DIRECTION WITH PURPOSE
Growth mindset and mandate Encouraging leadership of diversity and nurtured employee experience
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INSIGHT
Building an agile organization for the desired results
INNOVATION is undisputedly a vital necessity these days. Innovation agility and the ability and courage to challenge the business models and earning logics typical of one’s own industry are the cornerstones of success. According to the survey respondents, personal development and a risk-taking attitude are highly valued in organizations (cf. the courage to challenges one’s own industry). The survey demonstrated that as many as 45% of respondents think that no one dares to share blunders and mistakes openly in their organizations. In addition, 38% of respondents feel that failure is not allowed in their organization. Innovation requires a bold experimental corporate culture, transparency, and openness. In light of the survey results, generating trust to support the creation of an experimental corporate culture is a key theme in which the organizations of today should invest. On the basis of the survey, the genuine ability of Finnish organizations to reflect and learn by doing gives us concern. More than half of the respondents thought that operations and actions are reflected on and that the direction is changed in an agile way when necessary. NETWORK-TYPE OPERATIONS. For the part of networks, 82% of respondents feel that various internal and external networks are utilized efficiently in their organizations. It is, however, clear that operating in networks is more relevant for top management than the other roles in the organi-
zation. This also suggests that it has more to do with networking than strategic network-type operations that create competitive advantage. In addition, according to our survey, the utilization of diversity and putting varying views into effective use are not yet established practices in organizations. Of the respondents, 68% think that these are not yet sufficiently utilized. In order for network-type operations to be genuinely profitable and enable, e.g., diverse earning logics, the organizations must invest more extensively in this area in connection with their strategic planning. We already have good examples of this from some Finnish organizations, but there is still room for more.
How can growth be achieved with modern leadership? As diverse global factors are shaping jobs, the labour force, and work itself, it is critical for organizations to create a corporate culture that is based on collaboration, creative thinking, and empowerment. A network-type working culture based on joint development requires a pro-growth attitude, an agile corporate culture of experimentation, and innovative and inclusive management practices. Genuine joint development is based on the courage to provide the personnel with the freedom and empowerment for development. In future,
innovation will be an even more intensive process in which collective intelligence of the work community is utilized. This collective intelligence also best predicts the community’s performance. Agile experimentation and cross-border network-type joint development also challenges strategic thinking and the ways of doing and implementing things in the organization. The backbone of an agile organization is both strong and flexible at the same time, and the operating principles, objectives, distribution of power and responsibility, and principles of joint participation which constitute it are commonly agreed upon. Efforts are made towards a common goal while trusting and respecting others and managing oneself. Agile organization forms the basis for innovation capability. It creates the feel of ownership and enables self-management. The maintenance of competitiveness and smart growth require extensive inclusion in creative thinking and innovation activities. This, on the other hand, enhances the experience of meaningfulness on an individual level and thus increases employee happiness and occupational well-being. According to the Confederation of Finnish Industries, one day of absence due to sickness costs 350 euros per employee. What could you do today to increase meaningfulness and happiness in your organization?
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What do we want to achieve?
How ready are we to transform toward agile?
How do we organize for agility?
AUTHORITY & RESPONSIBILITY
Based on the desired results, co-create an agile organization model:
TARGETS & MONITORING
Define key processes, forums, roles and responsibilities
Increased innovation New business development Improved way of working in cross-functional teams
PRINCIPLES
Establish mandate and decision making mechanisms
PARTICIPATION
Create principles to guide action and participation toward the desired results
MOTIVATION
Define model for employee experience and success management
MANAGEMENT
Develop competences, especially for self-management
An organization model that ‘fits’ us €
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GROWTH LEADERSHIP
KESKO KESKO
Turning managers into change makers When Kesko updated its strategy, it launched a new training programme for managers, who are to implement the strategy into practice.
HANNA LAAVAINEN KESKO
KATJA LEE KESKO
Every manager ignites small sparks of change, which hopefully will join together to light a company-wide blaze, reflect Hanna Laavainen and Katja Lee.
E
ven in large companies, strategies are sometimes created by a small group of executives. When implementing strategies into practice, however, large group of line managers always play a key role. That is why Kesko also modernized their management training programme after their latest strategy update. ‘We needed to change leadership so that daily management better supported the new operational model.’, says Katja Lee from Kesko. As the change in strategy encompasses the entire group, the new training programme applies to all Kesko managers. Previous programmes had to be applied to, but now the training is an integral part of each manager’s development path. In practice, there are two management training
programmes: one for relatively new managers in the group and one for those with more experience. Over a period of two years, 250 Kesko managers have already participated in the updated programmes.
Good customer experience as the goal Quality and customer orientation lie at the heart of Kesko’s new strategy. In fact, one of the objectives of the K-Way training programme is the improvement of the employee and customer experience. What this means in practice is that all the ‘invisible’ background work must serve the customer’s interest. Due to ever-increasing competition, every one must react to customer needs
quickly. ‘When necessary, decisions must be made as close to the customer as possible. Not all decisions can be submitted to the top management for approval, as slowness weakens customer experience’, says Lee. That is why the other key objective of the training programme is to activate managers to take more initiative and responsibility. This, on the other hand, requires that the supervisors have clear operating principles and that they are trusted. The personnel can only take responsibility if management provides them with some. ‘This is not just about leadership, but also about a culture of trust, openness, and taking responsibility that applies to the whole company’, says Hanna Laavainen from Kesko. What the new strategy means for the leaderTALENT VECTIA
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KESKO
MANAGEMENT TRAINING IS SOCIAL RESPONSIBILITY
K Group’s operating principles
In the new supervisor training, collaboration played a central role. Each group carried out a strategic project, during which cross-industry development was contemplated. In this respect, the training differed from the everyday life of many managers, as most of them usually concentrate on issues in their own field. Crossing industry borders was important, as looking at the big picture may allow unexpected insights. In the quick-paced business world, people tend to adopt a silo mentality. The silo walls may prevent them from seeing the big picture. This can be reflected, for example, in that one department takes care of the coffee machines and the other takes care of the coffee, and the teams do not discuss how they could together provide the customers with better coffee experiences. The cultural change will also be clearly visible in Kesko’s future head office in Kalasatama, Helsinki. ‘In addition to the new premises, the K campus will also host new operational methods and equipment. It will bring all our industry branches together, so it will also be a natural place to carry out projects at the K Group level’, summarizes Laavainen.
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I sh ow
t
I o p e ra t e d
p
en
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o y,
all
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in
ire
The written feedback from Kesko managers about the new training programme is downright enthusiastic. At least on the basis of the feedback, they have been provided with the best and most comprehensive management training of their careers. Many praise the change management skills, techniques, and tools acquired, that are needed in everyday work. The managers felt that they needed new operational methods for, e.g., change management, dealing with challenging situations, and providing feedback. Issues such as underachievement have, of course, been addressed in the company before, but constructive discussion has been sporadic and the effects of the discussions have not really been followed up on. Now the managers have a documentation tool, which supports the creation of a development plan and assists with the documentation of objectives. At this point it is, however, important that the employees take part in setting objectives for themselves. ‘According to the feedback, methods like this, that are required in everyday situations are very important
Cross-border collaboration
th pa he
Issues are brought up
to the managers, says Laavainen.
Ic re
ship work is that a manager should act more as a coach than an oracle. Customer-oriented agility is possible if everybody realizes the power of their team. All employees are competent, not just the managers.
I
an
dh
o n e st
ly
The more fast-paced working life becomes, the more joint training events are needed. Managers have less and less time to stop and think about their work. They have even less time to discuss development targets with their colleagues. Naturally, the motivation to develop competence primarily lies in an employer’s objectives. However, competence development is also important because it improves each manager’s chances to succeed in their work. ‘Thus, development is, in a way, taking social responsibility, as it provides people with competence that can also be utilized when they no longer work for their current employer’, says Katja Lee. In the K-Way programme, 70% of learning takes place during work, 20% during peer-to-peer work, and 10% during independent studying. Many managers were particularly pleased with the small group discussions conducted among colleagues, as these provided them with ideas that had been tested in the course of everyday work at K Group. ‘After the training, these discussions can be continued in connection with alumni operations, in which anyone who has undergone the training can participate’, summarizes Laavainen. The training programme itself was also the result of similar interaction. ‘We considered it important that the trainers at Talent Vectia actively provided us with constant development suggestions on the basis of the participant feedback’, says Laavainen.
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OUTOKUMPU OUTOKUMPU
Renewing leadership to become a high-performing organization
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utokumpu is a global leader in stainless steel, with operations all around the world and production facilities in Finland, Germany, Mexico, Sweden, the UK and the USA. With headquarters in Helsinki, Finland, Outokumpu employs some 10,000 professionals globally.
ELKE HUMPERT VICE PRESIDENT, MANAGEMENT DEVELOPMENT AND LEARNING OUTOKUMPU
For the last two years, Outokumpu has been during a transformation that has taken the company from a highly challenging market situation into a new, successful business direction. “We now have, for the first time, a truly global organization”, says Elke Humpert, Vice President, Management Development and Learning, Outokumpu. “As part of our transformation, we also introduced a lot of new, younger managers who had not yet received systematic leadership training. So we decided that this group should be a priority for us.” To develop the required leadership skills in the organization and to forge a strong link between everyday work and the strategy of the company, Outokumpu implemented the Outokumpu Leader
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programme in 2015. Currently in its third iteration, the programme has so far trained some 75 managers across the whole organization, from sales and product development to IT, human resources and finance. The programme has been designed and realized in collaboration with Talent Vectia.
