Swedish start-ups struggle to scale up
We are all witnessing the immense success of the Swedish start-up scene. Part of it is attributed to the country’s engineering heritage and digital literacy, while the rest is accredited to the Swedish culture of flat organizations and participative management styles. However, not many talk about the growth struggle of number of Swedish start-ups. There is a gap in investments forcing entrepreneurs to rely heavily on bootstrapping to address cost pressures and learn to go as far as possible with limited budgets.
According to Nordic Innovation’ Review, areas that are especially challenging are access to finance, in particular, venture capital at expansion stage, and skills in specific fields.
Outsourcing as a cost-effective strategy
I feel like a broken record when I mention once again that outsourcing can address both cost pressures and skill shortages if implemented correctly. Let’s face it; ooutsourcing is no longer the new kid on the street. You simply cannot ignore the fact that companies in this sector have accumulated knowledge and experience which can significantly drive cost savings, efficiency and performance up the ladder.
Even though Sweden has been pioneer at adopting new innovative ways of working (more inclusive and collaborative), they are lagging behind when it comes to outsourcing. Although 70% of Swedish companies outsource their accounting, majority use the services of a providers within Sweden.
Why? According to a paper from SSON, the Swedish consensus culture is the biggest hurdle to using outsourcing services, particularly in finance and accounting (F&A).
Consensus culture hampers change initiatives in Swedish companies
Consensus decision making is a creative and dynamic way of reaching agreement between all members of a group, committed to finding solutions that everyone supports, or accepts even when they do not fully agree with the decision.
While this type of management encourages innovativeness creating environment for sharing ideas, it can also hamper change processes. The consensus driven management style ensures for high quality input, greater commitment of involved parties, and higher follow-through rate. However, the process has also shown as counterproductive when there are people resistant to change and prioritizing minimizing conflict in contrast to critically appraising all alternatives.
The biggest hurdle occurs when a change initiative is put on the table for discussion. In consensus based groups there can be a resistance to change, with some people using the decision-making process to block new ideas and to maintain the status quo. According to a paper from the SSON this consensus based culture discourages the kind of mouldbreaking decision making that opens doors to new opportunities. An article published by Forbes even identified consensus as the team building’s silent killer.
How to deal with groups biased towards the status quo
Many people can feel intimidated by new people wanting to introduce new ways of doing things, especially when that involves restructuring of organization and the adoption of outsourcing services. It can be difficult to get employees to focus on the welfare of the company as opposed to their own (e.g. proposed layoff or requalification) or the welfare of the company over the welfare of their respective departments (e.g. proposed outsourcing of certain accounting tasks).
It can be hard to overcome this, but consensus should not be used as to stifle progress, especially in times when companies are facing increased global competitiveness and intense cost pressures.
The Consensus Handbook by Seeds for change Network proposes three successful ideas that have shown successful when the group is biased towards the status quo:
- A sub group could go ahead with a project without everyone being involved.
- A trial period for a new way of doing this, with built in review.
- Identify what it is that people are afraid of and find solutions.
To be honest, I find the first recommendation a bit risky, especially when adopting a change in processes reorganization. The following two strategies, however, have proven quite effective particularly when the decision concerns collaboration with external parties, such as in outsourcing. Both, the sub group and the trial period provide enough time and space for everyone to realize and understand the benefits of the change without feeling skeptical or threatened.
At Coordea we create partnerships with our Swedish clients and gradually provide them with talent from Macedonia for resources augmentation with long term goals and targets based on trust, rather than executing big complex outsourcing projects. We also provide dedicated teams via the Extended Office Model which work exclusively for the client providing them support in various services: accounting, logistics, graphic design, marketing and IT. With offices both in Stockholm, Sweden and Tetovo, Macedonia we have accumulate experience and country-specific knowledge which equips our team with better audit readiness.
You may think that your company is still not ready for such change initiative, but I still encourage you to reach out, let’s talk about the endless possibilities of how your business can grow in today’s collaborative business environment.
