In this episode of The Heidrick & Struggles Leadership Podcast, Kim Pomoell speaks with Riitta Savonlahti, executive vice president of human resources and member of the group executive team at UPM. She shares insight into how she led a decades-long transformation from a legacy paper business to a global, purpose-driven material solutions company.

Riitta shares how UPM built a culture anchored in trust, clear accountability, and the values “Trust and be trusted”, “Achieve together”, and “Renew with courage”. She unpacks matrix leadership, ambidextrous capabilities, AI upskilling, and the role of HR and recruitment in sustaining momentum, offering a practical playbook for aligning culture with long-term strategy.

Welcome to The Heidrick & Struggles Leadership Podcast. Heidrick is the premier global provider of diversified solutions across senior-level executive search, leadership, assessment and development, team and organizational effectiveness, and culture shaping. Every day, we speak with leaders around the world about how they're meeting rising expectations and managing through volatile times, thinking about individual leaders, teams, organizations, and society. Thank you for joining the conversation.

Kim Pomoell: Hello. I'm Kim Pomoell, a partner-in-charge in Heidrick and Struggles’ Helsinki office and a member of the Consumer Markets and CEO and Board practices. In today's podcast, I'm excited to speak to Riitta Savonlahti, the executive vice president of human resources and member of the Group Executive Team at UPM. Over the course of her career, Riitta has played a pivotal role in shaping UPM’s transformation into global biofore company—a term coined by UPM themselves—to describe a new forest industry. Here, she is helping to steer the organization's strategy, culture, and people agenda. She has also served on the boards of several major organizations, bringing to the table her deep expertise in leadership, compensation, and organizational development. Riitta, welcome and thank you for taking the time to speak with us today.

Riitta Savonlahti: Thank you, Kim, happy to be here today.

Kim Pomoell: Great. So, without any further ado, and speaking about leading cultural change: Riitta, established businesses often carry strong traditions and ways of working. What do you see as the biggest challenge when trying to balance traditions with the need for transformations, and how have you addressed those challenges?

Riitta Savonlahti: Maybe a bit of background of UPM first, if okay for you?

Kim Pomoell: Absolutely, that's great.

Riitta Savonlahti: So UPM as a company was formed by the merger of Kymmene Corporation with Repola Ltd and its subsidiary, United Paper Mills Ltd, in 1996. And we have grown into a global material solutions company, now having production units in 11 countries, with almost 16,000 employees in 43 countries. And in our case, if thinking of when the platform really started to burn, it was the year 2005. Paper consumption had started to decrease quite rapidly, and yet there were some who didn't see that fact. Also, after the merger, personnel had been told that there won't be any changes in the number of personnel.

20 years ago, the biggest challenge with the leadership of the new CEO was to start changing the culture from internally focused to more outward-looking and starting to bring employees also from outside and learning to live in a matrix organization, which was new at that time, with renewed concepts and processes. The leadership team needs to be aligned and have the same view about the needed change. So also, the leadership team needed to be renewed, not at the same time but gradually during the years. So, in addition to the needed cultural changes, there was a clear need for restructuring of the organization.

One of the starting points was to change the way we recruited. All the positions needed to be open not only internally, but also externally. And gradually, we started to get new people to all levels of the organization from outside, from different companies with different backgrounds, persons who questioned the status quo and brought new ideas to develop the company further. Slowly but firmly, the culture started to change.

Kim Pomoell: It's been quite a dramatic change. A lot has happened, a remarkable transformation journey over the past few years. From your perspective, what has been the biggest shift in the company's culture during that time?

Riitta Savonlahti: Probably the biggest shift has been to become from a, if I may say so, quite old-fashioned forest industry company to a global industrial player, a biofore company and lately material solutions company, having global processes in place. From a cultural point of view, change has gone from internally focused, i.e. all the wisdom is inside of the company, to an open non-political environment where values play a big role. What we saw as our strength at that time and what we wanted to keep was the very respectful way of working with our colleagues. One sign of becoming non-political organization was that the CEO told all who tried to get answers to their problems from him, to go to the responsible person, not to him.

Kim Pomoell: OK. A big shift.

Riitta Savonlahti: Yes, it is. And gradually, the organization learnt how to behave in a proper manner, even though it might sound a small thing, but it was really a big thing when CEO, all of the sudden, started to say, “Hey, please go to the person who is responsible of that topic.” And today one thing I'm very proud of is that we truly have a non-political working environment, which of course needs constant care, because it easily will be disrupted if you let it happen.

Kim Pomoell: Yes, sounds like something that needs to be reminded towards the organization. When you began shaping UPM’s transformation, was culture a driver from the outset?

