Interim Leaders – The Best of Both Worlds

I have discovered one of the best ways to help companies grow and overcome tricky situations. It is by using an interim leader; an experienced freelance leader, who works in an operational role within the organization for a period of time or part-time. This is quite different from being either an employee or a consultant, although it combines the best of both worlds. An interim leader is objective, like a consultant. She needs to provide external views, alternative paths, and novel solutions. Simultaneously, she needs to understand the company dynamics, culture, and employee commitment. Her coworkers generally consider her as one of their own. She is often presented like an employee externally and she has authority to make decisions. This assures her a strong buy-in.

Often an interim leader works as a Chief Financial Officer, Chief Strategy Officer, Chief Digital Officer, Chief Technology Officer or as a Program Manager for a demanding transformation program. I have myself done a interim Commercial Director, Executive Director and Relationship Management cases, but those are a bit more uncommon in the Nordics. Chief Growth Officers have become trendy, and the role is perfect for an interim leader as no company should have a full-time, permanent growth officer.

Interim leaders are often used to solve situations, that require excellent implementation in the organization or a coach for leaders and teams. A consultant can effectively support in creating a strategy, a sales process or an operating model. An interim leader will do that too and will stay onboard to assure it also gets implemented and adjusts when needed. Although the best consultants can offer this kind of a service as well, my experience is that the success rate is greater with interim management. Consultants hardly ever have experience in working inhouse and they are trained to work in different ways. Therefore, I believe that in order to succeed as an interim leader, you benefit for having experience both as a consultant and as an employed leader.

Another reason for the high level of success is that interim leaders are often “overqualified” for the job. You might not be able to hire them but can benefit for their expertise for a period of time. Surely various executive advisors can help as well, but instead of whispering great wisdom, an interim leader rolls up her sleeves and gets the job done with the same level of wisdom. An interim leader also understands to leave when the customer organization manages on their own. She does not have an interest or incentive to overstay her welcome, nor to take part in organizational games.

It is worth mentioning, that interim leaders are not suitable for certain tasks, which require a full arms-length approach like auditing, due diligence or assurance services. Sometimes it is also better to use an external professional to evaluate serious conflicts within an organization.

So why are interim leaders still quite rare? Well, they actually are used a lot in Central Europe and the US, they are just not extremely visible. Freelancers are common in creative industries and a long-term external project manager is not far from an interim leader either. I believe that we will see more interim roles as the nature of work has changed and is continuously changing.

Working as an interim leader is also extremely rewarding as you too get to experience the best of both worlds, with various customers and situations.

If you got interested or are looking for an interim leader for Strategy, Growth or Transformational roles, let’s talk!

Business Potential Arising From Sustainability?

I recently did a Market Study on The EU Taxonomy together with Marko Seppänen from The Tampere University and Ilkka Lähteenmäki from The Aalto University. Our aim was to create a real market study, the kind that indicates credible monetary value to the various businesses and scenarios emerging from the new regulation. Well, it turned out that it was not feasible to do that just yet as there was a bigger need to create a simple storyline indicating possible scenarios and implications beyond reporting and compliance. Everyone we talked with had a differing view of what business opportunities might be ahead of us, if any. Hence writing a story became a good way to initiate more valuable conversations.

Now our work has become the second most downloaded paper at SSNR (a great research paper site) in it’s category of International Institutions. Apparently, there is a tangible need for simple, helicopter view stories about sustainability, ESG and all the related stuff as people are struggling to understand their new obligations and are quite lost in contradicting details. Hence it is hard to think about new business opportunities or how to make business decisions with positive impact. Afterall, The EU Taxonomy or any other sustainability related regulation does not exist for companies to be busier reporting things. They exist so that our planet would continue to exist, and for all of us to adopt new ways to act as individuals, corporations, investors and states.

You can read our research paper here. In this blog I give you a short version, which I hope continues to initiate meaningful conversations. And that is why I have included our ever so vague monetary estimation of the arising business potential. So let's talk, this is the most important task we all have regardless of industry, role or location. Challenge us!

