Talking to brothers Jouni and Jouko Salo, fourth-generation members of the Hollming shipping dynasty, one of the great benefits of the family ownership model quickly becomes clear: it makes possible a cross-pollination of ideas. Jouko works full-time in R&D at one of the family's businesses, Auramarine, where Jouni is on the board. Jouko is on the board of the holding company and so he oversees the decisions Jouni contributes to in his work there.
“Even though we don’t work at the same company per se in our daily lives we do collaborate quite a bit in trying to find new points of view and ideas, and also constantly trying to look at how we can get more efficiency out of what we have,” says Jouko. The brothers also have two start-ups together, one importing Japanese cars - “a hobby”, Jouni calls it - and another, still in the R&D stage, which will use unmanned drones to monitor pollution levels.
It's all a long way from the business's roots. Founded by Filip Hollming in 1922 as a cargo company, the Salos' business switched to shipbuilding in 1945, the ships being part of Finland’s war reparations to Soviet Russia. Over the years it grew and by the 1980s it was making tug-boats, ferries, military ships, geological research vessels and heavy cargo ships. Their biggest customer was the USSR.
When the Soviet state collapsed “we lost 80% of our revenues overnight”, says 32-year-old Jouni. “A huge recession swept over Finland and the banks, which were backed by the government, called in all their debts and there was basically a fire-sale,” he goes on. “A lot of Finnish companies went belly-up, but we fought against the banks even though we had to sell some companies at low prices. We learned that there are no friendly banks.”
The business was able to survive partly because over the years it had diversified, for example into electronics. (One of its firms was involved in the company that would become Nokia.) These days Hollming has four main branches: a waste management company, a group of steel works mainly in the mineral, mining, offshore and marine equipment industries, one which makes fuel systems, and another group which provides industrial services and equipment modernisations.
Although mostly still based in Finland, they now have businesses all over the world, including in Shanghai. Together, the Hollming businesses employ over 700 people and turnover is about €150 million. The group is 100% owned by five members the Salo family, Jouni’s father and two of his brothers including the 30-year-old Jouko, and his aunt.
It is clear that creativity is absolutely central to the Salos’ success. “What brings us and the family together is the love for technology and innovation,” says Jouko. “We’ve grown up in an environment where discussions about technology have been part of everyday life, that’s what we talked about at the breakfast table. For as long as I remember we have had multiple business branches in different sectors and introductions to different branches of technology.”
Entrepreneurial spirit is the essence of this family business. “I believe in trying and failing,” says Jouni. He is no fan of the US family office model, where families “sell their businesses and they have a pile of money and they don’t know what to do with it.”
It is far better, he thinks, to have a seed fund for family members to start businesses. “Learning by doing”, he says, is the key, and creating businesses also creates motivation, He adds: “If there is no motivation or goals, and no culture of hard work, if innovation and serial entrepreneurialism are not valued then I don’t know how to go forward as a family.”
It is about “fostering a culture of courage, but also of creativity,” says Jouko. A multidisciplinary approach is very valuable. “As we all know, innovations come from meeting different people and not sitting at home and drinking tea. But to be able to apply your curiosity and courage you have to have some sort of fund that allows you to experiment in a safe way. That is a good way to foster a culture of creativity,” he adds.
Jouni says that he talks to his father “two or three times a week” about “some radical sort of idea. We are trying to encourage innovation, one person will say it’s not going to work and the other will say, hell yes it is, someone is trying to knock it down and the other trying to pop it up again - it’s this ongoing argument about innovation”.
The Salo brothers are not disconnected egg-heads, though, and feel their duties deeply. “I am not a great sleeper,” Jouni laughs. “I feel that I am responsible as an owner for the people we employ. At the same time I feel that we are in a tough market and we have to do something to make the company profitable. If I had to take lower margins to keep people employed, I would rather do that than looking at the numbers and adjusting the workforce accordingly.” He is very aware that the business is responsible for the wellbeing of the employees’ families.
This ethical approach is engrained in all parts of the businesses. The brothers are very proud of their greentech, and point out that even a heavy machinery subsidiary makes wind and water power. Their ship equipment company makes a product which cleans ballast water to prevent species from spreading around the oceans from their natural habitat.
A lot of people talk about creating a culture of innovation in family businesses, but the Salos are a living, breathing example of what one looks like. And they certainly aren't lacking in vision. “I feel really hopeful that within 10 or 20 years we will have achieved something that has an impact in a global sense,” says Jouni. “I would feel proud if we could do something to help with air pollution in Shanghai, where our oldest brother lives, for instance."
Soviet tug-boats are a distant memory.