In January 2014, Mona Grannenfelt walked into a meeting room, not knowing why she had been summoned there. Amongst a roomful of complete strangers and some acquaintances sat her father.
Nanten, the manufacturing company the Grannenfelts had owned for decades, was in trouble.
What the then 28-year-old Grannenfelt did not yet know was that, within a year, the price of oil would collapse and the sanctions by Western countries against Russia would start having an impact. The value of the ruble would continue to drop, resulting in the halving of Nanten’s sales in Russia, an important market area for the company.
Moreover, she could not have even begun to imagine months of persuasion managing to convince her to take on the financially struggling family business. She would become a superior to employees who had been in the house for 36 years and seen her as a baby in a pram.
That someone is born into inheritance in a country that prides itself on the equality of opportunities seems to disagree with Finnish sense of fairness. Yet families like the Fazers, Herlins and Ahlströms are seen almost as national heroes that produced wellbeing in a post-war Finland.
Ten years ago, over half-a-million Finns worked in family businesses, most of which were small and medium-sized enterprises – in other words, the ones that are managed from the kitchen table. Out of these thousands of companies, one was Finnpak, a chemical packing company founded by chemical engineer Olavi Myllynen. Later, the company specialized in floor coatings.
Myllynen’s son worked in the company and his daughter Eeva Myllynen sat in the company’s board. Eeva married chemist Kim Grannenfelt, who also ended up working at Finnpak.
In the 1980s, Eeva and Kim Grannenfelt had three children, Lotta, Mona and Lasse, all born only a few years apart.
The Grannenfelts were a family that valued education. A university degree was a must, and not just any degree. The options were law, business or medicine.
As a teenager, Mona Grannenfelt was a competitive ice-skater and aimed for business school.
”Well, it might’ve been acceptable to study chemistry – for the sake of the company”, Mona Grannenfelt laughs. She is the CEO of the company once founded by her grandfather. Today she is working from home.
The company has always been an inseparable part of Mona Grannenfelt and her family’s life. When Myllynen’s son, Mona’s uncle, was bought out of the company in 1998, Eeva Grannenfelt and her husband Kim took over. Eeva continued as a member of the board and Kim became the new CEO. Finnpak was renamed Nanten.
It was no longer the Myllynens but the Grannenfelts who were in charge.
”Most people think that the company comes from my father’s side of the family, but in reality it was my father who married into entrepreneurship”, Mona says.
She feels awkward talking about the first generational change in the company, noting only that her grandfather Olavi Myllynen did not want the company to be divided between his children.
”I remember the negotiations around the first generational change at the end of the 90s, and let me tell you, it wasn’t rainbows and butterflies.”
When the leadership changed, business edged its way to the dinner table. On weekends, the children would go and clean the office and can coatings at the factory.
There was one thing that the slowly maturing teenager was certain of: her life’s work would not be carrying on the family business.
Grannenfelt got a master’s degree in business and landed her dream job as an analyst at a bank at the age of 24. During her years in the bank, she managed to stay at an appropriate distance from the family company. But when she took maternity leave in 2013, her father asked her to help with the company’s numbers.
Nanten’s situation had started to unfold to her.
Helping her family out was not a problem for Mona. She believes that in a family business, everything is shared. There is no need to count everyone’s share by the penny. She wanted to help in a way that was natural for an analyst – by compiling reports for the bank even though she was on the last weeks of her pregnancy.
”I promised my father I’d take care of the Excels, but then I gave birth to my son early. I never finished them.”
However, Nanten’s situation had started to unfold to her. The loan conditions set by the bank were in danger of not being met. As an analyst, she knew that the situation was serious. Nanten had grown too much, too fast, and there were unresolved personnel problems to boot.
On her maternity leave, Mona tried to figure out where she stood: did she have the courage to take on such a huge responsibility if the situation demanded it?
Then someone suggested that she come and work for Nanten.
”I said yes first, but backed out when I -realized I had a child at home to provide for.”
When she realized there were no interesting positions in the banking world to go back to after her maternity leave, she reconsidered.
It was evident that Nanten needed someone with fresh vigor to steer the company back to success. Mona’s brother Lasse was still in university and her sister Lotta was in an entirely different field.
”I was the least bad choice.”
When working as an analyst, Grannenfelt had thought that she would one day like to get closer to practical work instead of just evaluating numbers. It was never supposed to happen in her parents’ company, but all of a sudden there was an opening in desperate need of being filled. When her husband encouraged her and accepted lengthy working hours ahead, she came to a decision.
”To be honest, I didn’t really do it to save the company – I went in to save my father from the situation”, she says.
In January 2015, Mona Grannenfelt became the new CEO of the company. She held her family’s lifework in her hands. She knew nothing about the coating industry nor did she have any experience in employee management. On the reorganization plan she wrote: ”a messy situation”.