Sustainability, ESG, The EU Taxonomy in a Nutshell

Environmental, social, and corporate governance (ESG) policies and frameworks are generally called sustainability. These frameworks are used for identifying, assessing, and addressing organizational objectives and activities ranging from the company’s carbon footprint and commitment to sustainability, to its workplace culture and overall approach to risks and operations.

At the global level, the United Nations Sustainable Development Goals and the Paris Agreement set the general sustainability agenda as well as the more specific climate agenda. Additionally, Europe has an ambition to become the first carbon neutral continent. The EU has created a European sustainable development program, The Green Deal, to promote this goal. An integral part of it is The EU Taxonomy, which is a classification system for determining whether an economic activity can be considered environmentally sustainable. It offers companies a standard that can be used to develop business activities towards more sustainable targets like lowering carbon emissions. The EU Taxonomy is backed with mandatory, public reporting.

The purpose of the EU Taxonomy is to decrease green washing and to increase transparency of activities, investment targets and direct funding to sustainable business. This is considered an effective way to drive and force activities supporting environmental objectives. Therefore, financial institutions have been given an active role and responsibility to evaluate or accept sustainability reports as a mandatory part of their funding decisions. The EU Taxonomy also creates a trustworthy basis for sustainable financial investments. This combination assures that non-sustainable activities will not be funded or invested in the near future and sustainable activities will have a funding cost and structure based on their level of sustainability.

The EU taxonomy already applies to large companies (public companies with 500+ employees) and the financial sector. The assessment and reporting of business compliance with the EU taxonomy has been mandatory for them since January 2022. The next step is expected to take force in 2024 when also small and medium-sized companies (250+ employees) will join the EU taxonomy reporting. Later, the reporting will be mandatory for all companies and potentially also households. It is expected to become a global benchmark, but it needs to be acknowledged that there are other classification systems alive as well.

With the help of the EU Taxonomy, a company's economic activities or operations are evaluated through six environmental goals. The company's actions must not harm any of the environmental goals, and in addition, certain minimum protective measures must be met. The six goals are: 1. climate change mitigation, 2. climate change adaptation, 3. sustainable use of water and marine resources, 4. transition to circular economy, waste prevention and recycling, 5. pollution prevention and control, and 6. protection of heathy ecosystems.

Business Opportunities and Some Conclusions

Without digging into the potential scenarios presented in the research, it is clear that we are at the brink of a major systemic shift. This shift is necessary for saving our planet, and it brings a massive number of opportunities for business innovation. Even in the short term, assuming a 10% increase in market size, the combined global market potential for enterprise software and AI could be 75 billion EUR. For consulting and compliance related businesses the potential could be 11,5 billion EUR. Both are mainly to support companies to do what they need to do today due to The EU Taxonomy: regulatory reporting, data creation, capturing and validation, compliance, analytics, management systems and data platforms, process automation and just getting the infrastructure in place or making it cater for the Green Deal. No major new innovation yet, but an essential base giving companies understanding of their impact.    

The EU Taxonomy as a part of the European Green Deal and ESG at large are presenting both a carrot and a stick for people and companies to move towards sustainable activities. Regulatory reporting and decreasing funding are a strong push. Assuring financing for green and transitional activities are a fantastic way to incentivize companies to do the right thing. Simultaneously sustainability has become a major global consumer trend increasing demand and brand value of companies hearing the call. The business potential for innovation is almost unimaginable. Some of the products and services we use today needs to be replaced. New solutions fighting the climate change needs to be invented in every industry. There are only glimpses of the new normal visible today. Hence assuming a modest 13,5 billion EUR business potential leads us to a 100 billion euro business opportunity for sustainability. And we are perfectly aware, that this is a ridiculous number, but it is also safe to say that the business potential is enormous.

Unrealistic wishful thinking, oh YES. The EU Taxonomy does not get implemented in a vacuum; there are several contradicting forces taking place simultaneously. Some strengthening the movement, others slowing it down. The main hurdle might be the current corporate strategies and hunt for quarterly earnings as sustainable options are likely to be less profitable in the short term. This can slow down transformational innovation, which in turn is necessary for long term impact. Today sustainability is also often considered only as a compliance topic or an investment gimmick. As long as The EU Taxonomy is seen as a regulatory reporting task, its goals or market potential will not materialize. Systemic shifts also require a mindset shift, which is often harder than the technical changes. 

