Norwegian management model

DenNorskeLedelsesmodellenHi everyone

During my years as a blogger I have written a number of blog posts about differences between India and Norway. I have written about difficulties for Norwegian companies to do business in India due to differences in culture and I have even written about differences in management styles in India and Norway.

For about a year now I have taken an executive management study in IT-management. Here management and different management models have been essential. Based on this I have started to ask myself if there exists any specific Norwegian model for management. And more important; can this Norwegian management model be a reason why Norwegian companies fail in India?

Some time back I came across a book called Den norske ledelsesmodellen (the Norwegian model of management). In this blog post I will give a quick review of this book. A discussion on how this model work in a country like India will come in a later blog post.

The book starts by asking if there exists any particular Norwegian management model or if management is universal. Based on research it seems quite clear that the Norwegian managers seems to be less strict, more involved, delegate more and act more as a coach than foreign managers. The Norwegian management model has evolved because it has shown to be a management model that works. Management the Norwegian way quite simply give results, both in Norway and abroad. The Norwegian management model is very much connected to the idea about the welfare state. The idea about equality has its roots far back in the history. Way back in 1739 elementary school was mandatory for everyone! This means that Norway was one of the very first countries where children from all societies should get some fundamental education. It is also important that the Norwegian farmers to a much higher degree than farmers in rest of Europe maintained their own land rather than to be connected to a landowner.

In Norway there has always been a huge degree of cooperation between the government, the employer and the employees.  The labor organizations have been strong and made sure that the workers have been able to “stand up against” the employers when needed. This also affects the way the Norwegian companies are organized and helps to break down the hierarchies in the organizations.

Some of the people interviewed in the book stress the importance about recruiting good people. A good manager is a person who achieves results by help of others. The most important is to build a team or an organization where people really work together.  It is also interesting to read about what is part of the management role. The importance of giving good feedback to the employees is being stressed. All people in an organization must be confident of their importance for the organization is something that one of the managers stresses. The more confidence a coworker feels the higher will the revenue and customer satisfaction be is being stressed. Research shows that management based by confidence also increases the morale for the coworkers.

It is interesting to observe the experiences that Norwegian managers have with international management styles. One person say: “It is more difficult to be a manager I Norway than in Sweden or Denmark. Norwegians don’t really believe in authorities, they ask questions and everybody have to be convinced. Not everybody do what they are being told either, even if they say OK”. Hierarchies are more dominant in other countries than in Norway. Even our neighbors Denmark have organizations with much higher hierarchies. One person says that the Norwegian management style will be inefficient in some other countries. In some cultures it is seen as a signal of lack of confidence if the boss starts to ask questions to their subordinates. One example from Romania shows this. The CEO of the Norwegian company visited one of their factories in Romania. There were some points in the presentation from the marketing manager that the CEO was uncertain about. He then asked the country manager about this during the lunch but got no answer. Suddenly the country manager disappeared from the lunch. When he came back he said: “Problem solved. I’ve fired him”.

The conclusion to this must be that the Norwegian management model is very much based on equality between the managers and the subordinates. Everyone will have a say and it is actually important for managers to have the confidence, or maybe I should say trust, of their subordinates.

Do you have any experiences with this? Any disagreements?

Talk to you soon

Karsten

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My learnings from seminar about opportunities in India for Norwegian companies

Hi everyone

It has been a while since I wrote about the seminar regarding opportunities in India for Norwegian companies. You will find my report here and a summary of the panel discussion here.

After the seminar I have spent quite some time reflecting about it. What did I actually learn there? Is India a success story for Norwegian companies? If not, what can be done different?

Like most other things in India, I don’t think it is any very simple conclusion to any of those questions. If we ask whether or not Norwegian companies presence in India is a failure or not, I’m quite sure that the answer will be fixed. It is no doubt that some Norwegian companies, like the Kongsberg Group, who spoke at the event, have been in the country for quite some time and also do quite well there now. Telenor is about to do well there now. They recently won a license in Myanmar. I can only guess, but it is probably not a wrong guess that their experience from India have helped them in getting this license and that it will also help them to operate well in that country. But I still feel that the presence of Norwegian companies in India in not at all that huge. If I remember, right, I was told that in Mumbai only, there are about 5000 French people! Haven’t counted the number of Norwegians, but I would guess hardly more than 20-30. And when I read Norwegian newspapers and listen to Norwegian business people, India is not really the country I notice the most.

