Aalto Leaders' Insight, Vol. 2: Spring 2015 by R S B

A A LTO U N I V E R S I T Y E X E C U T I V E E D U C AT I O N

W E LC O M E TO T E H R A N

Economy of 80 million people in the waiting: Reportage from the Iranian capital Vol 2, Spring 2015

slush: Story behind the startup feast c row dfun di ng: How to create a Kickstarter phenomenon leadership: Managing experts is an expertise h i s tory: Lessons from the Royal Navy of World War I

Where are you headed? People have a natural desire to do something momentous in their lives. Something that will leave the tiniest positive mark on the world. Together we can accomplish more easier. We are constantly developing cleaner fuels making it easier for people to enjoy being on the move, not only today, but more importantly in the future as well. Weâ&#x20AC;&#x2122;re looking for people who excel, people whose actions are determined by curiosity and courage. For us, the only way is forward.

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Aalto Leaders’ Insight is published and curated by Aalto University Executive Education. This magazine is a library of insights. The five long form articles – we call them Books – focus on different aspects of leadership, business and self-development. Aalto University Executive Education offers high-quality executive education (Aalto EE), professional development services for specialists and managers (Aalto PRO), and creative solutions covering the entire entrepreneurship lifecycle (Aalto ENT). Aalto University brings to our offering a multidisciplinary approach, together with innovative learning methods; this provides a unique combination of practical expertise with latest research.

Vol 2: Spring 2015

CONTENTS

S TA R T news, columns, and insights Pages 10–28 Aalto EE – the Best Executive MBA in the Nordic Countries 11–12 Instability Is a Tradition in Russia 13 Column by Riitta Kosonen New in Science and Research 14–15 Aalto EE News 16, 18–19 License to Fail (for Grown-ups) 17 Column by Mikko Laukkanen Figures: Aalto University 20 How to Lead Talents? 21 Financial Crisis Sucks up the Energy of the Management 23 Column by Timo Löyttyniemi Our Story: Slush 24–28

— LO N G - F O R M BOOK 1 Re portage Pages 29–50 Opening Soon? Iran: Economy of 80 million people in the waiting.

BOOK 2 Words of wi sdom Pages 51–60 Artist in Two Worlds Sampsa Sarparanta has a message.

BOOK 3 Be st practice Pages 61–70 Hello, Linda! How to create a crowdfunding phenomenon?

BOOK 4 Leade r ship Pages 71–84 Doctor’s Orders Managing experts is an expertise.

BOOK 5 Se lf-deve lopme nt Pages 85–91 Ahoy! Henrikki Tikkanen looks back – all the way to World War I.

— I M PAC T & E X P E R I E N C E Participants, faculty, and othe r Aalto EE alumni Pages 92–101 My Story: Margit Suurnäkki 93 Participant: Paula Salovaara and the importance of new and true friendships 96 Faculty: Mark Esposito and Terence Tse fixing the bridge between theory and practice 98 Figures: Aalto University Executive Education 101

— Aalto Leade r s’ Insight Online Stream 103

Design Thinking for Business Innovation

THE PROGRAM GAVE ME A FUNDAMENTAL FRAMEWORK AND METHODOLOGY TOGETHER WITH A LOT OF PRACTICAL TOOLS TO APPLY. WE ACQUIRED A NEW SET OF LENSES TO LOOK AT THE WORLD AND DETECT OPPORTUNITIES FOR BUILDING FUTURE BUSINESS.â&#x20AC;? Kristof Decock, Senior Innovation Manager, TomorrowLab, Belgium

Design Thinking for Business Innovation is a program for corporate leaders who want to integrate cutting-edge creative practices into their business processes and corporate structures.

Design Thinking is a methodology for practical, creative resolution of problems or issues that looks towards an improved future result in terms of innovation, strategic capabilities, processes and, in the broadest sense, management. It is a form of solution-based or solution-focused thinking that starts with the goal or what is to be achieved, instead of with a problem. Presented by ESADE Business School and Aalto EE, this exclusive, immersive program will give you a unique access to exciting new solutions for the challenges facing your business today. The program will be held in Helsinki and Barcelona during an intensive eight-day study period in April 2015.

www.designthinking.eu.com

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PHOTO ALEX TREADWAY

how me an annual report that lists six or seven constituencies, and I will show you a mismanaged company” asserted Al “Chainsaw Al” Dunlap. After a number of questionable leadership triumphs when at the helm of Sunbeam corporation he failed miserably and lost his reputation as a corporate savior. Nowadays, leaders cannot possibly lean on such a simplistic principle, as they have had to cope with a constantly growing number of stakeholders - the significant others of the corporate life. In this issue, an article of leading experts by sharing power, engaging and avoiding self-promotion, showcases the way leadership has had to change. The story of an angry punk artist is a convincing example of a discourse the future leaders have to keep in mind when making, justifying and communicating their choices. It is not self-evident for established organizations to be able to expect respect merely for the fact

that they exist and employ people. This is illustrated on an individual level by the story of naval rivalry at the brink of World War I. “There is properly no history; only biography”, as R. W. Emerson put wisely. Thinking differently is another lead theme of this issue. Linda Liukas decided to challenge the conventional belief that coding is only for nerds and boys. Moreover, Slush became a global brand in a matter of only a few years, turning into the Davos of the start-up generation. Submerging into life in Tehran challenges many of the images enforced by Western media. Instead of creating such a hype around China, India, and Brazil, we should take a serious look at less evident emerging giants, such as Iran and Indonesia. ◆

Aalto Leaders’ Insight Online Stream: aaltoee.com/blog

PEKKA MATTILA , EDITOR IN CHIEF GROUP MANAGING DIRECTOR, AALTO UNIVERSITY EXECUTIVE EDUCATION PROFESSOR OF PRACTICE, AALTO UNIVERSITY

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S TA RT NEWS, COLUMNS & INSIGHTS

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IN THE NORDICS IN 7 CRITERIA INCLUDING S A L A RY TO DAY S A L A RY I N C R E A S E F E M A L E FAC U LT Y FEMALE STUDENTS F E M A L E B OA R D

THE BEST EXECUTIVE MBA IN THE NORDIC COUNTRIES Business Area Director, Dr. Minna Hiillos from Aalto EE sees students having to challenge their own operating models and thinking as the main advantege of EMBA programs.

he Aalto Executive MBA program improved its position in the Financial Times’ annual ranking. In a global comparison,Aalto EMBA ranked 83rd (85th in 2013). Aalto EMBA is the best Nordic program, and its participants clearly have the best salary trend. Some 3,000 EMBA programs are currently being offered around the world, with only the top 100 making it onto the Financial Times’ ranking. “Gaining top position in the Nordics is especially important for us,” says Doctor Minna Hiil-

los, Business Area Director responsible for Aalto EE’s MBA programs. “Already before these rankings were introduced, the aim for Helsinki School of Economics was to be of top international standard and a forerunner, and we want to stay at the top of global development. Our ambition level has been high, which bears fruit and is demonstrated in the rankings.” Helsinki School of Economics (predecessor of Aalto University School of Business) was the first Nordic business school vol 2

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to earn the Triple Crown accreditation, meaning that an institution has been awarded the three most exacting accreditations or quality stamps available to business schools. The Triple Crown is awarded by three associations: US-based AACSB, European EQUIS, and British AMBA. The Aalto EMBA program is already offered in eight countries: Finland, Singapore, Poland, South Korea,Taiwan, China, Indonesia, and Iran. Internationality and versatility are among the

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program’s undisputed strengths. The latest addition to this list is Iran, where Aalto University Executive Education launched the nation’s first globally accredited Executive MBA program this fall. “We are competing on global executive education markets. We saw no radical changes in the Financial Times’ ranking this year, although Chinese business schools and programs that are partially organized in China scored high once again,” Minna Hiillos says. “All in all, the differences between the top international schools are very small. Aalto’s multidisciplinary approach gives us a competitive edge, as does its higher than average ratio of female professors.” The ranking is based on sur-

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veys by schools and Executive MBA program evaluations from alumni who graduated in 2011. This year’s edition gives a snapshot of alumni’s situation compared with when they started the program. Minna Hiillos has had a vantage point on the development of MBA alumni’s careers and competence for a number of years. She sees students having to challenge their own operating models and thinking as the main advantage of the programs. Business knowledge builds the confidence to take on executive positions. “MBA graduates gain a wide-ranging perspective on business and leadership, which allows to go as far as challenging a CFO sitting on the board of directors. The programs require

students to delve into business independently and thoroughly, providing a larger scope on business life on the whole.” According to Hiillos, after graduating MBA students usually gain new challenges and interesting tasks. Increased competence and proving one’s motivation are rewarded. The networks provided by the two-year program are another integral benefit. Aalto EE programs include a higher share of women compared to the other Nordic countries. According to Hiillos, whose own research has included female leadership, women should be even more proactive in applying to top management education “to develop their networks and competence”. ◆

W H AT D O T H E Y M E A S U R E ? Here are some examples of the ranking criteria. Weights for ranking criteria are shown in brackets as a percentage. (Source: FT Magazine)

SALARY TODAY US$ (20): Average alumnus salary three years after graduation. SALARY INCREASE (20): Average difference in alumnus salary between before the EMBA and now. Half of this figure is calculated according to the absolute salary increase, and half according to the percentage increase relative to the pre-EMBA salary. CAREERS PROGRESS (5): Calculated according to changes in the level of seniority and the size of com-

pany alumni work in now, versus before their EMBA. WORK EXPERIENCE (5): A measure of the pre-EMBA experience of alumni according to the seniority of positions held, number of years in each position, company size and any prior international work experience. AIMS ACHIEVED (5): The extent to which alumni fulfilled their goals or reasons for doing an EMBA.

The Financial Times’ ranking assesses various sub-areas, such as the versatility of the program, teacher qualifications, and students’ career progress, salaries and the achievement of goals. The ranking is based on assessments and information collected from students, and on statistical data produced by the schools. The ranking survey is sent to former EMBA program participants three years after their graduation.

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S T A R T C O L U M N

Instabi lity is a tradition in Russia

nly two years ago Russia was welcomed into various international agreements such as the WTO. Now all the good work has been destroyed by geopolitical turbulence that hampers Russia’s international relations and domestic modernization. Cleary, Russia is in the flux. It is therefore timely to identify any building blocks that determine Russia’s path beneath the turmoil. Firstly, instability is a tradition in Russia. Socialism was an unsuccessful experiment that was followed – not by a market economy in 500 days as was planned – but an economic crash with GDP dropping by 50 per cent in the 1990s.The next crisis was brought by the falling oil price and hit the rouble in 1998. And finally, just as Russia had recovered, the global financial crisis in 2008 turned growth into decline that Russia has not been able to combat till today. The present crisis is both economic and political. Secondly, the Russian economy would struggle even without the contemporary Western sanctions posed on Russia due to Ukraine. This is due the inability to modernize the economy to decrease dependence on the fluctuating oil and gas income. Without modernization and diversification, Russia will not prosper. Thirdly, the frequent crises have made Russia strong. The state is debtless and can use oil income-based reserve funds to mitigate

problems. Also the Russian people are persistent. They’ve seen shortage of money and goods, and know how to grow veggies in dachas. Besides, “joint enemies” unite people. Fourthly, Russia needs the West – especially Europe – on its road to economic modernization. It needs European enterprise-driven models of innovation to balance its state-driven approach. It needs ideas to boost new firms and the SMEsector, and to organize research-led innovation. It needs to broaden the concept of innovation from mere scientific thoughts to commercialization. Fifthly, Russia is at the crossroads and must choose either the road of international agreements and joint agendas, or tailor its own lonely Russian path. Two years ago the roadn was international, featuring the WTO and improving positions in international doing business rankings. Now the future is ambivalent. Even Russians do not believe that the government will manage – and is even seriously trying - to clean up corruption. This is stated in several international business meetings, research cooperation and cultural communication. For Russia, China is mentally distant, politically opportunistic and economically ambivalent. The European Russia with its business potential in modernization would be one platform to search growth in Europe. ◆

RIITTA KOSONEN is Professor and Director of Center for Markets in Transition (CEMAT) at the Aalto University School of Business. She is in charge of several multidisciplinary research projects, which provide scientifically rigorous

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and societally relevant research on emerging markets, especially on Russia and China, and on the competitiveness of the Baltic Sea Region in the global economy.

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A A LTO - B O R N BRAIN S T I M U L AT I O N T E C H N O LO G Y GOES I N T E R N AT I O N A L [TECHNOLOGY]

Medical device developed by Nexstim achieves promising results for stroke patient rehabilitation in the US. Nexstim’s invention makes use of a technique called Navigated Brain Stimulation, which offers two main advantages. “With other medical devices that use magnetic stimulation, the pulses are usually given with-

out precise anatomic targeting, and these devices cannot measure the brain’s reaction well. With Nexstim’s devices and their use of three-dimensional structural images of the brain, it is possible to focus the stimulation accurately, on the order of millimetres, and thanks to the EEG recording, we immediately receive information about

P E O P L E FA K E TO LO O K A U T H E N T I C ON SOCIAL MEDIA [ B E H AV I O R ]

Presenting an authentic image on social network sites includes an element of fakery according to a new study by researchers at Aalto University. Researchers discovered that being authentic is very important for social media users. At the same time, users also admitted faking parts of their online image in order to conform to social norms and expectations. “We noticed that there was

a heavy focus on maintaining a profile that is as natural as possible”, says Suvi Uski of Aalto University. “We also encountered a widespread disdain by users for what is known as profile tuning, or intentionally sharing content designed to depict the user in a false way.”

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changes in the brain’s electrical activity”, says Professor Risto Ilmoniemi, one of the original developers of Navigated Brain Stimulation. Risto Ilmoniemi founded Nexstim in 2000 in order to commercialize the research work that had been carried out in Helsinki University of Technology (now part of Aalto University) and the BioMag Laboratory at the Helsinki University Central Hospital. “This work has required a wide variety of expertise: physicists, medical researchers, doctors, psychologists, electrical engineers and software developers”, Professor Ilmoniemi adds.

“Our study reveals that sharing content in a way that is considered to be excessive, attention seeking, or somehow portrays that individual in a fake manner is judged extremely negatively”, says Suvi Uski. However, this presented the researchers with an interesting paradox. “While social norms required individuals to be real in their sharing behavior, presenting oneself in the right way through sharing often necessitated an element of faking”, adds Airi Lampinen, co-author of the study.

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A A LTO U N I V E R S I T Y A “ R I S I N G S TA R” I N I N N OVAT I O N AND ENTERPRISE AC T I V I T I E S [ I N N O VA T I O N ]

R E S E A RC H E R S C O N V E RT C O 2 I N TO A VA L U A B L E R E S O U RC E [TECHNOLOGY]

Researchers at Aalto University have opened a pilot plant that converts CO2 and slag, the byproduct of steel manufacturing, into a valuable mineral product. The product, Precipitated Calcium Carbonate, is used in e.g. plastics, papers, rubbers, and paints. The innovative plant represents the next stage prior commercialization of a new process that consumes CO2 in order to convert a low-value by-product into a highly valuable resource for industry. “We are turning the industrial solid by-product from steel-manufacturing into a product which is 50 times more valuable”, says Arshe Said, postgraduate researcher at Aalto University. “Also, this process actually consumes CO2 and acts as a CO2 sink which benefits the environment greatly.” The pilot PCC plant is now running in Otaniemi campus of Aalto University. The method used in the pilot is based on the patent owned by Aalto University Foundation together with Åbo Akademi and Rautaruukki Oyj (now part of SSAB).

In a recent MIT study of the world’s leading 200 universities, Aalto University was grouped among the five rising stars. In the study, Aalto was praised for its strong and fostering culture for startup enterprises.

R E S E A RC H : M O B I L E DEVICES FREE S T U D E N T S TO E X P R E S S T H E M S E LV E S [ E D U CAT I O N ]

Researchers of the Helsinki Institute for Information Technology HIIT explored how an anonymous discussion forum used via the mobile phone impacts the behavior of 12- to-13year-old students in class. The research showed that computer-mediated communication frees students to express themselves without the need to consider the social relationships currently prevailing in their Acco rdin g to th e stu dy o n p r ima r y sch o o l stu de n ts,

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“We’ve set innovation and enterprise activities at the very core of Aalto University’s operating principles since it was established”, Hannu Seristö, Vice President of Aalto University, comments. The MIT study evaluated the ways in which universities foster innovation, their research strengths, the orientation of students towards enterprise and entrepreneurship, and the support offered by the state.

class. Computers and mobile devices also enable new ways of participating in classroom activities, and they can be used to reshape the rules of traditional social interaction. “We found that anonymity enabled discussion that, more than regular classroom discussion, allowed for multiple voices and enabled the students to express themselves more freely, as they were not constrained by existing social relationships.The interviews highlighted both the opportunity and the obligation to form independent opinions”, explains doctoral student Matti Nelimarkka.

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PEKKA LAAKSONEN – MOST RELIABLE CEO OF 2014 [BUSINESS]

Pekka Laaksonen, former CEO of Valio, was awarded the Most Reliable CEO in Finland by Nordic Institute of Business & Society (NIBS) for his contribution for the four preceding years. The title will be awarded annually to the CEO of a large Finnish company characterized by the most solid profitable growth. The recipient of the Most Re-

“Throughout my career, I have aimed for consistent, sustainable growth in the companies I have overseen”, says Pekka Laaksonen.

If you are working as a CFO, controller or other financial executive, you no longer can be just a number-crusher. You need to have a holistic view of leading a financial organization and also strong strategic competence. This means in-depth understanding of

D I S S E RTAT I O N O F T H E Y E A R AWA R D TO PA U L A K I L P I N E N [BUSINESS]

D. Econ. Sc. Paula Kilpinen’s doctoral dissertation on management and international business, Capability Development within the Multinational Corporation, has been chosen as the best dissertation of the Aalto University School of Business. Granted in 2014 by the HSE Foundation, the award covered dissertations completed in 2013. In her dissertation, Kilpinen studied the interactions between strategy and internal and external business environments. In practice,

tools for financial analysis, risk management, business valuation, leadership skills and new ways to influence and communicate. Visit aaltoee.com to find out if the Aalto Financial Executive program is what you are looking for.

she focused on how these factors influenced capability development in Nokia, Kone and Iittala. Dr. Kilpinen, who is currently working at Aalto EE, develops capability-based strategies and solutions for corporate clients. She also trains in both open executive programs and customized solutions, to help companies to understand their own strategic capabilities. “A strategy built on unique expertise is more difficult to copy. Since capability development can take years, capabilities needed in the future must be identified now,” says Kilpinen. Paula Kilpinen is Head of Solutions and Impact at Aalto EE and a member of the Management Team.

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liable CEO award is selected by analyzing Finland’s 200 biggest companies. The selection is based on the average annual rate of revenue growth for the four preceding years in proportion to cyclical fluctuations. The Most Reliable CEO nomination awards significant yet consistent growth over the years. The nomination is awarded by NIBS in cooperation with Aalto University Executive Education for the first time this year, and will be awarded subsequently in October 2015.

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Any business executive who lacks the ideas, frameworks, and tools of Design Thinking risks being irrelevant in the ultra-competitive business climate of the future. “The combination of Design Thinking and Business Models is a really powerful way to deliver market changing innovations with good returns.” Dr. Luis Vives, Associate Professor, Department of Strategy and General Management, ESADE Business School Visit aaltoee.com to find out if the Design Thinking for Business Innovation program is what you are looking for.

S T A R T C O L U M N

Lice nse to fai l (for g rown-ups)

t’s been claimed that we are currently living in the “Failure Age”, where the underlying logic seems to be that, when it comes to generating new innovations, quantity is a condition for quality, and the more often we fail, the more likely we are to come across the next big thing. Indeed, in unison with the growing attention given to topics like lean startups, open innovation, and intrapreneurship, there has been a growing chorus calling for not only a greater tolerance of failure but for an outright celebration of failure.We have all heard the stories about innovative start-ups celebrating failures with champagne and success with beer, or of charismatic entrepreneurs wearing their experiences with failed companies and initiatives like badges of honor. The fear of failure in business organizations and the lack of a tolerance for failure by top management are seen stifling, and as something that needs to go the way of the fax machine. Employees, especially those who have entered the business world quite recently, often bemoan “old” managers’ risk-averseness and apparent need to assign blame for failures. Amid all this hype about the benefits of failure, a point that is sometimes overlooked is that, as with most things in life, all failure is not equal. Harvard Business School’s Amy Edmondson categorizes types of failures on a spectrum spanning from praiseworthy to blameworthy. At the blameworthy end of the spectrum

are failures resulting from not adhering to prescribed practice and those resulting from inattention. Management need not have increased tolerance for these types of process failures. At the praiseworthy end of the spectrum we find failures stemming from hypotheses testing and exploration. These ought to be tolerated and encouraged, as they provide vital information related to new innovations and markets. So if the “quality” of a failure is essentially about the amount of new information we can gather from the failed initiative, can we design ways to maximize the potential learnings? Columbia Business School’s Rita Gunther McGrath has written extensively on innovation and failure, and gives us four principles for intelligent failure: Firstly, define at the outset what success will look like. Secondly, specify what assumptions you’re making and how you will test them. Thirdly, construct the initiative out of small parts to facilitate fast learning and limit risk. Fourthly, encourage a culture of openness where failures are shared and analyzed. So whatever approach you choose to take to failure in your organization, keep in mind that failure is a vital element of progress and it’s this forward motion towards a better tomorrow that keeps organizations healthy and employees motivated. In Winston Churchill’s famous words: “Success consists of going from failure to failure without the loss of enthusiasm.” ◆

MIKKO LAUKKANEN is Head of Thought Leadership at Aalto EE. In his doctoral thesis he examined the challenges of modern-day innovation

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initiatives and reasons for their failure. Doctor Laukkanen is a frequent lecturer in Aalto EE executive programs.

