Nordic countries are known for being happy, with high incomes, robust welfare support and easy access to nature. Finland, Denmark, Iceland and Sweden are in fact the world’s four happiest countries according to the latest UN-sponsored World Happiness Report, with Norway coming in 7th.
It turns out, many people are happy at work there too. Nordic-headquartered businesses occupy ten spaces on Fortune’s 100 Best Companies to Work For – Europe list, despite their countries constituting under 4% of the continent’s population.
Denmark and Norway each have three of the top 100—Novo Nordisk, Beierholm and JYSK for the former; Sector Alarm, Norgehus and Reitan Retail for the latter—while Sweden has four: Svea, Tre, Bengt Dahlgren and Sparbanken.
Is there something in the region’s glacial waters that firms in other parts of the world can learn from?
Erkko Autio, professor and chair in technology venturing and entrepreneurship at Imperial College Business School, points to four distinguishing features. “Nordic businesses are much less hierarchical. That’s one thing. The second is that these are high-trust cultures that give employees a high level of autonomy. Work life balance is the third factor. Finally, there’s an emphasis on collaboration and consensus rather than dictation,” he explains.
Anna Nivala, CEO of the Gothenburg branch of Swedish civil engineering consultancy Bengt Dahlgren, says that Swedes joke that “[we’re] the only country where the coworkers make decisions and then the CEO has to adjust. Democracy in that sense is very important, but it makes for a solid ground for psychological safety when you can say to anyone what’s on your mind.”
The Nordic model in practice
The four pillars of happy, Nordic companies that Autio highlights—autonomy, low power distance, work-life balance and collaboration—come as a package.
“Nordic businesses are much less hierarchical.”Erkko Autio, professor and chair in technology venturing and entrepreneurship at Imperial College Business School
A commitment to work-life balance, for example, is critical for empowerment, says Nivala. “When Bengt Dahlgren founded the company 74 years ago, he had a slogan that a hungry engineer was not a good engineer, and he used to treat his employees to blueberry pies and invite them to his house,” she says.
Today, there are “a lot of small things all of the time that happen to make you feel that your personal life also matters,” including regular fika—coffee and cake breaks where teams get to know each other without talking about work—subsidized company ski trips, and lectures about mindfulness or preventing calendar creep.
This level of caring and personal openness—owning mistakes is part of being present as a whole person—filters into the business culture. “Sharing with each other that you’re going through a divorce or having difficulties with this or that makes you trust each other more,” Nivala explains.
It’s a familiar story in the Nordics. Danish pharma firm Novo Nordisk, which also makes the top 100, is similarly known for a culture where employees call the CEO by their first name, and don’t feel pressure to stay at work late.
Not for everyone
These principles—however virtuous—do come with risks. Autio points to Nokia, Finland’s one-time giant mobile maker, as an example of the pros and cons of the Nordic approach.
Nokia started out in forestry and heavy industries before pivoting to electronics in the 1960s and 1970s, later rising to dominate the global mobile phone market in the 1990s and early 2000s. At the time, it credited this position to its flat hierarchy, pushing decision-making closer to customers.
“Sharing with each other that you’re going through a divorce or having difficulties with this or that makes you trust each other more.”
Anna Nivala, CEO of the Gothenburg branch of Bengt Dahlgren
But when the iPhone ushered in the smartphone era, the company couldn’t make the transition a second time and eventually exited the market; it now specializes in telecommunications equipment.
The much-dissected failure partly came from strategic errors, but Autio also blames the company’s system of middle management committees: “The committees were empowered to decide which approaches to move ahead with. They ended up in a situation where the middle managers kept voting down each other’s initiatives, and that reduced Nokia’s capability to respond to industry change.”
That isn’t to say that consensus culture prevents innovation or agility—Autio offers Sweden’s vibrant start-up sector as evidence to the contrary. Nivala also says that once consensus is secured, things tend to move faster because everyone is aligned.
Getting the balance right does take skilful execution. Perhaps the most important—and apt—lesson from the Nordic companies on this year’s Best Companies to Work For – Europe list is that leaders cannot impose a collaborative culture from the top down.
“Often you can think it’s the leader’s responsibility, but you need to talk to every coworker about creating this kind of environment,” says Nivala. “It’s not just what is the boss going to do, it’s how are you going to contribute? And what do you need to contribute?”