Soft skills, high performance “Outokumpu’s vision is to be the best value creator in stainless steel by 2020 through customer orientation and efficiency,” Elke Humpert says. “Our strategy builds on six strategic targets, or must-win battles, through which we aim to drive competitiveness and further improve our financial performance.” One of these strategic targets is termed “High-Performing Organization”. This includes a set of development initiatives that guide the company’s daily activities and form the basis for performance management. “We are not carrying out a development programme just because it’s what
you are supposed to do. All our activities to build leadership skills have a strong link to the strategy of our company, and the topics and behaviours we train really help in fostering a high-performing organization.” Humpert points out that successful companies are not only driven by performance, but also largely by behaviour. “This is what I find most interesting about it. What can we do from the point of view of how we conduct ourselves with our team members and colleagues to make ourselves into a high-performance company? We have actually listed 37 management practices that we also track as part of our annual employee engagement survey.” The Outokumpu Leader programme has been received with enthusiasm. “We can really see that our managers are very committed to work on our high-performing organization. One example is that almost 100% of our managers have completed the target-setting activities in the performance management process, which is quite extraordinary for any company,” Humpert remarks. TALENT VECTIA
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One has to be aware of one’s own behaviour, as well as one’s personal strengths and weaknesses.
MISSION-CRITICAL BEHAVIOURS Leadership Sense of urgency – execution with speed Relentless drive for improvement
From small actions to big results The Outokumpu Leader programme features a balanced range of different approaches, including both remote and face-to-face sessions. As part of the programme, members of the executive team are invited to talk about their leadership career and what has been important for their success. “In addition to training in general leadership skills and exercises around our strategic topics, we also like to include what we call ‘micro actions’,” says Elke Humpert. “These are about really focusing on a small but very specific thing that people would like to change, and executing that change. This is a great way to get people on the right track without having to worry about all the big strategic things at once.” Almost one full day of the programme is devoted to performance management, and to providing new leaders with insights on why performance management is crucial for high performance. Participants also practice feedback discussions, gaining the skills to both give and receive feedback for the most effective result. “We try to create a good mix of behaviour and skills training, but also provide some real in-
sights into the ideas behind them. At Outokumpu, we give people a lot of freedom to do things, be proactive, and even take risks, but this freedom comes with responsibility. So ultimately, the training is about communicating to our leaders what we expect from them, and ensuring that everyone knows their role,” Humpert says. Humpert values the collaboration with Talent Vectia. “They are true professionals, with a lot of experience in leadership programmes. The communication has been excellent, and the Talent Vectia team always brings us continuous ideas for improvement. They are also great in engaging in open dialogue about how to develop the programme further together.” At its core, leadership is always about knowing other people – and oneself. “In every company, self-awareness, curiosity and a willingness to learn are critical,” Elke Humpert says. “One has to be aware of one’s own behaviour, as well as one’s personal strengths and weaknesses. We all have our own blind spots that we need to work on, but at Outokumpu, getting better is expected of every leader. You need to keep moving the borders. If you are only working in your comfort zone, you are probably not the best leader you can be.”
Decisiveness Collaboration Effective communication
KEY SKILLS FOR OUTOKUMPU LEADERS
CORE TOPICS OF THE OUTOKUMPU LEADER PROGRAMME Inspirational leadership
Self-awareness and willingness to learn and develop
Demystifying strategy Performance management
Provide role clarity and personal ownership
Leading multicultural and virtual teams
Take responsibility and empower people
Change management
Give feedback and communicate Set targets; be approachable, critical and supportive
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INSIGHT
Heidi Pihlaja, Consultant, Employee Experience
Employee experience as a strategic priority
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A strong employee experience has been found to directly affect the quality of customer experience and thus the organization’s turnover.
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ut the people first and see what happens.’ Business will not grow without competent employees who aim to learn constantly. Employees who are committed to the strategy and corporate culture of their employer and who are enthusiastic about developing themselves and the organizations they work in towards longlasting success. According to studies, in employee-oriented high-trust organizations, employees are 70% more committed to the organization’s common strategy and goals. This commitment and the enhancing of the employee experience are, in fact, important factors when implementing ambitious growth objectives and putting strategies into practice. At the same time, competition in the modern labour market is even more global, transparent, and challenging for the employer. In order to at-
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tract and, above all, to maintain competent employees, the enhancement of comprehensive employee experience has become an important part of the agenda of organizations worldwide. In addition, a strong employee experience has been found to directly affect the quality of customer experience and thus the organization’s turnover. According to our extensive customer experience survey, conducted in 2016, customer experience is a strategic priority for 75% of organizations. However, according to our recent employee experience 2018 survey, employee experience is a strategic priority in only 44% of organizations. The high-level objectives set for customer experience will not be realized unless employee experience is invested in equally. Creating a comprehensive employee experience directly affects not only implementation of the strategy via committed personnel, but also the ability to attract and keep competent personnel
and the ability to turn customer experience into a competitive advantage. In addition, according to our employee experience survey, the employees are much more aware of the strategy and common goals in organizations where the employee experience is considered a strategic priority. Due to these factors, it is time to make employee experience a strategic priority in every organization.
Being employee-oriented means relying on the structure We define employee experience as seeing the world and the working environment through the eyes of the employees. This can be achieved by engaging in a constant dialogue with them, by recognizing what is important for their everyday work, and by offering them the opportunity to find motivation and inspiration. An employee-oriented organization and strong TALENT VECTIA
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INSIGHT
Integrated employee experience employee experience do, however, require strong structures and a clear governance model in order to be functional. An organizational culture that drifts along by itself is not employee-oriented; on the contrary, it strains the individual. In our recent employee experience survey, 95% of the respondents emphasized the importance of a clear goal in their work and 87% considered it important for there to be objectives that support work and development. It is, in fact, particularly important to recognize the differences between an employee-oriented organization and an organization that lays all responsibility on the employees.
Five steps to develop employee experience
Turning employee experience into a competitive advantage
3. DETERMINE EMPLOYEE JOURNEYS AND THE CRITICAL POINTS ALONG THE PATH. Every employee travels a certain path from recruitment to retirement or exit interview. What does this path look like, and what are the critical points along it?
According to our survey, 23% of organizations have a clear plan for the development of employee experience. The way we see it, employee experience is the key to realizing the strategy, attracting and maintaining the most competent professionals, and enhancing customer experience. In order to turn employee experience into a competitive advantage, the organization must devise a plan for it. A plan that can be used to make the organization employee-oriented – an organization that has a clear goal and strong structures but where the individual can create their own purpose within those structures. Here we have compiled five steps to develop employee experience in order to turn it into a competitive advantage for the organization.
1. DETERMINE THE VISION AND GOAL FOR THE DEVELOPMENT OF EMPLOYEE EXPERIENCE. What are you trying to achieve by being employee-oriented? How much do you want to invest in the development of employee experience? 2. RECOGNIZE SEGMENT-SPECIFIC INDIVIDUAL NEEDS. The employee needs vary the same way as the customer needs do. Recognize what kind of requirement groups there are in your organization and meet the needs they have.
4. CONSTRUCT A SUCCESS MANAGEMENT MODEL THAT CREATES MEANING, AND IMPLEMENT IT IN EVERYDAY OPERATIONS. Provide your employees with the opportunity to succeed: promote success, not performance. Provide employees with the support and space to realize a work description that they find meaningful.
Vision and objectives for employee experience CURRENT STATE ANALYSIS
5. UTILIZE ANALYTICS IN CONTINUOUS DEVELOPMENT OF EMPLOYEE EXPERIENCE. We have an enormous amount of information in our organizations. How do we or should we utilize this information to continuously develop the employee experience with the aid of analytics?
STRATEGIC COMPETENCE DEVELOPMENT IN FUTURE WORK
VISION AND GOALS
Employee experience design Value propositions to employees
Experience throughout the employee lifecycle
Management model and metrics
Need-based grouping of employees
Employee path and critical points
Degree and management model of an agile organization
Need-based leadership
Organization of work and processes Success management model
Enhancement of leadership competences
Activities supporting community Utilization of knowledge in success management
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PFIZER PFIZER
PÄIVI KERKOLA MANAGING DIRECTOR PFIZER
MAILIS ORAKOSKI COMMERCIAL LEAD PFIZER
Great changes with small actions Pfizer Finland and its personnel acquired new tools to improve their employee experience. The steps taken made job satisfaction in the Internal Medicine team the highest in the entire group.
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e saw the changes as early as in connection with the first job satisfaction survey, which results showed a great percentage increase. Now our job satisfaction is among the best at Pfizer when viewed globally’, says Mailis Orakoski, who is responsible for sales and marketing at the Internal Medicine unit in Finland. The changes that Orakoski is so happy about were the result of employee and customer experience development project of the unit’s sales team. Pfizer started a development project in the unit’s commercial team when the management detected the need to strengthen team spirit of a group of professionals with very different perspectives. Considerable efforts had already been made earlier in both the group and Finland’s sales office to develop internal culture. The cornerstones of the OWNIT! culture, which the group introduced in 2012, are open discussion, listening, responsibility, entrepreneurial spir-
We were surprised by how short period of time it took to achieve these changes.
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it, and thriving in change. The company’s leadership philosophy can, in fact, be summarized by the notion of ‘Head, Heart and Guts’. The efforts made had also been reflected in awards when Pfizer received, as the only company, the Parempaa työelämää (Better working life) quality award in 2016. An empowered collaboration and employee experience were set as the objectives of the development project. The key objective was to find the targets and means for development in collaboration with Talent Vectia. ‘It was emphasized that every employee is a part of the process and the input and insights of every employee are important. We did not want to provide training that is controlled from top to bottom’, says Orakoski.