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alto University Executive MBA program is now up and running in Tehran through a partnership with the Iranian Business School (IBS). This is the first globally accredited EMBA program in Iran. The first module started in October with 28 Iranian participants. The Aalto EMBA is offered to entrepreneurs, senior-level executives and individuals with significant professional experience. One in three Aalto EMBA students in Tehran is a woman. For example, in Finland the corresponding figure for female students taking part in EMBA programs is one in five. “We have participants from various fields, for example banking, construction, telecommunication, HR management, fashion, manufacturing and retail”, says Yaser Kerachian, Director of Academic Programs at IBS. Iran is a huge market with a relatively young population (more than 60 percent of citizens are less than 35 years of age). It is said to be one of the last major emerging markets in the world. Before, Iranian graduates wanting to take part in MBA studies were forced to relocate to Britain or the United States, which was a difficult prospect especially for women, who are traditionally expected to take care of their families and children in Iran.

TEHRAN EMBA – ONE IN THREE I S A WO M A N

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MANI LOTFIZADEH

S T A R T

A number of women who have just finished their maternity leave have joined the EMBA program, claiming that corresponding studies in some other country wouldn’t have been possible in their situation.Women taking part in the EMBA program work in banking, as HR managers, in the clothing industry and in commerce, and face a similar dilemma as men: In Iran, education as such is of a high level and generally valued, but this doesn’t apply to management and commercial thinking. Aalto EMBA contributes to bridging this gap. According to Harri Kämäräi nen, Finnish Ambassador to Iran, educational cooperation is the best way to improve the status of women in Iran. “Unlike men, female directors in Iran haven’t been able to go off and study at Cambridge, Harvard or some other top uniSamar Modonpour, 32 serves as a prime example of those participating in the Executive MBA program offered by Aalto EE in Iran: Born in Iran and educated in Canada and the United States, Samar decided to return to her native country after graduation. Although she has a degree from a top university, up to now she hasn’t studied finance or management. Today, she runs a successful business – and is a woman, just like one in three Aalto EMBA students in Tehran.

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“This is of key importance for Iranians: Aalto EE offers outstanding education, while supporting the position of women.”

versity around the world. As family continues to be the number one priority for women, many rejoice in this chance to take part in management training, while taking care of children, family and work.This is of key importance for Iranians: Aalto EE offers outstanding education, while supporting the position of women.” The modules of the EMBA program are structured around for the four key areas: strategy leadership, finance, and marketing. Participants will acquire globally applicable, multidisciplinary competencies based on the latest theories, principles and business practices. ”There is a management gap vol 2

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in Iran, and we hope to be able to start filling that gap”, says Mehdi Khajenouri, Managing Director for IBS. ”We have the knowledge, we know the numbers, but the gap is in soft fields: management, strategic thinking, leadership.” According to Khajenouri, Iran needing world-class management education is a common topic of conversation. “This program offered by Aalto EE fulfills management needs in Iran, supporting both our present efforts and leading us to a more prosperous future.” The former CEO of the IBS Mostafa K Eghbal says that in Iran, the business school students are not after the degree, they are after the top-level content. ”If you run a family business you do not need the degree, you need the skills to run the business.” He sees the program as a possibility for Iranian business people to get to know other people with similar background. Business connections were being formed already during the first module in October. In Tehran, Aalto EE collaborates with Iranian Business School, a not-for-profit postgraduate school founded by Iranians who have studied and worked abroad. ◆ See more at: www.aaltoee.com/blog

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S/ T AAO RCT TU NF II VL E R F I G U SR TE AS R : TA A L FT ? S I T Y

A A LTO U N I V E R S I T Y – W H E R E S C I E N C E A N D A RT MEET TECHNOLOGY AND BUSINESS

20,000 380 3,500 students in total, of whom

professors in total

are doctoral students.

6 schools

THE FINANCIAL F O OT P R I N T O F A A LTO E E Through its operations, Aalto University Executive Education Ltd contributed a total of approximately

in the Helsinki Metropolitan area, and with over 300 years of combined history: School of Business School of Arts, Design and Architecture

2 million euros

School of Science School of Chemical Technology

back to the Aalto community in 2014, in various forms including dividends, lecture fees and rent.

Over

School of Electrical Engineering School of Engineering

100

bachelor’s, master’s and doctoral degree programs.

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S T A R T H O W T O

H OW TO L E A D TA L E N T S ? Talent can no longer be reduced merely to a list of competencies. According to Riitta Lumme-Tuomala, Director, Russia and Talent Management at Aalto University Executive Education, leading and spotting talent takes fresh thinking and boldness.

ILLUSTRATION JARKKO HYPPÖNEN

How to spot talent? “Talent-spotting is evolving, old-fashioned competence lists soon becoming a thing of the past.The same skills don’t necessarily apply in the future, and former skills and experiences don’t guarantee success in some other task. Talent frameworks should in fact be defined in some other way than as a list of competencies.” How should talent be defined? “Talent has a lot to do with potential and what a person can take onboard. In addition to skills and competencies, one needs ‘situational smartness’ – an ability to function in new, changing situations. People must learn how to tap into their existing potential.We need the courage to recruit curious people. Experience can be a good thing, but can hinder a person from adapting to what’s new. ”

restricted to the members of the top management team, who are also paid more.This is no longer necessarily the case, and key positions should be viewed more broadly. They could for instance be found in the customer interface, if customer experience lies at the heart of the company’s strategy.” Do you believe anyone can learn any skill? “Naturally, there are different talents skills and competencies in need also in the future. We all have our strong points: a particular strength we wish to hone. But without the ability and desire to share knowledge and learn, a son is neither a talent of today nor tomorrow.” Will our perspective on a company’s key positions also expand? “According to former thinking, key positions were pretty much

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How are high potential employees managed? “High potential talents are the people who end up leaving, unless managed skillfully.They may be ready to look on at indifferent management for a while until they’ve had enough. According to a recent study, people spotted as high potential talents appreciate development opportunities and being trusted.This ensues in a number of ways: confidence, autonomy, an opportunity to develop skills, and feedback. These are of course basic needs that are often forgotten.” ◆

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RAKASTETTU 90 ohjelmatoteutusta

ARVOSTETTU Koulutuksen kärjessä jo 45 vuotta

KAIKESSA ON MUKANA TEORIAN OHELLA MITEN ASIAT VOIDAAN VIEDÄ KÄYTÄNTÖÖN. SAIN OHJELMAN VALMENNUSJAKSOISTA USEITA ERINOMAISIA JOHTAMISEN TYÖKALUJA.” Kosti Talala Toimialajohtaja, Suur-Seudun Osuuskauppa

a a l t o l e a d e r s i n s i g h t · 22 · v o l 2 Lue uudistuneesta ohjelmasta ’ja hae osoitteessa aaltoee.fi/aaltojoko

SUOSITTU Tuhansia osallistujia

S T A R T C O L U M N

Financial Crisis Sucks up the e ne rgy of the Manageme nt

hen a financial crisis strikes, other activities make way for handling the situation. How can a board avoid crises in advance in the exceptional setting following the 2008 financial crisis? A few basic principles should be kept in mind. The financial crisis of 2008 served as a true stress test for funding. Many companies were forced to begin negotiations with banks in 2008, having to question their capacity and counterparties of OCT derivatives, or at least transfer funds to more secure banks. In addition to liquidity and counterparty risk management, a number of companies had to reinforce their equity in the middle of the crisis, which is always an ungrateful task. In a tight spot, some companies relied on high-interest hybrid financial instruments to strengthen equity. The financial crisis has created an exceptional financial environment. The record low interest rates would be appealing for funding the operations of companies, if potential growth targets could be found. Many corporate directors have come to see that despite limited availability, funding is not a problem except in special cases. Also financial regulation has changed dramatically since 2008, particularly affecting the banking industry. The main change relates to the possibility of authorities to force banks to swap debt for equity. Due to the industry’s vulnerability, banks aim to raise equity in a determined manner.

The financial crisis is a serious issue for companies – for a publicly listed company it’s actually a matter of life and death. A listed company is always at the mercies of the market forces. On the other hand, companies owned by venture capitalists are able to take care of funding out of public view. Efficient leverage creates increased revenue for venture capitalists, while a financial structure that is too solid could result in lazy management. So what should a company consider to prevent a financial crisis? The first thing is to ensure adequate liquidity buffers. Liquid assets need to cover payments and fund operations at all times. Secondly, sufficient equity must be ensured to avoid the loan portfolio maturing as a result of debt covenants in a crisis situation. Managing equity requires suitable allocation of dividends and skillful management of the share of debt. Thirdly, companies need to be prepared for surprises in the operating environment. Risk management enables charting sources for surprise changes and tools for being prepared. A company needs to be ready for the possibility of interest rates rising when determining the amount of debt. A rise in interest rates does not necessarily result only from central bank policy or regular market logic, but can also be caused by a lack of confidence or disturbance on the markets. ◆

TIMO LÖYTTYNIEMI is Managing Director at the State Pension Fund and Chairman of the

Aalto University Executive Education Board of Directors program.

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PHOTO SAMI VÄLIKANGAS

S T A R T

2014. Slush was organized at Messukeskus Helsinki. The Main Organizer Miki Kuusi (wearing a Slush-t-shirt) followed the program at the main stage with the Vice Premier of China, Wang Yang, and his crew. On his right the Prime Minister of Finland, Alexander Stubb.

MISSION: S L U S H C O N Q U E R S T H E WO R L D Miki Kuusi, the main organizer of Slush, reminisces on the startup event’s early days back in 2011. How is a small startup gathering transformed into a huge global festival? 2011 ” D O N ’ T WO R RY, BE CRAPPY” ”I was the chairman of Aalto Entrepreneurship Society (Aaltoes). After Nokia’s “burning platform” memo leaked into the public, Finnish media raved on about how everything had been lost and it was all doom and gloom. One Monday afternoon, an idea struck that the situation required a bit of provocation and something new. We organized

the Finland Post Welfare event at Finlandia Hall, which included Jorma Ollila, Björn Wahlroos, and Risto Siilasmaa as speakers. 1,700 people turned up, with Image magazine and daily newspaper Helsingin Sanomat featuring lengthy articles on the event. Aaltoes began to plan the next move. It dawned on us that Finland was lacking a conference aimed at international investors that would bring together startup guys from the Nordic Silicon

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Valley… With all the confidence of a 20-year-old, I declared that we’d arrange it. It was spring 2011. Slush had been held since 2008, and one of its organizers, Peter Vesterbacka, suggested we’d take the event on, as otherwise it would probably no longer come about. We met up once and agreed on the next phase, but things never lifted off from there. By the beginning of September we had nothing together.

S T A R T

it off, as two months later we’d arranged an event for 1,500 people. We had a website with 246 likes created for free using Wordpress, 27 speakers, a rather large stage, and a good thing going. It was like one of those happy student festivals.”

PHOTO JUSSI HELLSTEN

2011. Peter Vesterbacka, Chief Marketing Officer, Rovio.

2011. Ilkka Paananen, CEO, Supercell.

2013. Jyrki Katainen, Prime Minister of Finland.

One night I called Peter to say there’d still be slush at the beginning of the following year. This fall, time was running out. He was so excited about us doing the event that I could never bring myself to telling him we wouldn’t go ahead. I had told the whole team that Slush was off the cards in the fall, as we didn’t have speakers or investors lined up, and it wasn’t public knowledge yet. But I couldn’t get the words out of my mouth.

It was about nine o’clock at night. I ran up my emails thinking I should probably start inviting speakers. The first invite went to Ilkka Paananen from Supercell, which had been founded a year before. Paananen replied with an immediate yes and an offer to help. I told him we really could do with some help, and he put me in touch with about half of the Finnish players in the industry. Somehow we managed to pull vol 2

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2012 ” W E L E A R N T F RO M THE BEST AND C R E AT E D A T E C H Y CONFERENCE WITH A TWIST” ”Prime Minister Jyrki Katainen visited Startup Sauna, and I’d invited a few experienced guys to host the visit.We sat there afterwards and I asked Ilkka Paananen what he thought I should start doing, as I didn’t feel ready to go back to studies yet. A week later I was working for Supercell. We assumed that someone would probably arrange Slush again in the fall. When nothing had happened by the previous spring, Atte Hujanen and I began to contemplate whether to organize the event once again. Atte booked the Cable Factory, while I got busy with emails. After the summer, we set up a foundation we’d been working on for a while, and I left Supercell. This time things were more professional. We got some Russian firms involved, and managed to get through a couple of cash flow crises. At some point the

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sheep effect emerged: one by one, international investors announced their interest in supporting the event, which in turn brought in more companies and investors. The aim was to create a oneof-a-kind technology festival.We visited Israel, and followed top international events to see what they did right and what we could learn. We managed to get Prime Minister Jyrki Katainen to open the whole show. In 2012, Slush attracted 3,500 attendees. The event succeeded in bringing lots of crazy ideas into fruition and benchmarking the best events in the world.All this created a techy conference with a twist.” 2013 ”DREAM COME TRUE: I N T E R N AT I O N A L EVENT” ”I’ve decided each Slush would be my last. But each time I’ve been left with a hunger for more. In April 2013, I told Atte that our two full-time people model would no longer work, and continuing on a voluntary basis was getting a little scary. We had reached such large proportions that even if there were enough volunteers, we’d need more people to take responsibility. I drafted the first ever staff budget for Slush. The board voiced its concerns, fearing the fun of volunteering would be

PHOTO JUSSI HELLSTEN

S T A R T

“In 2013, Slush had a rock festival feel”, says Miki Kuusi.

lost. But we decided to push on. In April-May-June, we’d set up a team of eight. I called the best people in the community and explained what was going on. A few came onboard, who then recommended others. Many of these people continue at the Slush office to this day. Slush has never recruited anyone. It’s been easy to join the organization: you walk in and prove yourself. But that’s also the hardest thing: officially we are never looking to hire anyone and there’s no application process. This is a meritocratic system, and building an organization has been important for Slush. An eight-person team is big for us after getting used to just two people doing everything alongside other responsibilities: I’ve been the CEO of Startup Sauna, while Atte runs his own company. We realized Slush would need larger facilities, but there was nothing suitable around. We got

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a little down about having to carry on at Cable Factory. How could it be scaled up? Covering the courtyard? A Silja Line ship in the backyard? A building in the backyard? The National Board of Antiquities didn’t like the idea of a covered courtyard, so we went for a heated marquee instead. The idea of using a Silja Line ship was even discussed by the ferry company’s board, but fell through due to technical difficulties.We did have three smaller ships docked on the seafront though. Finnish commercial television station MTV3 ran its breakfast show from Slush despite our insistence that nothing at Slush is to be in Finnish. But the breakfast show airs so early in the morning that there was no one at the venue to listen. Slush was scaled up to cater for 7,000 visitors. This was our first dream come true: a leading,

PHOTO JUSSI HELLSTEN

S T A R T

2013. Toomas Ilves. President of Estonia.

Nordic startup event that also involved top companies from Russia and the Baltics. We had Jorma Ollila, the Estonian president, journalists from Forbes, Jolla releasing their new products, Spotify, Skype, Japanese companies, Nokia… Incredible content and a rock festival feel. It was both an international event and a Finnish breakthrough.” 2014 ”SLUSH CONQUERS T H E WO R L D A N D M OV E S TO A V E N U E FOR 10,000 PEOPLE” ”We aimed for a 5-digit visitor number and knew we’d need new premises. Messukeskus Helsinki had a fantastic attitude and was willing to change its own practices to ensure Slush could use the venue. 2014 was a rollercoaster ride; we set up a total of 71 international events in 43 different countries. Building a concrete international image while branding the Nordic countries was our starting point.

Slush isn’t an event, but a community and movement, evangelized abroad and making the techy scene proud. That’s why large enterprises want to attend and the news spreads by word of mouth. The past year was a huge risk. Overestimating the number of international visitors would have made us bankrupt. Slush is organized increasingly professionally. Becoming established as a recognized international player has taken quite a few years. Similarly to Cannes being a movie mecca, Milan a fashion and design capital, and Barcelona a mobile city, it’s our dream for Helsinki to be home for startups, new technology, and growth companies. Silicon Valley hosts plenty of lousy conferences that cost a lot of money but have no focus. People go there because of the location and to hear Mark Zuckerberg speak. That’s something we can’t afford. People don’t necessarily even know where Helsinki is. It’s not enough to snatch the best investors - we have to arrange the best party, do so much more, be an event with a difference. This year, the foyer of Messukeskus Helsinki was transformed into a type of chapel.We brought our own restaurants and vibe. Slush has to be a world of its vol 2

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own: a holistic, seamless experience. We put a lot of effort into international marketing, video, and the likes, and each Slush event is built on the last. I know I held my goodbye speech also last year, but this year I really stepped down as CEO for Slush. It’s time for other flowers to bloom.” 2015 ” G AT H E R I N G P R E C I S E F E E D B AC K TO D E V E LO P S L U S H ” ”I continue as a board member and work behind the scenes at Slush. Now is the time to analyze the previous year’s achievements and failures, how investor meetings went, the number of investments, and what metrics and analytics speak about the event. All the hype and good vibes are great in light of the cultural shift, but not the main point. What actually happens at Slush is what counts. People wouldn’t come over to walk in the slush, if this was just another festival. We are now building a new website, sending out save-thedates, nailing speakers. As for whether the next Slush will target 10,000 or 20,000 people - getting bigger isn’t really the point right now.The focus is on the overall package and international aspect: heading for Iceland, and Japan, and…”

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L O TO I N U T N O IV F E V R I SI E W T

S T A R T

L AC K O F F O R M A L P RO C E S S E S A N D S C A RC I T Y O F R E S O U RC E S H E L P S S TA RT U P S TO B E S U C C E S S F U L

Mikko Laukkanen Head of Thought Leadership, Aalto University Executive Education The interesting account of Slush over the last four years illustrates how extremely talented and motivated people can develop something truly unique – but it also touches on an interesting phenomenon of our times and links to wider discussion about business growth. Let’s briefly reflect on these latter points below. Slush is an event for startups organized by people from the startup industry, so it’s only natural that its actions reflect those typical of a start-up firm. One of the recurring themes in Miki Kuusi’s story is the ad hoc and creative nature of the actions taken. Without the formal structures and processes of more established organizations or a history of best practices to guide actions, every emerging opportunity and challenge can be approached with a blank slate. This allows for both the generation of truly innovative solutions and novel combinations of resources, as illustrated by the bold Silja Line example, which almost came to fruition and almost certainly would not

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have emerged from a more traditional firm’s development process. Academic researchers have used the term “entrepreneurial bricolage” to describe how entrepreneurs use unique combinations or new applications of existing resources to make up for their lack of resources, and how this fundamentally sets them apart from established players. As one groundbreaking entrepreneur recently illustrated the issue to me when discussing the difference between his firm and the larger, more traditional firms in his industry: ”We all have an idea of where we want to go. It’s about how we can get there. The big ones are all motor boats with big engines. We’re a sail boat, we have to navigate our way. So what we do here is sailing – and that makes us fundamentally different.” The firm behind the previous quote needs to be creative and unique in its actions due to its lack of formal processes and scarcity of resources, but in fact this is what helps it to be successful. The risk is that as it grows, and resources and processes become more abundant, it will lose this natural source of differentiation. This similar concern can be felt in Miki Kuusi’s recalling of the board’s initial objections to recruiting formal staff for Slush. The fear is that the magic that makes the concept so successful will be lost in its “corporatization”. So it seems that in order for a movement such a Slush to stay vibrant, it may need to continuously grow into new areas and push past its earlier boundaries, thereby creating a situation where the organization is forced to generate new processes and novel resource combinations. This strategy of resource-scarcity by design or choice is an interesting one, characteristic of many rapidly growing firms in emerging industries, and one that academic researchers will be keen to continue to investigate further in the coming years.

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BOOK 1 [ R E P O RTAG E ]

OPENING SOON? Iran, hemmed in by the economic sanctions, is an economy of almost 80 million people. The streets of Tehran show a different side to Iran than the news. Here you meet people willing to open the gates. Words Reetta Räty, photography Arttu Muukkonen, graphics Jarkko Hyppönen.

