CHRO insights: Digitalization and disruption

In this podcast, Heidrick & Struggles’ Merja Eskola speaks to Hanne Peltola, chief human resources officer at Neles, a publicly listed Finnish technology company. Peltola shares her insights on how digitalization has created opportunities, not only for the customer environment, but also helping employees to better balance their working and private lives. She further taps into the importance of a diversified workforce, which should remain a common challenge for all companies around the world.

Some questions answered in this episode include the following:

• (2:23) As we know, the advances in digital technology keep disrupting your industry. What is Neles’ strategic plan for the next five years?
• (7:24) As a very experienced HR leader in the global company, what is your advice to attract and retain talent? 
• (11:33) As you look to the future, what are the new skills and some behaviors that CHROs need to develop in order to excel? 
• (12:36) As a leader, what were the biggest challenges you had to face during the crisis and what did you do to overcome them? 
• (14:23) What’s the most important way your organization is building on the lessons of 2020? 

Below is a full transcript of the episode, which has been edited for clarity.

Welcome to the Heidrick & Struggles Leadership Podcast. Heidrick is the premier global provider of senior-level executive search and leadership consulting services. Diversity and inclusion, leading through tumultuous times, and building thriving teams and organizations are among the core issues we talk with leaders about every day, including in our podcasts. Thank you for joining the conversation.

Merja Eskola: Hello, I'm Merja Eskola, a partner in Heidrick & Struggles’ Helsinki office and a member of the Corporate Officers Practice. In today’s podcast, I'm speaking to Hanne Peltola, chief human resources officer at Neles, a Finnish publicly listed technology company. Hanne joined Neles in 2016 as the vice president of HR, EMEA region. After a demerger and the creation of Neles in 2020, she became CHRO of the company. She is now a member of Neles’ executive committee, running the HR and people strategy. Hanne, welcome, and thank you for taking time to speak with us today.

Hanne Peltola: Thank you, I'm happy to be here.

Merja Eskola: First of all, could you share Neles’s journey to date and the reasons for the demerger from Metso?

Hanne Peltola: At Neles, our business has always been pretty independent from Metso in a large part, so we always had our own strategy, our own customer base, and our own organization. The demerger, in that sense, was actually a quite logical next step from our owners. It actually allowed two excellent companies to proceed with their own success stories. Neles has more than 60 years of history: it started with an independent, family-owned entrepreneurship and that began to grow globally, then became Metso. Neles was integrated as a fundamental part of Metso and its predecessors. However, throughout this history, Neles has remained pretty focused and compact, continuously developing the business and the offering together with its customers.

Merja Eskola: As we know, the advances in digital technology keep disrupting your industry. What is Neles’ strategic plan for the next five years?

Hanne Peltola: So, we actually see digitalization more as an opportunity than a disruption. It will have a big impact to our business, of course. However, we are already on that journey and it’s clear that the way our customers want to be supported is moving rapidly towards the virtual. And then, of course, what happens in the customer environment will have a big impact on our own organization, on the things that we need to learn as an organization, and it will require continuous development, learning, and innovating. And we are a partner of many different kinds of process industries globally and the opportunities coming with the digitalization to improve the productivity and the reliability of our customers’ processes are very broad. We are really there helping our customers to achieve that.

Last year taught us that most office work is not really bound to any specific location and that people really appreciate the flexibility and the choice. At the same time, being able to meet face-to-face with your colleagues and with your customers, sharing ideas, brainstorming, innovating, mingling, and building relationships has become even more appreciated. So, a good point of all of this is that digitalization actually allows us many more choices and helps us to balance our working and private lives.

Merja Eskola: Neles was created in 2020 at the onset of the pandemic; I believe when you were planning the demerger, you didn't have any idea about the unique situation, yes? How did you balance the challenges of building a people strategy for a new company with the challenges of the pandemic?

Hanne Peltola: I think “balance” is the right term to use here. We looked to the horizon and at the same time also acted in a very short-term crisis mode, and our focus was and still is keeping our people safe and then ensuring our factories can operate so that we can deliver products to our customers. And I would actually say that our team adapted to the new circumstances extremely quickly. To exaggerate just a bit, it feels like we just took our laptops and keyboards, made some space on the kitchen tables at home, and then continued the business. But this was at the beginning. Unfortunately, during the last months, the pandemic has also hit us very, very hard, especially in India where our colleagues and the society at large are really suffering. So, the crisis mode really isn't over yet, even if most of the organization has been settled with this new normal pretty well since mid-2020. Our focus since then really has been more and more on the strategy and long term—how our business environment has changed, how will it change, and what competencies are needed and how to build them—and digitalization is part of it all. Building leadership capabilities for this digital or hybrid working environment is pretty much our challenge today.

Merja Eskola: In this unique situation, what did you have to do differently from a people perspective?

Hanne Peltola: A lot of focus has been on how to lead virtually: how to create a sense of belonging, how to engage people while not meeting physically, how to build and develop the teams.

