“I was in a seminar six or seven years ago, and by accident the microphone was given to me. I said that I fully buy into Russian modernisation, but I strongly disagree with the President about the order of importance. And when that ‘strongly disagree’ was translated to the 3.000 people in the audience, I heard exclamations of astonishment. Next morning at 6 a.m, I was invited to breakfast with an advisor of the President. Ever since we’ve been friends”, says Pekka about the lucky accident that brought him to Moscow.
Pekka says that there are many people who could say the same, and even have the guts to do it, but the point is that he actually made it happen, and that’s why he ended up in his present advisor position in Skolkovo, helping Russian companies to go international - assessing, helping and giving access. Pekka is not a person who surrenders when the first obstacles present themselves. Quite the opposite, in fact. His nick name is ‘Bulldozer’, so this might be a real chance actually to make some big changes. He has written a book called ‘No Fear’, where he describes in detail the importance of skills in building a winning organisation. And during the meeting you can sense that Pekka is really committed to driving cultural change in his own Skolkovo organisation.
Two years ago, Pekka had a 25th anniversary, and not a very typical one. The anniversary was about 25 years of working in P&L. Pekka was managing 9, 000 people in 24 countries in Tieto Corporation. He joined the listed company after selling his own software company Visual Systems to Tieto. Today Pekka is the biggest private shareholder in Tieto after leaving the company, and he has no executive duties, except for “increasing the dividends every April”.
“Hell will freeze over before I work in the public sector, especially in Russia”, said Pekka. But Russians are very strong in negotiations, and discussions continued for four months until they signed the contract, and Pekka became advisor to Mr. Vekselberg, the person leading the whole Skolkovo project, and reporting to Prime Minister Medvedev.
Skolkovo is a start-up itself, having been active only two years. Pekka compares it to the Finnish public investor in start-ups, Tekes. Tekes is the most important publicly-funded expert organization for financing research, development and innovation in Finland. Tekes promotes a broadbased view of innovation: besides funding technological breakthroughs, it emphasises the significance of servicerelated, design, business and social innovations. Tekes works with the top innovative companies and research units in Finland. Every year, it finances some 1,500 business research and development projects, and almost 600 public research projects at universities, research institutes and polytechnics. Even in Finland, you would not expect fast results from a public company, so how could that happen in Russia? Thanks to Russian history and bureaucracy, it should have taken much longer than two years. “Technopolis is the role model for Skolkovo, so a Finnish background should be an advantage as an advisor in Skolkovo.”
“I’m not here to build houses or construct buildings, although I do understand that we need places and infrastructure for companies. I’m here to help young entrepreneurs and companies to establish a leadership culture - a different leadership culture. My grandfather started to teach me how to manage a company when I was four, but here we don’t have this culture. In Russia, parents tell their children that starting a company is not only a risk, it’s dangerous. We have to start at the fundamentals here”.
“We will be ready, when mothers and fathers in Russia advise their children to start a business”, Pekka points out. It sounds like he will stay a longer in Russia, and is highly motivated and committed to change the culture and give a boost to entrepreneurship in Russia.
Pekka says that he is now 40 years old, being P&L responsible over 25 years, and knowing basically all of the top 100 businessman in Finland, going to his smoke sauna with them. There could be good business opportunities, but he doesn’t see any more learning for himself. “I’m here to learn, and when I’m not learning anymore, I will retire”, Pekka says. It so easy to be trapped on your success. Pekka calls this as “the most beautiful boy of the town syndrome”. It would be easy for Pekka to be the hottest guy in town in Joroinen or Munich, but if he’s not learning anymore, it’s useless. Fun, but useless. “Honestly, I hate the Moscow traffic, and to leave my kids for a week to work in Moscow, so this is definately not fun, but I try to balance this so that I learn. And there is much more to learn in Moscow than in Bavaria or New York”.
Many innovations in Skolkovo are based on very heavy scientific research. Many of the products are business-tobusiness innovations, and fewer are consumer-driven as in Helsinki or Silicon Valley. “There will be many Russian consumer-driven brands, but it will happen through acquisitions, not through systematic brand building. For example, the world’s 11th biggest bank is Sperbank”, says Pekka. So Russia has plenty of capital, and companies are able to buy a global market share.
There are Russian brands in the IT sector, such as Parallel in virtualisation for Mac users. “It’s a Russian brand, but nobody knows that”, Pekka suggests that maybe Russian image and heritage in branding is something for the future, and today it could be even harmful for a good service to have the Russian stamp on it. “There is a leading iPad app developed in Skolkovo, and if the Americans knew it was Russian, it might frighten them,” says Pekka.
According to Pekka, western countries’ image of the current situation in Russia is wrong. It’s right in a historical perspective, but wrong when looking at the future because in five years the country won’t be managed by Soviet era chiefs, but people who were born after the Soviet era. In the White House and leading companies, managers under 40 years of age are taking over all the key positions. In daily life, you still meet many people who don’t trust anybody, and companies with a very heavy top-down culture, but in most cases it’s similar to western companies.
“I have only once drunk vodka in Russia, at a funeral, because that’s the custom here”. The change would really be big, if vodka was not part of business in Russia anymore. “We talk about sports, kids, kindergarden. It’s a totally different mindset to what it was five years ago. It’s a different ball game now. In five years’ time, not everything will be changed. There is still a lot of bureaucracy and corruption, but the companies you want to work with are pretty modern in their thinking.” That’s what Pekka honestly believes.
“The speed of change is much greater than is suggested in Spiegel or the Financial Times. The media is talking about riots and *** Riots. But the reality is that it’s safe to work and live in Russia, and people have freedom of speech, especially compared to the Chinese, who can’t even use the internet freely.
Pekka Viljakainen is sure that Russia will keep its uniqueness. The Slavic culture is still strong. Pekka’s Russian wife has told him that all major changes have taken more than 300 years, so don’t expect a big change in just three years. Pekka thinks that it’s somewhere in the middle. ”We can perform a miracle perhaps in 30 years”. Then he’ll be about 70, a good time to retire. Russia needs Pekka to modernise the economy in the next 30 years, but Pekka needs Russia just as much to keep him vital and to keep learning curve on the up.
“Why the hell are not the big European companies here?” Pekka asks. There is huge potential in all industries, and the service market is particularly underdeveloped. So where should you go, if you want to grow. It’s much easier culturally, linguistically and business-wise to do business in Russia than in China. “It’s not easy, but it’s easier”, is what Pekka has learneded.
Pekka is a very strong believer that Russia will develop well, and that the train is unstoppable. The young generation has a clear vision and, regardless of governments, they will do what they see important. There is no way back to a closed society. Pekka doesn’t really see any country risk as such. “There are more opportunities than threats here. And I’m not Russia-positive, I’m business-positive”, are Pekka’s last words, as he rushes off to his next meeting.
Konsu Magazine (.pdf file)