Why is it like that? One reason I think, is that India has been named as a “difficult” country to do business in. It feels much easier for Norwegians to do business in markets that are closer to our home soil. The difficulties in India are probably, at least to some extent, true. But instead of saying it is difficult I would maybe say that it is different. Most of the speakers at the seminar mentioned the diversity of India, and that companies have to plan for long term in order to have success in India. This is something I really have to agree to. But I think it is more to it than that; in order to succeed in India you have really be prepared for the unexpected and to be able to take quick decisions. And I really wonder if that fits with the usual Norwegian model of management. If you look at the most successful Indian companies, or rather corporations, most of them are family owned.  The patriarch of the family is also the CEO of the company. And he (mostly a he) is the one who will make the final decision. I’m just not sure if Norwegian companies, where consensus management is quite important, manage to make decisions quick enough when some big shifts happen.

For many years I have been very interested in sailing and have followed a number of the around the world races. I read a book about the Norwegian challenge “Innovation Kværner”. The title of the book, written by the captain of the boat, was “Responsible for the irresponsible”. He wrote that when you sail a race around the world you just can’t prepare for everything that can happen. But what you can do is to prepare for how to handle unexpected situations. This is exactly the same as what I think is important if you want to do business in India.

Two other things I took back from the seminar is the Norwegian naivety and the importance of understanding the market or rather the culture you will be working in.

If we take the naivety first, I absolutely agree with those that say that Norwegians are naïve. We like to think that things are exactly the way they look. But this is very rarely the case. And maybe even more so in India than in many other places. It is absolutely possible to live in India and think that it is a heaven, with a driver, a maid, a couple of people cleaning your home, air-conditioned car and office and so on. But that is just the surface. As Dr. Amit Kapoor so brilliantly said it, India is much more than that.  And in order to succeed in India you really have to dive below that surface and to understand the country and the people there!

Any thought or suggestions?

Talk to you soon

Panel discussion at Indian Seminar

Hi everyone

Yesterday I wrote about the first part of a seminar regarding opportunities in India for Norwegian companies. That blog post triggered a number of comments, which I’m surely very happy about. Part of the fun in writing a blog is to get people to comment on what you write and to be part of a good discussion. Hopefully there will be even more comments on this post.

The panel discussion started off with an introduction to the business that Telenor and Kongsberg Group do in India. Both of these companies are quite large companies (at least large in a Norwegain scale) and they have both been in India for some time.

Hilde M. Tønne, EVP in Telenor Group gave us some very interesting insight into their operation in India. Even after having been there for a number of years she said that they are still in the middle of building up their business there. Right now Telenor are doing very good in India. They are in six telecom circles, which she described as being in the “growth region of the growth region”. However, Telenor had to learn about India the hard way. They anticipated that India would be very much like the rest of Asia, which was totally wrong! In order to get success in India they had to have a very clear message, which in case of Uninor, Telenors brand in India, is to be there for the masses. Telenor had to work extremely innovative to balance their cost structure with the aim to deliver to Indian working classes. When they started up in India, they considered India as one country and didn’t realize how diverse it actually is.

Pål Helsing from Kongsberg Group said that they had a quite different approach when they entered India. But they have been there for a much longer period than Telenor (more than 30 years). Kongsberg Group already had their IT-infrastructure in place when they entered India, so they didn’t had to do the same investments as Telenor had to do. The biggest challenge for them initially was communication he said. In order to cope with that they had Indian colleagues working in Norway for quite some time. This helped very much in filling the communication gap. One challenge in doing this is that these people became very attractive when they went back to India and that a high degree of turnover had to be expected. This fits very well with my experience from the IT-business. You have to have a plan to overcome the communication challenge and you also have to have a plan for how to cope with retention.

Both the companies stressed the importance of having local management in India. Being global, acting local is a statement that Kongsberg Group uses. They also both said that their companies are so large that they can cope with the situation of high turnover. This will not be the case for smaller Norwegian companies. Here it would have been very interesting to hear what smaller companies like Devant have done to succeed in India. These companies will probably have to have a quite different strategy than the large companies have.

The panel discussion was rounded off by Torgeir Reve asking all the participants about what are the biggest pitfalls for Norwegian companies in India. Harald Nævdal was quick to state that the Norwegian culture is naïve and that this will easily be a huge threat. It is important to have some basic understanding of the culture you are working in. The representatives from both Telenor and Kongsberg Group stressed that it is important to be patient and professional when you work in a company like India. Anthony D’Costa mentioned the fact that Norway is not part of EU as an issue. Norway is being considered as a small country and will not be the one that is most interesting for India to deal with. Amit Kapoor also mentioned that companies have to be there for a long term and also to understand the diversity of the country. Where in India you decide to establish actually depends on what kind of business you are in and your strategy for the country.

I had planned to finish this blog post with some concluding words. But it has already been quite long, so I will create a different post with my reactions from this seminar.