Small deeds have great meaning In addition to the 12 members of the commercial team, the closest internal collaboration partners were also requested to participate in the first group
meeting of the project, which was launched at the turn of the year. The objective was to find a goal and the means to renew and start the change process. In the first meeting, the participants discussed, among other things, how individual input affects the whole, the strengths of each participant, what it means to provide appreciative feedback, and which factors increase happiness at work. The significance of small deeds was emphasized right away at the beginning of the meeting. When it comes to team spirit, everything a person says and does not say, as well as how they say it, bears significance. When two people meet, it is important that they both feel that the other is present. Using one’s mobile phone or browsing through the calendar or some papers are an effective way of diminishing that feeling. The worst is the feeling that the other person is in a hurry to get someplace else the whole time. The feelings of presence and trust in working life are emphasized at a time when change is more common than stagnance. ‘The ability to be present and TALENT VECTIA
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It is important to remember that clients are the key to our success.
listen are also crucial when interacting with a client’, says Product Specialist Hanne Tegelberg, who works in Pfizer’s Northern Finland region and who is one of the twelve team members that participated in the project. One of the basic assumptions in the development project was that employee experience is also inevitably reflected in customer experience. ‘It is important to remember that the clients are the key to our success’, notes Tegelberg. The development project consisted of joint team meetings, in addition to which a consultant from Talent Vectia facilitated small groups between the joint meetings. During the whole journey, the participants thought up small actions that were related to encounters and collected feedback on how they work in everyday situations. According to the feedback, a strategy, functional structures, objectives, and clear management are not enough to create a winning team, even though they are a prerequisite for it. It takes extensive interpersonal skills, such as empathy and mutual understanding and the creation of joint experiences, to make people feel like they belong to the community.
Stopping is important when you are in a hurry The soft elements of personnel management can be easily neglected in busy business life, where
everyone seems to have too few hours in the day. Electronic means of communication do not rise to the challenge, as emojis cannot always fully convey real emotions. ‘We should stop more often to ask how someone is feeling. If you do not have the time to do so, you can be surprised by, for example, how differently different people can interpret the same message. This poses a challenge, particularly when not all employees work in the same location’, reflects Päivi Kerkola, the Managing Director at Pfizer Finland. Kerkola emphasizes the significance of soft values. ‘Soft values are hard currency. To have the courage to be human to another human being, to talk to people about what you are grateful for in your everyday life, as there often are many reasons to be grateful. The results of the training were fantastic, as the evaluations provided by the personnel were improved by 25–30% in several measures when compared with the previous survey. ‘Somehow this generated trust in our joint efforts within the team. We have been provided with the opportunity to affect our own work more than before, although this has been just as much a journey of self-development’, reflects Tegelberg.
FORWARD WITH THE SAME STEPS THIS IS PFIZER • One of the world’s leading pharmaceutical development companies • International, but has a strong presence in Finland • Turnover in 2016: 52.8 billion dollars, MEUR 145 in Finland • Operates in 175 countries, headquarters in New York • Personnel: approx. 97,000 persons, in Finland approx. 130 persons • Areas of focus: - Cardiovascular diseases - Oncology - Vaccines - Neurology and pain - Rare diseases - Immunological diseases • ‘We bring hope, support science, and contribute to society.’
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It was natural for Pfizer to start a development project with Talent Vectia, as the companies had been collaborating for years. The long-standing partnership helped to start change quickly and with empathy. Empathy was the driving force that engaged the team members in the development work. ‘I have participated in training courses of various consultant companies. This training was different in that the inspiring consultant made us do things instead of offering ready-made solutions. We were given the opportunity to think things over together with time’, says Tegelberg. Pfizer’s management does, in fact, believe in trusting in the power of the personnel in development projects. ‘I am really proud of the group that grabbed ahold of this matter together and proved that things can be changed. It really is worth it to let the cat out of the bag and not be afraid of addressing the issues that require addressing’, states Kerkola. When the personnel has found an empowering path on their own, it is easy for them to travel that path in the future, as well. ‘We should not be trying to invent something new but to maintain this’, says Kerkola.
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INSIGHT
Petri Leino, Senior Partner Marja-Leena Johansson, Managing Consultant
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The next 100 years of the Finnish public sector
he public sector in Finland provides the best teaching and education services in the world. In fact, the Finnish public sector organizes and produces a wide variety of functional services. This is one of the great achievements of the 100-yearold nation. Now, on the heels of the centennial year, we can direct our gaze to the future and predict what kinds of services and with what kind of leadership the next hundred years will be started.
The essence of the need to reform The increasing indebtedness of the state and municipalities must be stopped. The road of increasing taxes and payments has almost reached its end. As for population structure, we are now one of the oldest nations in the world. Statistics concerning demographic renewal show that no change is in sight, either. Less than 60,000 babies are born in Finland annually, which is not enough for demographic renewal. The care of the elderly must be organized in a high-quality and cost-effective way. Urbanization is accelerating, due to which the few growth centres are struggling with an increased need for services. In
the increasingly empty rural areas, decision-makers are contemplating how to be able to provide services for the diminishing population in some kind of sustainable way. The government is under constant cost pressure. At the same time, it is known that even if the entire annual labour cost of EUR 4.3 billion (Government personnel 2016 publication) were to be cut, which is not, of course, even possible, the problem would not be solved. Instead of the examples given above, the focus should be strongly on a positive future. How can the public sector continue to be a driver of societal success and growth in its own role?
Placing the focus on residents and customers Customer satisfaction is a very extensively used phrase. At the same time, it is so worn out that its organizations and production of services often falls under the ‘basic issues’ category. Measuring, monitoring, and developing. The development trend is, however, that over the next hundred years, the focus will be strongly on residents and customers in organization and production of services in the public sector. More emphasis will be put on service needs,
service use behaviour, acting as an active resident and customer, and freedom of choice. Consumer behaviour regarding the use of public sector services is changing. Residents and customers will make even more choices, in which one of the most significant criteria is customer experience. Residents and customers and their service needs must be recognized better than before, and the services must be targeted and personalized. The services must be available 24/7. When examining the current services, it can be noted that in surprisingly many fields this is, in fact, already reality. How can this be realized in the future with the best possible resident and customer experience, in a competitive multichannel service environment, and with lower costs?
Modernization of service processes When it comes to the public sector service processes, we are living in times of change. The segregation of the roles of organizer and producer is a growing trend, and networking and various multi-producer models are becoming increasingly popular. The increase in disruption and digital services in the public sector enables a great leap in the production and organization of services in TALENT VECTIA
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a new way. Software robotics and the use of artificial intelligence are issues that will shape service processes more than anyone can even predict. All of this together brings great potential for the development of service processes. At the same time, there must be ways to find potential. During the modernization of service processes, one can surprisingly easily be overwhelmed by the various opportunities and advantages and benefits brought by them. Usually, the benefits of the different development areas are not considered thoroughly enough. How does, for instance, the resident or customer truly benefit from the digitalization of service processes, and what is the amount of savings gained in the long run? Lean digital thinking, for instance, could provide a beneficial direction. With what kind of development work can short-term benefits be generated for the development of expert and service processes? How can capacity be built, at the same time, for more strongly digitalized services, software robotics, and artificial intelligence? Lean digital thinking can provide the answers to these questions.
Modern management Successful management has a great effect on employee and customer experience, and thus on the success of the company or organization. At the beginning of the new century, the public sector is faced with a significant leadership challenge. The leaders and managers in the public sector will guide large reforms where possibly tens or even hundreds of thousands of employees switch employers, and all this should be accomplished quickly without causing any inconvenience in the organization or production of services. The importance of good leadership and management will be highlighted. As members of the work community, employees may assume a stronger
role in setting objectives, succeeding in operations, and innovating. All this requires the capacity to increase the level of competence in leadership and management in addition to increasing individual competence. These can be developed with the aid of modern leadership.
The heavy burden of balancing the economy The government debt of Finland has doubled since 2006. Many cities and municipalities have been struggling to balance their economies for years. At the time of writing this, one cannot help but notice the news concerning economic growth. It remains to be seen how long growth will last, but, in any case, the need to balance the national economy will continue. The issues described above, i.e., placing focus on residents and customers, the modernization of service processes, and modern management all support the notion that the challenges of balancing the public sector economy will be overcome. At the same time, we ought to be exploring possible means of balancing the economy even more innovatively. Such means could be, for instance, private funds in property investments, social impact fund type solutions in the development of the diabetes care chain, or other similar non-traditional ways of funding services or investing. Innovative options must be introduced to decision making in a constructive way. They must be thoroughly considered and justified from the perspective of both the political and official entities. The public sector also has a good chance of succeeding on the threshold of the new century. Steering through the period of change will require joint effort, courage, and a great deal of open-mindedness and innovativeness. TALENT VECTIA
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THE CITY OF TAMPERE CITY OF TAMPERE
The steps to empowering leadership City of Tampere created a multi-step programme for developing leadership. All the steps lead to empowering leadership.