Family entrepreneurship usually makes headlines for one of two reasons: disputes between siblings and tax issues. The former is usually about the parents’ wishes about who should take command of the company and decide its course in the future.
It is not about money, but about wanting to keep the business going. Parents do not always believe that their children are capable of ensuring the company’s vitality together. The most famous example of such a situation in Finland concerns the heirs of elevator company Kone. Founder Pekka Herlin left the executive responsibility to his son Antti Herlin in secrecy from the rest of his children. Kone saw success, but family ties were severed.
”Dad had the courage to let me try on my own, but he didn’t leave me on my own.”
When Mona Grannenfelt started at Nanten, she felt it important that she was not merely replacing her father as the CEO.
”I figured that if I was going to take this payless job in the midst of the biggest loan burden of my life, I should also have the possibility of benefiting in the case of success.”
She wanted to carry the financial risk in both good and bad. Owning a part of the company was also important for another reason: so that no one could tell her how she should act, or worse, how she should have acted.
”Our mother could’ve inadvertently blurted out some sharp comment had something gone wrong.”
Eeva and Kim Grannenfelt felt that Mona should take over 50 percent of the company so that she could make decisions on her own – in other words, so as not to have to negotiate with her siblings, should there be disagreements. This had been the way of things already back when Eeva’s brother was cashed out of the company.
Mona’s brother immediately refused the idea. He thought Mona having ultimate say would be problematic for the company. If the decisions she proposed did not stand well with Lotta and him, there would have been something wrong with them anyway.
”If I had made the 50 percent arrangement with my parents without the approval of my siblings, we would’ve ended up like the Herlin family.”
And so the siblings informed their parents they would decide how to divide ownership together. Mona took a bigger share of the company than her siblings, but she did not get ultimate decision-making authority.
Mona started as the CEO of Nanten in 2015, when the company was making annual losses of almost half-a-million euros. At that time, she did not exactly fit the description of a modern leader. She was unused to dealing with employees’ feelings.
”When my employees were telling me how something felt, it was difficult for me”, she admits.
Grannenfelt steered the company with an authoritarian touch, keeping her eyes firmly on her goal. In the economic downturn, she was forced to make some tough calls.
She acknowledges that her first year at work was constant controlling and directing of others.
”I’ve probably been pretty uncompromising and a bit of an ass, but I had no other choice”, she says. She doubts that her father would have had it in him to do the same, to completely put feelings aside. Mona had never really formed an emotional bond with the company.
”When a business is growing, everyone is happy. When downsizing, no one is happy. That’s when being a CEO is a shit job”, she says.
That is also why CEOs hired to rescue a financially struggling company often resign once the process is over. It is difficult to rebuild broken trust.
Mona, however, staid. Within three years, feelings would gradually emerge, too.
”Now the company is almost like a child.”
Well, a child that made a profit of almost half-a-million euros last year.
The heirs of family businesses have to think over whose dream they are fulfilling if they decide to take on the company. No one knows what Nanten’s fate would have been if Mona had not stepped in and the generational change taken place when it did. Many families end up selling their companies when a suitable successor or willing owner cannot be found within the family. It can be painful.
Even though Eeva worried about leaving a struggling company to her children, it was a smart decision tax-wise. The inheritance tax Mona, Lasse and Lotta had to pay was not as gigantic as it could have been had the company been making good profit. Still, Mona calls the inheritance tax envy tax.
”In reality, a pretty penny is paid for the company before it starts generating any kind of revenue for the new generation.”
She thinks that the expenses paid by the heirs take away from the company’s investment capability.
”I fully understand why some people don’t want to take a huge loan to own a company they’re not truly interested in”, she says.
Even though Eeva and Kim had to hand over most of the formal control over the company when leaving Nanten to their children, they were still able to keep the company close. The Grannenfelts’ family dinners are like weekly meetings of the board. Kim even stayed as the head of Russian operations.
”My father wasn’t distressed about letting go, unlike my mother. Dad had the courage to let me try on my own, but he didn’t leave me on my own”, Mona says.
Many people who inherit a family business are satisfied with the role of an owner and are not interested in being involved in daily operations. That is why they hire someone from the outside to take charge.
Mona’s ending up as the CEO was the result of her maternity leave and the downturn of the banking industry taking place at the same time – a very particular and brief window of opportunity.
How can she know if she is the best choice for the company?
If you look at the numbers, though, Grannenfelt could not have done better. She is well aware of it herself, too.
However, she does not think she will necessarily be the best head of the company forever. She recognizes her shortcomings in people management and knowledge of the industry – it is certainly not easy to transform from a reorganization manager into a change and growth manager.
Recently Mona has hired a business director to work between herself and the employees. It would never had been possible had she not first fought to save the company and had the company’s Russian operations not been revived.
She does not believe that having the family name is a guarantee of success. But perhaps, in that particular situation, Mona was the Grannefelts’ best bet.
Translation: Victoria Odum