Story 2: Tough times do not last, tough teams do

Reijo acquired his company recently and started a new career as an entrepreneur. The playground is set by the previous owners, and it seems that the other players (employees) follow the rules set by the previous owners. It is now time for Reijo to create new rules about how he wants people to play his game. Reijo is a true professional in his field and has practical knowledge about the business area. He has also started electrical studies to be able to bring more knowledge to the new company and to expand the potential for the current business.

However, leading a business is new to him, as he has previously been an employee. He has some experience in running teams at large corporations, but managing everything as an entrepreneur is new to him. When Reijo acquired the company, his target was to grow the business, and he had a clear vision of how he could expand into other cities and at the same time bring new solutions to the old-fashioned business. He is especially interested in scalable business models, although it seems that these are quite hard to apply in the current industry of his business. During his career at large corporations, he was not able to influence enough to achieve growth. As an entrepreneur, he has a clear vision that growth is a natural part of business as an entrepreneur. He connects the growth to wellbeing and success—if the firm is successful, the success will flow to employees. He thinks that companies have different lifecycles, and now is the time for his company to take a new leap and growth step.

Acquiring a company requires a huge amount of money and involves a risk. However, as they say, the risk is smaller than starting from scratch. Sometimes, Reijo thinks that it would have been much easier to start from scratch—an old dog cannot be taught new tricks. An

event from the previous week validated this saying. Reijo had tried to persuade one of the key employees to take more responsibility for the sales of a new product idea, which they had rejected, citing that sales was not an agreed part of their job description. Reijo was able to convince two other persons to undertake the work so he could focus more on activities that bring guaranteed money to the company. Reijo has decided to continue developing the idea further before announcing it to the employees. The first reaction from one of the key employees was a bit disappointing, and Reijo thinks that he has to prepare the idea further to get support from others. Reijo is a completely different person compared to the previous owner, and he thinks that he needs certain types of people around him and honest feedback from the employees to be a better leader. To achieve growth and look for new opportunities, the current team needs more experience and understanding about opportunities outside the company. Many of the employees have not worked in areas other than their current workplace, and Reijo thinks this might have contributed to their narrow mindsets about available opportunities. Given that there have been the same kind of people inside the organization, Reijo believes they need experience and knowledge outside their company to foster growth and develop new products and services. The most pressing question in his mind is whether the people are dedicated and interested in learning new things, or if the company needs to change personnel to go for the new business?

As an owner, Reijo thinks that the managing director should have the courage to improve the business, find new ideas, and execute them. If the managing director does not have a hunger for growth and new endeavors, then it might be time to change the director—even if the managing director is the sole owner of the company. Reijo says he continually let his employees know they should not fall in love with their current products and services, but rather, to adapt to the surrounding environment. He sometimes thinks he could have been in completely different businesses than he is today—the mind has to be very open when looking for different opportunities. Reijo thinks that they are working in an old-fashioned industry that does not have modern innovations in use, and they have to keep their eyes open and look for possibilities to improve the industry or at least be awake if new opportunities arise. Reijo shares that acquiring a company includes acquiring the heritage of previous owners, and he feels locked in to the heritage of the former owner. For Reijo, it is quite hard to identify which parts of the business should be cut out and where to focus since the business is quite complicated and cutting out some part of old business might close a door for a new business.

He has to adjust many things to the new position, including the change of previous ERP (enterprise resource planning) software to achieve efficiency of the current operations. They had a complicated ERP to execute current capabilities efficiently. Too many products, complicated tasks, and other unnecessary steps that slowed down task execution.

Reijo has tried to win the employees to his side by openly sharing his aspirations about the company and their current performance. Last month, the numbers have been in the red, and it is crucial for every employee to understand that the company has to focus on activities that bring in money and cut down on those that spend money. It has been quite hard to encourage a can-do attitude when there is no money to do the investments.

Reijo shares that it is sometimes frustrating to discuss with the employees who have indicated they have no time to think about ‘new fancy things’ because they have so many things to do in the current activities. In response, he has told the employees that rather than staying in a job with a low growth rate, it might be better if they all found new jobs elsewhere. There is no point in running a company that is not growing. Reijo thinks that many of the products they offer are outdated and should be immediately replaced. But how and where do they find enough time to optimize the product line and gross margins? He consistently tells his employees that even if the business has started with certain products and those represent a large portion of their current revenues, it is self-evident that they do not have to keep importing products that add no value. He has suggested a joint venture with some other company in rendering these products while focusing on new business areas.

Reijo has been watching his competitors, some of whom, at least, seem to be doing the right things. It seems that the previous owners of his company were not hungry enough to develop the business; they were happy with almost zero profit. For Reijo, it is not acceptable to run the business with thin margins. His target is to grow the company but focus on profitable business. A major challenge is the amount of work that has to be performed, and it seems that he is the key person to do this turnaround. The amount of work is not the only problem;

it seems that scheduling is not one of his strengths. He handles customer training, and serving current customers while reorganizing the company seems to be time-consuming.

As a new leader, Reijo has noticed that there are tensions related to the new entrepreneur,

and it seems that people are too much at the comfort zone. People are not innovating enough.

He, however, believes this is partly due to a lack of resources. He had once heard that a handful of employees shared some ideas about how they could develop the company and offerings, but the previous entrepreneurs were not very keen about investing in new ideas.

This has led to a situation where people are not open-minded enough or have the courage to present their new ideas. Reijo has been disappointed because he had quite a clear vision for the company when he stepped in. It has been challenging to execute his vision since people are not so keen about changing. He has discussed these tensions with his wife and how unbelievable the number of tensions is considering the firm’s size. The tensions are related to the old things, but new tensions surface as they try to execute current capabilities as efficiently as possible and find new business opportunities. Reijo has tried to manage these tensions by letting the employees participate in the strategic planning of the company. He has also arranged a monthly Q&A session to mainly discuss some key numbers of the previous month’s sales and profit/loss. Reijo thinks that as an open person, he expects others to be open to him. Reijo thinks that communication is the key to managing tensions. Also, the tone of discussion and the way in which things are communicated seem to be vital. Some people are very sensitive to the tone of the message, which can be wrongly conveyed. He is coming to accept that not all the employees can adapt to the new working culture that he is trying to implement, and he needs to focus more on management at a personal level.

Sometimes Reijo thinks that he should discuss more with other employees. They have been so supportive, but sometimes it feels a bit confusing to explain his ideas when they are not ready and organized in his head. When he has everything in place, then it is easier to elaborate with others and go for the target. He sometimes discusses the running of the company, employees, and other matters regarding business with his wife. It is vital to have this kind of person with whom you can share your thoughts, successes, and failures privately and confidentially. Otherwise, he likes to share his ideas with some close friends and an experienced businessperson he had met at one entrepreneurs’ association. This person has become a mentor to him, sharing knowledge and tips on how he can improve on human resource management.

The past few days have not been very motivating, but Reijo wants to show that he can grow the company to the next phase. This is not just for him, but also for his wife, past colleagues, and the employees. The current, quite tight situation of the bank account is limiting

opportunities, but perhaps growth and success can be found by geographical expansion.

4.3 Growth oriented entrepreneurs, ambidexterity, and tensions management in small