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few years ago, the City of Tampere took the evaluation of the operational model and the personnel surveys, which suggested a need to reform the management and operational culture, seriously. The management decided to take on the task requested by the personnel. The city understood that leadership cannot be developed with simple hocus pocus tricks in an organization that employs approximately 13,000 people. Therefore, Tampere wanted a versatile development programme where the purpose was to change the leadership culture throughout the organization. The cultural change had many objectives. ‘When leadership is developed, the personnel’s satisfaction increases, competence improves, and the number of absences is reduced. We believe that such matters can also bring about more
JAANA VILLILÄ-VAKKILAINEN HRD MANAGER CITY OF TAMPERE
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positive economic effects and better customer experience’, says HRD Manager Jaana Villilä-Vakkilainen. The first step of the development journey was to set the goal. The essence of the objective boiled down to the sentence ‘Dare to lead, and trust competence’. Tampere developed four management principles as the foundation of daring and trust. • • • •
I provide a clear direction for us to be productive I enable success I encourage effective development I promote partnership and the customer experience
The principles say much about what kind of leadership is valued in Tampere. For every manager, they are like a lighthouse that guides the way. In addition, they also provide concrete guidelines. ’When new
managers are being recruited, these issues will be emphasized in aptitude assessments. We wish to determine the applicants’ capacity to act according to these principles’, says Villilä-Vakkilainen.
Everybody on board The atmosphere at the workplace can be seen as a coin with two sides. Good leadership constitutes one side, and the actions of the rest of the personnel the other. That’s why Tampere developed another set of principles as well. There are also four of the ‘Personnel as developers’ principles: • I am a maker of Tampere • I develop competence and I am curious about new things • I develop with others in a goal-oriented way • I improve customer experience The aim of these principles is to emphasize the notion that leadership cannot be created by conTALENT VECTIA
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In the case of such a large entity, it is crucial that top management is truly involved in the process.
centrating only on the management. Change can be achieved by developing attitudes, thinking, and behaviour of the entire work community. Everybody must take responsibility for their own work and understand their role as a member of the community. The principles work together smootly. When management encourages the personnel to have an effect on matters and they do, at least the prerequisites for change are there.
Many paths in the same direction Principles turn into actions only when the people involved share a common understanding and have the potential to implement the principles. That’s why Tampere’s management development plan includes a comprehensive selection of tools that promote the desired change. The city promotes the strengthening of the coaching leadership culture with the aid of management forums for top management and management events. The City of Tampere has invest-
ed particularly strongly in making management groups successful in order to be able to introduce operational model reform and the management principles throughout the entire organization. During the spring of 2017, the work of management groups of the service areas and service groups was facilitated on the basis of the objectives of the operational model reform. The sparring was strong and goal-oriented operational development work, conducted both together and separately among the management groups of the service areas and service groups. This was complemented with the management forums for top management. At the individual level, the change and the development of individual leadership were expedited with the aid of self-assessment and manager assessment. In a multi-industry organization such as a city, the application of general principles is not without its problems. The principles may be shared, but the issues are very different in the fields of, e.g., education and construction. That is why each industry
THE TAMPERE MODEL and every person must ultimately be the one to determine what the principle means for them. During the early stages of the reform, the management groups of the different industries, in fact, reflected on what empowering leadership means in practice. In 2017, the principles were discussed on several occasions in the top management forums. ‘In the case of such a large entity, it is crucial that the top management is truly involved in the process’, reflects Villilä-Vakkilainen. The management training programme will be carried out in 2018, and it is mandatory for all managers. This way it can be ensured that everybody has an equal opportunity to succeed in leadership in accordance with the selected principles. Supervisory training is extremely important for the entire project, as, in the end, some 800 managers from Tampere will determine how well the new management models will be realized in practice. ‘We have informed the employees of what they can expect from leadership. That’s why it is important for the changes to truly be realized and visible in everyday operations’, states Villilä-Vakkilainen. TALENT VECTIA
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City of Tampere teamed up with Talent Vectia during the planning stage of the process. At that point, the various principles and measures, with the aid of which empowering leadership was to be realized in practice, were established. It is precisely the comprehensiveness of the development work about which Jaana Villilä-Vakkilainen has heard so many good things from other municipalities. These days, many municipalities are considering their needs for change, so colleagues are following the changes that are being made in Tampere with interest. ‘Now we are utilizing the Tampere model, which includes various measures from management group training to recruiting. Talent Vectia played a key role starting from the construction of that model’, says Villilä-Vakkilainen. Several Talent Vectia employees have participated in different stages of the implementation process. In the course of 2018, the company will participate in, for example, the management forums for top management. ‘They have provided us with their own experiences and views, which have then confronted and challenged us’ summarizes VilliläVakkilainen.
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NATURAL RESOURCES INSTITUTE FINLAND NATURAL RESOURCES INSTITUTE FINLAND
Raising services to a new level The Natural Resources Institute Finland raised the quality and efficiency of their research support services by clarifying roles and simplifying processes.
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eedback suggests that we are on our way to reaching the service quality we have been aiming at’, says Tiina Mellas, the Director of Research Support Services at the Natural Resources Institute Finland. There was a need to raise the services to a new level, as the Natural Resources Institute Finland (Luke) is about to enter the second stage of a strategic process in which internationalization, stronger effectiveness, and customer-oriented solutions are emphasized. The new objectives also require a new approach for Luke’s own support services. Luke was formed some three years ago when MTT Agrifood Research Finland, the Finnish Forest Research Institute (Metla), the Finnish Game and Fisheries Research Institute (RKTL), and the statistics services of the Information Centre of the Ministry of Agriculture and Forestry (Tike) merged. It was a large operation during which Luke’s growth story was clearly phased. In the course of the second stage of the process, which will occur dur-
TIINA MELLAS DIRECTOR, RESEARCH SUPPORT SERVICES NATURAL RESOURCES INSTITUTE FINLAND
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ing the period between 2018 and 2020, Luke wants to become one of the leading bioeconomy experts in Europe. This objective also requires the ability to provide cost-effective, high-quality, and international support services. At the beginning of 2016, the support services employed some 200 persons that were responsible for, e.g., personnel services, communication, and finances. After the cooperation negotiations conducted in the spring of 2017 and the joint project with Talent Vectia, the same entity is now run in a new way with a personnel whose size is one fourth of what it was before.
A coherent approach After the four organizations had merged, many of operational models were used in internal services, and they did not always appear coherent to internal customers. In 2015, during Luke’s first year of operation, the emphasis was on getting the joint systems in order. However, the coherence of the operation-
al methods still needed improvement at the beginning of 2016. ‘The promise to produce the services in a high-quality and cost-effective way still required some work’, admits Mellas. Going through the processes proved to be the key issue in the development of service operations. In the course of the development work, each team discussed which services could be decreased and increased and how the old operational models could be modernized. The teams produced a long list of measures, and the management group of research support services follow up on it regularly. The development of coherent operational methods has already improved both the quality and efficiency of the services, but the work continues.
Internal partners for specific needs Since internal customers may have very different service needs, a partnership model for internal services was developed during the project. The objective is to channel the best expertise towards each need. TALENT VECTIA
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The KPIs are one of the most important outcomes of the development work, as they provide us with constant trend information on how our service promise is being realized.
SMALL STEPS FORWARD For Luke’s service unit, this meant a three-step division. The role of partners is to focus particularly on the implementation of Luke’s strategy and on introducing proactive ideas to the management. The personal consultant acts, on the other hand, as one half of a work pair particularly in the planning and implementation of projects. Luke’s key persons are the core customers of the personal consultants. The entire personnel can seek guidance and support from the service experts. Usually this has more to do with day-to-day transactions. ‘This partnership model forms the framework for our service, and we will implement it fully during 2018. This will realize the changes in the processes and give a face to the services’, says Mellas.
Competence according to needs In addition to the processes, it was important to plan a strategy for competence development of the experts who produce the support services. The processes alone will not be enough if competence does not correspond with new needs. The development targets were divided into strategic and generic competences. Generic competences meant, skills like customer service skills, which everybody needs. Whereas, only a part of the personnel needs to alter
the strategic skills. As customer service competence is an important skill for everybody, a training course was arranged for the entire personnel to discuss practical customer service situations that occur in the day-to-day work of each employee. ‘During the development discussions, we will consider the competence needs of each employee in more detail in order to determine what kind of a gap there is between the needs and the competence’, says Mellas.
Success is measured Since there is only little experience of the new operational model, the proof of success is based more on verbal feedback than KPIs. The first service questionnaire did, however, already suggest satisfaction with some of the services. According to the respondents, the availability, service attitude, and reaction time are already on a good level. In future, Luke will, however, be provided with more detailed results, as the service questionnaire and process meters developed during the development project will begin to produce comparative results. ‘The KPIs are one of the most important outcomes of the development work, as they provide us with constant trend information on how our service promise is being realized’, summarizes Mellas.
LUKE IN BRIEF • A research and expert organization that works on promoting the bioeconomy and the sustainable use of natural resources • Turnover MEUR 120 • 25 offices in Finland • Present on 12 campuses due to collaboration with universities, research institutes, and universities of applied sciences • 1,300 employees, 50 research professors, and 650 researchers • Luke’s research support services are responsible for personnel services, communications and marketing, IT services, project support services, office premises, acquisition support, and finances
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Modernizing the processes is at least as much of a mental change as it is a technical one. ‘That’s why we divided the change process into small steps, so that it would not become some shapeless thing that no one could get grip on’, says Mellas. Many of the changes made during the project were very small practical measures that immediately created the feel of modernization. Such changes included reducing the number of service e-mail mailboxes and producing material in English for the intranet. Creating real change takes time. Mellas stresses the fact that it is advisable to be a realist when it comes to timetables, even though it would be nice to get results quickly. When change is carried out while taking care of daily work tasks, a sufficient amount of time must be allocated for it. According to Mellas, the presence of external consultants was essential, as an outsider has a fresh perspective and is able to question customary habits. ‘Even though the consultants provided the operational model, they still listened to our personnel intently. They were able to continuously create new steps in a positive way.’
