Nordic GIP Part 3: The Lessons Taken Home

Kit O’Connor ’17

NEW YORK – This is, alas, the final time you’ll be hearing from me. Which sounds so morbid, but really, it’s just because my work as the social media guru will conclude with this post, and then I’ll graduate and won’t be able to take week-long trips around the world on random Spring Breaks anymore! A single tear rolls down my cheek…(to match the single dollar left in my bank account).

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The gorgeous Nyhavn district in Copenhagen – be sure to take the canal tour (bottle of wine or six-pack optional, but highly recommended).

But! Sweden! Denmark! Families! Business! That’s what this is about. I struggled a little bit with structuring this post, so like any good consultant, I ended up with three main takeaways: one negative, one positive, and one that’s purposely a bit amorphous (I know, I know, show, don’t tell). Let’s get started.

The bad: One of our first visits was to the American Embassy in Stockholm, where we met with a number of senior embassy officials and learned about their initiatives for American interests in Sweden and how they can help US businesses make inroads around the globe. That meeting was perfectly fine, and we were impressed by the number of speakers who made time out of their day to meet with a group of Columbia MBAs.

However, the security protocols necessary to get into the embassy honestly made me embarrassed to be a United States citizen – I saw a young girl, who couldn’t have been more than four years old, shouted at through a glass wall, forced to take off her coat on a chilly day, and contort her feet and body to prove, I guess, that there were no threatening items on her, all while her mother had to stand twenty feet away (yes, we all had to do the same). I’m proud of my country and believe there’s a reason that our mantra of freedom above all attracts the most innovative and accomplished people to learn, teach, and start businesses – by no means does that mean that our people or politicians are always correct, though I do like to think that we represent the opportunity to make life better, no matter who you are or where you come from. But when I’m reminded of that scared little girl and her introduction to America, I wonder whether we’ve become a bit too possessive of our liberty.

(steps off high horse)

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OK, so, the candles aren’t exactly the focus of this photo but they really are everywhere!

The good: Hygge! Hygge, the Danish concept of “everyday togetherness”, which has certainly seeped across the border into Sweden, and definitely enjoys a robust ad campaign in the US.

There are a couple ways that hygge was present during our trip. The first is in the purely physical, and can be represented best by the abundance of candles in nearly every conference room that we met in. What would certainly be a fire hazard in America is a source of coziness and serenity in Scandinavia: proof that work in the Nordic is supposed to be comfortable in addition to being productive.

The second is the attitude that work in Sweden and Denmark is generally a two-way career contract. I alluded a bit to this in prior posts, but it deserves a specific callout here: employment in Nordic is designed to last much longer than in other areas of the world. Compared to the two ends of the spectrum – the US, where workers are used primarily for efficient productivity, and, say, France, who has extensive protections for employees to keep jobs – Scandinavia firms seem to invest more in training and education for their workers, and those workers in turn accept slightly lower wages for a career that can span decades rather than years. I will put a caveat on this: my belief may be skewed a bit due to small sample size or meeting exclusively with family firms.

 

The fuzzy: Speaking of family firms…another student and I were talking with Professor Angus about one small family firm’s search for a CEO. We wondered why the search never seemed to find a good candidate: the business was established, profitable, and had a well-oiled supply chain and production facility. In fact, we softly felt that just about any of the students on the trip would be well-positioned to run the company after our education at CBS.

However, Professor Angus asked one question: “Could you run the firm AND deal with the family issues behind the scenes?” We immediately shook our heads and realized THAT’S what makes family firms different – it’s never just about the money, contracts, or factory. It’s about everything that came before and the legacy that will be. One founder noted, “That’s my name on the jar. What will it stand for after I’m gone?” Will an outsider ever be able to live up to that attitude?

So in the end, neither the Nordic region nor family businesses can really be put into neat little boxes (classic consulting again: it depends.) But, like each Chazen trip I’ve experienced, I feel I now truly have an informed opinion on the region and will be better able to understand and transact with my future Swedish and Danish colleagues and business partners. Thanks again for reading along with my journey, and looking forward to my next chapter after Columbia!

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A trip we’ll never forget.

Nordic GIP Part 2: Descendants and Decisions in Denmark

Kit O’Connor ’17

COPENHAGEN – Um, well, COPENHAGEN-ish. Mostly written on a flight from Copenhagen to London, which means I’m still very technically on the trip! And feeling much better; thanks for everyone who expressed concern (both of them).

