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Scandinavian management model: NERDZ LAB Experience


Volodymyr Khmil



8 min read

8 min read

Read this article in Ukrainian here – Cкандинавська модель менеджменту:досвід NERDZ LAB

Article content:

  1. Hierarchical vs Flat organizational structure
  2. Scandinavian management model
  3. Pros and cons of Scandinavian model
  4. NERDZ LAB experience: from theory to practice
  5. Our results

What’s the first thing that crosses your mind when you hear the word Scandinavian? You would probably think of trademark minimalism, that IKEA furniture we all love so much, or the Scandinavian walking, especially during the lockdown; and if you are a project manager, you’d probably think of the Scandinavian management model. As much as most things come to us from that part of the world, this one is really cool and progressive.

Our employees are cool and progressive too – we love the idea of Scandinavian management and so we decided to implement it in our work. We’ve grown thanks to that model – there are 50 of us now – and we keep on moving up and forth. I am Volodymyr Khmil, founder and CEO of NERDZ LAB and I’d like to share our experience of adopting the Scandinavian management model in our company.

Hierarchical vs Flat organizational structure

Let’s get back to the past for a brief moment. Back in the 20th century, companies were deeply hierarchical. There was a big boss in charge of the top management, who were in charge of department managers, who were in charge of the team managers, who were in charge of the regular employees. The big boss would make decisions and those decisions would move from the top down all the way to the regular employees, and they, in turn, would send reports from the bottom up. Such a model has its perks; decisions are made fast; the boss makes decisions and the subordinates do what they are told to do. No need to waste time negotiating and approving each decision. Of course, there are some serious flaws to that model. The decisions are not always the best because the boss would rarely listen to the opinions of the subordinates who might have valuable insight to share. Also, it kills off the motivation to grow and be creative – what’s the point if the boss just scraps it all?

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In time, the hierarchical model became obsolete and it has been replaced with the flat management model. As you can tell by the name, there’s no top-down decision-making with the almighty top-manager making all the important decisions. Now, each and every member of the organization can take part in its development and help the company move towards its goals. Each employee becomes a micro-entrepreneur who’s genuinely interested in the growth and development of that part of the company they are responsible for. But for than puzzle to work, everybody has to understand who goes where and how to help each other achieve the common goal. People are at the center of this model, people who work for the company, their working conditions, their skills, and their motivation.

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Scandinavian management model

You’ve probably figured already that the Scandinavian model is flat and does not include any complex hierarchy. It is kind of similar to its European and Japanese counterparts but it adds five crucial points that clearly define this model as something made in Scandinavia. Here’s the glorious five:

1. The company does not just hire seasoned experts from the local talent pool but also improves the loyalty of the employees to the top management and the company as a whole.

2. The responsibility is decentralized. The communication between the managers and the employees happens without third parties, which minimizes the distance between the employees and the managers.

3. The organization constantly builds and maintains informal relationships between the top managers and the employees. It does not matter how long and intimidating the name of your position is – the Scandinavian model is all about erasing the boundaries between people and helping them make and realize effective decisions.

4. Less paperwork. Almost all the decisions are made in an informal atmosphere without much bureaucracy attached to them. There are no complicated and entangled processes that are meant only to restrain people and make their work as inconvenient as possible.

5. Results and nothing but results. Nobody cares how, when, and where you do your job. The results are all that matters. Whether you work from home or at the office, from nine to five or five to nine, we care only for the results of your work.

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Pros and cons of Scandinavian model

Modern companies wage wars for the people. Each wants to get the best professionals, and that is where the Scandinavian model comes in handy since it is a very human-oriented model in its code, so it covers several critical issues.

The companies that roll with this model have comfortable working conditions, which contributes to staff retention. The Scandinavian model fosters informal relationships within the team and motivates the employees to stay with the familiar and friendly team rather than leave the comfort zone and get used to the new people. The introverts know the pain.

According to the model, each individual takes responsibility for their work and they are free to organize it however they like. Such an approach motivates the employees to grow and look for new solutions to their routine issues. The business, in turn, benefits from having people who never stop growing and keep on developing their professional skills.

A business that runs with the Scandinavian model is a business with nearly zero bureaucracy. The employees are not afraid to throw in their ideas and can discuss them freely without having to go through the bureaucratic hell to get the top manager’s approval.

Another big benefit is that the company that cares for its employees and treats them as responsible professionals automatically becomes a magnet for the people from other companies. The word of mouth does its job well, which makes the recruitment process much easier.

