How is digitalizing a big, traditional company different from running a new business based entirely on a digital service model? Can the Goliaths of the business world adapt to the modern customers’ expectations and needs, or will the small startups take over? Here is what a couple of representatives of two different business models, Wolt and Fiskars, have to say about digitalization.
Before awarding Finnish personalities and companies of outstanding social media presence in 2015, SomeAwards Finland organized four seminars about the digitalization of media, marketing and advertising. In one of these seminars, in the beginning of February 2016, Juho Jokinen, the CEO of Finland’s leading social media advisory Dingle, hosted a Talk Show concerning business and digitalization, interviewing startup entrepreneur Juhani Mykkänen of Wolt and Daniel Goodall, the Director of Digital Experience at Fiskars.
See the Talk Show in the Globalization via Digitalization Webinar (Starts from 02:00:00).
Tell one thing in digitalization and digital business that you are most excited about?
Daniel: What is most interesting is the very active change. I’m not someone, who can do the same thing for very long. Back in 2001–2002 when I was working at the American Express as a graduate trainee, I introduced them to search marketing, because they were still doing direct marketing. I always try to be one step ahead and think about what the next thing is, that’s the way I have always led my career.
Juhani: Most interesting in digitalization for me at the moment is the digitalization of food industry – getting rid of your hunger. All of us need to eat two to four times a day, and if you can change the way we do that, like Uber has done with transportation or Airbnb with accommodation… With food, in the US alone it is a 70 billion dollar market just with takeaway and delivery food, and out of that only 9 billion is digital revenue. That’s about to change, right? That’s what we are trying to do here.
"I always try to be one step ahead and think about what the next thing is, that’s the way I have always led my career."
There is a lot of talk about startup businesses – the Ubers, the Wolts, the Airbnbs. What is the most important process in businesses that needs to be digitalized? Or is already being digitalized?
Daniel: In terms of traditional companies the digital is usually seen as a marketing channel. A big part of my job is getting that digital channel, that promotional channel right. This obviously misses the bigger picture of what digital is, which is the behavioral change amongst the masses as well. The most interesting thing is basically the digitalization of insights. The insights would come from two areas: your own employees and your customers. At Fiskars we have an intranet, but I noticed the other day that it is all one way – a corporate press machine pushing things out. You can give thumbs up for something or you can comment, but no one ever really comments, because it is all one way.
"The most interesting thing is basically the digitalization of insights. The insights would come from two areas: your own employees and your customers."
Some other companies I have worked at have some sort of internal social media going on. That would be the first step of digitalization for me, to encourage your employees to communicate in a more digitized way beyond email. The social media aspect is also about trying to listen to consumers and understanding them better to get insights, to understand their behavior and to ultimately offer them the value we have not previously offered. To understand the customers’ behavior and their journey better is the most important thing. It crosses silos and it gets difficult to implement though.
Do you thing businesses have traditionally gone the wrong way, so to speak, when they first look at the web-page and the social media page, the outer layer, and not the insights?
Daniel: Yes, in a way, but I think it’s inevitable, because even the most agile marketing team has to build a website, they have to keep up with the external appearances of other companies. But it is not often based on true insight, like listening, I would say.
So Juhani, how does your team at Wolt communicate with each other? What is the intranet like?
Juhani: We use Slack. We have a ban on email, we don’t use it at all for internal communication, because it’s pretty much broken. It’s a to do -list that everyone can just put shit on. We use Slack for real-time communication, to keep everybody at the company updated and knowing what’s going on.
Daniel: That’s a good point about the email you made. In digitalization there is this feeling that it’s always good. Like any big company, we get hundreds of emails a day, and it’s so easy to add someone to the cc-list. You get these mass emails, which improved communication at one stage, but now it has made things worse.
"Like any big company, we get hundreds of emails a day, and it’s so easy to add someone to the cc-list. You get these mass emails, which improved communication at one stage, but now it has made things worse."
Juhani: Yeah, it can make you feel like you’re doing something important, answering emails, but it’s actually in the way of doing the stuff that matters. If you could only do one thing tomorrow, it would probably not be answering those emails.
What about the insights at Wolt? What do you learn about insights from the digital world?
Juhani: What we do right now, is dealing with a lot of different restaurants. People who go into the restaurant industry are all about making good food and making their customers feel happy – getting them to sit down, giving them good food and giving them great service. From our point of view, digitalization in that industry is about giving people choices. Traditionally there could be a busy pizzeria, with a customer calling an order in, asking the person on the phone which of their pizzas have meat in them. Now there’s an app for that, where the customer can check what kind of pizzas are offered, and the order is in in five seconds. The restaurant can use their freed up time to serve the live customers. The restaurants can concentrate on what they think brings the most value to their customers, and that’s a choice the digitalization gives them. Digitalization doesn’t mean that something has to be done in some way. It’s not about efficiency, it’s about being efficient where you can be more efficient, so you can be better with the interpersonal things for example.
"From our point of view, digitalization in that industry is about giving people choices. Traditionally there could be a busy pizzeria, with a customer calling an order in, asking the person on the phone which of their pizzas have meat in them. Now there’s an app for that, where the customer can check what kind of pizzas are offered, and the order is in in five seconds. "
How does this reflect at Fiskars?
Daniel: I guess this is something Juhani perhaps takes for granted, but not all the insight comes from the digital channels. He obviously created an app, and to do that you spend time with customers, watching them. You spend time at restaurants. Nearly all good startups are customer-driven, end-user-driven, they adapt and change based on what they find and what their apps are showing them in the statistics. At Fiskars, until recently, I don’t think we’ve done any of that.
