Per Akerberg is CEO of customer experience cloud, Voyado.
What makes Swedish businesses so successful internationally?
Spotify, Zettle and Klarna—to name a few—are all Swedish tech companies that have earned a place on the world stage. But how does this Scandinavian nation with a population barely above 10 million continually produce such successful global businesses?
I’ve got 20 years of experience in leadership and CEO roles across several types of organizations, including in the U.S. and Germany. I think what differentiates Swedish businesses from others is their long-term focus on creating a supportive, positive culture and investing in employee well-being. Fortunately, these considerations are increasingly common in businesses worldwide, but they have always been at the core of many Swedish businesses—and they have been an even greater focus over the last decade.
Focusing on employee well-being makes intuitive sense: Businesses are made of people, and people do their best work when they are treated well. It also doesn’t mean that a business can’t be competitive or driven by growth—it’s possible to combine the two. Here’s what that looks like in practice.
Take a laissez-faire approach to culture.
Every organization is unique, of course, but many Swedish businesses—especially the most successful tech businesses—generally pride themselves on fostering a warm, open culture. Management emphasizes a focus on individual well-being, personal development, flexibility and even ensuring that people can have fun at work.
Creating this laissez-faire culture is hard work, but I believe it’s worth the effort. Employees who feel included, engaged and supported can do their best work. The approach is not only for technology startups; major businesses like IKEA also embody this well. The approach can also positively impact hiring, as the businesses with the most positive culture often have the simplest time attracting new talent, which is essential to achieving growth.
An employee-focused model must also consider the workload placed on each employee. It’s important for employees to know that they won’t be pushed to the point of burnout. Everyone needs slower periods where they can recover so they’re ready when the time comes to roll up their sleeves and work extra hard. Because we do work hard. I’ve noticed employees are also more willing to contribute, innovate and come up with great ideas when they are invested in the company’s vision, core purpose and values.
Focusing on creating a comfortable, supportive workplace isn’t at odds with being competitive—it’s essential to success. Yet, in my experience, too many businesses around the world focus on ambitious results without the required support for the people who work hard every day to make them a reality.
Consider whether a strict hierarchy is really for the best.
Another notable difference I’ve observed is that many Swedish businesses are less hierarchical. A hierarchical approach to structure and decision-making can certainly be useful, but it also has downsides. Too much hierarchy can have a negative impact on employee engagement and innovation. For example, in a highly hierarchical organization, a person may choose not to take a risk out of fear of what their boss will think, and this can be extremely limiting, especially for a tech company.
Empowered teams require a framework that encourages employees to act and solve problems. After all, we hire our staff for their intelligence and expertise. While executive management must navigate challenging decisions, it’s crucial to leverage the full range of employee knowledge.
Conversely, in a less hierarchical organization, employees are often likely to feel more motivated and responsible. They feel motivated because they believe good work will be recognized, wherever it comes from within the organization, and responsible because the culture emphasizes that they are all in the same boat. When people pay less attention to job titles, they can spend more time building working relationships and collaborating toward common goals.
Making a less hierarchical approach work depends on effective communication. An organization is made stronger when all employees, regardless of their role, feel involved and able to speak up. To get to this point, I’ve found Swedish businesses typically invest in leadership education and HR support, in addition to giving managers the tools to keep employees motivated. They also hold one-to-one meetings, 360 reviews and performance talks regularly.
A trusting environment can help provide stability in challenging times.
This all sounds straightforward, but what does it look like when times are tough? I have been through plenty of tough times myself—I have led companies during IT crashes, multiple recessions, Covid-19 and more—and, in my opinion, they make culture more important than ever.
Fundamentally, trusting the people you work with provides an island of stability in an otherwise shifting, unpredictable world. This means that leaders should be transparent and communicative, admitting what they don’t know and being honest about the future.
Sometimes, leaders will need to make difficult decisions. Sweden’s belief in fairness and togetherness is codified in law. There are clear regulations on how businesses can conduct downsizing and reorganizations, including a rule that the last person in is the first person out.
Every company will eventually face challenges. Companies that have worked to create a baseline of respect for work-life balance, communication and support often find that these times bring out the best in their employees.
Go global with the Swedish approach.
The Swedish way of running a business—with a strong focus on open communication, a flat structure, fairness and giving employees the support and flexibility they need to do their best work—has a strong record of international success. But Sweden isn’t magic: Businesses around the world can implement these lessons to access these benefits.
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