OK, so, last blog post, I wrote mostly about the Nordic part of this trip. Obviously, there’s another critical component of the class: family business! It was pretty amazing hearing the stories of so many people in the Three-Circle Model of the Family Business System, especially those with close connections to CBS. One quick caveat before I get started: our hosts were incredibly open with their personal experiences, so some of the references below are slightly changed or frustratingly vague in order to protect their privacy.

Three Circle Model of the Family Business System

One big overall theme was the idea of pervasiveness, which manifested itself in two main ways. First, literally everyone, and I mean every one, who was a family member talked about how family dinners would always revolve around the family business, unless someone, almost inevitably Mom, banned the topic. For anyone who didn’t grow up in a family business (author raises hand), this is a sobering reminder of the all-encompassing nature of such a venture.

Second, we spoke a lot about the “long shadow” effect of company founders, even long after retirement or death. At Maersk, our host spoke in hushed reverence of Mr. Moller, the only person he didn’t refer to by first name. At Ikea’s headquarters, our tour guide told the story of Ingvar Kamprad, Ikea’s founder, coming in with an eleventh-hour request (ha, no, it was definitely a demand) that the restaurant be removed from the first floor of the massive open-concept four-floor complex. He felt that if employees wanted a hot meal, they could trek ten minutes across the parking lot…to an Ikea retail store.*

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Just a perfectly normal corporate headquarters…

The other word that every presentation contained was choice. The amount of choices that need to be made in a family venture are enormous, and start at a very young age. One current CEO spoke of his father pointing to a chair and telling him that he’d sit there one day – no choice for the five-year-old kid there. More than one had lives and un-related businesses in other countries when the call came – would they give it all up to come home?

This choice element seemed to me to hint at why family businesses have so rarely persist beyond three or so generations. Does the grandson truly want to be there or is it just expected? Are there the right management skills to go along with the last name? Current CEOs we spoke to who had experienced the chance to work outside the family business before moving back seemed much more happy with their firms, as it was largely their decision to be there. Others felt trapped – one even mentioned possibly selling the company, but as he put it, how could he? It’s his name – his legacy – on that bottle!

That will do it for in-country updates from me. Time to figure out where and when my classes are tomorrow! I’ll see you again in a week or so with a final recap of the trip.

 

*Alright, this is a little harsh. His reasoning was that upper management couldn’t lose sight of what was happening in the stores and this was a good way to keep them engaged there. Ikea also seems to fancy itself a bit of a socialist workers’ paradise, constantly stressing that if something is good enough for an entry-level employee, then it must be good enough for management as well. In the end, a small-ish cafeteria with prepared meals replaced the restaurant.

Nordic GIP Part 1: A Swift Summit in Stockholm, Sweden

Kit O’Connor ’17

STOCKHOLM (or at least begun on a train from STOCKHOLM to COPENHAGEN) – Hej again, reader(s? one can dream!). My upmost apologies for the lateness of this post; I’ve been quite waylaid with a combination of seemingly every non-lethal upper respiratory infection possible. For those of you keeping track at home, countries I’ve visited during CBS when I haven’t had to spend an entire day floating in and out of consciousness in a hotel bed: Dominican Republic, Argentina, Uruguay, Chile, Curacao, Mexcio (twice!), and Vietnam. Countries where I’ve missed seeing the assembly of the most expensive bed in the world: Sweden. Go figure.

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Mike Conway ’17 hanging out in a FAR more luxurious bed than I was in that day.

 

ANYWAY. The meatballs. You want to know about the meatballs, not my health. They’re great! We did have to wait until the second day to taste them, however, as the first night included an even more unique Swedish dish: reindeer!

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Not quite Instagram-worthy, but Dasher tasted wonderful. There was a very Christmas-y vibe.

 

A couple observations about life/business in Sweden. First, gender equality is extremely important – we saw just as many men pushing around strollers as we did women, and, even at our nicest meals, there was no order to the service (i.e., both men and women were served according to seat position, not gender).

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One of our nicest dinners was at Bread & Table, generously sponsored by CBS alumnus Per Börjesson.*

Second, consensus is critical in corporate governance. As opposed to a more hierarchical system, where a manager decides the best course of action, it’s much more likely to be a group decision at every stage of the corporate ladder. Though this necessarily can slow down the pace of action, it creates a more cohesive environment where everyone in the organization is more aligned with the overall goals (in theory, at least).

I’ll leave you for now with this picture of the oldest church in Sweden, Storkyrkan. Besides being visually stunning, it’s also ancient – on a board listing events in the building’s history, there was a gap of 292 years, which one student noted was longer than the history of the entire United States!

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“On this site from 1600-1892…nothing happened. Check elsewhere on the map.”

Next stop, Copenhagen!

