Text: Ari Rytsy Pictures: AJ Savolainen
Matti Alahuhta, CEO of the elevator and escalator giant KONE Corporation, emphasizes the importance of leadership in the company’s business. This emphasis is evident on all management levels of this globablly operating, listed company. Alahuhta was interviewed by Tapani Haavisto, Managing Director of Psycon Oy.
KONE is one of the success stories of the Finnish business world. Its footprint is visible throughout the world. The company’s main assets have always been its high-quality products, which make moving about easier for people. When Alahuhta joined the company a few years ago, it marked the beginning of a new era for KONE. The wave of internal change has driven the processes in a more uniform and customer-oriented direction. In other words, customer orientation and productivity gains are now equally important as the technical performance of the company’s products.
The reforms KONE has carried out make clear that the success story of its sector is determined to become even better. However, the results were not achieved without efforts. It was in 2005 that the transformation phase began. At that time, Alahuhta was very active in visiting the company’s offices and facilities and in compiling his own team. The team’s intensive efforts produced a new strategy, goals and development programs for KONE. According to Alahuhta, choosing the right development programs is as important as defining the strategy. Through them, the entire organization can be made to support the attainment of business goals. The leadership skills of key individuals are highlighted in implementing changes.
“They are responsible for establishing the process that allows the change to be implemented throughout the personnel. In that situation, the aim is to produce genuinely interactive communication instead of one-way messages.
Successful implementation of the strategy requires presence and unambiguity from the company’s management.
The management approach must be clear, and the chosen message must be repeated often enough.
“The management must be sensitive to the signals coming from the field. It is important to maintain such two-way interaction,” Alahuhta adds.
A good manager is an inspiration to others
Alahuhta says that defining the strategy is a pretty straightforward task. The main challenges are in the consequent implementation of the strategy. In order to achieve the goals, the management must have perseverance and enthusiasm because their message is reflected on the entire organization. That is why the right people must be appointed as the owners of the selected change projects.
“A good manager emits positive energy and puts him- or herself on the line. He or she has both passion and substantive competence. The good manager also recognizes the potential in others and is open and willing to interact,” Alahuhta says, listing his own recruitment principles. As the head of an international organization, he has had the opportunity to observe the general challenges of global management. On the basis of his observations, Alahuhta divides leadership into its universal basic principles and into additional emphases that change with the operating environment.
“The fundamentals of good management include integrity, customer orientation, interest in human development, as well as the ability to inspire people and act in a holistic manner. The additional emphases brought about by globalization are equally valuable for good leadership. They include global learning that means the ability to transfer good ideas from one market area to another.
The portability of resources, strategic agility and integrity of management are also important from the point of view of a global company. The management team must work in line with uniform goals.
KONE has made People Leadership one of the strategic themes of its operations. As such, this is not a new situation because the company has a long tradition of taking its personnel into account. Alahuhta’s view is that its importance is further emphasized in the current operating environment.
“We have very high ambitions in this area. More than half of KONE’s business is based on services that we provide through nearly a thousand offices around the world.” In such a scenario, leadership development can have a significant positive impact on customer satisfaction and productivity.
At KONE, leadership development is not limited to the company’s top management. Management abilities are in particular being improved at the first level of management, close to the customer interface. The key individuals’ quality of management is regularly assessed through 360 degree assessments. The professional skills of experts in this field are utilized in the associated feedback process. This periodic measurement allows key personnel to further define their self-image and develop their self-knowledge. It also adds to the maturity required for closer identification of the team members. At KONE, leadership development of this kind is directly linked to the company’s values.
“The accomplishments and methods used in achieving them are analyzed in annual appraisals. Both the results and adherence to the company’s values are essential for the company’s business,” Alahuhta says.
All in all, he is rather satisfied with the way the change process has progressed at KONE and with the interim milestones reached in the process. Of the company’s values, “winning together” has materialized through the development of operations and the continuous dialogue between the company’s international and local dimensions.
Development at global and local levels
A change process always means renovation for the company. With its process, KONE has strengthened its position as a customer-oriented actor and innovation leader in its sector. In practice, this means that the globally managed company has also intensified its local competence. The vision of providing the best user experience, launched at year-end, has in turn nourished the renovation enthusiasm of the whole personnel. Now the focus of operations is extended all the way to end users in addition to the customers.
The value equation may sound complicated, but it contains no conflicts as everyone seeks to provide the customer with positive experiences in moving about. In that quest, the multi-faceted renovation process of KONE and its leadership emphases seem to show the way towards a more holistic service concept. Alahuhta is confident that leadership will be significant in the future as well.
“The world is constantly changing, making the ability to foresee changes ever-more important. In the future, leadership will require reading people and the market more sensitively than before.”