Reykjavík Grapevine - 10.10.2008, Side 11

REYKJAVÍK GRAPEVINE | ISSUE 16—2008 | 11
A SPEECh BY THe pReSIDenT of IceLAnD ÓLAfuR RAgnAR gRÍMSSon AT THe wALBRooK cLuB, LonDon 3RD MAY 2005
Distinguished business leaders
Representatives of the media
Ladies and Gentlemen
Recently, I have often found myself cornered at
various functions, especially here in London, and
pressured to explain how and why daring Icelan-
dic entrepreneurs are succeeding where others
hesitate or fail, to reveal the secret behind the suc-
cess they have achieved.
It is of course tempting to let it remain a
mystery, to allow the British business world to be
perplexed. This mystery would give my Icelandic
friends a clear advantage, a fascinating competitive
edge – but when my friend Lord Polumbo asked
me to speak on this subject at the distinguished
Walbrook Club, I could not decline the challenge.
It is indeed an interesting question how our
small nation has in recent years been able to win
so many victories on the competitive British, Eu-
ropean and global markets, especially because
for centuries we were literally the poorest nation
in Europe, a community of farmers and fishermen
who saw Hull and Grimsby as the main focus of
their attention, a nation that only a few decades
ago desperately needed to extend its fishing limit
in order to survive, first to 12 miles, then to 50 and
finally to 200 miles. Each time Britain sent the Navy
to stop us but each time we won - the only nation
on earth to defeat the British Navy, not once but
three times. With this unique track record, it is no
wonder that young entrepreneurial Vikings have
arrived in London full of confidence and ready to
take on the world!
Yes, it is indeed a fascinating question, not
just with respect to Iceland, but also because it
throws light on some fundamental trends in mod-
ern business. It touches on the new nature of suc-
cess, and why some fail where others triumph.
Globalisation and information technology have
given small states opportunities on a scale never
witnessed before. Obstacles to their growth have
largely been abolished and replaced by an open
and wide field where talent, imagination and cre-
ativity determine
what is harvested.
Innovations can now emerge from any direc-
tion; individual initiative can lay the foundation for
companies which establish a global presence in a
short time.
In recent years Iceland has shown how a
small state can make an organised and successful
response to globalisation and thus boost its own
business success. Every company in our country
now has a unique opportunity to profile itself. In-
deed, new companies can now emerge into the
global market regardless of where their home base
is and soon have the whole world as their market
region.
There is much to suggest that in the new
economy, a small state can be a very profitable
basis for business innovations because in a small
state it is easy to see how different elements link
up, how to establish cooperation between differ-
ent fields, how to gain access to information and
experience and grasp solutions to difficult tasks.
A small state can serve as a kind of laboratory or
research station in precisely those sectors that are
increasingly coming to dominate the economy of
our times.
Many examples can be cited to illustrate how
our business leaders have managed to establish
themselves on foreign markets. In previous decades
we saw the success of our seafood marketing com-
panies through their sales networks in Europe, the
U.S.A. and Asia, and the remarkable achievements
of our airline companies from the 1960s onwards
when Loftleiðir – now Icelandair – became the first
low fare airline in the world, enabling the hippy
generation to cross the Atlantic cheaply. These ex-
periences provided an important training ground,
but no one could have predicted the extraordinary
success in recent years, a success which does in-
deed raise challenging questions about prevailing
business strategies, theories and training in mod-
ern times. Let me mention a few success cases.
Baugur is indeed well known here in Britain,
playing a major part in the retail sector, not only in
London but also in Denmark and Sweden.
Avion Group, the specialised airline, is now the
largest of its kind in the world. It recently opened
its European headquarters in Crawley, close to
London.
Actavis has become the fastest growing phar-
maceutical company in the world, with production
facilities in Bulgaria, Malta, Serbia, India and else-
where.
Össur, the largest prosthetics company in the
world, was created by an unknown Icelander who
worked on his innovations in small rooms in the
oldest part of Reykjavik.
Kaupthing Bank, which only six years ago
opened the first branch of an Icelandic bank
abroad, is now among the largest financial institu-
tions in the Nordic countries, with operations in
Europe and America.
Bakkavör, which a decade ago started in a
garage in my home municipality, is now the largest
producer of fast food in Britain. It recently acquired
Geest, so expanding the scope of its operations.
I could go on to mention many other exam-
ples: companies in transport and food processing,
machinery and software production, telecommu-
nications and other fields.
How has it been possible to achieve such
success in so many different fields and in such a
short time, in areas where we definitely had no
prior competitive advantage, areas such as phar-
maceuticals and prosthetics, banking and finance,
retail and fashion – to name only a few.
Of course, many factors have contributed
to the success of this voyage, but I am convinced
that our business culture, our approach, our way of
thinking and our behaviour patterns, rooted in our
traditions and national identity, have played a cru-
cial role. All of these are elements that challenge
the prevailing theories taught in respected busi-
ness schools and observed in practice by many of
the big American and British corporations.
We are succeeding because we are different,
and our track record should inspire the business
establishment in other countries to re-examine
their previous beliefs and the norms that they think
will guarantee results. The range of Icelandic suc-
cess cases provides a fertile ground for a produc-
tive dialogue on how the modern business world is
indeed changing.
Let me offer you a list of a dozen or so ele-
ments that I believe have been crucial to Iceland’s
success story. I am not listing them in any particular
order, but taken together, I am convinced that they
amount to a significiant framework of business
success – a guide to the ground in which achieve-
ments are rooted.