*When visiting Per’s company, Spiltan Fonder, we were treated to rather unique decorations in the restroom: rejection letters from every firm he had applied to from CBS. I can relate to him on at least one level!

Nordic GIP Part 0: Relatively Speaking

IMG_7915This sign in our hotel lobby was CLEARLY added to welcome the CBS group.

Kit O’Connor ’17

NEW YORK – Hej! Kit O’Connor ’17 checking in again – you might remember me from my travels earlier this year in Vietnam  – and no, I didn’t make a typo on my very first word, it’s just the way that we’ll say hello at my next destinations with the Chazen Institute: Sweden and Denmark!

Let’s start with a quick quiz: what do The New York Times, Volkswagen, Walmart, and Ikea have in common (other than what I suspect would be a very weird Sunday op-ed)? They’re all family businesses! One of the really cool things about this Global Immersion Program (GIP) is the dual focus on both family businesses and the way that those firms are run in the Nordic region. And yes, Ikea is indeed on the itinerary, though no word yet on whether we’ll have to assemble the conference room ourselves.

A little refresher for those readers who aren’t based out of Uris Hall (hi mom!): GIPs, unlike other Chazen programs, involve classwork and projects before and after the in-country experience and provide the same academic credit as a full-semester class. We’ve been incredibly lucky to have Professor Patricia Angus, a recognized expert on family-run firms, guide us in our classroom experiences over the last six weeks. I’ll be sharing some of the lessons we’ve covered over the next week of blogs, but for now, two quick facts that astounded me: did you know that family businesses make up more than 80% of companies in the world? And that despite that concentration, it’s incredibly rare for a family business to survive more than three generations? One of our most highly anticipated meetings will be with The Wallenberg Foundations, which are run by a family currently grooming the sixth generation to take the reins, so hopefully we’ll hear the secret to longevity.

I’ll wrap this up for now – my next report will cover the arrival into Stockholm and opening dinner (future spoiler alert: I bet the meatballs are awesome). See you across the pond!

Vietnam Part 4: Back in New York

Kit O’Connor ’17

NEW YORK – Back home, I think I finally know what time it is after nearly six days in the US – when people say that the jet lag is significantly worse west to east, they’re not kidding. It’s strange to think that four weeks ago, I was just getting ready to leave for Hong Kong en route to Vietnam, but now I can say that I definitely have an appreciation for and basic understanding for both the country of Vietnam and the economic environment therein. And, of course, a newfound appetite for $2 banh mi sandwiches.

To structure the overall lessons of the course, I’m going to break this into three main takeaways, two that I’ve previously discussed (but are critically important) and one other key aspect of life and business in Vietnam.

Takeaway 1: The emerging consumer economy will be the driving force of Vietnamese growth in the near term.

It’s quite easy to assume, as, frankly, I did, that Vietnam would be composed primarily of manual laborers who worked for subsistence while manufacturing the gadgets and clothes that are immediately shipped to richer countries. While Vietnam certainly has a thriving manufacturing industry, domestic firms work hard to serve a populace that is increasingly focused on health and quality. One theme that was hit several times was a focus on proof of quality: Vietnamese consumers vastly prefer food that can be proved to be produced in a safe manner. Just take a look at the outfits that we wore while visiting Veeteq, a farm focused on healthy produce!

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Takeaway 2: The communist government operates in an opaque and glacially slow fashion, unless it sees politically relevant reasons to expedite processes.

While the general populace seems mostly unaffected by the government (one tour guide had no idea Vietnam was a communist country and income tax payers are estimated to be south of 10%), many foreign nationals can quickly become frustrated by the inability to proceed without a local fixer, who generally has to grease the right hands. Building a business without a strong consumer presence can be dangerous, as it could easily be suddenly ruled illegal – B2C firms, however, could be slightly better off, due to the active and relatively free press. One story in particular that seemed to demonstrate the government’s motivations: after Rex Tillerson was nominated to Secretary of State, ExxonMobil was suddenly granted permission to drill in an offshore oilfield after years of negotiations.

Takeaway 3: Vietnam has developed transportation solutions that uniquely suit both the needs of the individual cities and the overall country.

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A constant presence in Vietnam is motorbikes. Roads: motorbikes. Sidewalks: motorbikes. Most shops: motorbikes. Factories at closing time: veritable seas of motorbikes flowing out. An especially poignant question was asked during the meeting with the American Chamber of Commerce in Hanoi: what technological progress will have a similar effect on Vietnam as the motorbike? After thinking for about a minute, the chairman of the committee couldn’t come up with a single advancement that would have anywhere near the impact of the motorbike, which had opened up opportunities and connections so widely.