Riitta Savonlahti: Yes, it was. The leadership culture needed to be changed, and we worked a lot with the leadership team to find the common understanding of that. Also, new matrix organization was one driver, and if you think about matrix organization, the responsibilities are never clear. The former functional organization had very strict responsibilities, and in the very beginning, it was constant discussion with our employees, that “What is your responsibility and what is mine?” And then, as we know, there are always these grey areas in a matrix organization, and you have to somehow shuffle there in between of everything. It was difficult in the beginning.

Kim Pomoell: Yes, I can imagine. How do you build trust in times of large-scale change and make sure employees feel included in, rather than disrupted by, transformation, especially on an international scale?

Riitta Savonlahti: “Trust and be trusted” was defined as one of our three values already, in 2010, together with our employees. So, the whole organization participated in defining our values, and the two other values are “Achieving together” and “Renew with courage”. But the trust was clearly the most important element when it comes to our values. They are still valid and alive in our everyday life and form a core of our leadership culture. One important element, in addition to values, is that we have a very inspiring—at least, I think that it is very inspiring—future-oriented and bold purpose. We renew the everyday for a future beyond fossil. And purpose is the core reason why we exist as a company, and it serves as a guiding principle that motivates employees and fosters a positive culture. It also describes why we do our work and where we can create a unique positive impact. Our purpose sets, also, ambition level for us and it acts as a compass or as a North Star, pointing us to the right decision and actions. We have also defined value-based behaviors, which can be called value strengthening behaviors because they reflect our values, make them stronger and build our culture in a positive way. And I could open a bit those behaviors, if OK for you?

Kim Pomoell: Yes, that would be great.

Riitta Savonlahti: All right, so starting from “Trust and be trusted”. It means that we create a clear and compelling picture of the future, and we trust people to do their work by giving them space to succeed. We keep our promises and hold others accountable, too. So that is about “Trust and be trusted”. And then “Achieve together” means that we are hungry for results. We set bold and brave targets both individually and at a company level. We are brave and timely in decision making, bringing others onboard. We drive across organizational cooperation and ask for feedback and give constructive and positive feedback in a timely manner to others. So that's about achieving together. And then “Renew with courage” means that we show passion for renewal, we share our own opinions and ideas bravely. We experiment and take all opportunities to share and learn from mistakes and successes, and we take care of our own wellbeing and capability to lead. So those are the behaviors we would like to see. How did they resonate to you?

Kim Pomoell: Trustworthiness is fundamental for being able to do stuff together, so it resonates quite well at least for me, and apparently for everybody at UPM.

Riitta Savonlahti: Yes, at least I think that, because they have really been alive since 2010 and they are inbuilt in all of our leadership programs and development programs. And they are somehow sort of, they are not only words on the wall, but really, we live according to our values.

Kim Pomoell: Now shifting over to the following area, looking at leadership, people and culture of change. You’ve often spoken about the importance of leadership culture. In your view, what distinguishes leaders who are able to guide people effectively through transformation?

Riitta Savonlahti: I think that they are able to lead well, businesspeople and themselves, and I think that if you don't, if I don't know myself and keep myself balanced and courageous in the face of uncertainty, how could I lead others? And in the core are our values, of course, and leading according to them. Leaders are first of all open and honest about the change which is there, and they involve and empower people. There is trust in between of the team members [that] the planning of the transformation, whatever it might be has been done well. It has been discussed and agreed together in the leadership team, and the top team is aligned and works together, not in their own silos. I think this is very crucial, that we really collaborate together and not sort of go only our own paths with our own areas of responsibilities and not sort of taking others into account when we do decisions, but really work together and collaborate together.

Kim Pomoell: As you are a global company, how do you help leadership teams align not only on business goals, but also on values, behaviors and ways of working that support long-term change

Riitta Savonlahti: Now, we have had dialogues in the whole organization about diversity and inclusion and purpose and values. And when you make these topics concrete in your everyday work by discussing about them in your team, discussing about what do they mean to us and to me, they become alive and meaningful for all. You find out concrete examples on those and then you really also understand what they mean. And annual employee engagement survey also gives us good feedback on what are the needed actions in all business areas and global functions. And then when it comes to leaders, I think that what we'd like our leaders to be is that they are really ambidextrous, meaning that they can manage, at the same time, two very different demands, delivering the results with today's core business and building tomorrow's business through innovation. And they have leadership capabilities to drive business results, sustain performance under pressure and build organizations which are fit for the future. And of course, they would understand purpose, values, behaviors and culture. A bit of demands for leaders, but I believe these are crucial for leaders to succeed and also to make a company successful. 

Kim Pomoell: Absolutely. Transformation requires new skills and mindsets, right? How have you approached preparing and re-skilling leaders to navigate and changing their environment? You just mentioned what is expected, so how do you take them on the path for being part of the future? 