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Growth with customeroriented operational models
DANSKE BANK METSÄ GROUP VIANOR OUTOTEC
By making operational models more customer-oriented, organization’s current business operations can be grown and streamlined.
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CUSTOMER-ORIENTED OPERATIONAL MODELS
INSIGHT
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Niklas Nemlander, Senior Consultant Kirsi Ranin, Managing Consultant Kalle Laine, Partner
Does your sales culture destroy the chance of better profits?
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hat makes sales so gratifying is that its results can be clearly measured. Few of us, however, recognize and acknowledge the elements of a sales culture that enables success. Are you growing successful salespersons or a successful sales organization? To what extent does the following apply to your organization? PROACTIVITY. Do we recognize the needs and challenges of our client groups before the clients themselves become aware of the issues? Does our sales culture enable and support active and spontaneous activity? VISION. Do we provide our clients with new insights and ideas for developing their business operations? Is our organization able to produce visionary mes-
sages and content to support the salespersons? BOLDNESS. Do we have the boldness to utilize productized views and challenge the client on the basis of those in a constructive way? Is the questioning of existing sales policies allowed in our organization? TRANSPARENCY. Does our client feel that buying from us is easy and interacting with us is uncomplicated? Do we conduct sales or client work alone or together, and do we do it for the common good? What are the strengths of your sales culture? What about sluggishness and blind spots?
What makes a sales culture successful? When a client wants its problems to be solved quickly and effortlessly, the salesperson and the organizaTALENT VECTIA
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Do we, as an organization, have a clear image of why the client should interact with us, provide us with their time, meet us, and purchase from us?
tion they represent cannot be a hindrance. Instead, they must act as an enabler, helping the client decide to purchase. Guiding the client to realize things and providing them with insights are some of the most important sales tasks. The client must be guided to view its business operations from a different perspective than before and to recognize the development potential in them. In addition to this, the client requires assistance with purchasing. Managing the purchase process and helping the client come to a decision are the challenges that need to be met. The sales culture must support this. In Talent Vectia’s opinion, the elements of a successful sales culture include the following: PROACTIVITY. This must be reflected in the operational models, attitudes, and management. The organization must look forward, not just examine the past, and understand what it can and cannot affect. Do your sales KPIs provide more information about the past or do they predict the future? Is your organization waiting or acting? Proactivity is immediately visible to the client from the first steps on the client path. VISION. The client wants more than to be sold to. The client also wants to learn. Clients often feel that they give more than they get during sales encounters. The client wants thoughts and ideas to develop their business operations. Do we, as an organization,
have a clear image of why the client should interact with us, provide us with their time, meet us, and purchase from us? It is essential to understand and be able to answer the question of how we can help the client and their organization to succeed. BOLDNESS. Boldness is a matter of will and corporate culture. Does your organization allow the internal challenging of existing policies, or do new ideas get suppressed? The sales department must have the courage to challenge clients in a constructive way and the boldness and desire to help the client view even familiar matters from a new perspective. TRANSPARENCY. Transparency is our best internal teacher. When our operational methods are open and easy to understand, both internally and to the client, it is possible to increase client understanding and accelerate learning and the production of perspectives. Transparency is valuable to the client, and it generates partnership and helps to improve the operational methods of both parties. A change in the sales organization can only be managed by knowing where we are now. Recognize and acknowledge! A successful sales culture cannot be conjured out of thin air. Instead, it requires a meaningful common goal and constant management in everyday operations. New things cannot be managed in old ways, because then nothing ever changes. TALENT VECTIA
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DANSKE BANK DANSKE BANK
Positive challenging is serving the client Danske Bank fine-tuned its network to challenge the customer with new views.
RAMI TÄTTILÄ HEAD OF BUSINESS DEVELOPMENT, PERSONAL CUSTOMERS DANSKE BANK
ASKO MIKKONEN BUSINESS DIRECTOR DANSKE BANK
Creating a good customer experience is the responsibility of the entire system, believe Rami Tättilä and Asko Mikkonen from Danske Bank.
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ne person should be able to channel the expertise of our entire organization towards the customer so that we can provide the best perspectives we have as a bank’, summarizes Rami Tättilä, Head of Business Development, Personal Customers Finland, Danske Bank, regarding an important aspect of the change process the bank started a few years ago. When customer needs are at the heart of the discussion instead of products, it creates the feeling that the bank is producing real added value for the customers with its expertise. The principle is simple, but modernizing the operations of an entire organization is not. ‘We wanted a more extensive change in the operational culture and not just new ways to encounter the customer’, says Business Manager Asko Mikkonen from Danske Bank.
That’s why Danske Bank didn’t just settle for sales training in the development project but, instead, started to develop the entire value chain with a large group of people. People who support customer service and produce, e.g., customer data and marketing information participated in the process. It says a lot about the new take on things that the bank has also requested customers to join the training events intended for specialists. In these situations, the customers are free to tweet or even stream to Periscope. ‘We can do things this way, since everything we do should be justifiable by customer needs. Nothing competes with the customer’s interests’, says Mikkonen
Customers expect personalized service Digitality has in many ways altered both the expectations of customers and the bank’s opportu-
nities to meet those expectations. Traditionally, in the meeting of a specialist and a customer, much time has been spent on collecting background information. The customer may have found it odd that the bank clerk asked things they should already know. ‘Now we can process the existing information even better, so that our specialists can provide perspectives that are relevant precisely to the customer in question’, says Tättilä It is precisely in this moment that the importance of the entire value chain is emphasized, as the specialist requires a lot of data and the interpretation of it to be able to meet the customer’s expectations. Personalized customer service is an important competitive tool at a time when customers themselves know ever more about financing. Producing value-added services is also important because customers are increasingly ready to change ser-
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DANSKE BANK
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Whether the meeting is held online or at the bank, it is essential to produce targeted information and perspectives. If the customer doesn’t gain valuable insights from the meeting, they can easily question the meaning of the entire meeting.
vice providers regardless of the field. This is the case particularly when competing for investor customers, as the international competitors that operate solely online are looking to get a foothold in the market. It is also an important part of the bank’s customer service that the customer can choose the method of transaction that suits them best. Even though online meetings are an increasingly popular option, face-to-face meetings at the bank are still important. Whether the meeting is held online or at the bank, it is essential to produce targeted information and perspectives. If the customer does not gain valuable insights from the meeting, they can easily question the meaning of the entire meeting.
A new mode for the whole system Danske Bank started to develop a new customer encounter model in collaboration with Talent Vectia. The development project included identifying the prerequisites for challenging customers in a positive way, conducting an internal Sales Fit test, observing real customer situations, and
interviewing customers. The entire value chain, and not just individual specialists, were under constant scrutiny. The model for preparing for customer encounters was updated to support positive and constructive challenging. During the implementation stage, all the specialists who work in private customer business and their managers, which is almost 800 people in total, participated in the training. ‘I have to admit that changing the strong sales-oriented culture was rather difficult’, says Mikkonen. In order to reform the corporate culture, many discussions were conducted on why it is important for the customer to receive useful information from the bank and why that also benefits the bank. The new objectives were realized in practice and in a reward system. Concrete anchors are important for the maintenance of a new operational model, as otherwise it is too easy to fall back into old habits. Talent Vectia provided valuable support during this challenging journey. ‘We knew the objectives, but had not yet created the path that led to achieving them. Talent Vectia brought fresh insight to the table based on their previous experience, but were also willing to look for new information when
necessary. We were not about to go easy on them either’, says Mikkonen. The challenging path has produced results. Customers gave much more positive feedback on the new operational model than the old. This was apparent as early as the development stage when the bank canvassed customer experiences concerning both the new and the old operational model. Both the customers and the bank’s personnel answered the preliminary questionnaire blindly in a way, as they did not know what its objectives were. The bank has also made clear progress according to the standard customer experience questionnaires. According to a customer satisfaction report produced by an external survey institute, due to the development of the operational model, satisfaction towards customer encounters was increased by over 0.5 units on a scale of 1 to 10. ‘The best feedback is, however, the oral feedback from the customers saying things like "I am glad you brought that up"’, says Tättilä. At that point, at the latest, the personnel also feel that offering their expertise is more meaningful work than mere product presentation. TALENT VECTIA
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”
Now we can process the existing information even better, so that our specialists can provide perspectives that are relevant precisely to the customer in question.
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METSÄ GROUP METSÄ GROUP
From purchaser of timber to forest asset manager Metsä Group wanted to provide its specialists with skills for selling services and producing an excellent customer experience.
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etsä Forest, which manages Metsä Group’s forestry services, started the transformation from purchase to service organization seven years ago. The change meant that the personnel had to learn to see the forest for the trees, or rather, to see the customer for the forest. This was necessary because a growing number of forest owners required support in forest management. Only a few decades ago, the majority of forest owners, who lived close to their forest, were semi-professionals in forest management. Now an increasing majority of them live in cities and earn their income in fields other than agriculture. Metsä Forest realized that a growing number of forest owners required something more than just
JUHA JUMPPANEN SENIOR VICE PRESIDENT, MEMBER SERVICES METSÄ GROUP
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the money from the timber sales. They found it important that the forest assets were managed systematically and professionally. ‘We argue that we are a pioneer in the maximization of the profitability of forest assets. The production rates of our management agreement customers are 25% higher on average’, says Juha Jumppanen, Senior Vice President of Member Services. To support the launched change programme that had started out so well, Metsä Forest initiated a service sales training programme for forest specialists some three years ago. The key objective was to develop the competence for service sales and the production of a good customer experience. The feeling that the salesperson is solving the challenges of that particular customer and is able to relate to the customer’s situation is an important part of the customer experience. Cus-
tom-made solutions are, on the other hand, possible only when the salesperson is familiar with the customer’s situation. ‘We are well equipped for that, as a great deal of material can be acquired for customer meetings by exploring customer and forest asset data’, says Jumppanen. When a specialist prepares well for a customer meeting, they can discuss the needs and objectives of that particular customer and suggest solutions that suit them. This is a prerequisite for the forest owner trusting the service provider to the extent that they want them to manage their forest assets.