The most important enabling element for The EU Taxonomy and the Green Deal is data. And everything around data: creating, verifying, distributing, sharing, analyzing, reporting, and hopefully also understanding and acting based on the insights it provides. Data is essential in changing the attitude and helping us all make better choices. My great hope is that companies would come together around open, shared data, which would support them all in running their business in new ways. This data need is so massive that nobody can sufficiently act on it alone. Therefore, this is a call for cooperation, even those who are driven by profit alone, should see the opportunity!

Are Strategies A Waste of Time?

I have recently met several executives who firmly state that they do not need strategies anymore. “The world has become so unpredictable that it is impossible to plan ahead. Strategy work takes focus away from running the business. We do Agile now and teams decide what they will develop.” Although I understand the challenges, I cannot be the only one who thinks these demonstrate the definition of an oxymoron.

It is true that the world has become more unpredictable, and it probably continues to do so. There is even an acronym for it, VUCA. It was introduced in the late 80’s to describe the volatility, uncertainty, complexity and ambiguity of conditions and situation. VUCA was originally a military term highlighting the importance of predictive intelligence and strategic planning. Without a purpose, people and organizations easily just react to external events.

Strategy work should be fun, inspiring, practical and help organizations and teams to focus. A strategy done well guides everyday work even in surprising situations, attracts talent and enables companies to embrace fundamental shifts like sustainability and circular economy. Adding speed, flexibility or experimentation are all strategic choices for a business. So how to turn strategies from stiff five year plans suitable for today?

First, customers and deep understanding of their needs must be in the core of any business. The antique strategies were internally driven; contemporary strategies are customer driven. A strategy must be built around understanding the competitive advantage a company delivers to it’s selected customers in selected markets. If your plan is to sell everything to everyone everywhere, your success depends on luck, monopoly or extreme power. The importance of customer experience is beautifully highlighted in a recently published book “B2B success breeds from customer experience / B2B menestys syntyy asiakaskokemuksesta”, (available only in Finnish so far, sorry). This book gives practical advice on how to find the essential customer understanding. A must read for this summer!

Secondly, contemporary strategies are dynamic, agile some say. Strategy work has become more a continuous process involving many levels in an organization rather than an annual board exercise. Legally boards do approve corporate strategies in many jurisdictions, and they are responsible for certain M&A activities on behalf of the shareholders. But intelligent boards understand that the process of creating a strategy is just as important as the outcome. Involving people and even customers in strategy work can be rewarding bringing more insights, opportunities, and an honest view to capabilities. It also secures commitment and alignment.

Thirdly, strategies need structure to assure they are actionable instead of daydreams or severe misuse of PowerPoint. Monitor Deloitte created a famous model called the Cascade of Choices, which is suitable for corporate strategies, business area strategies and even product strategies. I have used this model a lot and although it is an Oldie, it is a Goldie. During this spring I have come across a dynamic strategy framework called StratOps created by Taival. This model borrows from DevOps thinking enabling continuous, future-focused, and ecosystem centric strategies. This model resonates with me in every possible way, including the slight irony in naming… Apeiroga has partnered with Taival and I am really excited to start working with these talented strategy and Circular Economy professionals in August.

Rather essential elements for any successful business, and more relevant now than ever before. Definitely not a waste of time.

Sustainability – The Biggest Disruption of All!

Every year, Euromonitor International identifies top 10 consumer trends that are expected to gain traction in the year ahead. These trends provide insight into changing consumer values, exploring how consumer behavior is shifting and causing disruption for businesses globally. For 2021 Euromonitor highlights sustainability as the most important trend: consumers now demand that companies care beyond revenue and become more purpose driven. Consumers value protecting the health of society and the planet. And this expectation is not fading away any time soon.