Riitta Savonlahti: I would say that our leadership development has been an integral part of our transformation, and we have had several leadership programs during the years, and we have systematically invested in leadership development in good and challenging times. So, we have never stopped the development; starting with the renewal of UPM leadership principles and values to a robust program portfolio, supporting the transformation we need; for example, aiming higher in performance, leading with passion, and leading beyond turbulence and instability. So, those topics have been changing during the times, whatever might have been the need coming from the transformation of the company. And if still thinking of the goals of our leadership development, they are to support the company to perform and drive, of course, growth and transformation towards a future beyond fossils, which was our purpose, as I said earlier, and strength in the leadership culture based on UPM values and aiming higher mindsets which enables, which enable everyone to grow, perform and achieve business results. And also develop future leaders for more demanding roles and ensure that the leaders have the capabilities they need to lead themselves, people and business. And leading change is always part of the leadership and now, for example, the big goal is transformation enabled by AI, and at the moment at UPM, we have a companywide AI program ongoing. AI up-skilling for leaders is part of both AI program and of our leadership programs today, it's crucial to have there. 

Kim Pomoell: From your experience again, everything that you just walked us through and looking at the HR, what roles does HR play as a strategic partner and a culture catalyst in times of transformation?

Riitta Savonlahti: This probably should be asked from somebody else than the head of HR. But of course, I see the role of HR as very important, but not only in top level, but in all levels of HR organization, and really in bringing development needs visible, is one of the key elements. And we have done, and you probably know McKinsey's Organizational Health Index Survey, which we have done several times during the years to find those development areas and to be able to focus on needed organizational capabilities; for example, raising, aiming higher mindset which is needed in transformation. 

Kim Pomoell: Transferring into a third area, which is about sustaining transformation and looking ahead, and transformation is really a onetime event, and you mentioned that there's been various phases in reference to transformation at UPM. It's continuous. How do you keep cultural momentum alive once the initial wave of change has passed?

Riitta Savonlahti: For example, regularly done, these Organizational Health Index Surveys give you their data on, “How does the culture look like and how have we developed, or have we?” And also, our different global programs, like now AI program and different leadership programs support keeping the momentum alive. And annually we raise development areas from our employee engagement survey. But even though we have all kinds of surveys and programs, I think that the most important thing is to have constant dialogue with our employees about those topics we see important. But of course, the data is crucial to bring those topics visible, what is really needed, and what do we need to develop further in the in the company.

Kim Pomoell: Now, UPM is also deeply rooted in sustainability and, as you already walked us through, innovation. How do those themes influence the way you think about future leadership and culture at the company?

Riitta Savonlahti: Now, when we are focused in business on sustainable low carbon products, renewable feed stock, future leadership must be visionary, long term and ecosystem-oriented, while the culture must be responsible, innovative and purpose-driven. Sustainability sets the direction. For example, decarbonisation and innovation provides the engine, like what technologies and new models are.

Kim Pomoell: So looking at the next generation of leaders, what capabilities or mindsets do you think will be most critical in ensuring that culture and strategy remain aligned?

Riitta Savonlahti: The next generation of leaders, they need to be purposeful, adaptive, ambidextrous, inclusive, courageous, and endlessly curious. And this ambidextrous is very difficult topic because, as discussed already earlier, they need to manage, at the same, time two very different demands: delivering results with today's core business, and building tomorrow's business through innovation. So it's a bit difficult thing, but I believe that future leaders can handle that. But of course, we have to give also tools for them being able to develop themselves in that area. But what is also very important is that they are endlessly curious about new things. And these capabilities ensure that strategy, meaning that what we aim to do, and culture, meaning how we act, reinforce each other rather than drift apart.

Kim Pomoell: Now finally, Riitta, if you could give one piece of advice to HR and business leaders in other established companies embarking on a transformation journey, what would it be?

Riitta Savonlahti: This is really difficult to pick only one, but what always has been very close to my heart is recruitment. So, it's people who make the results, so really paying attention to having competent, diverse teams with people with the right attitude in place, it's really crucial for the success of the company. I believe that recruitment process is one of the most important processes of the company.

Kim Pomoell: I couldn't say it better than you did. Riitta, thank you for making the time to speak with us today. Thank you very much.

Riitta Savonlahti: Thank you. It was my pleasure.

Thanks for listening to The Heidrick & Struggles Leadership Podcast. To make sure you don't miss the next conversation, please subscribe to our channel on your preferred podcast app, and if you're listening via LinkedIn or YouTube, why not share this with your connections? Until next time.

About the interviewer

Kim Pomoell (kpomoell@heidrick.com) is a member of the Consumer Markets and Private Equity practices; he is based in the Helsinki office.