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Now let’s drop the rose-tinted glasses and take a look at the flaws of the Scandinavian model. Overall, there are two flaws, or better say, risks that can threaten your company’s success.

So, the first risk factor is the time spent making and approving all the decisions. Well, it’s not that lightning fast as you might want. All the major decisions are to be discussed and agreed upon with the team, and this takes a lot of time. It might happen that trying to please everyone might lead to decisions that would ultimately hurt the company.

The second issue is the ideation process. If the goals and objectives are not precise enough, the employees just cannot do their job right. Freedom and responsibility are great but without clear goals and objectives, you might be a long way from seeing positive changes.

Now, let me tell you how we roll with the Scandinavian model at NERDZ LAB.

NERDZ LAB experience: from theory to practice

Right off the bat, when we just started the company, nobody talked about the Scandinavian model. We wanted one thing – to create a company that’s really comfortable to work for. And we were not talking about tastier snacks at the office kitchen; we were talking about the atmosphere, our projects, and the way we treat our employees – the three factors that make a great working environment. It was later that we learned that our approach coincided with the Scandinavian model. That’s when we decided to study it thoroughly and borrowed a ton of brilliant ideas from it.

OK, say you, but how does it work in practice? Let me tell you.

We make a strong emphasis on our employees and the projects they are working on. When looking for the projects, we select the ones that would motivate the developers and the ones that are actually exciting to work with. We do not embark on projects that involve working with the legacy code, yes, that’s true. We do not take on the projects where you have to fix the code because the previous vendor did a poor job. We do not want to fix somebody else’s mistakes. We do not work with outdated technologies.

We are genuinely interested in the projects that allow us to work with something new so that our developers can truly let their skills shine. That is why we actively cooperate with startups at the first and the second funding round. The newest technologies, from scratch code, freedom, and responsibility – that’s what we love and it really drives us forward.

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What else, apart from exciting projects, do we offer?

We believe that there’s no need to chain the developers to their chairs. We give MacBook Pros to all of our developers, so you can come to the office, work from home, or from the coffee shop – whatever suits you. It is especially great whenever you see (cheap tickets to Bali )here’s yet another lockdown.

We also understand that each and everyone has their own rhythm. Some people are more productive in the morning, some in the evening, some do not enjoy working at all but, well, we don’t have such people. We have a flexible schedule – you start your working day whenever you like and have as many breaks as you need for a comfortable performance. If you have any urgent matters to attend to during the week, you can leave for several hours and do your thing as long as you get the job done later. Want to work during a national holiday and save yourself an extra day off for later? That’s fine too.

A friendly atmosphere where everybody knows each other is paramount to us. We do not have plans to hire hundreds of developers, we want to stay a small family where everybody knows what we do here, which projects we work on, and what we do in our free time.

Our small size gives us another bonus – we do not give our developers any kind of rankings or levels. The only thing we care about is their skills and experience with respective technologies. No levels – no hierarchy. The same goes for the candidates. We select people, not by the number of years they’ve spent with the technology but their ability to get the job done the way we need, years of experience do not matter, only the quality of that experience.

As the Scandinavian model goes, all the people in our company are equal and there’s no middle-men between the top managers and the developers. And one more thing – the quality of work is not measured by the number of hours you’ve spent with the computer but by the results of the work you’ve done. We do not track the time our employees spend working – that’s not how we do things here.

Our Results

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How did the Scandinavian management model help us?

I’ll start with the best thing: in three years, almost none of the developers left the team. The team grows stronger, so do the relationships within the team. The Scandinavian approach helped us build a robust and friendly community. People talk about us, and the word of mouth helps us hire more talented specialists. This is a great advantage in the times when recruiters go to a full-scale war for the candidates.

Did we have any problems along the way? Yes, of course, we did. Our model puts people at the forefront and financial gain comes as an afterthought. Because of that, we are sometimes forced to compromise our financial interests to make sure our employees are comfortable. It happened to us on several occasions that we would get lucrative offers but they would not meet our criteria, have us deal with outdated technologies, or whatnot. And so, we had to turn those offers down to make sure our developers feel comfortable and excited about their job.

We’ve lost a couple of projects during the lockdown but we did not fire anybody and did not cut wages. A large portion of our income went to keeping people happy and occupied but that’s what our values are all about. People first, money second.

In three years in the IT-Market, we became convinced that the Scandinavian model suits our company best, at least for now. Its core ideas and values match our own and help us build a company you are comfortable and excited to work for.