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FINNISH PHOTOGRAPHER ARTTU MUUKKONEN TRAVELLED TO IRAN IN AUGUST 2013. THE PEOPLE PRESENTED IN THIS ARTICLE ARE NOT THE SAME AS IN THE PICTURES.

choolgirls punch in the pin code on their mobiles to check what’s new on Instagram. It’s a normal Monday in Tehran, the capital of Iran. Their screens show a flow of images from around here: a young man skating, a mat seller, and a group selfie of darkfeatured girls – just like these students, sitting in a café with sneakers on their feet and scarves covering their heads. ”Using social media is not allowed in Iran, but everybody is doing it”, says an Iranian man sitting next to me. There are 15 million people residing in the greater Tehran area. The traffic is as you would expect: busy and highly polluted. However, this coffee shop, located in the charming park that surrounds the cinema museum, is a haven of tranquility. Here you can buy fresh pomegranate juice, grilled sandwiches, and salads. The wi-fi works like a dream. On the table is a copy of Tehran Times, the English daily. It features an article from The Wall

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Street Journal, its headline jumping up from the page: Iran tries to open up for business. That is the very topic on many lips here: is Iran opening up? Most of the store signs in the malls are in Farsi, but there are also many familiar brands: Zara, H&M, Calvin Klein, Seiko, Abercrombie & Fitch, Nike, Lego. Could this fascinating, yet unpredictable country really open up to the West – or could the West move closer to Iran? One thing is clear: Iran has plenty of business potential.

here are many obstacles on the path to openness, the most obvious of which are the economic sanctions imposed on the country by the West. The mood in the café is quite continental: cappuccinos and faintly playing music; chairs and tables built from construction pallets in the spirit of trendy interior magazines, a group of German

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There are about 15 million people living in the greater Tehran area, and the Milad Tower is the landmark of the city. In Tehran, there are separate malls for clothing, electronics, furniture... This one is a mall for electronic devices etc.

tourists. Prices, too, are reminiscent of Starbucks. In the nearby bazaar, vendors weigh saffron, nuts, dried fruit, and chopped herbs on a scale for their customers. Fall is well underway but it’s still warm, over 25 degrees centigrade. However, the reality confronting us in the newspaper is chilly. Relations between Iran and the international community are strained by an ongoing conflict over Iran’s nuclear program.The West

suspects Iran is aiming to develop nuclear weapons. Iran, meanwhile, claims the nuclear program is only intended for energy production and civilian purposes. Some progress has been made during the reign of Iran’s current president Hassan Rohani, but here in Tehran it is easy to see the impact of the sanctions. There are no ATMs, and Western credit cards are not accepted anywhere. Only cash, in other words the Iranian Rial, is used.The economy is halting also within the country: inflation is rife and unemployment high, especially among the highly educated. Walking around in Tehran you might come across a street corner where loud bargaining over dollars is taking place. The men shout their offers for wads of dollars while counting the bills in their hands - almost like a live version of the stock exchange. The latest talks on Iran’s nuclear program ended

”Using social media is not allowed in Iran, but everybody is doing it.” vol 2

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E D U C AT E D A N D C O N S E RVAT I V E N

P O P U L AT I O N

80– 75–79 70–74 65–69 60–64 55–59 50–54 45–49 40–44 35–39 30–34 25–29 20–24 15–19 10–14 5–9 0–4 2%

10%

IS N A

TA IS

1979 The Islamic Revolution transformed Iran from an 1979–81 absolute monarchy under Iran hostage crisis: Shah Mohammad Reza Following the admitting Pahlavi, to an Islamic of the former Shah of Iran republic under Ayatollah into the US for cancer treatRuhollah Khomeini. Pahla- ment, on November 1979, vi left the country for exile Iranian students seized US in January 1979, and on embassy personnel, labeling February, 1979 Ayatollah the embassy a “den of spies.” Khomeini returned to 52 hostages were held Tehran to a greeting of for 444 days until several million Iranians. January 1981.

1980 C U R R E N T H I S TO RY

D BI I A

IRAN

In Iran, more than 60% of the population is under the age of 30

1980–1988 Iran-Iraq War lasted from 1980 to 1988. It was the 20th century’s longest conventional war. Half a million Iraqi and Iranian 1989 soldiers, with an equivalent On his deathbed in 1989, number of civilians, are Khomeini appointed a believed to have died, with 25-man Constitutional many more injured. The war Reform Council which brought neither reparations named Ali Khamenei as the nor changes in borders. next Supreme Leader.

1990

2000

Life expectancy at birth (years) 2012 Total adult literacy rate (%) 2008–2012 Primary school net enrolment ratio (%) 2008–2011

73 . 7 85 99.9

L I T E R AC Y R AT E Youth (15–24 years) literacy rate (%) 2008–2012, male Youth (15–24 years) literacy rate (%) 2008–2012, female

98.8 98.5

In recent years, the number of young Iranian women who have been admitted to universities has risen dramatically. In the last five years alone, Iranian women have made up more than 60 percent of university entrants.

S O U R C E S : W I K I P E D I A , W O R L D B A N K , W H O , U N E S C O , U N I C E F.

L I F E E X P E C TA N C Y

THE ISLAMIC REPUBLIC OF IRAN ‫ناریا یمالسا یروهمج‬ Capital and largest city

Tehran 35°41'N 51°25'E

Official languages

Persian

Spoken languages

Persian, Azeri, Kurdish, Lurish, Gilaki, Mazandarani, Turkmen, Arabic, Baloch, Georgian, Armenian, Neo-Aramaic

Religion

Official: Shia Islam

Other recognized religions

Sunni, Islam, Zoroastrianism, Christianity, Judaism

Demonym

Iranian, Persian

Government

Unitary presidential theocratic republic

· Supreme Leader

Ali Khamenei

· President

Hassan Rouhani

Legislature

Islamic Consultative Assembly

Area · Total · Water (%)

1,648,195 km2 (18th globally) 636,372 sq mi 0.7

Population

1997–2005 Mohammad Khatami, reformist, as a President of Iran. Attempted to make the country more free and democratic.

2005–2013 Mahmoud Ahmadinejad, mayor of Tehran, was the sixth president of Iran. Conservative. In 2009, allegations of large irregularities and fraud provoked election protests both within Iran and outside the country.

2010

· 2013 estimate

77,176,930 (17th globally)

Currency

Rial (IRR)

Time zone

IRST (UTC+3:30)

· Summer (DST)

IRDT (UTC+4:30)

Calling code

+98

ISO 3166 code

Main resources

Oil, natural gas, coal, chrome, iron, copper, lead, manganese, sulphur

Export articles

Oil (80 %), petrochemistry products, fruits, nuts, rugs

Exports to

China, Japan, India, South Korea, Turkey

2013– Hassan Rouhani, current president. Described as ”moderate”.

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“Yes, the Chinese are really taking over in Iran.” in November, once again without results. However, the US, Russia, Germany, China, France, and Great Britain all reported their willingness to continue negotiations.The new deadline is set for June 2015. Sanctions have been loosened while negotiations are ongoing, but oil exports as well as the fields of banking and finance are still regulated strictly. Clothes, food, medicine, health products, and educational exports, on the other hand, are not affected by the sanctions.

he taxis outside Tehran’s business hotels are filling up mostly with Chinese, Korean and Russian visitors. Western businessmen are a rare sight. Asia has filled the gap left by Western countries leaving Iran due to the economic sanctions. Tehranis laugh that French automobile dealers walk around with the list of sanctions, trying to figure out which car parts are affected and which are not. A lot of Peugeots, for instance, are made in Iran. The CEO of The Iranian Business School, Mehdi Khajenouri, says that business between Iranians and the Chinese is smooth for a number of reasons: ”We are both business-minded people, we share the same mentality and desire to make products for very different levels of quality and price. Yes, the Chinese are really taking over in Iran.” The value of Finland’s export to Iran has dropped by approximately 75 per cent compared to what it was in 2006. In 2012, exports totaled

Just about everybody in Iran has a mobile phone. In Tehran, it is easy to find wifi, and especially young people tend to have an Instagram profile or Facebook account even though the use of social media is officially prohibited. The President of Iran tweets, too: @HassanRouhani.

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EUR 50 million.The same decrease has been seen in other EU countries. But statistics don’t tell the whole truth, since the majority of Western products in Iran arrive through third-party countries.Western companies usually circulate the cash flow via Turkey or the United Arab Emirates. Transferring funds from Iran to Europe is complicated: direct transfers cannot be made to banks operating in the West due to the threat of sanctions by the Federal Reserve of the US. However, it is fairly common knowledge that some southern European states and American companies openly deal with Iran. But is the situation becoming normalized? Many hope so, at least. Iran has nothing but potential: close to 80 million educated inhabitants, oil money, and a trading culture on the mythical Silk Road stretching back thousands of years. Iranians have purchasing power and are familiar with Western consumerism. Iran is the fourth largest producer of petroleum in the world, and the known oil reserves are the third largest after Saudi Arabia and Venezuela.The country is also one of the founding members of OPEC and holds the world’s second largest reserve of natural gas after Russia. Many Western companies are anxiously awaiting the end, or at least the easing of, sanctions against Iran. The Wall Street Journal recently quoted sources reporting that senior executives from Apple had met up with potential Iranian resellers in London.According to the news,Apple is considering to embark on the same path as many other Western companies: entering the Iranian market, should the sanctions permit. The iPhone is already a common sight on Iranian subways and buses. Shop windows display a row of the latest iPhone 6. According to the seller, they cost approximately a thousand dollars, and demand is high.

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F O R M E R LY K N OW N A S P E R S I A TEHRAN

as Se pia a n

Tehran is the capital of Iran and Tehran Province since 1778. It is a subject of mass migration of people from all around Iran. The capital has been moved many times, and Tehran is the 32nd national capital of Iran although it has been Iran’s capital for 240 years.

Tabriz

Mash

Kermanshah Qom

Dezful

Birjand Yazd

PERSEPOLIS

Ahvaz

550–330 BC Achaemenid dynasty rules the first Persian Empire. At its greatest extent it stretches from the Aegean Sea and Libya to the Indus Valley.

Kerman Zamedan Bushehr

Bandar Abbas

492–479 Persian attempts to conquer Greece fail.

500BC 0 H I S TO RY O F I R A N

Chabahar

312–140 Most of Persia is part of the Greek-dominated Seleucid Empire, founded by a general of Alexander the Great.

ul m f o an f

Pe r G si ul an f

Founded by Darius I in 518 B.C., Persepolis was the capital of the Achaemenid Empire. It was built on an immense half-artificial, half-natural terrace. The importance and quality of the monumental ruins make it a unique archaeological site. Persepolis was burned by the Greeks of Alexander the Great in 330. What remains today is the stone terrace (530 m by 330 m), backed against the mountains.

636 Arab invasion, start of Islamic rule.

500

9th–13th century Decline of Islamic Caliphate, replaced by a series of Iranian and Turkic dynasties.

1000

1501 Shah Ismail I becomes first ruler of Islamic Safavid dynasty, Shia Islam declared state religion.

1500

E S FA H A N , A . K . A . I S FA H A N Isfahan is located on the main north–south and east–west routes crossing Iran, and was once one of the largest cities in the world. It flourished from 1050 to 1722, particularly in the 16th century under the Safavid dynasty, when it became the capital of Persia for the second time in its history. It is famous for its Islamic architecture, with many boulevards, covered bridges, palaces, mosques, and minarets.

One of the top three Muslim food consumers, valued at $77 billion in 2012. Two Iranian banks, Bank Melli and Bank Maskan, rank second and fourth respectively in the top five Islamic banks globally.

“Iran is the great outlier of the global economy, the last sizeable emerging market to stand apart from integration. Iran’s economy, despite sanctions and isolation, is one of the world’s 20 biggest; its gas reserves are the world’s secondlargest. ‘It will make a gigantic difference when an economy this size joins the world, with implications for both Western and Asian economic interaction,’ said Hamid Biglari, who left Iran in 1977 to study in the US and went on to become the vice chairman of Citicorp, before setting up his own investment company. ‘A black hole will be connected to the rest of the universe.’” Roger Cohen: Way back to Iran, New York Times 12. 6. 2014

SHIRAZ Shiraz is known as the city of poets, literature, wine and flowers. It is also considered by many Iranians to be the city of gardens. Shiraz has had major Jewish and Christian communities. Shiraz has a major oil refinery and is also a major center for Iran’s electronic industries: 53% of Iran’s electronic investment has been centered in Shiraz.

Iran is the second biggest global market for Muslim clothing, behind Turkey – valued at

$ 20.5 billion in 2012. Iran was the number one source of Muslim tourism expenditure in 2012, estimated at

$ 18.2 billion

1828 Iran cedes control of Caucasus to Russia after second RussoPersian war.

1914–1918 Iran declares neutrality but is scene of heavy fighting during World War I.

1935 Formerly known as Persia, Iran is adopted as the country’s official name.

IRAN’S ECONOMY IS A MIXTURE OF CENTRAL PLANNING, S TAT E OW N E R S H I P OF OIL AND OT H E R L A RG E ENTERPRISES, V I L L AG E AG R I C U LT U R E , AND SMALL SCALE P R I VAT E T R A D I N G A N D S E RV I C E VENTURES.

1941 The Shah’s pro-Axis allegiance in World War II leads to the AngloRussian occupation of Iran and the deposition of the Shah in favour of his son, Mohammad Reza Pahlavi.

1963 The Shah embarks on a campaign to modernize and westernise the country.

2000

”Iran is interesting because of the contrasts. It’s isolated and risky but has great potential.”

ou can sometimes spot Western products in Tehran that will leave you scratching your head as to how they got there. The black market is thriving, but so is the sale of legally imported products that are not affected by the sanctions. A number of companies dealing with Iran are reluctant to talk about business in public, as the country is a risk investment, and regulations and related interpretations applying to monetary transactions change all the time. One also gets the feeling that the unwillingness to shed light on Iranian connections is down to the country’s bad reputation. The companies share an interest in the business potential offered by the country, while also recognizing that with rules and regulations prone to change at the drop of a hat, there are also risks involved. Some have managed to find an importer in Iran willing to carry some of the business risk. Mining technology company Outotec has been doing business with Iran since the 1970s. In the summer of 2012, a deal was clinched that meant Outotec would deliver 265 million euros worth of technology solutions and services to a stateowned mining company in Iran. Outotec manages its Iranian operations from its Middle East Market Area Unit in Dubai. According to President of EMEA region Adel Hattabi, Iran’s abounding mineral resources and advancing mining industry make it an ideal business partner, but the risks are greater than in many other locations: “Risks are related to regulations and embargos. If regulations tighten or new embargos are set, Outotec will not be able to deliver the agreed projects or launch new ones in Iran, and customers will not receive financing for their projects.” According to the export director of a Nordic

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company taking consumer products to Iran, experiences in dealing with Iran have been positive, although there is a lot of red tape to get through. Previously, export permits for products had to be renewed annually through three different government ministries. Now the permits are issued for four years at a time, but new rules have been added: the products must include labeling in Farsi. Also product deliveries have slowed down by long distances and customs procedures, and products must be equipped with a hologram sticker that indicates the ministry’s import permission is in order. And that’s not all: Western production facilities have to be inspected by international auditors approved by the Iranian Ministry of Commerce. At home, the company needs to stay in contact with the Ministry for Foreign Affairs e.g. to report that business partners are not blacklisted due to EU sanctions. The permit procedure does have some positive aspects: large Iranian chain stores can only sell officially imported products, which helps those willing to deal with bureaucracy by the book. Companies exporting Western products into the country state that Iranians appreciate high-quality products. There is also a certain sense of luxury attached to Western products, which are fairly expensive compared to e.g. the Turkish, Chinese, or local varieties. Compared to China, Russia, and Arab countries, there is a closer affinity with Iranian business culture, which is marked by a Western feel. People are highly educated and promises are kept. Western partners are willing to see through the red tape and uncertain conditions. In the words of a sales director: “The potential offered by Iran is greater than we have been able to exploit in reality.”

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artin Talvari, Chief Strategy Officer for startup event Slush, has just woken up. It’s five in the afternoon and we are sitting in a café on Aleksanterinkatu in Helsinki. Talvari has just returned from a world tour with Slush, hence his severe jet lag. Slush is an event promoting entrepreneurial growth that brought together thousands of entrepreneurs and investors in Helsinki in November. In addition to Finland, Slush has visited 80 different countries in the course of a year. ”Iran was one of the most interesting countries we visited. Perhaps even THE most interesting”, says Talvari. Why? ”The contrasts: it’s isolated, and there are no

Motocross route is up in the mountains. People in Tehran say that the rules of Islam do not apply in the mountains. Some women drive motorbikes, too.

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P L E N T Y O F W O M E N AT T H E U N I V E R S I T I E S B U T N OT AT T H E PA R L I A M E N T G LO B A L LY R A N K E D 2 1 S T I N G D P AT P P P * USD billion

2011

2012

FIVE MILLION SQUARE METRES OF C A R P E T S A N N U A L LY

1,200 1,000 800

The Persian carpet is an essential part of Persian art and culture. Carpet-weaving is one of the most distinguished manifestations of Persian culture and art, and dates back to ancient Persia.

600 400

* PPP = Purchasing Power Parity

In 2008, Iran’s exports of hand-woven carpets was $420 million or 30 percent of the world’s market. However, industry has been hit hard by repeated economic crises, as well as by sanctions imposed by the US, formerly the biggest market for Persian carpets. Even in Iran, cheaper, machinemade rugs are starting to outsell handmade ones.

BIG IN OIL AND GAS

There is an estimated population of 1.2 million weavers in Iran producing carpets for domestic markets and international export.

200

Tu r

ke y Ira iA n ra bi a Eg yp t UA E Q M ata or r oc c Ku o w ait Ira O q m a Ye n m en Jo rd an

Proven Crude Oil and Natural Gas Million Barrels of Oil Equivalent

Reserves (2011)

Iran exports carpets to more than 100 countries, as hand-woven rugs are one of its main nonoil export items.

400,000 350,000

The country produces about five million square metres of carpets annually – 80 per cent of which are sold in international markets.

300,000 250,000 200,000

The skill of carpet weaving has been handed down by fathers to their sons, as a closely guarded family secret.

150,000 100,000 50,000

The bazaar Tehran is home to, by most estimates, the highest concentration of handmade rugs in the world, with millions piled high in more than a thousand shops.

Ru ss

V Ir Sa ene an ud zu i A ela ra C bia an ad Q a at ar Ira q U Ku AE w ait U S N A ige ri Ka Li a za by kh a st an

URBAN DREAMS 80%

Urbanization

Rate of Urbanization

70%

3% 2.5%

60%

50% 40%

1.5%

30%

20%

0.5%

10% t yp Eg

co or oc M

Ira q

Tu r

Ira

ke y

0% n

Female seats in parliament

3.1%

C U LT U R E E X P O RT S In the early 21st century the service sector contributed the largest percentage of the GDP, followed by industry (mining and manufacturing) and agriculture.

Books from Iran:

M O R E P R I VAT E S E C TO R State

Private

Co-op

5% 75%

20%

25%

55% Before privatization

10 years target

UNIVERSITIES: 50–50

48.8% Female

51.2% Male

Sahar Delijani: Children of the Jacaranda Tree Author Khaled Hosseini has described the book saying: “Set in postrevolutionary Iran, Sahar Delijani’s gripping novel is a blistering indictment of tyranny, a poignant tribute to those who bear the scars of it, and a celebration of the human heart’s eternal yearning for freedom.” Parinoush Saniee: The Book of Faith “Fifty years of life in Iran”, it says in the cover of the book. It is a banned novel that became a bestseller: the story of Iran during the second half of the twentieth-century told through the life of an Iranian woman.

Film from Iran Asghar Farhadi: A Separation The film focuses on an Iranian middle-class couple who separate. A Separation won the Academy Award for Best Foreign Language Film in 2012, it was the first Iranian film to win the award. It also received the Golden Bear for Best Film at the 61st Berlin International Film Festival.

Average Share 2005–2009

We come from Iran Arman Alizad A Finnish tv-personality. Internationally best known for the martial arts series Kill Arman (airing in over 100 countries). Alizad was born in Tehran, Iran, in 1971. When the Islamic revolution started in 1979, his family escaped to US and then to Finland. Rumi Jalāl ad-Dīn Muhammad Balkhī, also known as Jalāl ad-Dīn Muhammad Rūmī, Mevlana, or Mawlawī, and more popularly in the English-speaking world simply as Rumi (1207–1273), was a 13th-century Persian poet, jurist, theologian, and Sufi mystic. His poems have been widely translated, and he has been described as the “most popular poet in America”. Iran National Football Team Known as Team Melli. Ranks 2nd in Asia and 56th in the world according to the November 2014 FIFA World Rankings. Iran is one of the most successful national teams in Asia with three Asian Cup championships (1968, 1972, 1976). Iran has qualified for the World Cup four times (1978, 1998, 2006, 2014). Former Real Madrid manager Carlos Queiroz brought players from the Iranian diaspora to the national squad.

S O U R C E S : B B C , I R A N C H A M B E R , T H E I N D E P E N D E N T, W I K I P E D I A , B P S TAT I S T I C A L R E V I E W O F W O R L D E N E R G Y 2 0 1 2 , M I N I S T RY O F SCIENCE, TECHNOLOGY AND RESEARCH OF IRAN (2012): SCIENCE AND TECHNOLOGY INDICATORS IN THE ISLAMIC REPUBLIC OF IRAN, UNPD: HUMAN DEVELOPMENT REPORT 2013, AMAZON.CO.UK, GULF BUSINESS, NEW YORK TIMES.