Talk to you soon

Karsten

Report from event regarding opportunities for Norwegian companies in India (part 1)

Hi everyone

As I wrote in a previous blog post, last Thursday I was at a seminar about opportunities for Norwegian companies in India. This seminar was indeed very exciting and it is even clearer to me now than before that Norwegian companies still have a lot to do in terms of taking their opportunities in India.

The seminar was opened by Professor Torgeir Reve from Norwegian Business School. He said that India do have an important role as a change maker in the global economy. Until now China has been known for manufacturing while India has been known for its service industry. Will this change?

The next speaker, secretary of the Ministry of Trade and Industry, Jeanette Moen started by mentioning chess, and the upcoming world cup match between Magnus Carlsen and Vishy Anand. This she said, is one of a very few examples where India and Norway actually compete. Except from that, the relationship between the countries is more based of collaboration. The Norwegian government launched their India strategy back in 2009 and from 2002 to 2012 the trade between the two countries has quadrupled!

After this introduction by the two Norwegian speakers the scene was handed over to two Indian experts in this area. First Anthony D’Costa Professor at Copenhagen Business School talked about drivers, trends and sectors in the Indian economy. He talked about the evolution that has happened in India since its first economic reforms back in the 1970’s. Foreign investment to the country has been tripled from 2005/06 – 2009/10. He also talked about the enormous talent pool that India have and that the service sector stands for about 1/3 of the export today. But he also pointed at some challenges for India:

–          Import of oil is enormous.  In order for India to continue to be competitive they have to think about alternative energy. It is too costly to import that much

–          Most people in India is still employed in what he call the informal sector, which means that the work is not organized at all and that there is no security for the workers at all. 52 % of the workforce in India today is still at the agriculture sector

–          Purchasing power is only at a very few hands

–          India is ranked extremely low (number 134) in human development

Amit Kapoor

He was followed by Dr. Amit Kapoor from the Management Development Institute in India. This guy was an absolutely firework at the stage! He used a lot of irony in his speech which leads to some other blogger writing a quite negative story about his presentation. To me his was just brilliant! He started off by saying that only 5 million people in India work in the IT-sector and that this hardly brings anything good to the country, but only to the few people who work in this sector and get their money from there. He also said that 95% of the population doesn’t know English, so that the idea of India being a country with a lot of English speakers is, well, bluntly, bollocks! Further on he said that Indians doesn’t make any innovation, they always try to take short-cuts.

But he also had some very interesting ideas about what are the biggest opportunities for companies that want to succeed in India. The biggest opportunity he said is the healthcare. Today India has a very rapidly growing number of people in their 40’s or 50’s that have good income and then a good fortune. They will be able to and willing to pay a considerable high amount for people taking care of their health when they get older. But as he stressed, it has to happen “the Indian way”. Huge hospitals are nice and fine, but the main problem with healthcare is not the doctors at the hospitals. The problem is the infrastructure. If you get a heart attack in an Indian metro you will probably die before you get to the hospital. He suggested that instead of building only big fancy hospitals there is a need to build smaller hospitals at the streets. Hospitals that people can actually reach quickly. This was one example of how your business plan has to be adjusted to the Indian market. Another example is the cigarette industry. For the many poor people in the country, buying a pack of cigarettes is a too big investment. It is then quite common to see small cigarette shops at the streets where people sell single cigarettes! Another example of the same is Unilever, a company that understood that they had to go away from their “selling in bulk” strategy and sell their items in small quantities. This was the only way to get success at the Indian countryside.

Dr. Kapoor also stressed the importance of not looking at India as one market. Your business strategy will have to be very different if your main market is the metro of Mumbai or if it is the rural area of Bihar. But, as he said, don’t try to promote your product as cheap! Tata Nano is an example of a product that failed because it was promoted as cheap. Indians are proud. Even the strugglers in Bombay will not accept to buy anything that is cheap. But if they can buy something that give good value for money, they will surely be more interested…

The first part of the seminar was nicely wrapped up by Harald Nævdal from Innovation Norway. He asked on important question: “Can Norwegian companies actually afford not to have an India strategy?” At the same time he stressed the fact that a successful entry into the Indian market will take time. Don’t expect to get success rapidly and immediately. But you have to start your planning now!

The seminar concluded with a panel discussion regarding how Norwegian companies can join the economic growth in India. Hilde M. Tønne from Telenor and Pål Helsing from Kongsberg Oil and Gas Technologies both have long experience from operating in India. I will write more about that second part in tomorrow’s blog post.

Any thought or suggestions?

Talk to you soon

Karsten

Innovation Norway India event

Hi everyone

Just a very quick one today.

event hosts

This Thursday Innovation Norway will host an event about opportunities for Norwegian companies in India. The event is hosted by Norwegian Ministry of Trade and Industry, Innovation Norway and the Norwegian Business School.