A sense of belonging and being a community is something we have tools for when we are working and meeting each other face-to-face, but it became time to find and create new tools for making it all happen in the virtual format. Our managers have adopted new ways to communicate with their people and new ways to have their fingers on the pulse of their teams. And, of course, it’s required from all of us a lot of learning new skills and learning how to become safe with digital tools and also how to supporting employees to adapt their skills very quickly. Throughout the year we have also been recruiting new employees and new key people and onboarding them, getting them into the teams and into the community quick and efficiently. It’s really new and we have succeeded in that as well.

Merja Eskola: Interesting to hear! And, as a very experienced HR leader in the global company, what is your advice to attract and retain talent?

Hanne Peltola: I would say it all starts from your values, your leadership principles, and the culture. It really is about walking the talk and in an authentic manner. The basis of our culture and values is our customers’ success, and what we as a team can do to help our customers succeed. That provides us opportunities to learn and develop ourselves, and development always also means growth opportunities on a personal level as well as opportunities to grow as a team, for us as individuals to share our own knowledge and be proud of what we do. That’s what then creates a sense of meaning, wholeness, and belonging and that, as we know, builds that engagement. So, I would say that attracting talent follows when we have all these elements in place and the word spreads out from the organization—but, of course, it requires that we also actively share our stories.

Merja Eskola: How have the concerns and needs of the workforce shifted from your time at Metso?

Hanne Peltola: Neles is a smaller and leaner organization, so self-initiated teams and self-leadership has really become more important. In a smaller organization, job roles tend to become wider. That allows people more responsibilities and also more opportunities to learn, which for many of us is a big motivator. And, at the same time, it then requires new competencies and readiness to take on new challenges.

Merja Eskola: Diversity is very, very important. What advice would you give companies that are trying to increase diversity in the workforce? Are there particular challenges or benefits of being a Finnish company in these efforts?

Hanne Peltola: Start with identifying and recognizing your biases, assumptions, and beliefs that are hindering progress on diversity to proceed in your organization, and then go through your practices in daily management, especially in recruitment, celebrating and promoting employees, and offering development opportunities and so on. And be honest with yourself. Then, you need realistic targets and a plan to get started. What will be your targets for the next two years? Five years? Where do you want to be and what are your KPIs? How do you measure your progress there? It’s important to set realistic targets.

I think being Finnish or a North European company has benefits. Globally, we are seen as fairly advanced in providing equal opportunities, but that creates the expectation that we would also be advanced on diversity issues, and maybe that’s a big challenge for us as well. We may think that we are further than we actually are. Our gender diversity has been improving well during the past decades; however there are many other areas in diversity where the work actually has not even started yet. So, I would say that increasing diversity should remain a common challenge for all the companies, globally.

Merja Eskola: Let’s talk about your role as CHRO. As you look to the future, what are the new skills and some behaviors that CHROs need to develop in order to excel?

Hanne Peltola: Currently, I’d call the role some sort of an ambassador of well-being and life balance, and even health and safety topics. And on diversity and inclusion, as I mentioned earlier, I think we still have a lot to do. Then, of course, digitalization. When it comes to our own function and the services we are providing for the rest of the organization, digitalization will play a big role. And at the same time, we must also build the digitalization and digital capabilities in the whole organization. And what remains very important still is the role as a business coach, and leadership coach.

Merja Eskola: As a leader, what were the biggest challenges you had to face during the crisis and what did you do to overcome them?

Hanne Peltola: That is a good question. I need to start from the very human side of this whole crisis, I think. The challenge was really this isolation—as a people person who gets a lot of energy in meetings with others and being with others, it has been pretty challenging to stay isolated from others. Feeling a sense of belonging is something I’ve also had to work on a lot. I think it required me and my team to redesign our methods of communication with each other; the frequency of the one-to-ones and even the monthly meetings has changed. And then, of course, the worry about the whole pandemic situation and how other people are coping with that one, that has been also a big challenge. A challenge I seem to share a lot with others as well is the sudden change from the office environment to the teams environment and how the days at the beginning became very, very long, starting early in the morning and ending late in the evening with your headset on. And after a couple of months, my body started telling me, “Hey, you cannot do this to me. You need to move kind of or do something else than be in team meetings.” And balancing one’s own time is hard. So, time management and this physical exercise part have been something I have learned to better manage during this crisis.

Merja Eskola: Yes. What’s the most important way your organization is building on the lessons of 2020?

Hanne Peltola: I think, for us, a very important lesson has been that we can really trust each other as an organization and that together we can overcome challenges in exceptional times. And, in the middle of that, we’ve also seen that we can still create flexibility and balance in this new way of working together while at the same time keeping our focus on the future and opportunities and implementing our strategy as a team. And then at the same time we’ll keep learning and developing the new ways of working together with our customers, who have also been a big part of this.

Merja Eskola: Hanne, it’s been great to talk with you today, as always. Thank you for making the time to speak with us today.

Hanne Peltola: Thank you, my pleasure.

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