Iranian Business School University of Tehran Asadi Tower

TEHRAN Mehrabad Airport Tehran Bazaar Tehran Railway Station

Shahrak-e-Shariati

“Brain drain is a hot topic. Educated young people are either leaving the country or dreaming of it.” international competitors. Just loads of opportunity.” How did a startup event like Slush end up going to Iran? ”It is a large country in the Middle East, and also an interesting region for its technology scene and fast-growing companies. We thought: absolutely, no question about it, we are going to Iran!” Talvari, too, approaches Iran from the perspective of potential. He points out that the population is large, and a majority can afford – and want to – use technology as well as digital products and services. It also helps that Iranians are highly educated, especially in the fields of technology and science. Iran boasts many engineers, a large number of whom are women. In the autumn of 2014, Iranian Maryam Mirzakhani became the first woman to receive the prize some call ’the Nobel of mathematics. ”Their mind is all about business”, says Talvari, who is himself Estonian. Would he consider doing business in Iran? ”I’m curious about it. If it weren’t for the practical obstacles, I would definitely consider having a business in Iran.” Talvari’s arguments are shared by others eyeing the country. ”You can’t avoid it: it’s a huge market. If the sanctions were removed, what would happen? Suddenly you would have perhaps half of this 80 million strong population standing there with their cards, ready to buy.” The startup world is also enticed by the fact that Iran is a young nation demographically: 64 per cent of Iranians are under 35 years of age. The Slush event in Tehran attracted a crowd of 250.A pitching competition was held in the country backed up by the Iranian network of Aalto EE,

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and an Iranian delegation also took part at Slush in Helsinki. Iranian startups and the technology scene are now developing at full speed in the hands of the locals. There is hardly any international competition, and local versions of global brands are being established as we speak. Iran’s eBay is called eSam, Amazon has inspired Digikala, Iran’s Rovio is called Lady Birds, Iran’s Blogger is Persan Blog. Café Bazaar is the name of Android’s application store selling 10,000 local apps. According to the World Startup Report, the value of Café Bazaar is approaching 20 million dollars. Digikala is estimated to be worth 150 million dollars. The startup ecosystem has emerged in Iran over the last two years.Venture capital funding and accelerators are on the rise. Still, launching a startup in a closed economy that operates by its own rules is never easy. “It’s definitely more difficult than in any other country,” says Eyad Alkassar in an article by The Washington Post that described the startup scene in Iran. Alkassar manages the Middle East investments for Rocket Internet, a German company that replicates successful businesses in the developing world. In order to do business in Iran, you need a local partner who can help you navigate the bureaucracy and cultural issues as well as make the necessary contacts. Talvari from Slush says that just like Western companies are hankering to go to Iran, Iranians taking part in Slush were keen to join an international business. “They would like to go out.” If the country does open up, many in business will be helped by the fact that migrant Iranians are now spread out all over the world. The network already exists.

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he subway takes me to the center of Tehran city, the station of Haft-e-tir. Obama looks down from the facade of a building by a busy square. The drawing is not flattering. ”Ridiculous”, scoffs a Tehrani man. He thinks the relationship between Iran and the US is marked by hypocrisy. Iranians flock to the West to work, live, and study. Rather than hate the Americans, Iranians envy them. Countless Iranians hold green cards. This man is yet another Iranian who is eager to show his city to foreigners. I choose not to name everyone who appears in this article, since many are cautious when it comes to talking about politics or religion. We walk along Valiasr Street, and talk about the Iranian diaspora. Many Iranians choose to move abroad and the brain drain greatly dismays everyone, although this is a country people have often found reason to leave: whether fleeing, going to war, or simply searching for better luck and greater freedom elsewhere. The most recent wave of emigration started before the Islamic revolution. The Migration Policy Institute has collected detailed figures, especially on the movements of Iranian students. In the academic year 1977–1978, approximately 100,000 Iranians studied abroad; over a third of them in the United States. At the time of the revolution in 1979–1980, Iranians studying in the US already numbered over 50,000. At this time, there were more Iranian students in the US than from any other country in the world. The flow increased when the students never returned, on account of the revolution. Instead, their relatives followed them in moving west. However, not everyone left Iran voluntarily. Many non-Muslims were forced to leave. Iran has continued to bleed money and talent also after the revolution: virtually every Western country is home to a community of Iranian expats. In the early 1980s, with Iranian society still in

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chaos following the revolution, came the war between Iran and Iraq.That, too, gave rise to a wave of emigrants as many fled the war and the draft. It is estimated that e.g. every third physicist and dentist left the country in the early 1980s. Research shows the Iranian brain drain in the shape of waves, but the truth is that the drain is constant, even now. Virtually every educated young person that I met in Tehran was either leaving the country or dreaming of it: ”My cousin is already in Sweden, I’m also going there soon.” ”I’ve just found work in California.” ”I’m looking to work as a researcher in Canada.” ”My brother lives in Barcelona. My mother is going there soon.” Even in the hotel reception, on seeing my Finnish passport, the man behind the counter excitedly shrieks: ”My uncle works in Turku! Tell him I said hi!” The current migration falls into two categories. One includes highly educated young adults, such as the young lady who just received her doctorate in physics: ”Everyone else in my year has left. For example in Canada, immigration policy is such that once you have your PhD it’s easy to get in.” The other category is represented by the relative of the hotel reception clerk: barbers, cooks, workers, assistant nurses. So why is Iran leaking money and competence into the rest of the world? Some put the biggest blame on unemployment. I ask a man, who studied in Canada and returned to Iran, what professions Iranian youth dream of having. His response: ”Anything that will get you out of here.” A man walking with me in Tehran is intending to move to California. He says the reason for the brain drain is the lack of freedom in Iran. ”I don’t need nuclear power, I need liberty.” But not everyone stays away.The dismal financial situation in the West makes many view their coun-

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“Women are not allowed to smoke in public, and in the busses and subway cars there is a Women Only section.” try with new eyes. Experiences of xenophobia also affect people’s desire to move back home. Everyone here is familiar with the riots in Swedish suburbs and the anti-immigration political movements and parties of Central Europe, both from the news and the stories of their relatives. The CEO of The Iranian Business School, Mehdi Khajenouri, returned home fourteen years ago after a long period of living abroad. He lists a number of reasons why some choose to come back.The most important is the chance to do business. ”Some return to be with family or with the saintly idea of helping their country, but many come for business: either to work in the family business or to start their own.”

ran is used to being at the heart of global trade, placed as it is between east and west. Many products that we consider Western, such as spaghetti and macaroni, have come to us from the East via Iran. Most of the time, however, the filter through which we view Iran is that of its conservative religious leadership. Sanctions aside, this is Iran’s other big problem: its appallingly bad reputation abroad. Iran is remembered for the Islamic revolution of 1979, the lengthy war with Iraq as well as the infamous list drawn up by George W. Bush, naming Iran as part of the ”axis of evil”. The news from Iran are grim indeed: A human rights activist was arrested, a woman condemned for murder was executed, and a group of Iranian youths dancing to Pharrel Williams’ ”Happy” were given suspended sentences and whipped. Iran is governed by a conservative parliament that is currently striving to e.g. diminish women’s access to birth control and abortion, which is illegal in most cases anyway. Iran is also often lumped together with its neigh-

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bors and mentioned in the same breath as ISIS, Syria, Afghanistan, Iraq… In a speech he gave in August, President Rohani described the situation by saying that Iran desires closer relations with the outside world but has to conquer three fears when it gets there: the fear of Iran, the fear of Islam, and that of its Shi’ite branch. A majority of Iranians are Shi’ite Muslims. Iraq, too, has a Shia majority, whereas headline-dominating ISIS is a Sunni extremist movement now sowing destruction in Iraq and Syria. The Syrian majority is Sunni. It will take more than the words or wishes of the President to accomplish change. He is considered a moderate reformer, but at the end of the day, Iranian policy is determined by the hardline religious leadership.The ’Supreme Leader’ of Iran is the gray-bearded Ali Khamenei. The President is hoping to draw nearer to the West. But how can that be harmonized with the conviction and leadership style of the religious authorities? Those who know Iran well are more prone to ask rather than answer:What kind of steps could Iran take? Has the country been left out in the cold, or chosen its own isolation? Could a country that won’t allow freedom even to its own citizens be modernized? Is the human rights situation getting better or worse? On the streets of Tehran at least one thing is certain: Iran looks like a fairly modern business partner.There’s a long line of shops full of cosmetics and hair extensions, over there trips to India and Paris are advertised, in that shop window Daily, about half a million people visit the biggest bazaar of Tehran. In Iran, women are not allowed to smoke in public, but a water pipe (shisha) is easy to find.

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In Iran, more than 60 percent of the population is under the age of 30. Since there are no bars around, the trendy hipsters from the North of Tehran meet up at the cafés. In the mountains, one can go paragliding (note the selfie stick used for taking a picture of the experience).

stands a long line of Tunturi stationary bikes from Europe. Newspapers and social media are full of stories from the rich northern part of Tehran: stories of flowing drinks, miniskirts, expensive cars and watches, endless partying.

ran is roughly the size of Peru or Mongolia. It is home to more people than Spain and the Nordics together. A majority of Iranians are ethnic Persians. Approximately every tenth Iranian is Kurdish, and there are numerous other groups: Gilakis, Mazandaranis, Lurs, Balochis, Azeris, Turkmen…Arabs account for only one per cent, virtually the same as the Jewish population. On the streets of Tehran you will hear Farsi, Turkish,

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Kurdish, and Afghani Persian spoken. Lonely Planet is right in saying that the most important sight in Iran is the people. The atmosphere of the country is polite, warm and friendly. A foreigner is given no time to even start looking for the bus, the taxi, or the way to the hotel, before someone is offering to help and demands to make sure you get there okay. And no, they are not trying to sell you anything or impose on you in any way. Iranians are exceptionally polite. ”We have a saying in Iran that strangers are a gift from God and should be treated well”, explains a man who escorts me to the right bus stop, almost half an hour’s walk away. He thinks this helpfulness could also come from Iranians wanting to mend their poor reputation. This well-refined art of politeness should also be taken into account in any business dealings with Iranians. There is a culture of almost court-like sophistication here that doesn’t only apply to the upper classes, but permeates the whole of society. If you do not understand, for instance, the different facets of respecting your elders or guests, you are more than likely to commit a faux pas. Hardly any Westerner does business in Iran without the help of local consultants. They not only help you navigate the different limitations and rules, but also the tricky waters of Iranian etiquette. The first rule of operation in Iran is thus to find a reliable local partner who is familiar with the local enterprise culture and legislation. There is much more hierarchy here than in the West, and local help is therefore necessary – much like in, for instance, China. Finland’s Ambassador to Iran, Harri Kämäräinen, explains it as follows: Iran is an Islamic republic and that dictates the rules. However, he also points out that the country has a cultural legacy that is thousands of years old and many customs trace their history back to the pre-Islamic era.

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”You have to respect the etiquette, but it is good to remember that it is not only connected to Islam”, says Kämäräinen, who has lived in Tehran for two years and is fluent in Farsi.

he scarf.This scarf. In Iran every woman, including foreigners, must cover their head with a scarf and otherwise wear modest clothing. Arms and legs must not show, and tight clothing is forbidden. Iranian women usually dress one way at home and another in public. ”Look at those girls”, says a man sitting next to me in the coffee shop, nodding towards a group of school students. They are drinking fruit slush and laughing at something on the phone display. ”They may not even know it themselves, but they are the next revolution in Iran.” The waitress brings special coffees to the tables and takes orders. ”Officially, women shouldn’t even be allowed to work in cafés”, says my company. ”There are lots of rules, but what matters is which ones to follow: not nearly all of them.” Many rules apply to women in particular. They are not allowed to smoke in public, they have their own section of the bus (in the back) and the subway. In addition to ”Women only” subway cars, there are cars where women may go only when accompanied by a man. Regardless of such constraints, many say the same as my companion: women are the hope of Iran. A majority of university graduates are women, and looking at the streets of the big cities, it is clear that the dress code is gradually being eased a little. Many women wear a lot of makeup and have eye-catching nails, and sometimes the scarf sits quite low on the head. An Iranian-American website for women called Payvand, established in California’s Silicon Valley, writes that university education is a way for Iranian women to leave home, postpone marriage, and thus achieve greater freedom and respect in society.

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Women are changing the Iranian labor market and family setup. They still account for only ten per cent of the workforce, but families are shrinking and women nowadays find work in engineering and business, not just as secretaries and nurses. This development is already worrying the religious conservatives. It has been suggested that a quota for women be introduced in the medical schools, where women students already outnumber the men.

When it gets hot, people drive from Tehran to the Caspian Sea to get some fresh air. In Tehran, you can see old men exercising in the parks every morning around 6.30 AM. Especially on Thursday and Friday nights – the Iranian weekend – people walk up to the mountains from Tehran. If they stay downtown, people hide away from the sun and fog in the parks.

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amar and Friends’ showroom is located in northern Tehran, near the mountains towering over the city. CEO Samar Modonpour, 34, opens the door dressed in jeans. Samar and Friends sells scarves, shawls, and traditional manteau jackets to Iranian women. The clothes are made by four Iranian women who work from home. ”Naturally I want to employ Iranian women”, says Modonpour. All clothes are designed at Samar’s company, but the inspiration comes from abroad: Dolce & Gabbana and Versace are carefully monitored. The company then makes suitable Iranian versions of their designs. Modonpour grew up in the US and Canada, but returned six years ago. Her intention was just to visit, but to her own surprise she and her brother decided to stay in Tehran. Iran was enticing, mostly due to the business opportunities. Her brother established the Iranian version of eBay, called eSam, and is now working downstairs from Samar in an office housing around twenty employees. Both keep their businesses online. In Samar’s showroom there is a social media desk, where twin sisters sit posting new images to the picture streams of Samar and Friends. Samar’s Facebook page and Instagram account have 47,000 followers each. eSam, on the other hand, has introduced Iranians to Internet auctions.The online auction functions just like eBay, but Iranians are interested in selling slightly different ware than we are used to in the West. Popular items are old coins and sacred texts. Modonpour says that people in Iran need to learn a whole new culture of buying online. ”They have to learn to trust each other, believing that the goods they bid on or buy online really will turn up.”

utside the showroom of Samar and Friends lingers the fragrance of Tehran; its thin, dusty air. Tehran lies at an altitude of almost 1.5 kilometers, and the further north you travel in the city, the higher up in the brown mountains you

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go. The southern end is poorer, and if you travel about an hour on the subway you might find yourself in the suburbs of western Tehran: grey high-rise buildings in the yards of which parkour, skating, and even graffiti is going on. Iran is a country with some of the world’s oldest cities and streets, the most splendid mosques, desert, seashore, mountains, and incredibly picturesque landscapes. There is even a ski resort near Tehran, where Finns came to build recreational timber villas in the 1970s. Could Iran become more familiar to the West? Who would be a good fit for an Iranian business partnership? International corporations for sure, but also small and medium-sized companies. Those who know Iran well say that demand is high for e.g. textile industry machines and devices, elevators and escalators, cleantech solutions, automation technology, wood products and forest industry products, as well as paper and paper industry products. Iran is also an important mining country. Iranians are also increasingly interested in design. The Italians, Danes, Germans, and French are already successfully exporting design products to Iran. Financially, Iran is in the same transitional phase as some developing economies, such as Venezuela, the Philippines, Kuwait, Libya, and Angola. If there is one thing that Westerners with experience of doing business in Iran agree on, it’s this: Iran has both potential and risks.The bureaucracy is difficult, but the people are by contrast exceptionally easy to deal with. Finland’s ambassador in Tehran, Harri Kämäräinen, expresses it well. ”If an Iranian goes half an hour without talking, he’ll choke. Talking to strangers and exchanging phone numbers at the first meeting is the norm here. Iranians have networking and social skills in their blood, and this is evident also in business.” ◆ This article in Finnish online: www.aaltoee.fi/blog

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BOOK 2 [ WORDS OF WIDSOM ]

A RT I S T IN T WO WO R L D S Acclaimed painter Sampsa Sarparanta has an alter ego of a relentless punk rocker, but his two distinct forms of expression share the same message: criticizing the power of money. Journalist Mikko Aaltonen caught up with the artist in both of his worlds. Photography Touko Hujanen.

Sampsa Sarparanta: Unohdetaan ne edes tänään / Let’s forget them at least for tonight (2006–2007). Part of the Aalto EE art collection.

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he painting isn’t the most astonishing, but it does catch the eye. Many of the paintings at the opening of artist Sampsa Sarparanta’s exhibition are visually striking and dynamic, but most people seem to pause in front of this one. Especially two invited the National Coalition Party MPs spend a lengthy stretch of time staring at the painting. The reason is quite apparent – the work features a rather startled-looking Coalition Party Chairman and Minister of Finance, brushing his hand through his hair. His eyes are turned towards a striking nude woman against a backdrop of a herd of wild horses and a fading horizon. A couple of days after the opening of the exhibition, Sarparanta receives an email from someone at the party: “Is the painting up for sale?” Sarparanta mulls over the proposition for few days before deciding to go for it. Five years on, he looks back at the turn of events with some amusement. “Maybe the painting has ended up shoved in the Finnish Parliament Building cellar in a black bin liner”, he laughs. The artist wonders whether he was actually the subject of an old trick: a figure of mainstream culture first flatters a controversial representative of subculture by praising their work and talent – then pays them to be silent. In the end, the answer to Sarparanta’s existential ponderings came in the form of the controversy around the construction of a new reactor at a Finnish nuclear power plant. A group of Sarparanta’s friends wanted to travel to the plant to hold a demonstration, but didn’t have the money to rent a big enough coach they could also sleep in. A friend happened to mention the dilemma to Sarparanta over the telephone. “I’d just been paid 2,000 euros for the painting. I decided to keep five hundred, and told my friend they’d get 1,500 euros for hiring a vehicle and organizing a great demonstration.” This way, Sarparanta sees the politicians ended up funding the demonstration.

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Sarparanta has since gained approval also from conservatives: his paintings have been ranked among the hundred most valuable Finnish works of art to collect, sold at art auctions and bought by Kiasma Museum of Contemporary Art alike. But how does anti-capitalist art and selling it on a capitalist market fit together?

eated in the middle of his studio, Sarparanta explains that in his youth he had no reason to turn into a rebellious critic of capitalism. He was brought up in a good, middle-class home without strong political affiliations. His father was a chef and his mother a nurse. The November landscape outside the studio window is gray and bleak. But it’s exactly the kind of November gray that paints the surroundings of Perniö station just outside Salo with that timeless, rugged quality reminiscent of Aki Kaurismäki films. Sarparanta points towards a derelict business property with curtains tightly pulled across the windows adjacent to a huge silo (“It’s still in some sort of running order, at least one person works there”). That’s where the artist had his studio space some years ago, sharing the property with the local Pentecostal church. The artist and churchgoers were separated only by a partition that didn’t block any of the sound. “We weren’t a very functional community. It was pretty desperate. My paintings were getting grimmer by the minute.” Sarparanta has moved on since. A local builder offered to revamp the back room of the business property across the street for Sarparanta to use. Now he works in the only heated part of the building, but without the amenities of running water or a bathroom. “There’s no choice but to focus on what matters”, he grunts.“You can’t even make coffee.” Apart from his civilian service and eight years of studies at the Lahti Institute of Fine Arts and the Academy of Fine Arts in Helsinki, Sarparanta

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The desolation of the city has offered Sarparanta plenty of material for his artwork. “The lyrics of ‘Take the Money and Run’ became a prophecy”, he says. has always lived in the Salo region. Despite being appreciated among locals, sometimes small-town life gets a bit much. “Since Nokia closed down in Salo, the town has had a Chernobylian mood with low incomes and hopelessness about the future, as if covered by a dome of depression.” Nokia’s large handset factory in Salo closed down in 2012. But the desolation of the city has offered Sarparanta plenty of raw material for his artwork. Punk rock originally hailed from similar conditions as where Salo has wound up in recent years, providing plenty of inspiration for the lyrics of Sarparanta’s No Shame band established locally in 1996. “The lyrics of ‘Take the Money and Run’ became a self-fulfilling prophecy. The album cover features a caricature I drew of (Nokia’s ex-CEO and chairman) Jorma Ollila, and then there’s the song ‘Empty Promises’ written from the angle of my children’s future: I hope that you won’t end up on these empty streets with the same glaze of ‘I am nothing’ in your eyes.”

ccording to Sarparanta, he is first and foremost a punk rocker and only then a visual artist – although his artworks bring home the bacon. Despite having held a number of exhibitions with nearly all of the displayed works selling out, and regardless of a bunch of faithful fans, Sarparanta confesses that the bacon does usually come in thin rashers from grants and works of art sold at irregular intervals. No Shame’s gigs and albums do not bring much revenue, and the little that does come in trickles back into making the band tick.

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Sarparanta was already in his twenties when he found punk rock. Three particular albums and bands were the turning point. Rancid’s And Out Come the Wolves, Descendents’ Everything Sucks, and Social Distortion’s White Light, White Heat, White Trash were all released in the mid-90s, representing so-called American Neo Punk. “They weren’t exactly Green Day pop, but did have catchy tunes, elements of pop music, and an understanding of songwriting in common. Of course the most hardcore punk rockers look down on a pop sound, as it smells of commercialism.” We arrive at one of Sarparanta’s paradoxes. Generally known as a controversial, political artist and musician, originally Sarparanta was more drawn to the form rather than the content of music and visual arts. “Before punk, I’d even listen to Bon Jovi, if the song was good. As with my drawings of American Indians, first punk was inspiring because of the music itself and only then for its message – not the other way round.”

arparanta lived at home until he was 21, when he moved to do his civilian service at an old people’s home. “I’ve always had a close relationship with my mum and dad, and still do.They gave me freedom to be myself.” Sarparanta was only 16 and studying at upper secondary school when he met his future partner. Today, she is a yoga teacher and the couple are parents to two school-aged children. “Of course I’ve done everything I swore I wouldn’t: got married, returned to my childhood landscape, bought a house, had kids.”

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His hoods: Sampsa Sarparanta still lives and works in Salo.

