What we set out to understand
We embarked on this study to understand how important the role of company culture is today, in the aftermath of a series of external shocks. The pandemic, the war in Ukraine and the overall uncertainty across markets have blurred our view of the future and brought us face to face with our own fears and insecurities.
Our premise was that if the role of company culture is of higher importance to Finnish businesses today than before this series of abrupt changes, then there is an increased appetite for two things: understanding culture better, and learning to develop it in a more systematic manner.
The findings are based on 21 semi-structured interviews with CEOs and Chairs of Boards, and on 109 survey responses from top and middle management across Finnish companies that operate both nationally and globally.
Culture is the thing leaders say matters most
Two thirds of survey respondents said they discuss the importance of a healthy culture in their organisation a great deal. Across the interviews there was consensus on one aspect: a healthy company culture is vital for the success of a business, and this is particularly important in moments of change.
Topi Manner, former CEO of Finnair, put it first:
The short answer would be that culture is all-important. Culture eats strategy for breakfast and when you go through a crisis like the one that we've had during the past 3 years, culture cannot be underlined enough.
Elisa Markula, CEO of VR Group, was blunter:
Strategy doesn't do anything. People do.
What leaders described next was a speed problem. Culture changes more slowly than the new strategies require. Carl Pettersson, CEO of Elo, has watched the gap from the top seat:
I have seen changes in our culture. Of course, from a CEO's point of view you would always want to see the change happening much faster than it does in reality.
Turbulent times have moved people
Businesses have been through major changes. Some were forced to resort to drastic measures, including laying off nearly their entire staff. Many have been operating with more haste, in a reactive mode, constantly putting out fires. Whole businesses have been on hold for undetermined periods of time; others have flourished.
Two opposite feelings surfaced in what leaders reported from their teams. People feel relief and are energised by the changes. People feel afraid and are exhausted by the changes.
Alexander Bargum, CEO of Algol, sees the second group in the board papers of several organisations:
When you look at employee surveys you see that people today are under more pressure, feel more stressed, more exhausted, and they are not sure if they can cope with it. This affects the company culture negatively unless you find some way of understanding why that is and what you can do about it.
We feel threatened by newness if we cannot find our place in it.
The challenge for leaders, the study argues, is to cultivate collective hope in response to fear, scarcity and enhanced individualism.
Strategic decisions are culture decisions
Every strategic decision carries a cultural consequence, whether anyone intends it or not. A market entry, an acquisition, a restructuring, a change of CEO: each asks people to give up a way of working that has been carrying them.
Leif Frilund, CEO of Walki Group, described the mechanism from the inside:
Culture is how your people take decisions when you are not there. You can't control it, but you can inspire it.
Mind the gap: what is and what could be
Most organisations in the study could name the culture they wanted. Far fewer had a way of getting there. When culture is no one's and everyone's responsibility, it is hard to nurture it in a systematic way.
The employee value proposition is where this becomes concrete. Offices are emptier and encounters between employees are fewer, which raises concern about a lack of innovation and quiet quitting, because remote work makes it harder for people to feel that they belong. Employees expect fast and diverse enough career paths within the same company to stay. Employers must dedicate resources to retraining employees to keep up with the demands of a competitive, rapidly evolving market.
Pekka Vauramo, CEO of Metso, warned against underestimating what a culture will do to protect itself:
All cultures, good or bad, ugly or beautiful, hostile or nice, will protect themselves.
Where companies need outside help
The top three areas where companies said they need external support are defining the culture strategy, developing emotional intelligence, and enhancing creativity and innovation.
Moments of change create opportunities
The study closes by turning the same findings around. For every change there is a challenge and an opportunity attached to it: attracting and retaining talent in a competitive market becomes the chance to promote your culture to the profiles that will thrive in it. The report maps how change, mindset and practices reinforce one another, and where a leadership team can put its weight inside that loop.
The study was written by Alexandra Monsi, Ia Adlercreutz and Laura Sokka. The full document, with the survey data, the limitations of the research and the references, is available as a PDF.