Competition for timber is increasing Acquiring timber is, of course, still the main task of Metsä Forest. That task has become increasTALENT VECTIA
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METSÄ GROUP
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The person responsible for the training has been able to get the group to participate in practical exercises without resorting to heavy-duty slideshow lectures.
ingly important, because competition for timber is growing as demand is increasing. Competition is not eliminated by the fact that the company is owned by the over 100,000 members of the Metsäliitto Cooperative who all have a strong relationship with the company. ‘Typically, there are five to ten potential buyers for marked timber. The competition will intensify in the coming years, because the use of timber from Finnish forests will increase due to realized investments’, says Jumppanen. In that competition, Metsä Forest will undoubtedly benefit from the fact that it produces a good customer experience with its services. In 2010, the company did, in fact, decide to pursue the objective of being the most desired partner for Finnish forest owners, providing the best instruments for increasing forest assets. ‘We close approximately 30,000 timber deals annually, and the owner members are committed to working with us. Despite that, we can’t rest on our laurels, we still need to offer the best service’, says Jumppanen.
Results have been realized in practice At the end of 2013, Metsä Forest chose Talent Vectia as its partner for providing competence
training to enable production of the best service. Approximately 300 forest specialists have participated in the training programme. The key issues in the training have included solution sales, preparing for customer meetings, and so-called cold contacting. ‘The person responsible for the training has been able to get the group to participate in practical exercises without resorting to heavy-duty slideshow lectures. The feedback from each training has, in fact, been excellent’, says Jumppanen. The results of the training courses have also been realized in practice. Customer experience and the preparedness of the forest specialists for customer meetings have improved significantly. In addition, service sales have increased by approximately 50% in three years. ‘The systematic training of the personnel has had a great impact on this, although naturally there are other reasons behind such a large increase, as well’, states Jumppanen. Inspired by the results, Metsä Forest and Talent Vectia will carry out a three-year continuation of the service sales training, where the experiences from the first training programme will be recapitulated and the competence will be strengthened.
METSÄ FOREST IN BRIEF • • • • •
Turnover 1.5 billion euros 900 employees Approx. 300 forest specialists in Finland 30,000 annual timber deals in Finland 30 million cubic metres (Finland, the Baltic Countries, Sweden, and Russia)
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We argue that we are a pioneer in maximizing the profitability of forest assets. The production rates of our management agreement customers are 25% higher on average.
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CUSTOMER-ORIENTED OPERATIONAL MODELS
INSIGHT
Customer experience – Your North Star? Helena Mustelin, Consultant, Business Digitalization & LOGE
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hat exactly does omnichannel customer experience entail, and how do you ensure a good experience? In 2014, Jake Sorofram from Gartner wrote a list of the most overused terms and even three years ago customer experience and omnichannel were on that list. Today these terms are used even more frequently, and every other company promises the best customer experience within their industry. The problem with these wardrobe staples are that as standalones they are vague to say the least, and when put together they can mean pretty much anything. But as customer behaviour becomes more measurable thanks to an increasing number of touchpoints throughout the customer lifecycle, an increasing amount of data, and fast developing advanced analytics, we should consider defining these terms in a more concrete way, and talk about them as we
would with other business terms. Omnichannel customer experience is not an umbrella for everything fluffy that falls outside of traditional business framework nor is it a single department’s responsibility. It is a strategic choice that needs to be managed and developed based on data, albeit not excluding the feelings and culture it is partially born from. In 2015, at Talent Vectia we conducted a study on how firms perceive, develop and manage customer experience. In the study, we found that 95% of firms collect data on customer experience but only 30% make decisions based on their findings, and a mere 10% base development work on the data they collect. So, there are not small improvements to be done on this front, but rather a change in mindset and an understanding for how we can benefit from the growing data available to us today in developing the omnichannel customer experience. Customer experience is the sum of all interactions regardless of if they are online or offline. This means customer expe-
rience is always omnichannel, and should be viewed and developed as a whole. Identifying and defining key interactions with the customer and understanding how they influence the overall experience is key in the creation of customer experience strategy. For example, Sephora has recognized that to support the non-linear purchase process and preferences of their customers, they need to understand how customers interact with the company and create content based on their customers behaviour patterns, not try to change how their customers behave. This also means the data flow between channels needs to be flawless. In-store interactions have been boosted by digital payment and barcode scanning to connect customers to product reviews by other customers and support in purchase decisions. Barcode scanning enables customers to feel supported when choosing products even when Sephora’s employees are not available. Digital payment not only speeds up the buying process but has been shown to double the amount and frequency of purchases. Companies such as Sephora have successfully utilized data on customer behaviour in creating a truly omnichannel model where the data and behaviour in various channels, including face-to-face encounters, support each other and form one seamless whole. As a result, value perceived by the customers increased and the chain’s sales and efficiency improved. Perceived customer value is the difference be-
tween perceived benefits and sacrifices. To understand and develop the customer experience, you must understand what this equation means for your customer base. This means you can increase customer value either by increasing benefits or decreasing sacrifices. In order to succeed in this, a company has to understand its customer base and its everyday routines, and tailor themselves to become an extension of these routines. To realize its promise to be the neighbourhood gathering place that helps people make the most of their day and everyday life a little easier, another international organization, Starbucks, has, on the basis of its customer data, established different kinds of shops according to the location and local customer base. Close to schools and universities shops resemble labs for group work or libraries, in big downtown areas they are optimized to be fast take-away spots, and in smaller towns an extension of your living room where you can small-talk with your barista while lounging on a cozy leather couch. Sometimes customer-oriented development can even reduce the amount of contact in traditional face-to-face service and thus increase perceived customer value. Starbucks listens closely to its customers and continuously makes small improvements to its services to make them more convenient for their customers. Last year they enabled customers in a
hurry to order ahead and pay via the Starbucks app. This meant customers no longer had to wait in line to order and pay. Pick-up is made easy, so customers do not even have to interact with staff if they do not feel like small talking before 7.00 AM. Sephora and Starbucks are only two examples of international companies that have, with the help of data, gained incredible understanding of their customer base, from how they behave in different environments to the very different needs of different segments. They have developed and tailored their customer experience as a whole based on these insights, but prior to that they have made a very clear choice. A strategic choice to invest in the creation of good customer experience and its continuous development together with customers. As consumers, we come across poor partly-optimized customer experience processes on a daily basis. As the availability of customer data is increasing, it may be challenging to understand what should be developed in order for it to benefit both the customer and the business operations. When developing omnichannel customer experience, it is good to remember the guiding principle of Sephora and Starbucks, according to which the operational models are to be developed on the basis of the customers’ needs and not the other way around.
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VIANOR VIANOR
The way to the customer’s heart is through better leadership Vianor improves customer experience by developing management.
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few years ago, Vianor took a great stra-
VESA LAITINEN
SAARA PÄKKILÄ
AKI NEVALAINEN
BUSINESS AREA MANAGER VIANOR
AREA MANAGER VIANOR
SERVICE POINT MANAGER VIANOR
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tegic step forward when it decided to expand its service selection from tyre maintenance to providing versatile overall service for car owners. Vianor realized that it could distinguish itself from its competitors by offering more versatile services to make driving safer. In addition to tyre changes, the company also wanted to be able to offer car owners other kinds of maintenance and vehicle inspection all in the same place. This way car owners could save time and energy. The shift towards new services was natural but not easy. In addition to a new strategy, success required that the personnel really put their heart into serving the customers. ‘We wanted our employees to take initiative in solving problems for the customers’, says
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Vesa Laitinen, Business Area Manager at Vianor. The company didn’t just want to develop service attitude, but it also wanted to harmonize its policies and make chain management more effective. That’s why the company launched an extensive programme to develop customer experience.
It all starts with the management Vianor realized that establishing a culture of taking initiative would require a thorough change in management practices. Developing customer experience presupposed improving employee experience. Too many of the managers had grown in a world where the manager must be the most industrious worker. ‘We wanted to reorient the operations towards coaching leadership where the employees are au-
thorized to do a good job on their own initiative’, summarizes Laitinen. Traditionally, the managers are accustomed to telling the others what to do. ‘When that is the way you do it, you will have to keep assigning work tasks to others until the end of time. That is why it is better for managers to get the others to understand what they should be aiming at and to operate accordingly’, says Laitinen. Vianor started to bring about change in collaboration with Talent Vectia. Five service points were included in the first pilot stage. First, the managers at these locations were asked to come up with a view on what coaching leadership could mean for Vianor’s everyday operations. The service point leaders were appointed as coaches to support other service points during their development journey. TALENT VECTIA
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THIS IS 5S
We did exercises from which every participant gained something. During the exercises, I, too, identified some aspects of my own behaviour that need to be developed.
In their own training, the managers concentrated particularly on three themes: self-leadership, performance management, and coaching leadership. Self-leadership is an important theme, because the management of others requires self-knowledge. It is important to understand how one differs from others. Very concrete issues, which mostly have to do with management, were discussed in connection with performance management, whereas inspiring and directing individuals were covered in relation to coaching leadership. Those who participated in the training particularly valued the concrete part of it. ‘We did exercises from which every participant gained something. During the exercises, I, too, identified some aspects of my own behaviour that needed to be developed’, says Saara Päkkilä, Area Manager, Northern Finland, at Vianor.