This is a major shift, and a very welcome one. We, the people, finally want to save our planet and make it a nicer place to live on for generations to come. And we want everyone to contribute. We want not only companies to operate in a sustainable manner, but we also want to buy products and services that are good for us, the planet and the economy as a whole. This is a tall order for any business aiming to serve consumers, SMEs and soon also large corporates. But it is an especially tall order for the financial services industry as they have been given a dual role both as an actor and as a subject.

The ESG rules mandate banks to evaluate the sustainability of their corporate clients before granting funding. The more sustainable the client is, the lower the cost of money will be. Many banks are already offering ESG investing like mutual funds where environmental, social and governance factors play a role alongside financial indicators. These are going to be instrumental in forcing every company around to do more than greenwashing. This is the stick.

But the real question remains: could financial services themselves be purpose driven and sustainable? How do financial service providers today reply to the growing consumer need and sustainability trend? How does all this show is the services financial service providers offer? And above all: are financial service providers willing to finally reconsider their business models in order to become fair or ethical?

These are not easy questions and there are no easy answers. Financial inclusion is a big topic even within Europe where majority of SMEs and freelancers are underbanked just like most immigrants. Inclusion might be the hardest topic the financial services industry needs to solve on their sustainability journey. But it is not the only one as understanding customer needs, wants and desires are essential for all innovation. When 69% of consumer globally say they care about sustainability, everyone should listen. Innovation within financial services has for a long time been all about digital, open banking and other stuff that I believe to be mainstream. The next big thing is already here and we, the people, are telling it loud. This is the carrot.

Luckily a few, smart Fintechs have already understood that doing good can also be good business and is definitely is a goldmine for innovation. Tomorrow in Germany offers a sustainable bank account. Their offering is built around the fact that banks use the money deposited in bank accounts to invest. This is ok apart from the fact that  banks may invest in industries that damage people and the planet like coal and weapons. Tomorrow is investing the deposited funds only in sustainable projects and demonstrating the effects to it’s customers e.g. in the number of saved trees. Tomato pay in The UK enables businesses and sole traders to receive payments from their customers in the most affordable way, instantly into a bank account, without card minimum fees and chargebacks. This is a more fair and ethical way to receive money. This changes the business model for card issues, acquirers and many Fintechs, which have relied heavily on interchange fees. I could not be happier - but do expect the empire to strike back.

This is the beginning of a great journey. Both the stick and the carrot are already here. I believe that sustainability will be the biggest disruption in financial services, and hopefully in many other industries as well. Businesses that are purpose driven and good for us all, will prevail. This feels good in sooo many ways!

Needless to say, delighted to serve everyone brave enough to be on this journey.

Standing up - Just Do It

I was dodging garbage trucks at a recycling plant last fall. A few weeks later I was cracking my brain figuring out inventory management for an international luxury brand, data governance for a national sports federation and timekeeping for offshore motorboat racing. The only common denominator being that none of them had anything to do with financial services, which has been my principal domain for more than twenty years.

I know that many people firmly believe that professional skills learned in one industry are not transferrable or relevant in another industry. Headhunters, recruiters, executives, customers, colleagues. This perception could not be further from the truth and finally I am a living proof myself. Many industries experience similar challenges and look for new opportunities and ways to serve their customers. My experiences from transforming and digitalizing financial services have proven to be valuable in boosting circular economy, digitalizing education, retail, sports and much more. I believe that it is only wise to look for inspiration cross industries to improve business.

Stepping outside one’s comfort zone has become a mantra to encourage learning and growth. Transferring to a new industry is certainly that. It is simultaneously invigorating and daunting. You will immediately see yourself in a new light and learn about yourself. Regardless of your seniority. Skills you forgot you had might be rare and precious. Imagine that! The way people evaluate you is different and often surprising. And there are things you cannot understand but others take for granted and therefore cannot even tell you about. It is a bumpy ride for sure and occasionally you are set to mess up a little.  

Somehow, we are taught to fear change and tumbling. We are certainly not born that way. How does a baby learn to walk? How do you learn a new sport? By trying, falling down and getting up. It is the same with careers and business. Businesses that do not experiment or study their environment will stagnate and fade away. Executives who focus on keeping the status quo will eventually ruin their business. And people who are not curious enough to try new things, will not grow or achieve much. Standing up means you have tried something new and learned. It is a skill that has always been within you.