Of course, the R&D team spends time interviewing people, but in terms of the marketing department we didn’t have an insights team until about two years ago, even to do the big qualitative insights. I think there has been a distance between us and the end-user that is problematic and inhibits our ability to innovate and actually deliver value. The value has been that we know how to make a product and how can we sell it, rather than what is the bigger value we can offer these people by understanding their needs better.
Juhani: You cannot create a good digital product without really, truly, deeply understanding the non-digital experience that we want to make better. So we have a person who is just going to the restaurants and seeing what people are doing, just trying to grasp that world.
Daniel: We don’t have that. [Laughter] We should.
You both work in, or at least plan to work in multiple countries. Going global, are there really differences in markets with digitalization? What are the differences from market to market in preparedness for digitalization and content?
Daniel: Fiskars is interesting, because we have internationalized already, obviously. Back in the day the way we internationalized was by setting up distributors, that would distribute the product in different areas. US for example is a very successful market for Fiskars, but it’s totally independent from Europe, to the point they have their own products, their own president… It is it’s own business. So when the Finns go to the US they’re probably surprised by the Fiskars products that are sold there – it’s not the Fiskars we know. This has created a problem for us now the Web is available, and suddenly the problem is visible. Before, ten years ago even, there was a stage when Walmart sold this product and K-Rauta sold that product – it didn’t really matter because only a handful of people would notice the difference. Now you put your video on YouTube and everybody sees it, but the products aren’t necessarily the same. If we would have known what was going to happen in terms of digitalization, we’ve probably would have created a more consistent experience across the different countries.
"If we would have known what was going to happen in terms of digitalization, we’ve probably would have created a more consistent experience across the different countries."
We sell mostly to trade partners, not to end-consumers, at least at the moment, so that creates a difference. How ready are they for digitalization? If you go into a meeting and you want to sell the new axe or the new kind of garden products, you’re meeting sometimes quite traditional people – the salesmen – and if they say this is going to be on TV, it’s a good thing, because they buy all the products and put it on their shelves, because the products are going to be on TV.
If you go in there and say we have this really interesting social media campaign, it’s harder to sell to the trade marketing people. That is what I get told all the time, my ideas aren’t always usable in all of these markets. However, the UK is now telling me that in their market, the trade are asking them now, what are you doing digitally, what are you doing socially? It seems the big trade partners we have in the UK have caught up, which is driving our trade marketing people at Fiskars to ask me for more of that stuff. The UK are probably going to be one of our benchmark countries in Europe, where as in the more traditional trade markets it’s going to take a couple more years to do this. So it’s driven by external sources in a way.
"If you go in there and say we have this really interesting social media campaign, it’s harder to sell to the trade marketing people."
How about at Wolt, are you going to be exactly the same in every market?
Juhani: Hopefully not. We are now, with our business, exactly in the point where we need to figure this out. We have something, which seems to be working really well in Finland, in Helsinki – we’re growing by double-digit percentage every week. But now we are going to a few other cities and countries, and there are bound to be surprises. What’s up next for us in this spring, is seeing which bits of our model work universally, and which we need to change. If we try to multiply our model too early, then we will only multiply mistakes and that we don’t want to do. We feel that the basic premise of Wolt – giving you more time – is universally appealing, but how to get drivers, which cities like more take away and which delivery, are there places where people just resent the combining of food and smart phones… We don’t know yet. I’ll be happy to answer in six months and after that.
Daniel: At Fiskars we make hand tools, ways for you to make things for yourself, and at Wolt it is the opposite, it is about convenience and speed. Hopefully we are going to be the opposite, the balance, where people doing things themselves will become a trend. It is already starting to happen in certain parts of the world, this sort of anti-consumerism, anti-convenience, and it’s driving people to make their own things, use their own hands again. It is an interesting trend, to go back to our roots as humans. As a digitalization-guy at Fiskars I also see this trend in behavior, and we should be encouraging it, because ultimately we are selling tools to do things with, by your hands.
"Hopefully we are going to be the opposite, the balance, where people doing things themselves will become a trend. It is already starting to happen in certain parts of the world, this sort of anti-consumerism, anti-convenience, and it’s driving people to make their own things, use their own hands again. It is an interesting trend, to go back to our roots as humans."
Juhani: Yes, it is nice not to always be lazy and sometimes do things yourself. Actually what we are piloting, trying out soon, is taking the experience of making food, without having to do the grocery shopping: a service by which you can choose a recipe, press a button and have the ingredients delivered at your door in a half an hour.
Daniel Goodall originates from England, but has lived in Finland for a while now. His career has taken him from working at American Express in London through having an MBA in Finland and working at Nokia for many years, through working at the advertising agency 358 and at Rovio, finally to Fiskars, the oldest company in Finland and one of the oldest companies in Europe. He has been hired at Fiskars to be a part of the digital transformation. Exactly what that means, is still to be defined, according to Daniel, but after a six month’s experience he can tell it is an interesting role to be a change agent in an extremely old company with extremely traditional way of doing things.
Juhani Mykkänen says he has a mixed background – he is a Master of Science in Technology, but after studying IT Business he ended up working at Helsingin Sanomat (Finland’s largest daily newspaper) as the Editor in Chief of the weekly NYT-liite and Sanoma Corporation’s Radio Helsinki. Wanting to try out in an industry, where there would be possibilities for growth, he finally co-founded Wolt, an app and a service, which helps people to get their favorite food with a press of a button. Wolt launched in Helsinki in 2015 and is now growing fast, with Juhani working as the COO.