Getting everybody on board by playing a game Even though developing leadership creates the basis for a good customer experience, customer service also requires targeted training. Talent Vectia’s Good Decision game, which the entire service point personnel played, proved to be an important instrument. The aim of the game was to bring up practical situations that the personnel come across in their work.
SORTING (SEIRI). Removing unnecessary items.
This is why the game effectively complements the theoretical training, which may even seem foreign to many. As the game is about questions that arise from everyday work, the players can relate and keep up the interest. The strength of playing also lies in the way that all the rigidity related to a person’s position fades during the game. Success in the game is not affected by whether the player is a CEO or a messenger. ‘Playing also encouraged the quieter people to speak up. Professional skill and talkativeness do not, in fact, necessarily go hand in hand’, says Laitinen. The third important part of the training, in addition to coaching management and the development of customer service, was improving cleanliness and safety. When the work premises are kept in order, the processes run more quickly and the risk of accidents decreases. To achieve this, the company utilized the 5S method, which was originally developed in Japan, the aim of which is to make workplaces organized and work methods standardized. ‘To me, particularly the identification and elimination of Muda according to the 5S method has been a real insight’ says Aki Nevalainen, the manager of Vianor’s service point in Oulu, who is one of Vianor’s coaches. Even though the change process is in its early stages, the results are already visible in everyday operations. The first notable change is the cleanliness and orderliness of the service points. However, even
SYSTEMATIZATION (SEITON). Making efforts to find functional storage methods, such as marking the limits of workstations, keeping corridors clear and empty, and providing various storage and waste containers.
more important changes have taken place. ‘A great change has occurred in the employees’ attitude, interest in work, and the way they bring up new ideas. The processes have also, in many respects, become smoother’, says Nevalainen.
Same steps for the rest of the North After the first pilot round, the change agents came together to discuss their own experiences. The aim was to identify the things in which the company had succeeded particularly well and the things that still needed improvement. The training programme was developed on the basis of the experiences when its implementation at new service points started. ‘It was essential that the training be refined according to the actual experiences to make it even more concrete than it was at the pilot stage’, says Laitinen. The lessons learnt from the pilot projects also bore significance when Vianor, which operates in 27 countries, started to implement the same development path in the other Nordic countries. Pilot projects were first started in Sweden and Norway. The big picture of the development process is the same for all countries, although there are country-specific differences in the realization. The supervisory training themes, developing the customer TALENT VECTIA
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SWEEPING (SEISO) The daily cleaning of the workplace.
experience with a game, and the service point cleaning days were carried out in other countries, as well. Talent Vectia is responsible for the leadership training in some of the Nordic countries, and some of the operators in other countries are now conducting the training themselves. One of the most significant results of the entire development project was that the company now has the tools required for development. ‘We have been provided with good tools for developing the service points. This is important, as we are only at the start of our change journey’, says Päkkilä.
VIANOR IN BRIEF • Part of the Nokian Tyres group • A chain specialized in car maintenance and tyre services • Operates in 27 countries with a network of 1,501 service points • Turnover in 2016 MEUR 335 • Number of personnel (at the end of 2016) 1,742
STANDARDIZATION (SEIKETSU). Standardizing the best practices at the workplace.
SUSTAINING (SHITSUKE). Ensuring that the agreed methods are followed constantly.
CONCRETENESS AND COMMUNICATION The start of Vianor’s change journey highlights important issues that all development project organizers should bear in mind. Vesa Laitinen emphasizes the importance of communication. ‘Whatever amount you were planning on communicating, you can double the quality and quantity of it.’ The importance of communication is emphasized in change processes where the personnel must understand the reasons for and the objectives of the change. Otherwise, opposition to change easily overcomes enthusiasm for carrying out the change. Concreteness is another extremely important issue in working life, where the change is to be carried out, without exception, while taking care of daily work tasks. ‘The development work must be integrated into the daily activities and the objectives of the business. It must not be a separate activity’, states Laitinen. Laitinen also emphasizes the importance of positivity. ‘The employees made swift progress as strengths were utilized in the creation of new practices and no fingers were pointed when someone made a mistake.’ Working together is an essential part of positivity. ‘The employees at the service stations were included in the change process, so they had the chance to influence it. That is clearly reflected in team spirit’, says Päkkilä. TALENT VECTIA
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INSIGHT
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OGE is designed to remove barriers related to time and place so that large organizations can include and engage a vast number of employees in change, in a cost-effective and inspiring way. LOGE brings learning into peoples’ daily work and facilitates regular discussions amongst employees. This increases the collective understanding of the organization’s shared direction and objectives, as well as related upcoming changes. Using LOGE also means each employee plays a part in defining their own role and responsibilities. LOGE utilizes various gamification methods to make the user experience more inspiring, give participants a feeling and visualization of progress, and collect valuable real-time data on the actual change progress. LOGE not only uses points and encourages competition, but also gamification methods that make the user experience more dynamic and add elements of surprise. After all, that is what our day-to-day work is full of – unexpected changes and unpredictable outcomes. The innovativeness of LOGE as a method is enhanced by the intuitiveness of the user interface, which makes taking the platform in to use easy and pain-free.
Tuomo Tiilikainen, Head of LOGE
LOGE – the future of true organizational transformation LOGE enables organizations to develop their way of working and company culture to support the realization of their strategy in an engaging, inspiring and cost-effective way.
Engagement through excitement The discussions in LOGE are live audio-visual discussions not just chatting via text messages and decided and they are conducted virtually without interfering significantly with employees’ daily TALENT VECTIA
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routines. To put it this way, LOGE discussions are like a better version of your weekly meeting but with a slightly varying group of participants which already in itself increases the diversity and value of the discussion. One client even suggested using LOGE as a moderator in weekly meetings, in which case no one would have to facilitate or document the discussion and the risk of getting stuck on a specific topic would be eliminated. Prior to the actual group discussions LOGE can be utilized for learning about the upcoming discussion topic. Pre-reading material such as videos, articles and other types of documents can be uploaded to LOGE, which gives participants time to familiarize themselves with the topic, prepare for the discussion and even do additional research on the topic if they feel like. For large organizations, including and engaging people on a broader scale can be very challenging since employees usually are located in different locations, in some cases all around the world. If an organization wants to provide opportunities for face-to-face discussions, the cost for logistics alone is significant, not to mention for the time spent away from daily work activities. Naturally, face-to-face discussions cannot be fully replaced with virtual methods, but they can complement one another when used in combination. Another challenge related to complex organizational change is keeping up the momentum once the ball gets rolling and setting goals for employee learning. To achieve significant and sustainable results, the learning process needs to be systematic and
continuous. While the discussion topic and content play a significant role, creating this type of discussion process already in itself helps create a positive employee experience and thus support the organizations transformation. In other words, semi-annual face-to-face employee events are no longer enough to support demanding organizational change.
A flexible method and realistic overview It is not only valuable, but imperative to create organization-wide dialogue and discussions within diverse mixed groups. It can feel easy and familiar to have discussions within your own team, but the discussions might not be as fruitful, and many important perspectives can be left out of the discussion completely. People find LOGE’s cross-silo discussions exceptionally valuable and rewarding when the other parties are for instance colleagues with other roles and backgrounds based in other countries or continents. Normally, this type of geographical distance would pose challenges for creating diverse and optimal groups. There are other virtual meeting tools available on the market today, however they do not solve these challenges completely, since they require both manual facilitation and documentation by one of the participants, in order for any significant conclusions to be drawn afterwards. The optimal group size for group discussions is five to seven people, which for large organizaTALENT VECTIA
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INSIGHT
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The client organizations do not have to pay for new features separately. Instead, all new features that have been deployed are available to the client.
tions can mean up to hundreds or even thousands of discussions. This means the discussions need to be carried out and documented in the most self-managed and automated way possible. LOGE answers these challenges in a way other tools do not. With the help of the data collected in LOGE, the organization gets a comprehensive overview of the change progress and can identify different needs of various employee groups and allocate resources accordingly. This speeds up the change process even further. Our clients currently use LOGE in three different ways: 1. As a self-service solution, utilizing existing ready-to-use content in LOGE, on for example sales development, lean culture, and modern leadership to develop and deploy new working practices. 2. As a customized turnkey solution, using our services to create content for their specific situation and needs. The entire process is supported with services including reporting, going through the findings and further recommendations.
3. As an independent, yet customized solution, by appointing internal LOGE champions in which case new content and discussions can be created and edited without limitations or extra services. Our goal is to constantly learn from our projects and develop LOGE and its features as the method demands, in a systematic and agile way. In practice, this means a new version of LOGE is released at the end of every week. Our clients automatically have the newest version of LOGE in use without any hassle and without having to pay anything additional for new or updated features. Our clients also have an opportunity to influence the development of LOGE – sometimes even having their ideas developed and at their disposal within a few weeks. In 2018, the most significant investment is on developing the data analytics and smart facilitation in LOGE. The group discussions produce a large amount of valuable data (stored on Amazon’s cloud server in Germany) and a rapidly growing database. In the future LOGE must be able to analyse this data automatically. To draw even deeper and substantial conclusions togeth-
er with the client in the future, the aim is to start collecting and analysing the verbal data produced in the group discussions. This too in as automated way as possible. Smart facilitation will deepen the discussions even further and enable an even more progressive user experience.