Working at the old people’s home in the suburbs, Sarparanta began to suffer from bouts of boredom and invested in painting materials. He painted all evening long, only Native Americans at first. Like many others of his age, Sarparanta was brought up watching and reading Westerns, but unlike most, he always sided with American Indians. “I was no John Wayne fan. I was upset when the American Indians would keep losing in all of the battles with white people. Over the years, I grew more fascinated and began to study their history and mythology.” Sarparanta applied to the Academy of Fine Arts seven times before being accepted in 2000. “Classical realism has always been my thing.The style was as unfashionable as can be when I was applying. Now it’s enjoying its heyday.” At first, Native Americans represented the most sacred form of realism for Sarparanta, allowing to delve further into the situation of a subjugated

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group of people while condemning their suppressors. “At one point, a third of my works of art were so-called abstract art, which I refer to as color mess art. But it’s actually really hard to create. If you can’t just blast it on the canvas, it ends up looking crap.”

he studio is dominated by a massive selfportrait of Sarparanta standing in the middle of a field in western Finland wearing only a pair of rubber boots. The unfinished piece goes under the working title of Valkoisen miehen taakka (Engl.transl. White man’s burden). The artist unravels the piece further: “Its theme is the burden carried by an idealistic human being over the state of the world, but it also depicts the relationship with nature that was already present in my early works of American Indians.”

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“Classical realism has always been my thing.The style was as unfashionable as can be when I was applying. Now it’s enjoying its heyday.” Usually Sarparanta has one bigger exhibition jotted in his calendar for the spring, with works and a theme beginning to take shape during the previous fall. But this fall has been different: an exhibition location and date haven’t been set, and Sarparanta doesn’t even have a theme in mind. He has had more time to write songs and strum on his guitar that is tucked in one corner of his studio. “It doesn’t worry me.This self-portrait may well push the whole process in motion. And once things are moving, I work day and night. But I’m still not quite sure whether the self-portrait will be the key piece, it could be a bit much.” Surely any true fan would want to snap up a nude portrait of their icon? “I think the opposite is usually the case. People like to attach an element of mystique to their role models, and protect their myth. Standing there with one’s balls showing does strip off any element of mystique that may have surrounded me.There’s more of a risk that this painting will destroy the entire upcoming exhibition, but that’s a risk I need to take.” Sarparanta himself looks up to Albert Edelfelt, one of the most significant Finnish Golden Age painters from the end of late 19th century. Like Edelfelt, Sarparanta wishes to leave his mark on history as an artist who crystalizes archetypal people of their time. “Edelfelt used his sisters, family, and lovers as models. What’s crucial is that today, no one looks at Edelfelt’s paintings through a filter that makes the viewer think ‘those are his sisters or lovers’, but his paintings are viewed and studied as representations of archetypal people of his time. I hope that

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this nude self-portrait I’m working on will one day be a similar example of an archetype.”

ccording to Sarparanta, he has nothing against international success, but it should happen at his own terms. “Or at least I’m not prepared to sacrifice my principles in order to succeed”, he clarifies. Sarparanta is currently looking for a manager, or actually a gallerist, who could preferably distribute his art internationally. “In practice, I’m on the lookout for a partner who would be ready to do all the dirty work for me, such as negotiate finances and contracts. I’m darn lousy at that sort of thing.” Does dirty work get less dirty, if someone does it for him? In the world of visual art, the question usually boils down to the value of the pieces. Business around established and acclaimed artists, which is what Sarparanta has set out to become, is about old-fashioned capitalism in its simplest form. “I’ll give you an example from the world of rock ’n roll: we could be performing at a rock festival with the billboards of some big sponsor on either side of the stage, but I need to have the freedom to shout down the microphone that No Shame has nothing to do with the products in question. If I was told not to, I wouldn’t go to that festival with my band.” Sarparanta is well aware that the principles at work in the art world differ from those in rock music, but he does believe that it’s possible to establish one’s boundaries even in the case of an international breakthrough. A good agent could help maintain and define those boundaries.

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Sarparanta’s studio in Salo.

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“Capitalism is the main fundament of our time, so making fun of it is a taboo that’s even thought of as unintelligent.” “American art capitalism can be brutal. A wealthy gallery there could make a deal with an artist for 100 million dollars, requiring the artist to sign up to work solely for the gallery for the rest of his or her life. Even large record companies, which seem to be all about money, are softies compared to what goes on in the art world.”

n addition to the artist’s self-portrait, the studio walls are dotted with sketches of nude or seminude women. Mentioning the extent of nudity in his works causes the artist to exclaim. “Don’t focus on that! The only time my art was totally misinterpreted – or interpreted totally differently to what I’d intended – was five years ago, when I painted a lot of these so-called porn chicks.” How were they misinterpreted? “Almost without exception, modern art links nudity to a desire of the artist to pinpoint the role of women. Of course I could shine the light on their status in society, as a lot remains to be improved, but in this connection it wasn’t my point.” What was the point? “Women’s beauty, desirability, and nudity represent freedom and an ideal, which is also present in my buck naked self-portrait. Nudity represents freedom and liberation. I like to consciously use clichés, but without irony. My recent self-portraits see nudity as courage to be honest with oneself and others, and perhaps also being unprotected against all the shit in the world.” A pinch of social criticism can be scratched beneath the surface. “My intention was to communicate that we lack real freedom, as we run after money - indefinable basic security we think can be achieved with money. But it’s like chasing a ghost.”

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Sarparanta continues that the intriguing part about the discussion sparked by his “porn chicks” was that middle-aged women interpreted the paintings as objectifying the female image, while under 30-year-olds typically didn’t see this as a gender issue. “But the interpretations did demonstrate a clear divide between generations, which shows how quickly the world has changed – for better in this case. A ten year difference between viewers makes people see nudity in a whole different light.”

t would be easy to argue that Sarparanta veers towards nudity in his paintings because that’s what sells. Sex has always been used to sell, art being no exception. “Later on I’ve come to the conclusion that I just wasn’t a good enough artist back then. I wasn’t able to convey what I wanted clearly enough.” Sarparanta thinks it would have made more sense to follow in the footsteps of controversial Finnish artist Jani Leinonen, who uses American pop art that appeals to the masses as his steppingstone. He was fined for stealing a plastic Ronald McDonald statue from a McDonald’s restaurant in Helsinki, and then destroying it. “The outrage that followed Leinonen’s prank showed that mocking capitalism is the worst thing you can do these days. Capitalism is the main fundament of our time, so making fun of it is a taboo that’s even thought of as unintelligent.” Sarparanta speaks against the same issues in his artwork as he does in his music, but a different bunch of people will attend his exhibitions than his No Shame gigs. Sarparanta believes that the function of his creations is nevertheless the same for both audiences. “People who buy my paintings and come to all

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Sampsa Sarparanta: Odottavan aika on pitkä / Time is long when waiting (2009). Part of the Aalto EE art collection.

of my exhibitions are genuinely interested in the message my paintings convey. They just probably wouldn’t be as receptive via punk rock, so both channels are necessary.” “Someone did approach me at an art exhibition opening once to say they’d bought my band’s album, but found the music really awful, encouraging me to just focus on my painting.”

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ou! You! You!” Sarparanta stands on the edge of the stage at Tavastia club in downtown Helsinki pointing at people in the audience, getting them to join in the chorus. At the end, he jumps down from the stage and heads through the crowds towards the bar. The evening’s main act is pioneering British punk rock band Stiff Little Fingers, the main attraction for most of the audience.The audience is mainly made up of 40-50-year-old fans of nostal-

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gia punk, who have watched the gig rather phlegmatically, but warm up towards the end. No Shame gets a huge hand of applauds, returning to the stage for an encore. Dripping with sweat after the gig, Sarparanta sits behind the bar counter.“There weren’t that many people during our gig, but I guess we got the message across.” Queues of people wanting to buy No Shame t-shirts and albums begin to form behind the bar. “There is no free ride, as Burce Springsteen would say. A gig can’t just be entertainment. It has to feel dangerous. And disturbing. At least make you feel something. Even a schlager music star can’t just be an entertainer. It would feel like an insult, if someone called me an entertainer”, says Sarparanta, as he hands over a fan’s change. ◆ This article in Finnish online: www.aaltoee.fi/blog

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L O TO I N U T N O IV F E V R I SI E W T

“People who buy my paintings are genuinely interested in the message they convey”, Sarparanta says.

S H A R E D VA L U E IS A MUST

Dr. Pekka Mattila Group Managing Director, Associate Dean Aalto University Executive Education Professor of Practice, Aalto University School of Business

Sampsa Sarparanta’s interview is enough to stop many company directors in their tracks – often different worlds intersect only thinly. The growing power of citizens, consumers, or consumer citizens receives its most concrete form in the weekly scandals affecting companies that disregard what happens around them. Barilla, Lulu Lemon, Abercrombie & Fitch… Examples abound, whatever the industry. In recent years, strategy experts Michael Porter and Roderick Kramer have written about shared value with a focus on an in-depth understanding of the needs, expectations, and concerns of stakeholders. Devoting oneself solely to the needs of customers or owners is no longer enough for staying in the game. At times, an interest group that may seem marginal or

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even insignificant can actually clinch an organization’s entire fate – with catastrophic results in the case of disappointment or upset. Considering the business model and logic from the perspective of shared value is not a sacrifice for a company, but can at best even boost operations. The campus of SAS Institute headquarters caters for the diverse needs of the families of employees, ensuring an exceptional level of commitment, while, in its time, Body Shop’s brand was built on the promise of an ecologically and socially sustainable value chain. Also economist John Kay has examined the mechanisms of achievement. His book The Obliquity is a convincing account of the way companies and individuals that aim for something other than direct financial profit outshine their rivals also when measured with the narrower indicators of success. Those that openly seek financial profit do often amass a fat wallet due to the sheer determination at play, but still lag behind peers that have the greater good of society at heart or that are driven by a desire to solve the challenges of some marginal group. A good story is always appealing – also in the case of Sampsa Sarparanta.

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BOOK 3 [ BEST PRACTICE ]

H E L LO, L I N DA ! Crowdfunding that raises hundreds of thousands of dollars is a sign of something even bigger at play: a true community. Linda Liukas tells Ville Bl책field the story of her Kickstarter phenomenon. Photography Touko Hujanen.

young, flame-haired woman wearing a red top with white polka dots bounces up and down on a red sofa. At times she pauses and smiles – then bursts into laughter. Linda Liukas is obviously someone who is full of beans! “I grew up with Astrid Lindgren’s Pippi Longstocking and Tove Jansson’s Little My of the Moomins”, we hear Linda Liukas explain, as the video image pans from the sofa to the floor, where she is busy spreading out a pile of illustrations.The illustrations are sketches for her children’s book about little Ruby’s adventures.“I want to combine the art of storytelling and software, and help small children get excited about technology in a way that goes far beyond the bits and bites inside a computer”, she continues on the video. This 2 minute and 49 second video is a success story that helped her amass a record amount of 380,000 dollars for her children’s book project via the Kickstarter crowdfunding site.Towards the end of 2014, ten months after beginning her campaign, a total of 9,258 people had invested in her Hello Ruby project. And the book hasn’t even materialized yet. “I’m fully aware that the project is running late”, says Liukas. It’s an early winter’s morning in Helsinki, as she arrives for a coffee at a seaside café.The morning chill has perhaps subdued some of the

orderers all along. The great side about Kickstarter is that I’m accountable to the community that has arisen around the project. I know people are waiting for the finished product and want to hear how the work is progressing”, explains Liukas. “And they are also understanding.” There comes the other secret behind her success: community. Those 9,258 people who were ready to invest in a book project that was non-existent at the time. Liukas herself is of the view that this exactly is the root for something bigger and more meaningful.The creation of a community indicates something deeper at play beyond just an interesting idea for a book. It’s taken years to build this community, and Liukas is here to explain how it all happened.

hen Linda Liukas was 13, she, like others her age, had an icon. But unlike the icons of most 13-year-olds, hers wasn’t a rocker or movie star but a politician: Al Gore. The young Al Gore fan soon realized that for some strange reason the former US Vice President and climate change evangelist did not have a Finnish language website. So that’s what the 13-yearold set out to create. First she needed to learn a thing or two about coding. Let’s pause here for a moment. This is the point

“People are always talking about the websites of angry young males and the dangers they pose – but big websites actually crash due to the sheer mass of Justin Bieber fans.” bubbling energy running riot on the Kickstarter video, but there’s no denying she is a captivating character. Fascinating and self-assured, confident and humble, someone who fills the room yet knows how to listen. One reason for her success perhaps. “The project is running behind the original schedule, but I’ve been open about this to pre-

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where the success story we are retracing at a café in wintery Helsinki begins.The Kickstarter campaign of Linda Liukas aims to teach coding for children, especially girls. This in fact is her mission. “The world of teenage girls is often laughed at”, she says,“yet everything I’ve done or achieved has always been sparked by something I’ve been ri-

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“Everything I’ve done or achived has always been sparked by something I’ve been ridiculously exited about”, Linda Liukas says.

diculously excited about. People are always talking about the websites of angry young males and the dangers they pose – but big websites actually crash due to the sheer mass of Justin Bieber fans.” Liukas wants to see young girls becoming proactive also online beyond “liking and pinning”, moving on to acting and creating and “actually curating the Internet”. Not just using a mobile app, but inventing one. Not just playing games, but developing them. Not just consuming, but creating and publishing online content. This requires computer language skills, coding. According to Liukas, coding should be a required everyday skill in today’s society. “That’s why I advocate programing so much.” After creating a Finnish language website for Al Gore and finishing upper secondary school, Liukas went on to study economics. “Both of my parents studied at the School of Economics, and to be honest, I hated it. I never felt at home there.” Liukas escaped the Turku School of Economics to focus on her minor studies in visual journalism at Aalto University in Helsinki. She lived at Otaniemi campus with her boyfriend at the time, who was studying engineering. Aalto Entrepreneurship Society had just been established, and Liukas was sold. “It was like a massive tidal wave that swept me along.” Through the networks of Aalto Entrepreneurship Society, Liukas ended up taking joint study module ME310 organized by Aalto University and Stanford. “This was the first time something was actually required of me at university”, she says.“We studied in a multidisciplinary community for a year with the task of designing a completely recyclable consumer product. We had to hand in a prototype every two weeks.We learned the Stanford product development process, where instead of funneling, we were looking for wild ideas and challenged to invent something totally different. It took a while for me to warm up – the students looked like Barbie dolls – and studied at Stanford.”

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“I don’t know what Aalto University pays for the course, probably loads”, laughs Liukas. The final dissertation involved designing and assembling a fully working laptop that could be dissembled into parts. The laptop configured by Liukas and her team gained attention and was written about by Forbes. “It became a bit of a viral hit.” Liukas realized that doing one’s own thing could break into international news, if the idea was good enough. But there was more to her year at Stanford in California; Liukas ended up taking a course in coding. “There was probably nothing wrong with the course, but the way coding was taught was so boring. I couldn’t help thinking how I’d do it. My mind flooded with ideas on how coding could be taught in an interesting way.”

n 2010, ideas had become refined into a course arranged for friends. Liukas and her friend Karri Saarinen developed Rails Girls, a weekend event that taught women the basics in coding. “It was supposed to be for friends, but we received about a hundred applications for the first weekend”, Liukas reminisces.“So it wasn’t just for our friends.” Word about the women’s coding workshops started to spread online; especially bright coding stars eagerly shared the news on Twitter. ”When David Heinemeier, who had developed the Rails coding language, tweeted about Rails Girls, we just had to have it printed for our wall”, sniggers Liukas. Soon Liukas and Saarinen received a message from Singapore: could you organize a coding workshop over here? “Of course we can”, responded Liukas and Saarinen. As the trip finally dawned after nearly a year Liukas couldn’t help thinking: “If this thing works in a city and culture unknown to us from before – maybe it will work elsewhere, too.” From Helsinki, it was easy to take Rails Girls to Tallinn, Estonia – coders across the Gulf of Finland

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”We learned the Stanford product development process, where instead of funneling, we were looking for wild ideas and challenged to invent something totally different.” already knew each other. The next step was to arrange workshops in Berlin and Krakow.The core team began to expand, and Liukas and Saarinen were forced to learn the art of delegation. In addition to achievements, there were disappointments: after Singapore, Liukas took the course to Shanghai, where a Ruby China community had sprung up. But Liukas was in for a bit of a surprise when she arrived in the country. “The premises had no Internet connection. Someone had even removed the windows.” Yet even the most unusual experiences never took away the underlying sentiment: there’s potential here, it brings people together.This could get huge. “In the end, we open-sourced all of the Rails Girls booklets and materials and published every-

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thing online. Not just the technical guides, but also the social aspect.We explained how to gain sponsors for events, and allowed free access to all of the materials, including our logos”, Liukas states.“Letting go felt awful. I sobbed thinking all of this will go wrong. But it felt like the right decision – and it was. The best thing I ever did.” In a space of four years, Rails Girls has grown into a global community, where Liukas’ role is now only that of an administrator or hostess. Now Rails Girls guides are available online in English, Japanese, French, Chinese, Russian, Brazilian Portuguese, Spanish, and German. It was worth letting go. “If I’d hung in there as a bottleneck, Rails Girls would be much smaller than it is now.”

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It’s difficult to estimate exactly how many girls and women interested in coding have come in contact with Rails Girls around the globe. Looking at the number of followers in social media does give an idea of the size of the community: Rails Girls has just over 13,000 likers on Facebook and 10,000 followers on Twitter. The Rails Girls map already has pins on at least 227 cities. In the near future, Rails Girls workshops will be taking place at least in Brazil, Belgium, Austria, the Czech Republic, Japan, South Africa, and Poland. Liukas thinks the rapid growth is down to there being no exact plan to begin with. “In an effort to create a network, people usually first build the structure and then wonder how to engage an audience. Rails Girls did the opposite: we began with an idea that got people around the world excited, and made it the joint property of the community.”

“Often people are simply after followers, but it’s even more rewarding to raise leaders.” In February 2014, Liukas finally plucked up the courage to share her dream of a children’s book on crowdfunding platform Kickstarter, and the potential support base was already there: a global network of thousands of committed Rails Girls enthusiasts, who shared her mission of the importance of spreading coding skills. It came as something of a surprise even for Liukas that everything seemed to make sense after all. As if the big picture had been envisaged all along. “These days, it’s really hard to predict where the money will end up coming from.Trying to license Rails Girls and create revenue on the idea or brand may have completely failed. In the end, I became a children’s author with Rails Girls providing the supporting foundation. Perhaps the lesson of the

C ROW D F U N D I N G T H RO U G H S E L L I N G S H A R E S The crowdfunding model doesn’t only apply to art projects or computer games. Invesdor, a Finnish online service similar to Kickstarter, provides a means for startups to apply for crowdfunding from customers, risk investors, and business angels. “At its simplest, share-based crowdfunding refers to a regular issue of shares in line with the Finnish Limited Liability Companies Act, which is marketed online,” explains Mikko Savolainen from Invesdor. “In our view, the biggest hindrances for promising startups to gain funding include their limited presence and a difficulty to discover unlisted companies. Invesdor addresses this dilemma by gathering unlisted growth companies in one place and providing a straightforward way to invest in them.” The Netherlands and Great Britain are trailblazers in share-based crowdfunding. “Especially Great Britain has created excellent preconditions for the growth of share-based crowdfunding, as tax initiatives are in place to support growth investment. Also investment activities have deeper

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roots in Britain compared to Finland,” assesses Savolainen. Companies with successful crowdfunding via Invesdor include brewery restaurant Bryggeri Helsinki as well as Iron Sky Universe Oy, which sprang up from hit movie Iron Sky. Both startups were able to offer something valuable also to those investors who weren’t customers at the time: a committed community that served both as a customer base and marketing channel. Although success stories tend to trickle from the B2C market, Savolainen believes that the crowdfunding model works just as well in the context of the B2B side. A crowdfunding project can serve as a marketing measure, shedding light on the customer base that believes in the company. “People’s desire to decide where they put their money is the underlying thread. The Internet allows to bring together smaller streams, geographic borders rarely setting limits. People want to get involved in growth stories.”

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story is not to get caught up in wondering where the funds will come from too early on.” Liukas holds on to the thought that in this day and age attachments are formed with small, constrained subcultures rather than with megastars – “a thousand fans is all you need”. There’s no point in trying to attain the masses, but to make a genuine difference for a smaller bunch of people. Committed followers form a core group with a scalable force. “For me, Rails Girls was that crucial community. It was the foundation for pushing Hello Ruby over the threshold of a hundred thousand dollars.” This type of thinking can be difficult for traditional businesses and institutions to grasp. Liukas has a smile on her face, as she tells the story of meeting with the CEO of a large media corporation to whom she had just lectured on her philosophy of a thousand fans.

he Hello Ruby campaign attracted a hefty sum of 380,000 dollars, which is a huge amount compared to the average on the US-based Kickstarter platform. The service was established in 2009 typically for collecting a few thousand dollars as capital for creative projects, such as books, short films and albums. The founder, now chairman of Kickstarter, Perry Chen tells the story: “I was living in New Orleans in late 2001 and I wanted to bring a pair of DJs down to play a show during the 2002 Jazz Fest. I found a great venue and reached out to their management, but in the end the show never happened – it was just too much money.The fact that the potential audience had no say in this decision stuck uncomfortably in my brain. I thought: ‘What if people could go to a site and pledge to buy tickets for a show?

“If the first thing on my mind was to consider whether a particular idea could reach 100,000 customers, I’d never even get started.” “This boss told me they wouldn’t even consider a business activity involving a target audience of less than 100,000 people.” Liukas rolls her eyes. “If the first thing on my mind was to consider whether a particular idea could reach 100,000 customers, I’d never even get started. Take Rails Girls for instance: Finland wouldn’t have offered the same potential at the beginning, as it does now. We got a hundred people excited before Rails Girls grew in volume and started to gain international interest. Now Rails Girls workshops cover the whole of Finland.” Liukas has a message also for the corner offices and product development departments of large enterprises: traditional thinking can kill off a good idea right at the start. “Soon these jointly arisen ideas will eat up the money of large corporations.”

