Global lounge: Cross-Cultural Credibility – From Australia to Africa

In Ola Nilsson’s own words, he survived his first five years at Electrolux through “sheer cockiness”. As an MBA student studying finance and international marketing, Nilsson’s thesis tackled the thorny question of how Electrolux could enter the large domestic appliances market in Russia without “exposing ourselves to the mob”. During the time Eastern Europe was opening up, if you wanted to enter retail, you needed to pay for the privilege. The solution was to capitalise on the building boom by fitting out flats and luxury homes with Electrolux kitchens.
The thesis led to Nilsson’s first job at the company in 1994 where he says: “I got the opportunity to do things and show that I was eager and that, over time, led to some kind of credibility.”
Fast forward to Nilsson’s 30th birthday, still with Electrolux, but working as an international working capital consultant in Singapore. After dinner with the chief financial officer of the group, Nilsson was given 24 hours to decide if he would accept the position of Australian CFO to help the business there through “change process”. He accepted and nine months later was appointed managing director of the Australian operation and as he says, at the time: “I didn’t know what I had got myself into.”
Now 40, Nilsson was appointed to his current role in August 2008.

Your work has taken you to live in quite few countries – Sweden, Austria, Singapore, and Australia. What is your favourite?

It’s difficult to say as there have been different phases. Australia is probably one of our favourites as our first child was born there. It has combination of good climate, scenery, wineries, and the people – there’s an appreciation of life. It’s very easy going, friendly. There is genuine interest in Australian and New Zealand people that you don’t find in other countries – warmth.

How have the management challenges differed from country to country?

It is very different. Today’s modern managers, or leaders, all have our own profile and personality. You can’t move away from this, you need to be who you are. Being exposed to different nationalities, you are exposed to different cultures. For example, in some cultures hierarchy is extremely important and even if you don’t agree, you have to play the game. In other cultures, that would be suicide. You need more interpersonal skills. Russia, Vietnam, Sweden, France… they are all very different. It is fundamental to be who you are. Then people will get you and trust you. 

What is your strategy at the moment with regards to the slowing market?

We acted very early, took some tough decisions and were clear globally about what was expected – you need to act, and now! We have an increasing focus on our working capital management, with those who are able to generate cash flow seen as knowing what they are doing. The minute demand goes down, some people will end up with lot of stock, lack of tight credit control and will have an issue with assets.
Our strategy is: cost control, retail asset management and we’ll continue to launch product. We believe we have strong product development plan in the pipeline. We won’t delay launches although these may be done in different way. We need to keep the launches up, keep the pace up, and spend money in retail to keep boxes moving. It’s really important to come up with new product offerings, so both retailers and Electrolux can make money. It’s the best way of fuelling the top line and making sure gross profit margins are decent. To be afraid and offer volume discounting will kill us.

In your business, how is New Zealand tracking in comparison with the rest of the world?

Korea, Australia and New Zealand have had to deal with tough currency developments, which hasn’t helped. As long as we make money, we’re not too stressed about the bottom line, it’s healthy business.
The New Zealand market is suffering more than some of the others, but our trade partners see we’re not losing share, we’re here for the long run. We’re taking hit just like everyone else. We are reasonable and understand that it is tough, we need to work through this in close cooperation with our major trade partners.
Consumer trends are changing bit. They want to trust brands and money matters. We have to stand our ground. We have strategy and we’ll stick to it.

Internationally, what is the external opinion on New Zealand: as business proposition; as an ‘incubator’ market for testing new products, and in relation to other Asian-Pacific countries?

There is lot of similarity to Europe and Australia. In that sense, being European brand predominantly, it makes lot of sense. In general New Zealand is fairly highly positioned with innovation. It’s absolutely possible to sell premium and top models here, there is not ‘slash and burn’ mentality.
The link to Australia, (similar plugs, etc), makes sense with streamlining the product portfolio. I made it clear immediately that the markets do have synergies but that they are very different. It’s important to show proper respect to the culture of New Zealand. It’s important to success.
We try to focus on what is important to people like Alan [Dalton, general manager New Zealand]. If we didn’t have their passion and entrepreneurship we wouldn’t be successful, they need the space to grow. Yes, it’s cliché, but there is real need for it.

What advice would you offer to both businesses and CEOs/upper management in the current economic climate?

Take step back and look at the business. If you need to make changes, do it now or you’ll never be forgiven. Take step back once you know what the business needs to cope for three to five years. You need to act as responsible employee. You have brand. You need to do what’s right. It’s human beings we’re dealing with. It’s about doing what’s logical and right. People will respect it eventually, some people will get emotional. Get professional advice and do what’s right and see if you can offer bit more. That’s all you can do.
If you try to lay blame and make it what it’s not, you’ll never survive. You have to be up front with everything whether firing people or product failing. My first advice is to be honest and take it one day at time. These days, you need to be credible. Say it the way it is. They may disagree but at least they’ll understand or rationalise.

What do you do outside of work?

In the last year there has not been lot of time, so it goes to priority one, the kids [Nilsson has two children, nine-year old daughter and five-year old son]. The weekends are very much like any other dad teaching his son to swim. Both my kids take karate. We also take short weekend trips to let them see bit of Asia, very basic. I try to exercise with strict jogging regime. It’s more about the energy level.

Are there only Electrolux products in your home?

I appreciate good design and products. I have Electrolux products, naturally, because at the end of the day, people like them and I decide what products we sell. I surround myself with the good ones. I buy the best as I want to know what I should eventually expect from my brand.

Electrolux regional brief

President: Ola Nilsson
Regional span: Asia Pacific, Middle East, Africa
Headquarters: Singapore
Number of countries: Group subsidiaries in 14 countries (in Asia Pacific and South Africa), sales in 24 countries, (rest of Africa and Middle East is covered via distributor sales)
Number of employees: 350

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