Virtual service
Game-based approach
Communal learning
A flexible, scalable, and cost-effective model regardless of usage requirements, number of users, and time zone.
An inspiring and dynamic user experience can be created with the aid of gamification. The approach helps to collect valuable data regarding the operations of the entire organization, about progress being made and for the purposes of decision making.
Each stage of the process generates learning. Learning is generated in the course of the discussions where the views brought up by the participants collide and require further development of operations.
Additional value in the future with analytics and smart facilitation Our practical experience with various clients confirm what we believe - future organizations will start utilizing collaborative dialogic methods such as LOGE more and more. LOGE enables natural and agile forms of cross-organizational collaboration, which is a key requirement for agile organizations. We want to provide our clients with an easy way to test LOGE through piloting without having to make significant monetary or time investments. When we together have tried and tested the approach, it is considerably easier to evaluate and plan for more extensive use. And, as our LOGE users have expressed, discussions in LOGE are also incredibly fun and energizing! TALENT VECTIA
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Benefits to different target groups
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Participants Everybody can participate in an inspiring way.
2
Management A realistic overall image of the progress of the change process.
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Organization An efficient change process as part of day-to-day operations.
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CUSTOMER-ORIENTED OPERATIONAL MODELS
OUTOTEC OUTOTEC GUSTAV KILDÉN SVP, STRATEGIC CUSTOMERS & BUSINESS DEVELOPMENT OUTOTEC
VILLE SALOMAA DIRECTOR, SALES DEVELOPMENT AND STRATEGY OUTOTEC
License to Lead Sales
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utotec provides leading technologies and services for the sustainable use of Earth’s natural resources. As the global leader in minerals and metals processing technology, Outotec has developed many breakthrough technologies over the decades. Employing over 4,200 people in 34 countries, the company also provides innovative solutions for industrial water treatment, the utilization of alternative energy sources and the chemical industry. In 2015–2016, Outotec evaluated their sales organization and found a clear need to update and develop their sales capabilities and processes. Talent Vectia tailored a six-month training programme called License to Lead Sales for the company. The programme focused on value selling, i.e. quantifying and selling the customer
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business value instead of products, more efficient management of the sales funnel, and sales team leadership skills.
Listening to the customer “Outotec has traditionally been an organization of technical experts, so we needed to develop our capability to sell value to our customers, instead of just technical solutions,” says Gustav Kildén, SVP, Strategic Customers & Business Development, Outotec. “Talent Vectia was an easy choice of partner when the time came to design and roll out a sales training programme for our global organization.” Outotec’s License to Lead Sales training programme was first implemented for approximately 80 key people in the company’s sales organization. The topics included value selling, sales
management discipline – including efficient use of CRM – and general skills in managing the sales process. In the next phase of the programme, the training will be extended to all 300 of Outotec’s sales managers. “It’s essentially about changing our sales pitch so that instead of just talking about technology, we are finding ways to commercialize it as value for the customer,” Kildén says. The live three-day workshop of the programme included the participation of Michael Ahearne, Professor of Marketing and C.T. Bauer Chair in Marketing at the University of Houston. A bestselling author and researcher on sales and marketing, Prof. Ahearne is one of the world’s foremost experts on how to improve the performance of salespeople and sales organizations. “With this programme, the point was to consistently train our entire sales force,” says Ville Salomaa, Director, Sales Development and Strategy, TALENT VECTIA
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LOGE has been a very useful tool in opening up some great discussions.
Outotec. “We are looking at this as a long-term continuous effort, not just a one-off series of workshops. The investment has definitely been worth it.”
Shared learning A key part of the training programme was the use of LOGE, an online platform that is designed as a cost-effective way to enable organization-wide dialogue, share best practices and set concrete actions on an individual level. Incorporating gaming-style elements and focusing on collaborative learning, LOGE shifts the focus from one-way communication and self-study to practice by doing and concrete actions. “LOGE has been a very useful tool in opening up some great discussions,” Salomaa says. “It really strengthens the implementation of what we are trying to accomplish. LOGE is also very flexible in that it allows people to schedule the sessions at whatever time is most convenient for them and their teams.” Typically, LOGE sessions are conducted between 3 to 8 participants, who can be from anywhere in
the organization. The sessions involve discussing and finding solutions to various scenarios, and committing to the joint decisions as a team. To facilitate open discussion, team members provide their first answers to the topics anonymously. “LOGE has been an excellent way to bring people into the conversation who might otherwise tend to remain silent at live meetings,” Ville Salomaa says. “Each session concludes with some very concrete actions to which the participants commit, and system tracks the completion of these actions at the next session. It’s great for finding personal actions that support the goals to which everyone has committed as an organization.” The training programme has already brought about a marked change in how Outotec handles sales. “The focus has shifted in the right direction,” Gustav Kildén says. “We are now having much more dialogue where we try to really listen to what the customer needs, and turn these into win-win situations that benefit both parties. Our internal sales meetings have also changed, and people are talking about sales in a completely different way.”
KEY AREAS OF OUTOTEC’S LICENSE TO LEAD SALES PROGRAMME • Value selling: Sell business value, not only technology • Sales funnel management: Fact-based decisions and making full use of CRM • Sales team leadership: Coaching in sales skills, processes and working with a team approach
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CUSTOMER-ORIENTED OPERATIONAL MODELS
INSIGHT
Petri Leino, Senior Partner Jarmo Korhonen, Senior Advisor
Things will change – with or without the health and social services reform
T
he Finnish social and health care system is in the throes of a radical change. The ways in which social and health services are organized and produced will change according to the legislative changes stemming from the health and social services reform (the Sote reform) currently underway. If the legislative reform is not carried out at this point, the system will change regardless. The population structure change currently underway in Finland, the increasing indebtedness of the state and municipalities, the availability of a competent labour force, the competition provided by private social and health care operators, and the increased interest in health insurance are all resulting in a change in the system. Public sector operators will have to compete for customers more effectively in both specialized and basic health care. In the field of occupational health care, private sector operators will expand their service offering to a solvent group of em-
ployed persons, which will increase the competition further.
The health and social services and regional government reform is a significant renewal process and an extensive reform project The government proposal for the Freedom of Choice Act is to be submitted to the Parliament for consideration no later than the beginning of March 2018. The entire health and social services and regional government reform is intended to be accepted in the Parliament by the end of the spring term of 2018. What this means is that all the operators to which the Sote and regional government reform applies are in a hurry to prepare themselves for the new system. When it is realized, the Sote and regional government reform will be the greatest change in Finland’s economic history. Municipal responsibility to organize so-
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It is time for radical thinking, but we must also ensure that those thoughts have a chance to be realized.
cial and health services, which has lasted over hundred years, will come to an end. The public sector health care system will become an entity managed by the Ministry of Social Affairs and Health, Ministry of Finance, and the Finnish Government. The regions will become part of state administration, and the regions will be responsible for the organization of social and health services. The current hospital districts will become state-owned companies, and they will provide social services and specialized and basic health care services. After 2020, customers will determine social and health care operators’ range and methods of operation. When the freedom of choice included in the Sote reform is realized, each operator will be provided with funding, for the part of the services the freedom of choice applies to, on the basis of customer enlistment. Thus, the importance of the resident and customer experience will be emphasized even more when deciding on the service provider. On a Finnish scale, the Sote reform provides private sector operators with a great opportunity to extend their business operations. At the time of writing, it is still unclear what the final restrictions on the freedom of choice will be and which services will fall within the scope of the freedom of choice and how. What is clear, however, is that, on an annual level, the reform offers a several billion-euro business opportunity to the private
sector. It is up to private sector operators how they can gain the most in this new competitive situation. Occupational health care and its customers will play a key role in the realization of the extension and growth of business operations.
Social and health services will undergo a reform no matter what The change in the age structure of the population, the employment situation and the availability of the labour force, urbanization as a phenomenon, the increasing indebtedness of the state and municipalities, the service offering and the competition provided by private social and health care operators, and the increased interest in health insurance will, in any case, result in a change in the way social and health services are organized and produced. This change will take place, and it must be prepared for. If the Sote and regional government reform currently under preparation is not carried out, the next Finnish government will begin the preparation of a new Sote reform right away. How will the services be organized, produced, and financed? This problem particularly concerns citizens who are not covered by occupational health care. In addition, the aged population is increasing, which means that the increasing service needs in home and institutional care must also be responded to.
Reform requires radical thinking and a systematic way of implementing changes As social and health services are currently being radically reformed in Finland, all operators should have the courage to start planning their own reform and how to implement it. Taking successful steps in a time of radical change requires a change in thinking, beliefs, attitudes, ways of organizing and producing services, and management. Now is the time for radical thinking, but it and its results must also be provided with the opportunity to be realized. Will the old way of thinking and acting leave enough room for the new, so that the reforms required by the radical change can be implemented? The radical changes in the social and health services must be examined comprehensively in both the public and private sector. Current legislation, the increased interest in health insurance, and occupational health care services provide residents and customers with opportunities to select services and compare and select service providers from among a large group of public and private health care providers. What will make the future service organizers and producers competitive, and how can residents and customers still be offered the best social and health care services in the world in a sustainable way?
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THANK YOU Not only these thirteen clients of ours, whose growth stories we have had the opportunity to share with you in this publication, but also all of you, our clients, our partners with whom we are honoured to work, deserve our special thanks. Perhaps we can share your growth stories in our next publication.
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Contact information +358 (0) 201 600 700 info@talentvectia.com
www.talentvectia.com Talent Vectia Oy PO Box 48, Keilaranta 19 D FI-02151 ESPOO Finland