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And if enough money was pledged they would be charged and the show would happen. If not, it wouldn’t.’ I loved the idea, but I was focused on making music, not starting an internet company. Yet slowly over the next few years I started to work on the idea more and more. Finally, on April 28, 2009, we launched Kickstarter to the public. Projects trickled in. It was amazing! You cannot imagine how excited we all were.” In five years the venture has grown rapidly. Kickstarter has expanded to Europe (also Scandinavia) and Australia, and is planning for more. “We’ll definitely be expanding to more countries in the future”, says Julie Wood, communications director at Kickstarter. “And we’ll be continuing to improve our platform as a place where people can bring their creative ideas to life, and to support our community of creators.”

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Hello Ruby is a perfect showcase for Kickstarter. “Linda’s project was fantastic and embodies what Kickstarter is all about”, says Wood. “She filled a niche and showed that there is real interest in teaching girls the principles of coding. She told her story in a compelling way and shared her creative process with all of her followers extremely well.” The speed at which Hello Ruby amassed its funds is another defining feature: the first 100,000 dollars landed within a space of 24 hours. Individual campaigns – a few innovative technical devices, a film project, and a computer game - have managed to gain millions of dollars in funding through Kickstarter, while most achieve less than 10,000 dollars.When publishing a project on Kickstarter, the applicant needs to define a target sum for carrying it through.Approximately 50 per cent of applicants achieve their goal.

but the project never materialized, as the Finnish Police took matters in their hands, demanding an explanation for why she had not applied for a money collection permit in accordance with Finnish legislation.

imilarly to Senja Larsen, Linda Liukas set the target sum on Kickstarter at 10,000 dollars, which in hindsight is quite obviously an underestimation. The surprising total sum in fact enabled her idea to grow from word go. Now Liukas is busy working on an entire series of books, and has signed a deal with a US publishing company. “I took too long to procrastinate about publishing Hello Ruby. I would have really wanted my video on Kickstarter already six months earlier, but for some reason didn’t feel ready. I was too preoccupied with money collection laws and the likes”, Liukas recounts.

Now Liukas is busy working on an entire series of books, and has signed a deal with a US publishing company. Kickstarter grabs 5 per cent of the collected sum, while Amazon, which takes care of payments, charges a few per cent. Taxation is one of the stumbling blocks in crowdfunding, and tax authorities in different countries have rather unclear and contradicting views on the collected funds. In Sweden, crowdfunding is interpreted as a taxfree donation, while Finnish authorities have held varying approaches. Linda Liukas takes care to ensure that Hello Ruby’s investors get their money’s worth: in practice, they are pre-orderers of her book. Finnish Senja Larsen caused a bit of a stir, when she sought funding on Kickstarter for her Senja Teaches you Swedish project aiming to publish a Swedish language learning book. She managed to collect a total of 11,000 euros,

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According to current plans, the book series will be published in 2015. Kickstarter investors will be the first to receive an e-copy of the first book. “The Kickstarter community can also be demanding. I write a monthly ‘backer update’ to my investors, and have openly shared when I’ve felt totally stuck. At times like that, it’s been wonderful to receive messages along the lines of ‘Project delays are a fact of life’ from some stoic Asian investor.” With Hello Ruby splashed on the pages of every media from the Guardian to Wired, there’s always a risk that the reception and attention gained by the gospel of coding for girls widens the gulf between Liukas and her original community. One must not forget one’s roots. “After travelling around speaking to bigger audiences, I look forward to retreating to my world of introverts again. It’s important to remember who

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A C O N C I S E I N T RO D U C T I O N TO P RO G R A M I N G COMPUTER To put it simply, the task of a computer is to receive information, run a program that processes the information into a more useful form for humans, and display the end result. The task of a programmer is to make sure that the computer receives the information in an intelligible format, script a program the computer understands, – and admire the end result. VA R I A B L E In coding, a variable is a location for storing different types of information, such as a number, a piece of text, or a statement on whether something is true or false. Let’s imagine a situation where a customer visiting a bank gives out his account number to the clerk: The account number entered by the bank clerk accesses the bank’s database, which runs up software to check whether an account can be found in the database for the account number in question. The variable is given the value “true” to denote that the account really does exist at the bank. Next, information on how much money is in the account can be stored in another variable, which can then be displayed on the bank clerk’s computer screen. The bank clerk can then tell the customer what the balance is.

stance, draw a simple house on the display using the command “drawHouse”. Using the command will then repeat the action the computer was taught the first time round. A single function can include many algorithms and be used repeatedly in different parts of the programing code. Programing doesn’t make sense, if the same thing can be achieved faster otherwise drawing a simple house is after all easy by hand. But if the intention were to draw a hundred houses to, say, form an animated city, it would be easier to use the drawHouse function. By fine-tuning, the function can create houses of different sizes and colors in different locations. LIST Programing languages offer many different ways for storing and organizing information. A list is a type of pigeonhole for conveniently picking variables, calculating the total number of variables, or processing information as a whole. Moving from bottom up, the ingredients for a sandwich could include a slice of bread, butter, sausage, and cheese. A list would be able to know there are a total of four ingredients, the third being sausage.

A LG O R I T H M An algorithm is a description of the required measures for performing a particular task. Making a sandwich can be presented as an algorithm, beginning by removing the loaf from its package and ending by placing the butter back in the refrigerator. In programing basics, algorithms are usually connected to dividing and categorizing different items.

W H I L E LO O P S A N D C O N D I T I O N A L S Computers make decisions according to conditionals. Conditionals refer to structures that teach the computer to make a decision. “If the sausage runs out, only use cheese on the bread. If also cheese runs out, notify that the garnishes have finished.” While loops refer to the computer repeating something until something else happens, e.g. “Add a slice of sausage on each piece of bread until the sausage runs out”.

FUNCTIONS Functions are small elements in a program. The purpose of a function is to teach the computer to do something, which is then named. You could, for in-

Extract from: Koodi 2016 – Ensiapua ohjelmoinnin opettamiseen peruskouluissa (Linda Liukas & Juhani Mykkänen, 2014). www.koodi2016.fi

you are and to stay relevant to that bunch of people.” There’s really only one way to remain relevant: integrity.A close core community instantly knows when someone is bluffing. “I have to be totally genuine and honest in what I do.” Perhaps returning to these blustery Helsinki mornings is one way for Linda Liukas to stay grounded. Following her year at Stanford, she got

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a taste for New York life during her one-and-ahalf-year stint working for Codeacademy, a rapidly growing start-up that teaches coding, albeit also for boys and men. Liukas loved New York, but wasn’t too impressed with the working culture; 12-hour working days sucked out the last juices and taught the “straight A’s girl”, as she calls herself, one important thing: the ability to say no.

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ing language is that it’s written by a human being for others.” And how about Liukas herself? After her children’s books are out in the world, it’s time to pursue the next dream. If anything, Rails Girls and Hello Ruby have taught that an idea doesn’t need to be too ready or too conventional. “I’ve been thinking about an art exhibition where you could crawl inside a computer.” ◆ This article in Finnish online: www.aaltoee.fi/blog

L O TO I N U T N O IV F E V R I SI E W T

Returning to Finland also denoted a return to her original passion - children’s book illustrations strike the deepest chord with what Liukas is about. “Of course Hello Ruby is already a company, or two companies in fact, but most of all I feel I’m an artist.” However, putting labels on things goes against her philosophy; for Liukas, pure technology or pure art does not exist. “The Internet, like technology on the whole, is after all established on a humane aspect – human needs and interaction. The very idea of program-

FRIENDS OR FOOLS?

Elias Rantapuska Assistant Professor of Finance, Aalto University School of Business, Department of Finance

In Finland, crowdfunding is still lagging behind larger markets, such as the US and the UK. This partly because we do not have yet a clear, unified legal framework for this novel type of financing yet. Some platforms such as Invesdor, Mesenaatti, and Vauraus have opened the game in Finland by creating crowdfunding products consistent with the existing legal framework, which needs and is in the process of updating. Crowfunding has a clear place in the Finnish corporate finance domain for two reasons. Firstly, projects with an uncertain payoff requiring money beyond peanuts but below wholesale quantities are difficult to finance. They are too risky for a bank who wants to see an existing cash-generating corporation, not a promise of a cash flow. Crowdfunding projects are also typically too small for a serious private equity investor. They would rather consider projects with an opportunity to invest and make millions. Secondly, crowdfunding appeals to a potential new investor base: those who have a genuine consumption interest in the end product and also obtain other than monetary benefits from investing in the project. These benefits include being part of creating a product, service, or project that the investor finds cool or excit-

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ing. If the whole process of investing and following the investment brings joy, the potential monetary payoff from the investment is an additional benefit, not the sole reason for the investment. If you would like to have HIFK playing football in Veikkausliiga also in the future, a new sports bar in Tampere, or a book about Ruby’s adventures, why not to put your money where your mouth is by investing? Traditionally, projects now seeking capital through crowdfunding are those who would have historically resorted to FFF, “Friends, Family, and Fools”, as a source of funding. Crowfunding typically tries to attract “Friends” of the project to invest. However, there is also the less discussed aspect of crowdfunding. Many of the crowdfunded projects eventually fail, even if they are successful in sourcing capital. This is always the case with an investment: the crowdfunded book or game may never materialize or the restaurant turns out to be a disappointment and certainly not worth the investment. Then a “Friend” of a crowfunded project realizes that he is actually a “Fool”. Individuals considering investing in a project through crowfunding need to ask themselves: is this a serious investment which should yield an adequate financial return to compensate for the risk? If the answer is yes, then do your homework as with any investment. Many crowdfunded projects offer good financial investment opportunities, while others are doomed to fail. If the answer is no, be prepared to lose everything you invested, but make sure you have fun in the process.

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BOOK 4 [ LEADERSHIP ]

D O C TO R â&#x20AC;&#x2122; S ORDERS Managing experts is always a challenge that can get particularly tough when an industry is going through a major tumult. Journalist Annukka Oksanen examines how the health care sector should be managed, and what hospitals can learn from startups. Illustrations Aya Iwaya.

r. Gregory House is an enigmatic character. The ill-tempered character hopping around aided by his walking cane in television series House is the creation of actor Hugh Laurie. Dr. House is Head of the Department of Diagnostic Medicine at the fictional Princeton-Plainsboro Teaching Hospital, where he spends most of his time bickering with dean Lisa Cuddy (played by Lisa Edelstein), whether about hospital resources, rules restricting clinical work, incompetent staff, or, naturally, ridiculous patients. Dr. Gregory House finds being told what to do utterly intolerable, with tension between the top medical expert and dean providing the main twist to the tale. House topped the charts as the most popular television series a few years ago, leading to think that health care must be fascinating for the masses. Running from 2004-2012, a total of 9 million Americans gathered around their televisions to witness the final episode of the series, Everybody Dies. However, perhaps there’s more truth in concluding that the dramas and management of expert organizations are what really appeal to viewers with all the underlying conflicts, whether the focus is on lawyers, journalists or teachers.The theme is universal. At the moment, real-life health care management has potential for even greater drama. The

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sector is in the ravages of a transformation that it is sometimes even referred to as a paradigm shift. The advancement of a paradigm shift is characterized by experimentation, conflict, and restlessness. It takes a while before the new paradigm becomes established. Only change being permanent has become a modern buzzword. But what is required from management in turbulent times? How to make people see that what’s past is past, then embrace all that’s new? The scenario cuts even deeper in a situation where also leaders are uncertain about the future.

“ I T ’ S O N E O F T H E G R E AT T R AG E D I E S O F L I F E — S O M E T H I N G A LWAY S C H A N G E S .” D r. G r e g o r y H o u s e i n e p i s o d e H o n e y m o o n (2005)

Financial pressure, complex funding and administrative models and plans, rapid medical advancement, and humble patients turning into demanding customers have all contributed to siloed and hierarchical health care organizations seeming outdated. Almost everything in health care has changed over the last century apart from the organizations themselves. The Nordic countries serve as a test lab for the health care transformation. In line with the ideol-

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ogy of the Nordic welfare state, citizens are entitled to exceptionally comprehensive public health care that must be top-notch in return for the high taxes they pay. Ranking at the top of international studies on the quality of living, another reason for the test lab status of the Nordic countries is that they are modern and equal societies with an informal culture, with hierarchical health care administration contradicting with the rest of society. Another Nordic characteristic is that private and public health care operate side by side and supplement each other. As a result, pressures for the sector to transform are evident earlier on and more starkly than in other countries. Naturally, changes are experienced differently, some thriving on the buzz and turbulence, while others get stressed bordering on anxious. The transitions are usually particularly evident in the daily work of doctors. “Everything changes, right from the patient’s behavior. What was taken as a fact ten years ago has now expired. New information floods in at an incredible pace”, notes Petteri Hyrynkangas, Specialist in Occupational Healthcare at Terveystalo Oulu.Terveystalo is Finland’s largest private health care company with 18 clinic-hospitals and nearly 150 separate locations around the country. “Almost all medication for treating kidney can-

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cer has changed during the last decade, which is great”, exclaims Antti Jekunen, Professor and Chief of Oncology at Vaasa Central Hospital, as he describes the rapid advancements in his field of specialization. “Everything to do with doctors is undergoing change”, states Kati Haapakoski, Editor-in-Chief of Finnish health care magazine Mediuutiset. According to Haapakoski, this trend is heightened due to the economic downshift and related financial pressure. Once again, the phenomenon is universal, with IT, communications, retail, and every other sector feeling the brunt. Dealing with life and death adds its own spin to the transition in the health care sector. The same goes for a lack of competition within the largely public sector, which hasn’t added pressure to transform. “The dismantling of old ways has gradually begun in the health care sector”, explains Jaana Junell, HRD Director at Terveystalo. “Renewal, unlearning in particular, can feel difficult at times. Taking on a supervisor role and managing performance can be challenging for new managers in the sector. I believe that a discourse centering on customer-orientation and overall quality experienced by customers, rather than simply focusing on treating the patient’s illness like before, signify changes in a larger context”, continues Junell. “There’s no point for needless glorification.The same logic applies to health care and the work of doctors as for other expert roles”, points out Pekka Mattila, Group Managing Director at Aalto Executive Education and Professor at Aalto University. Aalto EE offers several health care management programs. Compared to other OECD countries, the cost of health care in Finland is of an average level. “But costs go up quickly”, adds Vesa Kämäräinen, CEO of Nordic Health Care Group, a company specializing in designing and developing health care and social services. The rise in costs

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needs to be curbed, as there’s a ceiling to how much can be collected in taxes even in Nordic welfare states. It’s easy to feel the pain of doctors. Journalists going through the motions of a media transformation know more than well that reinventing and redefining one’s work can be a painfully disheartening and uncertain task. According to Mattila from Aalto EE, this is exactly what doctors are up against: having to reinvent their profession. There’s no way to fast-forward such a fundamental process.

“ YO U WO N ’ T F E E L A T H I N G . . . E XC E P T T H I S E XC R U C I AT I N G PA I N .” D r. G r e g o r y H o u s e i n e p i s o d e The Itch (2008)

Crisis, chaos, rebellion, threat.These are terms that bounce from articles on management crises in the Mediuutiset health care magazine. The difficult process is clearly evident in the daily life of Finnish health care. A typical real-life hospital drama takes the following stages: Scene 1: Health care expenses need to be curbed and waiting lists shortened.This requires a new set of thinking. A change manager is hired for the job. This professional manager is not a doctor, but has degree in health care, engineering, economics, or the likes. Scene 2:The change manager takes the lead. He may replace line management with matrix management, reorganize tasks from one team to another, and create a chart for measuring the efficiency and quality of the performance of doctors. Scene 3: Uncertainty spreads like an aggressive virus through hospital corridors. A great deal of mumbling, scheming, and gossiping ensue. The phase can continue for several episodes, sometimes an entire season. Scene 4: Doctors threaten with mass resignation, if the manager doesn’t step down and isn’t replaced

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with someone with a background as a physician. Scene 5: The manager gets the sack and doctors take back their threat of resignation.The organization gradually returns to its old predicament, until the drama is replayed from scene 1 a few years down the line, this time with added pressures. Alternative scene 5:The manager isn’t fired, but is authorized to see the renewal process through in the organization with most of the doctors’ positions remaining vacant. The renewal process is long and painful. The parties need to accept that a miracle cure does not exist and everyone must carry their weight. The health care sector’s billion-dollar question is how to proceed from the tantrum phase to the alternative ending – the renewal process. This is a real challenge for the change manager. The first thing to understand is that an organization of experts cannot be steered by giving out orders. “In a traditional industrial workplace, a boss would put people straight by throwing a few fine and dandy terms in the air, but people in an expert organization have a higher level of education than their managers”, says Mattila. Not really the place for the boss to show off. An emphasis on expertise and the institutionalized profession is stronger in the hierarchical health care sector than in other fields of expertise. “Doctors are kings used to doing things a certain way. They are self-motivated and ambitious. In order to be accepted, changes first need to be justified or grasped. But once the underlying reasons are understood, doctors remain smart and loyal. Their professional identity is extremely strong”, remarks Petteri Hyrynkangas, Specialist in Occupational Healthcare at Terveystalo Oulu. He finds doctors to be exacting on the one hand, but easy to manage on the other. But why do doctors find it so difficult to be managed by someone who doesn’t share their educational background? “Traditionally, the chief physician has been the

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competence manager and specialist in the field. But this is something you can’t reason away”, responds Hyrynkangas. “In my view, doctors do require competence management, but otherwise management work can be of a high standard regardless of the educational background.” Hyrynkangas thinks the question may also be of many doctors expecting the manager to be able to support clinical work. In other words, doctors prefer the expertise of their manager to be at least of the same level as theirs. Doctors are ambitious in clinical work, wanting their manager to provide clinical authority. The convention in the health care sector to appoint a merited expert as a manager is prevalent also in other fields of expertise. Regardless of the field, the entire organization may be so enthralled by the institutional profession that members refuse to believe anyone else could understand its excellence and uniqueness. This type of management model views the authority of the boss to be established on mastering the substance at least at the same level as the subordinates, with management itself being something of an add-on to expertise. These are some of the reasons why the introduction of a professional manager can be so hard to accept. Typically, the work of an expert manager has been carried out alongside the main profession without management seen as a separate vocation as such. At Terveystalo, managers are no longer primarily doctors.This is a huge change in a sector where managers have traditionally been appointed on the basis of excellent clinical performance. HRD Director Jaana Junell sees doctors valuing expertise as a positive notion. “I believe this way doctors understand that professional managers are necessary in certain areas.” According to Junell, health care places more importance on professional competence than is the case in other fields. It is vital that management ensures this competence is developed in one way or another, such as

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by allocating separate resources in the matrix. As critical and analytical thinking forms a key element of the professional competence of experts, it is natural for experts to apply these skills also in evaluating management. Additionally, it is difficult for outsiders to be certain how well experts carry out their work.You can’t see what goes on inside someone’s head. “A critical approach is good, but can turn into sour cynicalness”, remarks Pekka Mattila, Professor at Aalto University. In Mattila’s view, the task of managers in an organization of experts is to be a little “dorky” and not to pretend to master the specialized field. “Questioning one’s supervisor comes with any job”,says Mattila. It is something a manager of experts just needs to get used to.

