Sergii Figurnyi - stock.adobe.co
It is no secret that Finnish innovators have been able to establish a successful link between technology, business acumen and societal need in recent years. It’s a knack that has been underpinned by Nordic values that include inclusivity, progression, problem solving, diversity and ambition.
Perhaps above all of these influences, though, sits trust.
Trust in Helsinki-based startups often derives from a decentralised form of leadership that seeks to extract the full innovative potential from each employee. And the secret to fostering this mutual trust will be shared with the world this coming May at the World Economic Forum in Davos.
The aim behind decentralised management is to create a positive cycle where a social need yields a problem-solving idea, which is facilitated through innovation and digital intervention, and is then rolled out by an inclusive and socially conscious business setup.
It is this latter strand of the circle that Helsinki’s finest will be bringing to Davos’ global audience this spring, emphasising that there can be no socially viable solution unveiled externally if there isn’t an equally open-minded and inclusive structure internally.
“The word ‘linear’ is often used, but really it’s about holisticness and clear communication. What successful tech companies typically do, and what we find critical, is to structure operations around holistic end-to-end value creation, not around each step in the process, as is typical in manufacturing companies,” said Juuso Haaksivuori, country manager at Reaktor Sweden.
“Innovation requires dedicated and cross-functional teams that can take on complex problems and integrate different kinds of thinking and approaches to tackle them.”
Trust in abundance
As a partner of Finnish Flow, an organisation that coordinates Finnish businesses, Haaksivuori, will be putting Helsinki’s and the wider region’s outlook on the global stage, by presenting this perspective and success story to the World Economic Forum.
He added: “One fundamental enabler of innovation that underlies not only teamwork and cooperation between companies, but society at large, is trust. Innovation is not only about creating the new, but often about breaking the existing. Innovation is change, and change is frightening in its nature. Unless, that is, we have confidence that things will be okay even if we deviate from our original plan.
“Trust takes time to build, but is critical to innovation and is something we have in abundance in Finland. We may be humble, but that is because we don’t need to make noise about this value – trust is an enabler of innovation that we have come to almost take for granted.”
Juuso Haaksivuori, Reaktor Sweden
Reaktor is a global strategy, design and tech consulting company built around facilitating tech. This includes education, democratisation, inclusivity and a host of peripheral values that are all geared towards an ultimate aim of successful innovation, and successful tech businesses.
“A necessary prerequisite for innovation is psychological safety and creating an environment where people can grow both professionally and as human beings. People need to feel safe and trust each other in order to be creative and innovate,” Haaksivuori said.
“It’s not only about doing our work well, it’s also about doing good; interacting in a way that helps others to reach their full potential.”
Self-organisation requires structure
This is where the notion of decentralised management comes to the fore.
It’s not a new concept of course. The idea of breaking down walls, encouraging communication and ideas sharing, and giving every employee an equal voice, is becoming more of a norm; especially through Covid-19 where traditional office spaces have been disrupted.
However, Haaksivuori does worry that this idea of a linear hierarchy and everyone being on an equal footing does sometimes become a cliché and a reputation-enhancer, rather than a tangible strategy.
“The main benefit of a flat and decentralised management style is agility and decision-making at a local level. The rule of thumb is that those who are in the best position to make a decision should do so,” he said.
“However, as organisation size and operational complexity grow, so does the scale and level of interdependencies across the various autonomous entities. This, again, brings about the need for the right level of structure to ensure that operations run smoothly and are capable of renewing and developing despite the growing size.”
In essence, businesses are ticking the ‘decentralised’ box as a way to appear more inclusive and open to ideas. But without an agile structure to inform change protocols, this model can quickly fall apart as a company grows and roles become less clear.
Haaksivuori said self-organisation without a structure to properly facilitate decentralised structures can lead to “full chaos”.
Autonomy, with a reason why
What is needed instead, and what Finnish Flow will be bringing to Davos, is a scalable strategy that best leverages decentralisation. Autonomy is encouraged as it leads to empowerment, ownership and belonging within a growing enterprise.
However, this sense of belonging and responsibility can quickly be lost if they suddenly feel autonomous without a plan or framework.
And this brings everything back to that simple, but vital, notion of trust. For a startup to be successful, those involved want to feel influential and part of something exciting, and they want to have their innovation trusted during that phase.
However, as the company grows around them, they also want to trust in management that their role still means something, and that they can understand that role clearly. Autonomy still requires a reason why.
“Technology and leadership talent can be built anywhere. But a culture of trust is more difficult,” Haaksivuori said. “Harnessing that trust is one of the major themes at Davos, and we believe we have a good ethos here at Reaktor, and in Finland, that we can share.
“A decentralised management model has worked really well for us, but it’s not a silver bullet. We too need structures to support us in our growth, and that takes a lot of hard work to get right, to re-evaluate, and to continuously develop.”
Read more about innovation in the Nordics
- Business can learn lessons from Nordic tech startups to prepare employees to return to the office after Covid restrictions.
- Early-stage tech companies across the world should set up Nordic operations earlier in their development journeys.
- Will the Nordics become the fintech and open banking innovation capital of the world?