I am by no means saying that everyone should jump into a new industry although it has been really gratifying for me. And I am not saying that trying out new stuff means you are set to fail, quite the opposite. Learning is a life-long journey. Even when it is about dodging garbage trucks while trying to find a meeting room (and praising oneself for not wearing a suit…). Pick you battle, personal or business, embrace your bruised knees and stand up with a smile on your face! Just do it…..

Apeiroga, it’s partners and I are always happy to keep your business moving. Including banks, fintechs and everyone working within Financial Services - you are still very close to my heart and I have new tricks up in my sleeve.

I Have Seen the Future – And It Is OPEN!

Most businesses in The Northern Europe have re-opened this summer with new ways of working and serving customers. And trying to avoid a second wave of Covid and lockdowns like the ones beating the Melbourne area (one of my favorite cities). Simultaneously, there is a major trend taking giant steps forward, partly because of the social distancing and other restrictions. And that is Open Banking.

Open Banking has skyrocketed in the UK this year: the number of users hit the one million mark in January and there has been more than 400 million monthly API calls to UK banks for four months in a row now. (Well, most likely five months, but the July stats are not in yet…) This is a major change compared to 2019 with total of 1270 million API calls; there has already been 2314 million during the first 6 months in 2020. In June, less than a million of these calls were about payment initiation, the majority were account data requests and mainly between the largest UK banks. Now, you may ask what API calls are and why is this interesting or relevant at all. Bear with me, this is groundbreaking.

Open Banking was created to promote development and use of innovative digital financial services. It enables regulated service providers, with a customer’s consent, to access payment account data and to request payments to be made from these accounts. All interactions are made though APIs. Open Banking has been around since 2016 in The UK and 2019 in continental Europe, but it has been a rocky road with intensive investments and search for appealing customer offerings. And not much interest from the public - until this spring.

The high number of API calls mean that consumers and SMEs want to view their bank accounts in another service than the one their bank offers. Especially in the UK, everyone has more than one financial service provider. SMEs are estimated to use four or five different banks, lenders and an accountant. Open Banking was assumed to increase churn, but instead it has increased the use of various financial services simultaneously. As all banks, challenger banks and FinTechs offer account aggregation services, consumers have no need to stop using the older services when taking on new. So financial services are becoming more fragmented than ever. Just like all other digital services around us: music, movies, messaging, social media etc. Nobody uses only one messaging or social media app as they fulfill different needs. This is how we already use payments and this is becoming how we bank.

Open Banking is the first step toward Open Finance embracing opening all financial data. I usually categorize the current Open Banking value propositions into account aggregation, analytical and advisory services, enhanced banking offerings, improved processes, beyond banking and FinTech offerings. All of these have revenue potential but to my great surprise, process improvements have provided the best business upside so far. Many banks have used Open Banking data to improve their lending processes and to reduce risks enabling financing new customers, like Rabobank’s Fundr in the Netherlands. Data has also been used to enable “light” working capital products like OP Group’s Invoice Finance in Finland. These are fabulous examples of how banks are reinventing themselves and quite far from the origin - account data and payments…

We have only seen the beginning. Open Banking is now starting in Australia, India and Mexico and it is more about data than payments everywhere. Covid has increased the need of various digital services and tools that help manage money. My simple advise to all banks is to offer account aggregation services (in all markets) to fight churn and to stay relevant. It is amazing how many banks do not believe (or know) their customers bank in multiple places. This phenomena is growing. The other advise is to learn to work with data in everything you do. Internally and externally. This will be difficult and painful, but there is no other way. The future of financial services is data based and very open. If you do not know what you are doing with data, that will be visible as well.

It is amazing how locking down societies, economy and human interaction boosts something like Open Banking. Many other services have become more human as well. Remote meetings have relaxed many business interactions, which I highly appreciate. There is always a silver lining and I kind of like this one!

The Magic is Emerging!

