Triple the government support for Swedish companies — and require transformed business models
This is an English translation of an article originally published in Swedish in Resume 14 April 2020. It is co-authored by Mathias…
This is an English translation of an article originally published in Swedish in Resume 14 April 2020. It is co-authored by Mathias Eriksson, Amy C. Edmondson, and Katarina Graffman.
Will the Corona crisis make Swedish business more dynamic and powerful? It is a real possibility, yet it would require the Confederation of Swedish Enterprise, business leaders, and the Swedish government to come together and help companies implement a massive transformation into sustainable business models. Jan-Olov Jacke, Director General at the Confederation of Swedish Enterprise, argued recently that the government should triple the financial support for Sweden’s companies, he is right, but the business sector should also be required to become truly sustainable in the process.
Right now we are going through a crisis few of us have experienced before. Several companies and entire industries see their revenues go down to near zero. People in our vicinity, entrepreneurs and leaders in different positions in business, describe a slaughter. However, no matter how bad a crisis is, it can also open up a window of opportunity. There is such a window, in the midst of the chaos, to identify new value for companies to create and capture. Organisations can take this chance to improve seeing the world from the customer’s perspective, to get climate neutral, digitise and automate, increase internal transparency, or implement other comprehensive but desired changes.
When the Corona crisis hit Sweden for real in early March, the outdoor company Icebug worked with a major transformation. The company had just identified a desirable shift: put e-commerce first, more specifically its own e-commerce in a project to make its business model more financially sustainable. When the crisis strikes, everything changes very quickly. Orders from distributors, stores and agents are canceled. Shipments to distributors and retailers are returned. The company is preparing for six months with little to no revenue. Meanwhile, sales in e-commerce shows an uptick. In the midst of a fiery crisis, the management chooses to change gears in the ongoing transformation project, from powerpoint and theory to practical implementation of change. In real-time, the business and the team’s work are being reshaped. The mission: digitise, generate new revenue, and help retailers find new revenue. Business development at a supersonic speed. The team and the culture steps up to the challenge and respond. Automation, digitisation and a great deal of new processes and transparency create a more financially sustainable business model.
For organisations and smaller groups, the cultural impact of the crisis can be powerful. The corona crisis may constitute the leverage point that overturns development to a certain extent when most of the sudden seems to fall freely. Utilising this leverage point and steering towards more ecologically sustainable business models is a huge opportunity for Swedish companies. However, from a consumer-cultural perspective, the world will probably not be substantially altered by this crisis. The majority will go back to — perhaps even catch up — the everyday consumption that is normal. This means that the time to start a change to a sustainable business model is now. The risk is otherwise that everything will return to business as usual and the chance of an ecologically transformed business life is lost.
Crucial to performance in extreme circumstances is the ability to create psychological safety in the working group, according to Amy Edmondson’s research from Harvard Business School. The forced distance work that is going on in Sweden and in the world may well mean that we develop a higher degree of socially sustainable working life, that is, if we as a society capture these new experiences as the crisis unfolds.
Distributed work is making us realise we have to be more deliberate and transparent. Because we can’t simply overhear what’s happening in the next cubicle, we now must work a little harder to share what we’re thinking, to ask questions, to raise concerns. We may be able to import this new sense of deliberateness back into our workplaces when we do go back to them — which will foster psychological safety (an environment where candor is welcome). A pandemic is an acutely stressful way to learn new behaviours, but perhaps we can gain some appreciation for what being direct and explicit and mindful looks like in our work relationships.
Groups are resilient — but to different degrees. As a leader you are an essential guide through this uncertainty to maintain and create psychological safety. Doing this successfully can have a big impact. The research from Harvard Business School shows that teams that have a high degree of psychological safety perform better compared to teams of individuals who are individually more high-performing but lacking psychological safety. This type of transformation creates a socially sustainable work situation.
The Confederation of Swedish Enterprise is right that support for Swedish companies should be tripled. We believe that increased support should also be made conditional on the companies accepting to perform a transformation to economically, ecologically, and socially sustainable business models. Then Swedish businesses would get the support they need and in return, Sweden’s taxpayers will have a stronger and more sustainable business life on the other side of the crisis.
We suggest that the support system — the local Chambers of Commerce, Företagarna, and the Confederation of Swedish Enterprise — should design and quality assure a transformation programme for Swedish companies where the world’s best experts contribute with a restructuring programme financed by the government. The programme should be designed to help, here and now, while ensuring that more sustainable business models are developed. This model would be returning significantly better results and outcomes for Swedish tax payers than Ulla Andersson and Jonas Sjöstedt’s proposal for the nationalisation of private Swedish business (DN 7 April).
Teams and leaders who develop and maintain psychological safety in a difficult time, who challenge cultural issues and take the opportunity to develop sustainable business models under extreme conditions will be the success stories of the future. The responsibility rests heavily on the enterprise organisations and on the government to ensure that this happens. Triple the state aid to Swedish companies but don’t be undemanding. Condition the financial aid with a mandatory transformation of business models.
Not a single company with the potential for a sustainable business model should fail in this crisis.
About the authors:
Amy C. Edmondson is a professor at Harvard Business School and is considered one of the world’s foremost thinkers and has been on the Thinkers 50 list since 2011. Her Ted talk on teaming in crisis has been watched by one and a half million viewers. Next year (2021) her amazing book The Fearless Organisation comes in a Swedish translation.
Katarina Graffman is a Doctor of Cultural Anthropology at Uppsala University, an expert on collective consumer behavior and sustainability. In April, her new book On Searching for the time to come. Bubbles, shame and other phenomena.
Mathias Eriksson is an entrepreneur and internationally award-winning advertising creative who has spent the last three years as growth manager at an AI company. He is currently taking his bachelor’s degree in anthropology and helping companies transform organisations for massive growth by borrowing methodology from fast-growing startups.