“Finns believe it’s acceptable to acquire wealth by car racing or by winning a lottery. But if someone owns a company and creates wealth with it, he or she is regarded as a predator – or at least as a shady character. Success as an owner, though, is gained through hard work, skill, dedication and – just as in ice hockey – a sprinkling of luck,” points out Marko Parkkinen, board professional, serial entrepreneur and CEO of solutions agency Seedi.
Many people remember a Finnish song about 20 families (Laulu 20 perheestä). The song holds that 20 rich Finnish families undeservedly wield economic power that rightly belongs to the people. Another prevalent view is that the rich are born with a silver spoon in their mouths and die holding a pot of gold, without lifting finger to make their wealth grow. Marko Parkkinen believes that up until recently similar opinions have distorted how Finns perceive ownership and owners. The latest setback occurred fairly recently.
“A study by professor Anu Kantola and university researcher Hanna Kuusela on the moralities of Finland’s wealthy elite has dented the social acceptability of ownership. The selfish and unpleasant aspects highlighted in the study do not equate with either my own understanding, nor with that of most owners in Finland. Luck is a surprisingly large factor in success, and having bad luck does not make a person incapable or lazy. On top of which, given a normal distribution of abilities, it’s obvious that nothing is the same for everyone,” he concludes.
Finland is full of owners
Parkkinen wonders about the bad reputation attached to ownership, bearing in mind that ownership has exceptionally long and robust roots in Finland. Farmers have generally owned the land they farm, and cooperatives were widespread. True, foreign magnates came from abroad to industrialise Finland. However, after World War II the broad shoulders of the state were needed for industrial ownership in order to meet the production targets required by war reparations.
“The state’s holdings in listed companies are, for historical reasons, exceptionally large in Finland, so you could say that each Finn is an owner of substance. In view of that, it’s strange that ownership is held in such low esteem. Entrepreneurship, conversely, wins approval – but not if it’s successful and produces wealth.”
A few years ago, solutions agency Seedi launched a Good Owner project aimed at enhancing the importance of ownership in society and improving understanding of the skill and work that ownership requires. Each year a prize is awarded to a good owner. Parkkinen believes that attitudes are beginning to shift in the right direction, but does not claim all the credit for it.
“There has been much discussion about this in the Boardman Network, for example. The good ideas of thinkers only start to spread when networkers adopt them and start to disseminate them. A majority of people then gradually endorse them,” he explains.
An owner’s role is often misunderstood
According to Parkkinen, the poor understanding of an owner’s role is most visible in Finnish social dialogue when the wrong people are readily condemned for fulfilling an owner’s rightful responsibilities.
“A pertinent example is the characterisation of Mikael Lilius, former President and CEO of Fortum, as greedy for receiving stock options widely regarded as unreasonable. A similar and more recent case is that of the furore over the salary received by Heikki Malinen, President and CEO of Posti Group Corporation.”
“An owner’s most important – and often most difficult – task is setting the company’s targets and the incentives for achieving them. To optimise management’s motivation, the bar should not be set too low nor too high. Sometimes the bar is not set at a defined point, but instead the CEO is made aware that the better the result the greater will be the reward. That principle works for owners themselves, but can be problematic if applied to executive management,” says Parkkinen.
Directly linking executive management’s bonus to the company’s performance can result in the pursuit of short-term profit rather than long-sighted investment. That can temporarily produce a good result, but it impacts negatively on the company’s development. Rapidly rising bonuses also fuel antagonism, as illustrated by the examples above.
Ownership faces increasing demands
Parkkinen feels that executive management’s role is given more importance in Finland than, for instance, in Sweden where the value and importance of ownership is better understood.
“If it’s felt that ownership does not involve actually doing something or possessing skills, the role and responsibility of operative management is overemphasised. Meanwhile, changing markets make ownership even more challenging. As markets globalise and more sophisticated translation services break down language barriers, Finnish companies are also able to genuinely compete in a market economy. These forces for change set new challenges for the development of companies and corporate ownership, and skilled owners will be needed to resolve those challenges,” he says.
Parkkinen believes that executive management is responsible for today, owners for tomorrow and the day after. Who other than owners could step up to solve our biggest problems – such as mitigating climate change? Owners are able to make decisions about investments that do not bring immediate returns. It is the responsibility of owners to define the level of a company’s risk-taking, and also how ethically companies behave.
“The time windows for seizing new opportunities are shorter than ever, so owners must meet constantly rising standards,” Parkkinen says.
Ownership skills can, he believes, also be mastered just like any others: by reading, gaining knowledge through verbal interaction, and by experimenting and learning through experience.
Photo: Junnu Lusa
Who he is: CEO of Seedi, a development and consultancy company. Parkkinen has also co-founded 23 other companies, including Verso Food Ltd (famous for HÄRKIS® products) and Woodly Ltd, manufacturer of wood-based transparent packaging. Has worked on the board of over 20 companies during the last two decades. Created and launched the ‘From Entrepreneur to Owner’ project (‘Yrittäjästä omistajaksi’) and many other socially beneficial programmes.
Education: MSc and BBA.
Earlier work experience: Started his career at Imatran Voima in marketing and as an in-house consultant, after which he was CEO of advertising agency Euro RSCG. Co-founded marketing agency Bob Helsinki, where he was CEO and then Board Chairman until the end of 2006.
Special: More interested in nature rambling then amassing possessions. Enjoys reading books and chopping wood at the cottage.