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!

Proxima Parada: Santiago [Next Stop: Santiago]

Peru, Colombia, Argentina, Uruguay, Brazil, Ecuador.  All places I have visited and or worked in at one point or another over the past several years. Speaking Spanish and having a long term interest in doing further work in this region, I was a little surprised when I thought about the gap in my regional knowledge as I have yet to visit Chile.  But that is going to change tomorrow.

When I heard about the Chazen Global Immersion Program in Chile focusing on family businesses and the unique challenges they face in Latin American markets, I wasn’t sure that this was the class for me.  Unlike some of my peers in the class, I don’t have any stake in a family business and don’t plan to start one in the near future.  However, upon further contemplation I realized that this was a valuable experience for me regardless of my (lack of) involvement in a family business. I attribute this in large part to two factors:

1)      According to a report by the Family Firm Institute, it is estimated that roughly 75% of all firms in Chile are family owned and controlled. While one might initially think that this is just a very large number of very small businesses, in fact, about 65% of the medium-to-large enterprises in Chile are family owned.

2)      Chile’s GDP growth- though somewhat volatile over the past ten years- has held steady at 5% to  6% throughout the past three years and even as the fortunes of its neighbors rise and fall, Chile has retained a sound economy and government about 20 years.

Just these two pieces of information were enough to convince me that this will be a very valuable program!  But that was five months ago, so lets fast forward to now.

Though I didn’t know much about Chile prior to this course, my peers and I have all been making an effort to understand more about the country and its progress over the past several years.   One of the most surprising things I discovered during our pre-trip lectures was that Chile is one of only about 20 countries in the world that, according to the World Economic Forum’s Global Competitiveness report, is successfully moving from an efficiency-driven to an innovation-driven economy.  Such a move will put this small country of about 17 million people alongside Western Europe and North America in terms of development. The report also ranks Chile as number 33 in terms of global competitiveness (out of 141 countries), placing it ahead of all its South American peers.  An economy with a majority of family owned businesses that is on a steady growth path and outpacing its cohorts is a country every businessperson should know more about.

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CBSers will feel right at home in the business district of Santiago, affectionately known as ‘Sanhattan’

In a recent interview with CNN, the country’s president Sebastián Piñera highlighted the “Four pillars of success for Chile: Education, science and technology, innovation and entrepreneurship, and more employment.” He went on to state, “Our vision is to transform Chile into a developed country and to eliminate poverty by the end of this decade.  We hope that we will be the first in our region to achieve that… by being an economically open and integrated country.”  My classmates and I can’t wait to see firsthand how Chile’s efforts are progressing and how family businesses are having an impact.

Hasta pronto!

Hannah Stern ‘13

(Follow my travels on twitter.com/Iamblond007)  [blogging from sunny Rio de Janiero…for now]