How flat company structure is helping Vector Software to conquer the Norwegian tech market
In 2018, Norway became a country with the fastest tech ecosystem in the Nordic region. Preventing the oil and other natural resources exhausting, the Norwegian government decided to support startup development and create comfortable conditions for business by continuous investment and support. Therefore, Oslo is ranked as one of the most business-friendly cities in the world. ITID talked to Ihor Vershynin, CEO of Vector Software, Ukrainian company with offices in Oslo and Lviv, to find out how to immerse into a different business culture and what makes working with the Norwegian market special.
Vector Software is a custom software development and outsourcing company. The main markets where the company delivers its services are based in Norway and Finland. Vector Software shows extreme growth by the last few years: over 80% annual growth few year in a row. Vector Software is building products for Stingray, which provides optical delousing solutions for fishing industry; SmartDok with planning, tracking and reporting solution for construction industry; Carus – self-service kiosks for transport passage automation, ferries booking solution; Vissim – sea surveillance and port information management solutions; Ecohz – green certificates trading solution for energy sector; ArtistNextDoor – marketplace for entertainment professionals.
In late 2000s I’d been working with a Norwegian HR services company. At that time I’ve met my future partners and after a while, we started a new stage of our career. With an understanding of Scandinavian market needs, we started a company in 2014.
We are building a Scandinavian business philosophy here at Vector Software. We adopted a flat company structure with little hierarchy, and focus on cooperation and trust among people. From my experience, I’ve noticed that Norwegians pay attention to the work-life balance, and everything connected to your personal life is important. Usually, people will not understand if you stay at work when you have personal issues, for example, working at weekends is typically inappropriate. Adopting Norwegian practices, we build our structure in a way that allows every team member to communicate with top managers, take part in the management process, and have a flexible schedule.
The main source of our sales is networking and references from previous clients. We have a base of satisfied clients so they recommend our services for other companies. Though, recently we have started working on our global marketing strategy as we would like to expand our services beyond Scandinavia.
It is important for us to hire people who share similar values and attitude to work. We try to hire people who are passionate about their profession and who really love their job. The ideal recruitment process would look like this: we check if people can do the job they want, want to do such a job and if we can comfortably work together. I try to take part in the interviewing process, to make sure that the candidate would fit into our company. Normally, a few simple questions based on the information from CV are enough to understand what kind of expertise a person has. We pay attention to things like how deeply people were involved in the development and decision-making process at a previous work place, and whether they are capable of taking the initiative. To define what drives people to do their job, I usually refer to McClelland's human motivation theory and try to find out what is the main motivating driver for the specific person: achievement, affiliation or power.
At the moment, there are so many companies in Lviv, the competition is tough – you should really fight for a good candidate. Before we proceed to an interview, we make sure our recruiter “sells” the company to a potential team member. This makes the whole process more difficult, as a recruiter has to sort of be a salesperson, and make sure the candidate gets all the information about benefits of working at Vector Software.
QUOTE: “We pay attention to things like how deeply people were involved in the development and decision-making process at a previous work place, and whether they are capable of taking the initiative.”
Norwegian market is pretty closed. To successfully work with Norwegians, you really should have a deep understanding of Norwegian people. When we were making our first attempts to work there, outsourcing was a new approach for Norway. It took time to win trust of our clients. At that time, only a few big companies were using outsourcing services, while among small and mid-sized companies it wasn’t popular. Fortunately, for the last ten years, the situation has changed as many new IT companies have opened, and there is a lack of qualified personnel among 5 millions of Norwegians.
Considering the decision-making process, Norwegians are mostly guided by their personal preferences. As the market is small and everybody knows the main players the important aspect of decision making is trust and loyalty. The interesting thing is that money is not the main priority. Loyalty to the product, quality, and personal views come first. Simple “I like it” is a very powerful argument for Norwegians.
Based on the 9 years of my experience in Norway, I can say that the price of Ukrainian services is far from the main reason of working with Ukrainians. Unlike the US, Norwegians are not that focused on competition. They somehow manage to divide the market naturally. Norwegian people encourage participation more than victory.
As the Norwegian government has been making efforts to encourage startup boom for the last few years, many accelerators have opened. Having an idea is enough to start your own company in Norway. If you have a project that is worth its salt, you can make a proposal for any accelerator, and you’ll be provided with practical knowledge, mentorship, and investments. The social environment is encouraging everyone to self-develop, as people live in conditions, where they can do anything they want. Corporations are sponsoring accelerators, and besides, there is a governmental fund that invests and supports social business initiatives.
QUOTE: “The interesting thing is that money is not the main priority. Loyalty to the product, quality, and personal views come first. Simple “I like it” is a very powerful argument for Norwegians.”
When I have just started my carrier in software development, the industry was formed by enthusiasts driven by professional passion, and a desire to make a difference. Back then, we couldn’t imagine that it will turn out to be such a profitable and demanded job. Twenty years ago, when Ukraine started expanding to the global market, we didn’t have a clear understanding of what and how to do. Things are different now: there is a whole new generation and much more opportunities. For example, right now school graduates can choose from many modernized tech degree programmes, something we couldn’t dream about. There are experts to learn from, many cases to analyze, and people thirsty for knowledge. I like the young generation and I’m hopeful about the future of the Ukrainian tech market. The technical base of Ukrainian engineers is strong, however, to compete at the global market, besides tech skills Ukrainian specialists should keep up with business ethics, responsibility, and communication skills. Nowadays, even though that there’s a hype around the IT industry, the market still needs more tech professionals.
Whether or not people are working in a product company, employees could be involved in a management process in different ways. It depends on the structure of a company, so if the company has a strong hierarchy, the fact that it is a product company won’t guarantee more flexibility. At Vector Software, we try to engage each person into a decision making progress, as it is important for our clients to get a constructive criticism of the products we build.
I believe that Ukrainians have many resources to start a business. However, as starting a business is usually a risk, what we really need is to establish more accelerators and incubators that would support early-stage startups. It is not difficult to get funding for a great idea, but we still need a more developed startup ecosystem.
It would be great to create an investment fund here in Lviv, and Lviv IT Cluster could serve as a base for such fund. I am confident that together with the Lviv IT Cluster community we could accumulate enough resources to kick start the development of startup ecosystem in Ukraine.
QUOTE: “Things are different now: there is a whole new generation and much more opportunities. There are experts to learn from, many cases to analyze, and people thirsty for knowledge.”
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