Nordic countries feature on the top of the UN's World Happiness Report. And their balanced, egalitarian approach to life seeps into their negotiating techniques, with similarly positive results, finds Rebecca Ellinor Tyler
It is often said that change results from evolution or revolution; incremental or transformational change. In the case of Sweden, which together with much of the Nordic region is famed for its egalitarian approach, this desire to create balance and achieve fairness heralds from a turbulent moment in the country’s history.
A month-long general strike in 1909 by more than 300,000 workers was the first major clash between the Trade Union Confederation and the Employers’ Association. It was lose-lose on both sides. The action caused a SEK25m (£2m) dent in the economy, resulted in thousands of workers being laid off and masses of members deserting the union.
The failure of this protest paved the way to a now famous pact (in Sweden at least) that still stands. The Saltsjöbaden Agreement helped define modern-day Sweden and permeates much of its culture, including the way companies conduct their business.
“It is probably the most well-known event regarding how deal-making in the Nordic countries came about,” says Ulf Andreasson, a senior policy adviser at the Nordic Council of Ministers. “Similar agreements are in place in the other countries, but to my knowledge, their ‘birth’ wasn’t as dramatic.”
It cemented the social norm that unions and employers reach agreements without government interference. These arrangements are about achieving balance – not who can get the most from the other. And the Nordics is now a region where a free market economy, collective bargaining and above-average minimum wages have helped furnish high living standards.
“If a union leader in the Nordics came out of the negotiating room and told members they had achieved half their wishes, people would consider that a good result,” adds Andreasson.
The Swedes even have a word for it. ‘Lagom’ means ‘just the right amount’ and is about appropriateness, not perfection.
When it comes to the workplace, professor Helge Hvid says each side seeks a win-win and trusts each other to a greater degree than is common in the Anglo-Saxon model. The approach is to challenge, critique and raise conflicts with a collective voice in a way that respects both sides – and it is present throughout business and society.
Pernille Hippe Brun’s recent book On the Move: Lessons for the Future from Nordic Leaders, includes interviews with 58 business heads from Denmark, Finland, Iceland, Sweden and Norway, who now live and work in other parts of the globe. In it, she distils the typical Nordic leadership style into six traits: being nurturing, open, responsive, direct, inclusive and committed. “We may be a small region with only 27 million inhabitants, but even though we come from small countries we know how to build really great businesses ready to do good in the world.”
Procurement heads agree the typical approach is to be open, with geography and nation-size influencing this.
Ken Friis is CPO at Danish chemical processing, hydroprocessing and emissions management company Haldor Topsøe. He says while each deal depends upon competition and market opportunities, it is part of the social construct for those from smaller countries to work outside their borders to achieve results where the negotiating partners feel they all win – and it can form the start of a trusting and ongoing relationship.
Martin Austermann, CPO at Swedish manufacturer of outdoor power products Husqvarna Group, says that while you might flex your style depending upon where you do business and your place and power in the market, the culture – especially in Sweden – is generally consensus-driven. “It is respectful, about finding common solutions where everyone sees the benefits. You could say win-win is the principal target; it’s not typical to have a winner or loser.”
Austermann has lived and worked in a few countries. He is currently based in Germany, heading up a 200-strong team comprising professionals from around 25 different nationalities who are spread across the globe. He says the Scandi style is typically transparent and solutions-orientated. “If you’re too one-sided you can miss some common opportunities. The Swedes go for more open discussion, see how it develops and weigh up the pros and cons. They find good, creative solutions, and take a bigger perspective of the business.” The disadvantage, he adds, is that it can sometimes take longer this way and eventually time runs out.
Annamaria Norrlin-Roberts, CPO at Finnish-based media company Sanoma, agrees the Nordic approach is more “discussive” and open to other party’s ideas and concerns. “This does not mean we would want to give up on requirements or our business case. The Nordic style is also looking for longer-term solutions and deals rather than opening the deal immediately for reductions and negotiations.”
Agreements are valued and committed to, she says, with the expectation the other party will do the same. Having participated in several mergers and acquisitions, and witnessing agreements and prices from the same suppliers to differents parts or locations of a large company, she says that there was often a price buffer included for other geographical areas, “ready for further negotiations that the suppliers expected to follow post signature”. Because of an expected fair, open and honest approach from the Nordic negotiators, this wasn’t included, resulting in better prices offered in the Nordics at the beginning of the contract.
Suppliers, like buyers, she says are cognisant to different cultures and approaches and flex their style to suit.
“I am a practitioner of the win-win approach,” she adds. “It is the basis of a healthy business relationship with suppliers and it builds trust. Those suppliers will be there for you when the times are hard.”
In a recent paper on Nordic leadership style, Andreasson, together with Mikael Lundqvist, says that businesses take a different view to large parts of the world about their wider responsibilities. “Companies have a closer and more symbiotic relationship to the surrounding society than their American counterparts,” it says. “The company’s responsibility can be described in different ways, but a common thread is maintaining good relationships with stakeholders.”
Some stakeholders, the paper says, have a strong influence, and can be crucial to the company’s survival – such as employees, customers and suppliers; while others have a more general influence such as the media, authorities, trade unions and local residents. “For Nordic companies, it is important to create trusting relationships with stakeholders. If these relationships deteriorate or are weakened, continued development of the company is compromised.”
Every negotiation features variable factors – in the case of procurement this includes the company’s market position, the strength of the supply base and the personality of those involved as well as their nationality, culture and background. But working towards a common end and being open to how that is achieved is a common thread. In some cases, it just may take a little longer.