“ T H I S I S E X AC T LY W H Y I C R E AT E D N U R S E S . CLEAN UP ON AISLE THREE!” D r. G r e g o r y H o u s e i n e p i s o d e S p i n ( 2 0 0 5 )

Also chauvinism is at play in the echelons of traditional health care. An emphasis on the doctor’s institutionalized profession can also be interpreted as a way of ensuring that women, those “gentle sisters”, are unable to break past a certain level. “The most demanding supervisor roles have previously solely been open to men, who were able to advance rapidly through research”, explains Mattila. The medical field is ridden with historical and cultural taboos that see certain tasks belonging to certain professional groups, which are further divided according to gender: the majority of doctors are male and the majority of nurses female. The pecking order has been clear-cut throughout the times. Seen as model nations for equality, the Nordic countries often brush off chauvinism as a problem of the world gone by. But even if not readily admitted, gender can still be seen to at least partially

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contribute to some of the crises at hand. Let’s take an example: if a woman with a nursing background advances to a management position, male doctors can always threaten with mass resignation. On the other hand, many see these types of management crises purely as people issues rather than to do with gender or the institutionalized profession. In any case, threatening with resignation is a major trump card due to the current doctor shortage. “These struggles that have become public knowledge are growing pains in the face of change”, says Mattila. In the public sector, distinctions among different professions are evident even in national politics: according to Mattila, MPs with a background in medicine keep quiet about renewing the management systems in the field, whereas MPs with a nursing background demand changes and attention to current management practices. “Some have accused me, a ‘cocky consultant’, of having prejudices towards doctors”, sniggers Mattila. But accusations soon quieten down, as Mattila explains his doctoral dissertation examines organizational change processes including a case representing the health care sector. Doctors place high value on academic research. Faced with a critical and suspicious audience, it is vital how one’s critique on organizational

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change is presented. Mattila often resorts to parody and humor on the whole. The emergence of professional managers in health care does not mean that a person with a background in medicine could not become an excellent professional manager. Quite the opposite – doctors can make outstanding managers, as long as they realize that their role in the organization is completely different to that of a specialist doctor. Swapping roles from a colleague to a manager is challenging in any organization, but particularly so in expert organizations that value knowledge management. “I always say you have to become extra hardheaded, if you go after a supervisor role. At Terveystalo, we highlight that it’s a question of exactly that, a role, which the new supervisor needs to understand”, says Junell from Terveystalo. In health care, professional managers are employed especially at the top level, while middle managers are usually experts in the field, i.e. doctors and nurses, with management accounting for just one area of their versatile job description. Let’s shine the spotlight on Antti Jekunen, Professor and Chief of Oncology atVaasa Central Hospital. His working week is split between one day reserved for administration, one day for research, and three days for working at the ward, clinic, and in radiation therapy. If the unit is not understaffed,

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he is also able to take part at research meetings.The unit has nine permanent positions for physicians, which are rarely all filled at the same time. The chief physician is constantly battling for resources – oncologists – with the university hospital, and the capital region attracts specialists like a magnet. University hospitals are appealing to doctors due to the research opportunities they offer, while the smaller units of central hospitals allow doctors to get involved in a wide range of tasks; the same professional needs to master radiation therapy, chemotherapy, and palliative care. Jekunen has examined complexity, i.e. interconnections within organizations. According to the complex organizational and management model, everything is interconnected. This complexity creates cycles that can be either good or bad. Addressing the lack of oncologists at central hospitals by changing the education system in their favor, for example, could lead to university hospitals becoming understaffed. During an average working day, Jekunen holds a 15–30-minute meeting at his unit. The advantage of a small unit is that issues and measures can often be decided on there and then. Jekunen sees the work of a chief physician fitting in with a renaissance model: being a master of many things. And that’s fine with him. According to Jekunen, doctors often have an

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overcritical attitude towards administration, outsourcing it to the chief and deputy chief physician. This is down to narrow institutionalized thinking. “But that’s not how it goes! Work can be organized in a more efficient and positive way only by means of administration”, notes Jekunen. In 2013, Jekunen’s unit was the first in Finland and the rest of the Nordic countries to trial an panel for organizational development, which was carried out in collaboration with Professor of Social and Health Management Pirkko Vartiainen and her department at the University of Vaasa. The panel’s members were selected from among all of the clinic’s professional and stakeholder groups, including cleaners, patients, physicians, and nurses, getting a chance to see complex decision-making in practice. “We created a kind of miniature society. Participants then discussed how the clinic could be transformed into the best in Finland.” As the members had to consider the opinion of the entire unit, “a type of consensus was reached by default”, according to Jekunen. The method forced everyone to take part, which in turn made participants take ownership of the clinic and feel it was a place they could influence. In the context of a hierarchical organizational culture, this type of deliberative or discursive democracy at the workplace can be a major turning point. The usual process would be for the head nurse to ask the chief physician how to attain savings of 5–10 percent, while others would listen. The role of pharmaceuticals in health care is another good example of complexity at play, with rapid advancements having the potential to create schisms within the organization. Kati Haapakoski from Mediuutiset magazine provides an example: “Doctors are really the only ones who see the significance of a particular pharmaceutical for the care process on the whole. New medication can be expensive, but may significantly reduce overall treatment costs, if it decreases the number of hospital days.”

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No wonder doctors often find it absurd when a maximum price patients have to pay for prescribed medication is proposed in the name of cutting down costs. “A ceiling for prescribed drugs would be of concern also for patients, as ultimately someone could be left without medication altogether”, says Haapakoski. “Health care is a conservative and slow-paced field with rigid organizations. On the other hand, treatments in oncology, for example, are developing at a fast pace. This creates an interesting conflict”, explains Jekunen. Jekunen would like to see complexity thinking integrated more deeply into administration in order to reap better results in what matters the most - patient care. He envisages taking stakeholder groups for a walk around the site of the planned new hospital in Vaasa, so they could discuss the optimal hospital building. “Now we are leaving the design process entirely up to the poor architect, who has a huge job in working out everyone’s differing needs”, laughs Jekunen. He thinks discursive democracy of this type would improve health care operations. “My goodness, it’s all about mutual interaction! That’s what creates a huge driving force in an organization.The power of a leader cannot be established on status, but goals can only be achieved when they are clarified first”, Jekunen observes. Juggling different roles is fine for Jekunen, although expertise in oncology is a matter of heart he is not prepared to give up. This was put to the test during his time as medical director at the Aventis pharmaceutical company, which resulted from the merge of French Rhône-Puolenc Rorer and German Hoechst Marion Rousssel. “I really enjoyed my management role in charge of 296 different ingredients. But then it dawned on me that less than ten of the ingredients were oncological substances. As an oncologist it was time to move on”, recounts Jekunen. Jekunen then worked within the pharmaceuti-

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cal industry in the United States for a while, before taking on his position as chief physician in Finland. “It was a massive leap, as I hadn’t worked with patients for twelve years. But my identity as a doctor was still intact”, says Jekunen. According to Jaana Junell from Terveystalo, middle management “stretches out in both directions”, wanting to remain experts on the one hand, yet advance within the organization on the other. As was the case for Jekunen, considering one’s options is a rather common occurrence. “Regardless of the field, the higher you climb up the organizational ladder, the more you have to give up as a top specialist. Although of course you can still maintain professional skills”, says Junell, who has previously worked at Nokia. She tips that someone contemplating a management position could first try out being a project manager, for example. This is something along the lines of what Petteri Hyrynkangas, Specialist in Occupational Healthcare at Terveystalo, ended up doing. He set himself a time limit of one year before he could resign from his management position. But in the end he decided otherwise. “I had to think of it as a new profession”, summarizes Hyrynkangas, adding that giving up what used to be was important to process. This is a valid point to remember, as sometimes in the middle of eagerly advancing up the ladder, remembering you can’t have it all is easily forgotten. “Maintaining competence as a specialist takes time.You have to question whether the new position is worth the possibility of existing expertise coming to a halt”, reminds Hyrynkangas. According to Junell, it is vital for supervisors to receive training for their new positions. Hyrynkangas decided to take part in the “Supervisor of the Future” program tailored by Aalto EE. “I’ve received practical tools and a clear idea of what a manager should be like. The program has been quite cultivating, as it has delved into more

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than just the practical side, such as strategies. It’s also a useful forum for peer support, which is important”, Hyrynkangas highlights. “Change begins at grass root level, from pilot schemes to shaping open organizations, and sometimes in such difficult organizations where there’s no other option but to change”, says Professor Mattila from Aalto University. Also feedback is an important aspect. “We use a supervisor index, which provides supervisors with feedback from employees and a support package for developing skills. The index has crystalized that management work can actually be a real job”, says Jaana Junell from Terveystalo.

“A R E W E TA L K I N G A B O U T T H E PAT I E N T, O R H OW TO G E T A R A I S E F RO M C U D DY ? ” D r. G r e g o r y H o u s e i n e p i s o d e Needle in a Hayst ack (2007)

What is a good doctor? The definition is currently being reshaped. Traditional health care defines a good standard of care almost purely clinically: symptom, diagnosis, treating the symptom, follow-up. In the old world, the authoritarian position of doctors meant they did not need to worry about the patient’s feelings, while staff lower down in hierarchy did not necessarily dare to comment on the doctor’s blunt behavior. Those times have gone.Yet clinical work forms the core part of a doctor’s competence. Without it, doctors can’t carry out their work. “In the end, doctors knowing their thing is what’s most important. There’s Dr. House at one end of the spectrum and a friendly, chatty doctor at the other. Being nice all the time isn’t enough, either”, Petteri Hyrynkangas sums up. As patient experience is a competitive factor at private hospitals, it is also an important focus area for management. Patient experience does also make a difference in the public sector. Citizens are

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not motivated to pay taxes, if they are not getting their money’s worth or feel ill-treated, end up on a lengthy waiting list for an operation, or do not receive the required treatment at all.These aspects, too, constitute patient experience. How to steer doctors, so they begin to routinely include other aspects of care alongside clinical quality: treatment process quality and patient experience? By putting the facts on the table. In specialist professions, quality is often mystified as an indefinable feeling, but it can actually be measured. Vesa Kämäräinen, CEO at Nordic Healthcare Group, categorizes quality into three separate elements. The first element is clinical quality. “Clinical quality is motivated by medical ambition and the doctor striving to always put the patient first”, says Vesa Kämäräinen from Nordic Healthcare Group. The second element is the care process. Quality development of the process always aims for zero errors. Physicians see the importance of the quality of the process when they are shown how much money can be saved by changing something minor or how the clinical response to treatment is more certain when the process is of uniform quality. They also understand that it is in their personal favor when the company does well. Kämäräinen applauds doctors for easily understanding and grasping when provided with research facts that justify the proposed changes. Knowledge works, as after all a large share of doctors conducts research alongside patient work. According to Kämäräinen, the health care sector offers managers grappling with pressures to streamline operations a chance to cut down percentage units rather easily by rethinking processes and restructuring expenses. This brings motivation. Competitive private sectors, such as retail, have such optimized processes that very little remains to be shaved off. Patient experience is the third element of quality.

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Kämäräinen sees patient experience as a “story of its own”. Clinical or process quality may be poor without compromising patient experience. Patients may see their treatment experience in a positive light even if they were misdiagnosed. A patient’s treatment experience can be down to the way staff interacts with each other, or being given a warm welcome when entering the hospital. The underlying logic is the same as in customer service on the whole. “The doctor should be there for the patient”, notes Kämäräinen from Nordic Healthcare Group. According to Professor and Chief of Oncology Antti Jekunen, it’s a question of interaction. Specialists no longer dictate their treatment decisions like before. Now a doctor’s appointment is about conversation. “These days, we aim to provide patients with enough information, so they can decide for themselves as far as possible.This is for instance the case in beginning palliative care”, says Jekunen. Palliative care refers to treatment that aims to provide relief from symptoms following oncological care focused on treating cancer. Jekunen, who previously worked in the United States, encourages patients in Finland to get a second opinion from several doctors like Americans often do. “The patient then needs to decide who to believe”, encourages Jekunen.

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“Brushing up on interaction skills and encounters is what’s most important, affecting everything from patient situations to administration”, believes Kati Haapakoski, Editor-in-Chief at Mediuutiset magazine. The clinical competence of doctors is rarely questioned internally, but patients with free access to online medical sources don’t hold back. Like journalists, doctors are no longer the sole gatekeepers and mediators of information. “Many come for an appointment with a diagnosis for cancer they’ve found on the Internet. That’s when a doctor needs to be aware of what the googled diagnosis is all about. Oncology is a great medical field in that it’s always at the forefront”, exults Jekunen, who appreciates informed patients. “Patients arrive at an appointment to discuss solutions they already know about, and are very conscious of their rights. A good patient is proactive, interested in their case, and motivated to take action”, defines Specialist in Occupational Health Care Petteri Hyrynkangas. “It can also be a tough cookie for a doctor to swallow when a patient has googled a certain diagnosis and then demands certain medication. It can be irritating when patients are so aware”, ponders Kati Haapakoski, Editor-in-Chief at Mediuutiset. “Can you imagine patients splashing their bad treatment experiences on the Internet a decade ago?” Mattila asks.

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“ I T TA K E S T WO D E PA RT M E N T H E A D S TO T R E AT S H O RT N E S S O F B R E AT H ? ” D r. L i s a C u d d y i n e p i s o d e F i d e l i t y ( 2 0 0 4 )

Back to hierarchy and silos.The stiffness of health care organizations is a recurring theme running through the comments of the interviewed experts. To put it in biz talk, now health care needs to follow suit with the rest of the world in moving from a product-centered to a customer-oriented operating model. Especially the United States has begun to divide clinics around a particular care package to avoid patients having to run from one place to another. In addition to finances, pressure comes from critique according to which one patient can be treated by so many doctors that in the end no one is in charge of the big picture. An explanation for the rigidness is that an organization that deals with life and death needs to be unambiguous and precise. Merging together the notions of the patient’s interest being at heart and only a doctor’s expertise being good enough for thoroughly understanding how a hospital ticks, it is plain to see why changes are so hard to implement. Managers find it difficult to question expert work, because they are unable to read minds. Yet outsiders are left wondering why nursing staff and doctors have their own organizations and management. Why is a separate chief physician and nursing director necessary?

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“That’s a good question.This shouldn’t need to be the case and the resources aren’t in place either”, responds Professor Mattila to the issue of dual organization. “Different professional groups with separate management is a problem. They usually only discuss the treated patient together rather than jointly developing operations on a more general level. This is probably down to siloed management”, says Mikko Keränen, chairman of the Junior Doctors’ Association in Finland. According to Keränen, doctors enjoy each other’s company to an extent that neurologists will sit around one table and surgeons around another in the hospital canteen. “Multiprofessional networking is the word on everyone’s lips, and it does work to a degree.” According to Keränen, at Karolinska University Hospital in Stockholm different professional groups study together already at the basic level in order to “shatter glass walls”. In other words, nurses, physiotherapists, and doctors may be taking notes at the same lecture. A conventional distribution of management is once again justified by expertise, but there’s more to it; nurses and doctors find it hard to trust that a representative of one professional group could or would want to think of the interests of another group. It’s quite an alarming thought that in a sense an organization is established on mistrust between different professional groups. On the other hand, people work together seamlessly in an operating theatre, and it is strange to think that an organizational conflict looms in the background. A new manager is unable to eradicate these types of conflicts in the blink of an eye, as they are the result of long and complex cultural, sociological, and financial entanglements. The roots can be traced back in history. The doctor’s profession did not gain esteem until the end of the 19th century, when the field began to truly develop. In Britain, doctors were forced to use the servants’ entrance when coming for a

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house call. An emphasis on expertise was a way to succeed professionally, socially, and financially. Nursing became established as a profession during the Crimean War (1854—1856) and World War I (1914—1918), nurses usually being daughters from wealthy families who volunteered. For them, nursing was both a calling and a way of gaining independence. A professional identity established on volunteering and a calling continues to sit tight, if not among nurses themselves then at least among stakeholders. Calling still gets mentioned when the discussion moves on to the salaries of nurses. Chief Physician Antti Jekunen compares organizations to hospital facilities. In their time, hospitals were constructed to serve a particular purpose, and as the organization’s needs change, the facilities no longer adapt with them. The transition is more straightforward in the private sector, as it can be directly justified by money. “Cost-consciousness is a reality for us”, says Specialist in Occupational Health Care Hyrynkangas. Changes can also be put into action faster than in the public sector, where decision-making is more sluggish. Politically appointed committees, councils, and boards bring their own spice to health care administration, as of course should be the case for activities funded through taxation. But the fact remains that political decision-making often slows down the implementation of reforms. Professor and Chief Physician Jekunen provides an example: “A radiation treatment machine costs in the region of 1.8 million euros and needs to be replaced every ten years. Budgets can of course be finetuned these days, but one still needs to decide how to save up for the acquisition. What would you decide, if you had to choose between saving a little here and a little there, or calling it a day for cardiac surgery in Vaasa altogether?” Jekunen illustrates and goes on to respond: “It’s a tough one. As a political decision, it’s of

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course a matter for the council. But the patients’ views should matter, too.” It is the job of Nordic Healthcare Group to scrutinize the operating methods of health care organizations. “Borders are strict, and old ways of doing things prevail.Without financial pressure, changes are often difficult to put into practice”, says Vesa Kämäräinen, CEO of Nordic Healthcare Group. The company’s representatives frequently present their commissions to committees and councils. “Genuine freedom to choose resulting from competition within the health care sector would be the single decisive factor influencing the motivation to change”, summarizes Kämäräinen.

D R . G R E G O RY H O U S E : “ S O T H AT ’ S I T ? ” D R . L I S A C U D DY : “I’M HOPING THIS IS T H E B E G I N N I N G O F I T.” D R . G R E G O RY H O U S E : “ Y E A H .” in episode Now what (2010)

Despite the rigid nature of health care organizations, change can surface also from within. All of the interviewees mention how different young people entering the job market are today. The famous Generation Y is stamping its mark also on the health care sector. Studies indicate that Generation Y is an adventurous bunch that values leisure time and freedom to choose without being as preoccupied with titles as its predecessors. “Fixed property is valued much less. The new generation rents and isn’t interested in owning a car. They are not interested in spending 30 years working for the same central hospital, but want to keep learning and gaining new experiences”, Kämäräinen from Nordic Healthcare Group sums up. Chief physician Antti Jekunen agrees. “It’s completely different now. Young people

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Y L O TO I N U T N O IV F E V R I SI E W T

THE ORDER O F D O C TO R S Janne Tienari Professor of Management, Aalto University School of Business, Department of Management Studies

Pardon the pun with the title. I share many of the concerns raised in Annukka Oksanen’s elegant article. I find it hard to understand how a professional in a given field can expect to degrade other professional groups and to turn a blind eye to developments in the wider environment. But is that all there is to challenges and opportunities facing health care today? Surely the situation is more complex, and the article does a great job in detailing this complexity. Three points of divergence seem to be crucial: assumptions about patients and health, preferences about managing patients and health and, most importantly, views on the uniqueness of health care as a target for management. The backdrop for all three points is that we are dealing with systemic issues that cut across individuals to groups to organizations to networks to sectors to societies to supranational organizations and multinational businesses in the interconnected global economy. I guess the “transformation” that we are all facing is to come up with higher quality with lower costs. And because the system is overwhelmingly complex this can only be achieved through collaborating and coordinating across professional and organizational boundaries, and honing our established ways of doing things. Most people involved in health care would never deny, at least not in public, that the patient’s health always comes first. So what’s the big fuss? First, the fuss is that we cannot agree on who the patient is – or what health is. Is the patient a recipient of medical expertise? Or a customer? Or both? Is the question of patients and health about someone diagnosing and curing me or is it about my experience as patient-cum-customer? Or both? Medical doctors are not a uniform group in addressing these questions. As far as I know, some view pa-

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tients as carriers of particular illnesses while others see them as complete and complex human beings who must be treated as such. If I were a management consultant working in health care, I would start by getting people together to discuss how they see the patient and how they understand health – and on the basis of what assumptions. The second point is how to organize and manage patients and their health. At best, the professionalcum-manager is like a conductor of an orchestra who knows all the instruments, who sees when the orchestra is playing well and cannot be disturbed, and who is able to help when help is needed. At worst, he is a tyrant with tunnel vision. The management professional, in contrast, is like a leader or coach of a sports team. He is not the most competent player but, at best, he helps others to see the value in coordinating and collaborating to develop procedures that help the team to be successful. At worst, he is just an autistic excel-man. We are dealing with different assumptions and operating logics that need to be reconciled: the professional and the managerial. And there are always good and bad professionals, as there are good and bad managers. For an outsider like me, the crux of the problem lies in the tradition where doctors run the show, while nurses give them a helping hand; one professional group in a system is routinely privileged over others. There is a gendered element involved in this. While there are many female medical doctors, there are still very few men in nursing, which is considered as feminine care work that is inherently inferior to what doctors do. I think this is wrong. To make matters even more complicated, the people involved have different life circumstances. While some juggle with raising a family while pursuing a career, others are more settled. As managers of people, we should always take people’s life situations seriously. As a consultant I would tread lightly because we are dealing with rituals based on widely held myths. But I would insist on the value of mutual respect, collaboration, and good people management for all. And I would make sure that I have the evidence to show how this makes things run more smoothly. (continued overleaf )

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This leads us to the most sensitive questions of all. Is health care really unique? Do its defining characteristics call for management that is different from all other organizations and activities? No matter what our own preferred answer is, we are dealing with two different aspects of management. Managing experts will always be difficult. Experts generally expect that they retain autonomy in their work. I find it hard to see how this could be otherwise. Experts managing other people are a different matter. The higher education sector is a case in point. We have our share of sad examples of competent experts turning into incompetent managers. Quite simply, I would like to see more good managers, irrespective of their background. Perhaps the answer lies in rethinking management,

aren’t interested in committing, and they spend a great deal of time seeking their own identity. Graduates used to pick a suitable room at the central hospital and stay there for the next 50 years.” Mikko Keränen, who is currently specializing in internal medicine, can relate to the observations of his senior colleagues. He sees the sector as being too hierarchical and demonstrating a huge gulf between management and the rest of the staff. “A decision-making committee sits somewhere up there declaring the great truth to everyone else.” Keränen’s list of what makes a good manager is a helpful to-do list for change managers in the sector. “The key behind a blossoming startup is everyone working together.” Keränen wants work to have a meaning and the manager to voice what that meaning is. Tight boundaries are unnecessary. It’s no use for a doctor and physiotherapist to squabble about who understands the patient better, as there’s plenty of work for both. An enthusiastic supervisor makes a huge difference. Managers need to be able to explain where things are at, what the aim is, and what needs to

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as Annukka Oksanen’s article so eloquently suggests. If I were a consultant I would make serious attempts to facilitate such a process focusing not on individuals but on what managers are expected to do. For me, it is all about balancing acts. Managers and professionals alike need to balance between the common good and local concerns, home base and networks, strategy and innovation, standardization and flexibility as well as operational efficiency and great service. We all need to see that things can be done in different ways to achieve our given objectives. At the same time, we must be crystal clear about where responsibilities lie. In the end, we are all facing the same challenges and opportunities in the global economy. We are health care.

be done to get there. Then comes the hardest part: inspiring the organization to step into something new. Young doctors get frustrated with the recurrent explanations for postponing changes: things have always been done this way; they are too complicated to implement; or they will happen once some difficult member of staff has retired. What if a young doctor frustrated with the slow pace of change would follow in the footsteps of Dr. House? Keränen, who loves the series, laughs: “House is the one who never bothers to read through recommendations. If everyone worked like him, the health care system wouldn’t run too well.” The system can perhaps handle one or two top level Dr. Houses, and the character does show up in almost any given expert organization. In one sense, organizations are indebted to these geniuses, who anarchistically question established practices. But there’s a limit to how far experts can go: doctors cannot compromise what’s best for patients. “House hasn’t ended up on the dark side yet, as the patients always seem to get better.” ◆ This article in Finnish online: www.aaltoee.fi/blog

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BOOK 5 [ SELF-DEVELOPMENT ]

A H OY ! What can today’s corporate directors learn from British admirals during World War I? According to professor Henrikki Tikkanen, historical and contemporary leaders share a great deal in common. Words Ville Blåfield, photography Touko Hujanen.

mperial Russian Navy, British Battleships. The piles of books in the room of Henrikki Tikkanen, Professor of Marketing at Aalto University, are a telltale sign that here is someone who quite clearly goes deeper than startup hype. In addition to present-day teachings in marketing, strategy work, and management skills, Tikkanen delves into history. ”Management theories come and go, and each century comes up with its own trends.Yet managing other people involves stronger principles at work. This means we can also learn from history”, says Tikkanen. ”In examining human development and top leaders, I see strong analogies between history and the present age.” Tikkanen is Professor of Marketing at both Aalto University and Stockholm University. He also sits on the board of Aalto EE. Lately, Tikkanen has particularly been reading up on naval leadership in World War I. Britain and Germany were involved in a rather extravagant arms race whilst equipping their fleets. In the end, it was the British navy that gained the upper hand, and a century down the line it is fascinating to analyze why it was the Brits who excelled in leadership. “Germany built the second most expensive fleet in the world, which they didn’t dare use”, Tikkanen interprets.“They suffered from an inferiority complex in the face of the British navy. The Germans were intimidated by the Royal Navy.” “Battleships were high-tech products of their time, which people had to learn to use in practice. It’s apparent that on a strategic level, the world’s greatest battle fleet and biggest dairy face the same decisions.” What is the chosen focus, how are competencies developed – and when is competition at its weakest.