First comes a strong work ethic. This is a heri-
tage from the old society of farmers and fishermen,
where necessity dictated that the fish catch had
to be brought ashore and processed immediately
when the boats came in to harbour and that hey
had to be turned and collected when the weather
was favourable. When Kaupthing Bank beat the
other bidders for the Danish FIH Erhvervs Bank,
the disappointed English representative returned
to London and informed his boss that the Iceland-
ers had won because, as he put it: “When we go
home these guys are still working.”
Second, we tend to focus on the results rath-
er than the process: to go straight to the task and do
the job in the shortest time possible; to ask when it
can be done rather than how.
Third, Icelanders are risk takers. They are
daring and aggressive. Perhaps this is because
they know that if they fail, they can always go back
to Iceland where everyone can enjoy a good life
in an open and secure society; the national fabric
of our country provides a safety-net which enables
our business leaders to take more risks than others
tend to do.
Fourth, there is absence of bureaucracy in
Iceland and a lack of tolerance for bureaucratic
methods. Perhaps it is because there are so few of
us that we have never really been able to afford ex-
tensive bureaucratic structures; when we encoun-
ter them, we prefer other means.
Fifth, there is a strong element of personal
trust, almost in the classical sense of “my word is
my bond.” This enables people to work together in
an extraordinarily effective way because they are
fostered in communities where everyone knows
everyone else. This trust also contributes towards:
The sixth element. This is the formation of
small groups of operators who work closely and
strategically together, creating a fast-moving net-
work of key decision makers who can close a deal
quicker than those who are used to working within
larger and more bureaucratic corporate struc-
tures.
Seventh, we have entrepreneurship – old-
fashioned entrepreneurship where the boss him-
self or herself stands in the front line, taking re-
sponsibility, leading the team, giving the company
a visible, personal face. This style of entrepreneur-
ship breeds leaders who know they are responsi-
ble, aware that their initiative will make or break
the deal. As an Asian business executive once told
me: "The reason why I like to do business with Ice-
landers is that the bosses themselves come to the
table; they don’t hide behind an army of lawyers
and accountants like they do in the big European
and American companies".
Eighth on my list is the heritage of discovery
and exploration, fostered by the medieval Viking
sagas that have been told and retold to every Ice-
landic child. This is a tradition that gives honour to
those who venture into unknown lands, who dare
to journey to foreign fields, interpreting modern
business ventures as an extension of the Viking
spirit, applauding the successful entrepreneurs as
heirs of this proud tradition.
Ninth is the importance of personal reputa-
tion. This is partly rooted in the medieval Edda po-
ems which emphasise that our wealth might wither
away but our reputation will stay with us forever.
Every Icelandic entrepreneur knows that success
or failure will reflect not only on his or her own
reputation but also on the reputation of the nation.
They therefore see themselves as representatives of
a proud people and know that their performance
will determine their reputation for decades or cen-
turies to come.
Tenth, there is the fact that the Icelandic mar-
ket, although small, has turned out to be an effec-
tive training ground because it is so competitive,
perhaps more so than many other European mar-
kets; therefore what succeeds in Iceland is likely to
succeed everywhere else.
Eleventh, because of how small the Icelandic
nation is, we do not travel the world with an extra
baggage of ulterior motives or big power interests
rooted in military, financial or political strength.
No one is afraid to work with us; people even see us
as fascinating eccentrics who can do no harm and
therefore all doors are thrown wide open when we
arrive.
Twelfth, the strong interaction which charac-
terizes the Icelanders offers opportunities for peo-
ple from different sectors to launch cooperative
ventures without difficulties or major bureaucratic
hindrances. The extensive knowledge that our
business leaders have of the capabilities of others
in different fields has made it easy for them to draw
people into promising projects.
And finally, there is creativity, rooted in the
old Icelandic culture which respected the talents of
individuals who could compose poetry or tell sto-
ries, who were creative participants in companion-
ship with others. These attitudes have been passed
onto the business community, as is demonstrated
by the Icelandic term used to describe a pioneer
or an entrepreneur, – "athafnaskáld", which means
literally “a poet of enterprise”. Admiration for cre-
ative people has been transplanted from ancient
times into the new global age, and originality has
turned out to be a decisive resource in the global
market.
Taken together, these thirteen elements have
given the Icelandic business community a compet-
itive edge, enabling us to win where others either
failed or did not dare to enter. Our entrepreneurs
have thus been able to move faster and more effec-
tively, to be more original and more flexible, more
reliable but also more daring than many others.
The track record that Icelandic business
leaders have established is also an interesting
standpoint from which to examine the validity of
traditional business teaching, of the theories and
practice fostered and followed by big corporations
and business schools on both sides of the Atlantic.
It enables us to discuss the emphasis on entrepre-
neurial versus structural training, on process ver-
sus results, on trust versus career competition, on
creativity versus financial strength.
I have mentioned this morning only some of
the lessons which the Icelandic voyage offers, but
I hope that my analysis has helped to clarify what
has been a big mystery to many. Let me leave you
with a promise that I gave at the recent opening of
the Avion Group headquarters in Crawley. I formu-
lated it with a little help from Hollywood movies:
"You ain't seen nothing yet".
HOW TO SUCCEED IN MODERN BUSINESS:
Lessons From the Icelandic Voyage