The notorious first 90 days have passed and I am still here. I founded Apeiroga to work for myself, to embrace freedom and contemporary ways of doing business. Well, it has been quite a journey and worth almost every minute of it! Being self-employed is the new black: 14% of the EU workforce is us out here and even more are dreaming of taking the leap of fate. So I wanted to share some of my experiences and hope you find my stories fun or comforting.

In three months I have sent out a handful of invoices and all of them have been paid. Sounds like a minor topic to start with, but for a start-upper, a paid invoice is a lifeline. Sure, I had planned this, but revenue is always uncertain until the money is on your account. And yes, there have been days when I missed my juicy Big4 salary. Many of them. Changing my grocery story to a more affordable one. But now that I have a revenue flow – nothing, nothing beats the feeling! And it enables me to grow. The learning: Do whatever small thing you can to get the money flowing your way. Even if it was not in your business plan, even if you have to sell yourself short for a while. Everything else follows. Just do it.

Although working alone may be one of the main reasons to start a business, you can do more amazing stuff by connecting with other businesses. In three months I have signed a couple associate contracts. One is with my former employer enabling me to work both as an independent consultant and in projects and engagements with them. A graceful way to continue our relationship and always worth asking for if you want an exit. The other one is with Fractal Labs, an incredible UK fintech in a scale-up phase. I am executing one dream of mine with them and could not have created the products on my own. The learning: no woman (or man) is an island. Small businesses join forces easily but large companies are getting more eager to connect too.

The start-up hassle is real. There are numerous service providers out there trying to get a piece of your wallet. I enjoyed creating my own website, visuals, social media accounts etc. Sure these could be better, but I somehow like this brutal, live test of my business plan and skills. I learned that Twitter is not for me, but Instragram and LinkedIn suit my style. The less fun side of the hassle is setting up bookkeeping, reporting and other financial rituals. But now that I have my P/L and VAT reports (and returns!) in place, I simply worry less and can focus on driving my business. The learning: choose what you enjoy doing yourself and no matter what, get decent financial software. Excel is fine for everything during the first months but will be hell before the year ends.

It is July, the sun is shining and most of the Nordics are vacationing someplace fantastic. I am working as there are billable hours available and my business is just a baby.  My customers are not in Finland so I use my beautiful garden as an office and think this place and time is just fantastic. This is a good beginning.

What Am I Doing Here? The Story Behind Apeiroga…

I woke up one morning and realized that I had lost my voice. Not physically, but the more important one. My inner voice. Somehow I had forgotten who I was and what was important to me.

I had been working hard in financial services for twenty years. Started fresh from law school, bought a green suit  (yes, it was the 90’s and green suits were cool back then…), put on high heels and worked long hours to learn and to prove myself. Lingered into product development during the first wave of digitalization as it was simply irresistible. We blazed the trail in re-thinking and re-creating everything. I ran projects, created strategies, products and built networks. Got myself a MBA, not the executive version but the real thing, while working through my first leadership role and second maternity leave. Grew into executive roles in leading banks and a supersonic challenger bank. Eagerly jumped into the second and third waves of digitalizing finance with a new generation of developers who would never wear a suit. Re-learned ways of leading, embraced agile and new tech. Built teams and organizations, transformed other. Started helping people and organizations as a mentor and advisor.

But there I was. Loving the content but acting on a plan that was not really mine. Trying to fit into a role that I started to find odd. Getting agitated about silly, petty issues. Found myself remembering the brown eyed girl in a green suit. And missing her. So I had to stop and take time to find my voice again. Go running, surfing and read a lot of books. Focus on my wellbeing. Alone time. Time with my sons.

I learned that my annoyance was mostly about being asked to “stay within the box” even when the goal was to create something new. And me trying to explain that there is no box…. Hence the name Apeiroga. Derived by me from a Greek word Apeiron meaning unlimited, boundless, infinite and somewhat a paradox. Embracing the freedom of thought including the unthinkable. Understanding that the essence of things can often be found in the intersections of forces that seem impossible to combine. Celebrating exceptional talent not bound to any single discipline. Good for people, good for business. Good for me.

This is the next phase of my story, the unlimited version... In jeans and boho dresses.