A similar issue existed in the trek from Saigon to Hanoi. At first, many of my classmates wondered why we were taking a 1.5 hour flight rather than what we suspected would be a quick bus ride. Turns out that the bus would have been nearly 25 hours due to poor roads and rough terrain. Once again, technology came to the rescue: every hour on the hour, multiple airlines are flying large planes (747s, A380s) back and forth from Vietnam’s two main cities. Both these solutions prove that the Vietnamese are practical above all and perfectly willing to find the best (if not the most traditional!) method to move both the society and economy forward.

Well, that’s a wrap for me! Time to start preparing for my next Global Immersion class: Family Business in Nordic Europe. Cam on (thanks) for following along!

Vietnam Part 3: A Tale of Two Cities

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Kit O’Connor ‘17

HA LONG BAY & HANOI, VIETNAM – Remember in the first blog about Vietnam when I said that CBS students rarely have just one adventure at a time? Well, a group of students from Vietnam, your correspondent among them, jetted (well, vanned and hydrofoiled) off to Ha Long Bay where we spent 24 hours sailing and kayaking amongst the thousand plus islands that make up “Descending Dragon Bay”. Our guide, Chan, regaled us with the legend of thousands of dragons dropping from the sky and each forming an island over ten thousand years ago. Incidentally, Chan was the tallest Vietnamese person we met and had gotten offers to play in the professional basketball league of Hanoi, but turned them down for the more lucrative and self-fulfilling field of tourism. Yet another difference from life in the States.

 

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But I’m skipping a key part of the trip! The title of this post refers not to Hanoi and Ha Long Bay, but Hanoi and Saigon. Hanoi and Saigon are about as different as any two cities in a single country can be: Saigon is the gregarious, free-wheeling, entrepreneurial hub, while Hanoi is the buttoned-up political center with constant reminders of the government around every corner. Our company visits, to Vietcombank, GE, and General Motors, were dominated by talks of how the companies were backed by (or cooperated with) the government in order to conduct business properly in Vietnam. One particularly instructive moment occurred when a student asked about a curious projected 2017 reversal of a falling inflation rate. The answer, courtesy of Vietcombank, which is majority-owned by the government of Vietnam: the set price for basic services is going to be increased.

 

file_000-11Wait, who’s that in the background next to the sickle? Enhance…

file_000-9That’s right, a statue of Ho Chi Minh in the conference room of the bank!

These visits stood in stark contrast to the meetings with the American Chamber of Commerce and US Embassy in Hanoi. The Americans (and a Brit and Canadian) stressed the unpredictability of the government moves and expressed frustration that the deck often seemed to be stacked in favors of locals with connections. However, both consistently praised the young and educated population and seemed to truly believe that the best years of Vietnam are on the near horizon. I certainly came away with the impression that Vietnam has a host of fantastic investments for both the local populace and foreign capital!

That just about wraps up the in-country portion of this blog for me. I’ll be back in a week or so to give a proper summary of the trip, but I now must continue the rest of my personal adventure. On to the land down under!

Vietnam Part 2: A Little Local Color

Kit O’Connor ‘17

HANOI, VIETNAM – I’m writing this blog post from the ground in Hanoi near the end of our trip, but it will primarily concern our final visits with local companies in Saigon. However, before I get to the official Chazen visits, it’s worth mentioning one very local company in particular:

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Vietnam is known for cheap labor and raw materials, so it’s no surprise that there’s also a strong market for customized clothing. One student on the trip decided that he wanted a customized suit, and network effects being what they are among MBAs, soon Phi Phi Tailor had orders for 15 suits, 25 shirts, and six pairs of pants. In a little over 48 hours, I had in hand both the cheapest and best-fitting jacket I had ever worn!

In the official company visits to Veeteq Farm, Tri Duc Foods, and Masan Group’s consumer division, we saw a similar dedication to price and quality. From the official banner welcoming the group to Veeteq Farm to the package of authentic Vietnamese coffee given to each of us as we left Masan Group, it was clear that each company took an enormous amount of pride in its ventures and was very excited to share its story with our group.

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Tri Duc’s motto, “Hygienic foods for your health,” nicely encapsulated a common theme that we saw in our travels. As the Vietnamese middle class rapidly grows, consumers are demanding more stringent safety and quality standards for food, and companies go to great lengths to assure customers that its products are genuine in both quality and health. Vieteeq Farms, which sells only through direct channels and its own self-branded retail stores, actually has a live feed of its facilities to prove that its standards are being followed.

That’s all for now – next time I’ll describe some of the key differences between the north and south of the country. For the moment, I need to run to our recap meeting, which is being held in quite the interesting venue…

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