“Another interesting aspect about military history is that, unlike business in many cases, it’s so well documented, offering another good reason for closer examination.There’s so much material available about historical characters and decisions.” So when Tikkanen talks about management skills, he is actually thinking just as much about czars, admirals and fleets from World War I as he does about modern-day companies. As an example from more recent history, Tikkanen and his team have studied the history of Nokia “from around the 1960s to the present day”. “At different points in history, Nokia has professed good, even excellent leadership. However, the company’s success wasn’t down to individuals, but to the achievement of a culture and drive that were tangible”, analyzes Tikkanen. During its height of success in the 1990s, Nokia was helmed by a management team coined as the ‘dream team’, which included Olli-Pekka Kallasvuo, Matti Alahuhta, Pekka Ala-Pietilä, and Sari Baldauf. “That drive was also easy to destroy.” Nokia provides a management lesson that Tikkanen has uncovered from the past. “A certain type of leader and competencies are right for an organization at a particular time, but at some point these are no longer valid. There’s a similarity to Mikhail Gorbachev’s recent criticism of Vladimir Putin: the ego gets too big.”

“It’s apparent that on a strategic level, the world’s greatest battle fleet and biggest dairy face the same decisions.”

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Historical lesson number one: Leader, know when to step aside. Self-analysis is always tricky, and success doesn’t make viewing one’s own situation and persona any easier. Leaders who have managed to get the company’s profits and morale up may not notice when their management style and specialization no longer serve the company. Stepping aside is no easy feat.

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“The director and the entire management team need to be seen as a product of their time”, says Tikkanen. “The right people must be in the right time. Even management skills can quickly become invalid. At one extreme you have American listed companies where management can be changed at the drop of a hat for what can seem like a minor reason from a European standpoint.” A company director is axed by the board – the company’s owners. In politics, it’s citizens who have the last say. “Political leaders are shown the door when trust has been lost.Voters soon get rid of political leaders who think they are the bee’s knees”, reflects Tikkanen. “Monarchical leaders are of course harder to oust, the Russian Revolution serving as an extreme example. In those cases, leaders are usually only replaced after hitting rock bottom.” Tikkanen ponders for a while, drawing historical parallels in the back of his mind. Politics and business. “That’s how it went for Nokia. It had to touch rock bottom before people realized it was a crisis company.” Tikkanen talks about path dependency: both management and personnel easily get stuck in their old ways, in the path of past achievements and culture. “It is pretty hard to quickly turn the course of a company that has been managed in a certain way for years or decades. Path dependencies are so strong, like mental locks.” Path dependency can also drive a company to rely on a harmful management culture. “There are styles that don’t work in any context: dysfunctional management styles that can be hard to break, as they are so deeply ingrained in the corporate culture. But usually it’s a case of a

style no longer working due to changes in the industry.” On the other hand, in addition to growing accustomed and attached, employees are also harsh critics of the director. In their view, few leaders are perfect during their time. “Everyone is critical at the time at hand.There’s always room for improvement. In Finland, the stance around directors can often be over-critical.” Criticism can be seen as unreasonable also from the viewpoint that a single person is rarely even responsible for all that they are held accountable. Historical lesson number two: Leader, don’t think of yourself as a hero. “It’s an illusion to think that the managing director – or even the German Emperor – could lead on their own”, says Henrikki Tikkanen. History gracefully proves that great, lone leaders who would always be right simply do not exist. “Even the greatest leaders are often uncertain as they make decisions. There’s no such thing as an infallible leader. Good leaders know how to patch up mistakes and change course after making the wrong decision.” “We imagine that modern corporations have been systematically built and maintained. In reality, a large share of decisions are made simply as issues arise, and things have been organized in an ad hoc way”, says the expert in organizations and management with a pleasant smile on his face. “Organization and management skills will probably never reach a culmination point where people would be ready and have an optimal model for organizing issues.” And when the organization does seem to be ready, something awkward takes place: the world changes.

“Even the greatest leaders are often uncertain as they make decisions. There’s no such thing as an infallible leader.”

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At work: Henrikki Tikkanen at the campus of Aalto University School of Business.

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“That’s when a vision is vital.” When it comes to the hero myth attached to leaders,Tikkanen observes a difference between American and European management traditions and rhetoric. The American narrative is alive and kicking with the dream of an infallible super leader. “The image of a hero leader is pretty clichéd and rigid”, says Tikkanen. “The American press is eager to print how GE’s management puts in 70-hour working weeks. Perhaps this is part of maintaining the myth of a hero leader.” According to Tikkanen, this illusion also permeates leadership literature.The Professor in Marketing emphasizes teams over heroes. “Even the greatest leader inevitably makes wrong decisions, but the team can help repair the damages if need be.” In other words, true management competence involves an ability to surround oneself with the right circle of people. “An admiral is quite obviously a visible figure in the navy, but even he needs to be surrounded by a team with fresh and relevant experience.” “Admiralty was reorganized in Britain before World War I. This resulted in the formation of a large body of experts made up of hundreds of officers responsible for different tasks.”

“Whether productive feedback is given internally, and whether the right tension that will take the company forward exist.” Tikkanen provides an example from Finnish corporate history: Traditionally, management teams have been too homogenous. “One half economists and one half engineers, all wearing white socks,” illustrates Tikkanen. “Diversity has been lacking.” The culture is changing. “But the change isn’t very rapid.” Tikkanen hopes that the diversity of management teams would be considered at a deeper level than simply in terms of a gender issue.“It’s a question of internal dynamics, how different personalities work together.” Examples of successful management teams can also be found in history – such as the British military fleets during World War I. “Or Winston Churchill and his team during World War II”, Tikkanen adds. “Brits have had a remarkable ability in establishing these types of teams. They’ve had people with this skill.” “Throughout history, the British have been forced to bend and come up with creative solutions with fairly small means. In addition, British business life has always included a fair share of humanists in high places. Perhaps their tradition emphasizes learning lessons form history.” Learning from history is of course a satisfying notion for Tikkanen. He considers many western cultures to in fact be ‘historyless’: “There’s been such an aim to be so modern. People have limited resources, and with a push to keep going forward, only the future is kept in mind. Leaders may feel it’s no use looking back.” Tikkanen admits that history doesn’t offer absolute truths. “History never repeats itself, but it does provide lessons for reflection: If this has happened once, what can we learn?” Studying history involves the risk of becoming infatuated with the success stories of the past,

“The image of a hero leader is pretty clichéd and rigid.”

Historical lesson number three: Leader, surround yourself with a dream team. It is important for management teams to combine relevant competence, which is sometimes easy to achieve: getting headhunters on the job and putting CVs in line. But setting up a management team that ensures that the individuals also get along is a tougher challenge. Group dynamics. A shared driving force. “Adequate alternation isn’t the only crucial factor for a management team, but also the dynamics within each composition”, says Tikkanen.

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PHOTO WIKIPEDIA

The Grand Fleet sailing in parallel columns during the First World War.

which can make the present seem chaotic, boring, or at least unromantic. But Tikkanen does succumb to one of today’s management wisdoms: “The present decade is quite fragmented: similarly, management teachings do not involve absolute truths. And that’s healthy. The same model doesn’t apply to managing all types of industries or companies. Nowadays, people don’t all have to buy into one, ruling way of seeing things.” A fragmented era of a multitude of truths fits in with Tikkanen’s understanding of leadership, as he hasn’t come across quick tricks, simple recipes, or overriding guidelines in his search through history. Historical lesson number four: How to gain followers? “Leadership is about succeeding in gaining followers. Why that happens is difficult to summarize. Leadership has a great deal to do with personality, or in fact a combination: a merge of personality and institution creates the driving force.” In discussing great personas, culture, and driving forces, professor Tikkanen refers to both history and the present day. Battleships and startups. “Why one leader succeeds and another one fails is down to culture and drive.” ◆

F U RT H E R R E A D I N G Henrikki Tikkanen recommends: 1. Strategic Leadership: Theory and Research on Executives, Top Management Teams, and Boards (S Finkelstein, DC Hambrick, AA Cannella). “An introduction to strategic management.” 2. From the Dreadnought to Scapa Flow: The Royal Navy in the Fisher Era, 1904–1919. “Arthur Marder’s monumental, 5-volume series on naval history during World War I that was published in the 1960s.” 3. Johtajuuden seitsemän syntiä (The Seven Sins of Leadership) (Metropolitan Ambrosius, Jaakko Aspara, Pekka Mattila, Timo Kietäväinen, Henrikki Tikkanen). “A book I co-wrote. I’ve also written the book Henkinen johtajuus (Spiritual Leadership) together with Metropolitan Ambrosius and Timo Kietäväinen.”

This article in Finnish online: www.aaltoee.fi/blog

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I M PA C T & EXPERIENCE PA RT I C I PA N T S , FA C U LT Y & A A LTO E E ALUMNI

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I M P A C T

E X P E R I E N C E M Y S T O R Y

“ I ’ ve always wante d to do po stg raduate studie s. At Aalto EE, I can study whi le working. ” Aalto Executive DBA candidate Margit Suurnäkki recently returned to Finland after her posting in China. Here she talks about some of the turning points of her career, and why she has wanted to study throughout her working life.

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PHOTO TOUKO HUJANEN

Margit Suurnäkki works as a product manager at a subsidiary of Tieto in Espoo. ”I managed a software development team, overseeing the entire lifecycle of a new financial management solution. We had a brilliant team. I learned to manage and give enough space to people smarter than myself. The distribution of tasks worked well: one aced the technology, another knew all about testing and instructions… I did whatever others didn’t. We were all eager to develop new things. I had studied management and organization in Tampere, but continued to study at Open University. What a wonderful place! I was interested in languages, and ended up studying French and Greek. Studying has always been my thing. I remember carefully reading through the course programs of evening schools to find out what’s on offer.” “Working life requires all sorts of skills. A M.Sc. in Economics provides a solid educational background, you learn the ropes at work in practice, and the rest has to be found somewhere else. Learning keeps the mind young and is really rewarding.”

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MARGIT SUURNÄKKI Director, Global Development HR and GD China at KONE. M.Sc. Economics, Business Administration, University of Tampere. Aalto Executive DBA candidate. Margit Suurnäkki’s leisure time activities include studying and gardening at her allotment garden in Helsinki.

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I M P A C T

E X P E R I E N C E

2 0 0 0 / AC C E N T U R E Suurnäkki is appointed as Senior Manager at Accenture, where she ends up working as a consultant for just over six years, including a one-year project in Switzerland. ”An opportunity to work with global companies and see how they operate was a major move. I was involved in large-scale enterprise resource planning with multi-international teams. I appreciated Accenture’s extensive pool of experts, which gave access to a global competence network. Information on what had been done before was available on databases, making it always easy to find the right expert.You received answers immediately.” “I carried on studying at Open University. I wanted to keep learning and took basic courses in different subjects, such as Finnish literature, media and communications, political sciences, and creative writing.” “I’ve managed to prioritize studying by leaving out something else, which has probably also helped me draw a line between work and leisure time. My mind is in constant need of stimulation and challenges. I study on my own terms, for my own pleasure. Studying helps to see the bigger picture, and allows to reflect on different issues and their interconnections.”

2 0 0 6 / KO N E Suurnäkki transfers to Kone. She works for Global Development in Espoo, Brussels, and Shanghai e.g. as Head of Process Solution Team Maintenance, and Head of Global Development China. ”I transferred to Kone during a really interesting phase, when the company was in the process of turning from international to global. I’ve moved on according to each task at hand, and although

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my career path hasn’t necessarily seemed so determined at the time, in my CV it all looks surprisingly logical. At Kone, I’ve had the opportunity to work in global units. It’s great to work with people from all over the world.” “China made me see the good sides of European and Nordic management culture. Although China is such a dynamic market, people there value stability, security, and a respect for the individual. In recruiting new people, I noticed how being a familyrun business arouses trust, even in the case of a company as big as Kone. One of my tasks was to develop my team to raise followers and make myself replaceable. China also taught me that work is really fun. My team worked hard and grabbed every training opportunity. People there strike a good work-life balance: good food and spending time together are valued. It’s something I would have wanted to bring back home as a souvenir.” “Our team in Shanghai had a really strong bond.We had a shared goal and strived to reach it. We spent a lot of time together, deciding in chat groups what we’d do in the evening. In Finland, it’s more often the case of a bunch of individuals working together. Whether that’s independence or sometimes even a case of loneliness is another question. In China, I studied the language in my spare time. I moved back to Finland in fall 2014, and now carry on studying.” “I’m currently taking part in the DBA program at Aalto EE. I thought that as I seem to study all the time anyway, I might as well complete a bigger entity. I also wanted to make use of my existing work experience: I’ve gained a great deal of insight into how a global company is managed and developed, and how this can be supported by information systems.” “The DBA program felt right for me, as I’d always wanted to complete postgraduate studies, but other options seemed challenging to combine with work. I saw a leaflet of the new Aalto

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Margit Suurnäkki has just moved back from China. In China, I learned a lot about work-life-balance, she says.

Executive DBA program, and it seemed to suit my current situation perfectly.” “The DBA program can be completed as longdistance studies while working, which requires selfdiscipline. Meeting face-to-face is extremely important.The group provides peer support, reminding of shared goals and spurring each other on.” “I’ve set a goal of three years for completing the program. The initial stages involve immersing oneself in the subject through reading, gathering information, and planning. At the same time, you learn critical thinking. I’m still specifying my exact topic, but it deals with global operating models. After my experiences in China, I’ve been interested in the issue of where to draw the line between global and local. Having always studied while working, taking part in the program feels natural. Studying broadens one’s view of the world and stretches one’s thinking.” ◆

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A A LTO E X E C U T I V E D B A The Aalto Executive DBA is a structured program in Business Administration for individuals with considerable managerial experience who wish to make a significant contribution to the enhancement of professional practice in their key areas of interest. It has both real world relevance and academic rigor, and focuses on the relevance to the employer and the professional development of the candidate. The DBA research project – finalized in a publicly defended DBA thesis – typically has strong linkages to business and managerial practice. DBA candidates can, for instance, conduct a sizable research project for their employer. Compared to some more scientifically oriented doctoral programs, the DBA studies and research place emphasis on the application of theories – the creation and testing of an entirely novel theory is not a necessity. The majors of Aalto Executive DBA are strategy and marketing, but any managerially relevant interdisciplinary topics are strongly encouraged.

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I M P A C T

What a ride Journalist and entrepreneur Paula Salovaara says the most valuable asset she gained from her Aalto Executive MBA years were the friendships.

‘T

he day our class met for the first time for the introduction, everybody got to say a couple of words about themselves and about what they expected from the program. We heard that most people in our cohort run weekly marathons while working with demanding jobs and managing their private lives, with and addition of some cultural hobbies to fight the boredom. After an intimidating list of achievements every one revealed the true reason for applying. We all said: I am here to find new insights. Maybe the biggest insight is the certainty that there will always be more to learn, and that new knowledge sure makes you feel good. But still, I think we gained something even more valuable as a group. In the introductions, the bravest of us said they expected to meet interesting people and learn about different ways of thinking. Networking was surely mentioned, it always is. Not a single one of us stood up and said: I would like to find a new friend. To get a new friend is the grandest thing that can happen to a person. I would not dare to get up in front of 50 people and tell them that I lust for your friendship. But in the oddest of moments, in the midst of producing exhausting amounts of power points, friendships emerged, as they do. I would like to thank Aalto University for building such a wonderful platform for friendship. Thank you for all the knowledge we were offered, while getting to know each other.

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But most of all I would like to thank my classmates. Thank you for finding the time to talk about all matters in life while figuring out the fluctuations of world trade. We will miss our time together, we will think fondly of the gatherings, we will even miss writing the business project for the fifth time over. Anybody can network, there is an easy formula for that. Smile eagerly, talk lightly, shake a hand, drop a name, offer a coffee. The formula gets much more complicated, when you have to solve problems together, ask for help when feeling dumb and miserable, and when you get up together to present the results of a job that took many months to finish. Everything gets so much more interesting, when the small talk is over. Our cohort moved swiftly over to big, long and loud talk. Our modules have been much about discussions. We have completed at least 20 modules, with the topics ranging from project management to how to influence other people. Right next to these modules there has been the invisible module of learning to know people, their families, their jobs, and bosses, loves and sorrows. We will now eagerly embark on the rest of our lives, not only clutching the diplomas, but also holding the hands of new friends.” ◆ Edited from a speech given at the Aalto EMBA graduation ceremony held in Helsinki, November 2014.

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PAULA SALOVAARA Journalist, entrepreneur, and mentor based in Helsinki.

PHOTO TOUKO HUJANEN

Founder, Radio Helsinki. Nearly 30 years of experience in various Finnish media. Former Editor-in-Chief of Radio Helsinki, Managing Editor of Helsingin Sanomat.

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Fixing the bridge Professors Terence Tse and Mark Esposito joined forces to bring practice and theory closer together. It all started from shared frustration.

ark Esposito and Terence Tse could be seen as an odd couple. Mark, Associate Professor of Business and Economics at Grenoble School of Management and at Harvard University Extension, teaches systems thinking and modern business dilemmas among other subjects. He is the founding director of Lab-Center for Competitiveness, a think tank that studies “competitiveness as a bottom up approach towards the creation of equality in society”. His next book ”From Hubris to Disgrace” is due to be released this year. Terence, Associate Professor of Finance, teaches at ESCP Europe, on top of several top business schools around Europe and China. ”My teaching approach also reflects my industry experience”, he says. ”Before joining academia, I worked in mergers and acquisitions at Schroders, Citibank and Lazard Brothers in Montréal and New York. I also worked in London as a consultant at Earnst & Young focusing on UK financial services.” Together the two have created the Business 360 module - a course breaking the barriers between finance and sociology, combining business thinking and understanding the society as a whole. ”We look at everything through a socio-economics lens”, they state.The first Business 360 module was tailored for Porto Business School, Portugal, further introduced at the IE Business School in Spain.

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MARK: ”It started from our frustration of students not being able to read The Financial Times or The Economist when they graduated. It is not enough to understand only your own narrow field of finance or business - you need to be able to see what is happening around you on a broader scale.” TERENCE: ”This is something Mark is really good at: Painting the social and economical issues so that we understand where things are leading in the future.” MARK: ”We want the Business 360 module to be very up-to-date.We talk about what is current - at the last course about the oil price, for example. Terence is a financial professor, so he’ll bring that point-of-view to the discussion. I bring socioeconomics.” TERENCE: ”It can be frustrating to see MBA students, too, who are very much restricted in their own field. We try to pull everyone out of their own comfort zones. Ask themselves the question: What is really going on in the bigger picture? Also, we force people to come out of their own geographical comfort zone: You all know China will have a major impact on you and your business, but what do you really know about the country?”

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DR. MARK ESPOSITO Associate Professor of Business & Economics, Grenoble School of Management, France. Member of the Teaching Faculty, Harvard University Extension School, USA.

MARK: ”The MBA students read The Financial Times, yes, but often very selectively.They tend to read about things they already know.” TERENCE: ”If you want to create a more sustainable society, you need to think a lot about social issues, not only business issues.” MARK: ”We are talking about the bridge between theory and practice. This is what business schools should be doing, but they have become very academic. Our contribution is to try to build the bridge.” TERENCE: ”This is what brought us together: Passion to actually make an impact on the world.” ◆

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DR. TERENCE TSE Associate Professor of Finance, ESCP Europe. Head of Competitiveness Studies at i7 Institute for Innovation and Competitiveness, ESCP Europe.

Espositio and Tse are the creators of the Business 360 module. This module is a part of the Aalto EMBA International Week program.

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