Speakers at the event will be a mix of people from the academia, the event organizers and also from executives from Norwegian companies operating in India. After having worked for more than two years in India myself I do think that events like this is extremely important. India is still a quite unknown country for many Norwegian companies and the opportunities are many. But in order to succeed here you need to know a lot about the country and the culture there. An event like this is a perfect opportunity to learn from others who are in the same situation.

You can find the full program here.

I will try to conduct some kind of a live blog from the event and hopefully also to get some good pictures.

Talk to you soon

Karsten

Cricket and corruption

Hi Everybody

It has been a while since I last wrote a blog post. I know, I know. Excuses can be many, but I’m not sure if they are really relevant, are they? One thing I can say is that I have watched cricket lately. You might read my predictions before IPL started? Quite correctly I predicted that Chennai Super Kings would make it to the final. I also expected Pune to be in the bottom of the table. My questions about whether or not there were too many strong voices in the Mumbai team must have been observed very carefully by the management there. How else could they manage the “clever” move of benching their captain and most expensive player? Thanks a lot for listening to me!

But. This time IPL was much more about the controversies that surrounded it than the game itself. Some time back I wrote about the 4 C’s of India. As you might remember from that article, I said that cricket and cash are two of the C’s. But there actually seems to be some kind of formula here. If you add Cricket + Cash you actually get Corruption…

Sreesanth

Exactly where it started is difficult to say. Maybe with the arrest of three players from Rajasthan Royals? They were immediately accused with spot fixing, which means that they have played unfair and not always done their very best. Interestingly enough, I haven’t been able to find any stories that says specifically what they have been charged for doing. But that’s maybe just part of the game?

But it all became worse, much more badly. Gurunath Meiyappan, who was at that time the CEO of Chennai Super Kings also got arrested. He was accused of having been in touch with a former Bollywood struggler who again has been in contact with some bookies. And to make it worse, this Bollywood struggler has in a number of matches been seen seated next to the wife of Indians captain, MS Dhoni. The same mister Dhoni who refused to talk about corruption on duty for the Indian national team lately.

And the story doesn’t even stop there! Mr Meiyappan is actually the son in law of a certain N Srinivasan, who is the owner of CSK and also the head of the Board of Cricket Council India! In other words, he’s maybe the most powerful man in cricket India. He’s also the CEO of the company India Cement, which is the main sponsor of CSK and the company in which Dhoni just got appointed as vice president! What he’s going to do in that company is highly unclear. Connections you might ask? For sure!

What is this all about? Money! The highly regarded magazine India Today have run a number of stories of this. In their cover page story at their last issue they suggested that mister Srinivasan is the spider in the middle of a very strong network. Some of my colleagues suggest that there are some even more powerful people who are those who really run the whole thing and that even Srinivasan is just one piece of it. More of that in a later blog post!

Talk to you soon!

Chess and politics

Hi Everyone

So far this blog has been without any posts about chess (I think). As I’m more than average interested in sport there has been a number of posts about cricket, football, sailing and even one about roller skiing. But now I think it is about time to even write about chess.

Norway and India doesn’t really have any huge rivalry in sports. It has been Norway against Sweden in cross country skiing and India against Pakistan in cricket. But this will change now! In November this year young Norwegian Magnus Carlsen currently ranked as number 1 in the world will play against Indian Viswanathan (Vishy) Anand in a world championship match in November! The match will take place in Chennai in India. This is of course not without controversies. Anand is actually from Tamil Nadu so playing in Chennai will be very much on his home ground.

carlsenanand

Management team of Magnus Carlsen has criticized the selection of Chennai. Surely I can understand this. Chennai is hot. The food is different. He will be travelling to the other side of the world and so on. But why not look at the opportunities this brings instead of just looking at the challenges?

A match like this will surely get a lot of media attention (not only on this blog). Norwegian television and newspapers has already started to write about this match and more will surely come! Norwegian trade with India is increasing. In fact Norwegian Business Association (India) was launched as late as January this year. Establishment of such an association will surely affect the already increasing collaboration between India and Norway. The Norwegian government launched what they call the Indian strategy a few years back. This was done based on the fact that there is more and more business between Norway and India.

As you probably know, sport and business very much goes hand in hand in India. Just read my post about the 4 C’s of India for an update on this. I really hope that Norwegian officials and business take the opportunity that this match creates to show their presence in India and even uses it as an opportunity to build on more business in the country. Maybe chess and collaboration can be two new C’s when it comes to the relationship between Norway and India?

Talk to you soon

Karsten