Recently, we spoke with Markus Suomi, former CTO of Nordic IT software and service company Tieto, and our new Executive in Residence. In this role, Markus will be focusing on intelligent enterprise and mobile technologies, looking at market trends, reviewing new investment opportunities, and supporting the existing NGP Capital portfolio.
Markus believes big corporations need to be more involved in what growth-stage companies are doing. He comes to us with both big-company experience, as well as experience scaling technology companies, making this bridge-building role a natural for him. You are likely to have held software developed by one of Markus’ teams in your hand – more about that in this interview!
You call yourself a technology geek. What is your core expertise?
I have always been a technology geek; I got started with computers and software at a very young age. When I was 12 years old, I got a Commodore 64, on which I didn’t just play games, but learned programming. This provided a good start that led to my software engineering studies at Tampere University of Technology, followed by 14 fantastic years at Nokia, CEO roles at 3 different technology startups, and the CTO role at Tieto.
I have extensive experience with the ways in which companies successfully develop products and services, and manage innovation for new business development and renewal. I’ve had the opportunity to observe companies in a variety of industries, from telecoms and IT services to financial services and manufacturing, as the markets and technologies in these industries have evolved. I’ve also been involved in helping companies succeed in international markets. One of my primary jobs when I was heading Finpro (now Business Finland), was to attract foreign investments into Finland, and to help Finnish companies get access to foreign markets.
Why should big corporations follow what smaller, evolving growth-stage companies are doing?
Many industries are relatively stable for long periods of time, allowing big corporations to optimize their structures, processes, and competencies for their chosen business model. Most of the innovation in these companies is incremental and focused on applying the best practices of their industry. This is all good, as long as the business environment remains stable. However, when the industry is facing a situation where it is being disrupted, the ability to rapidly adapt, learn, and adopt new ways becomes a matter of survival.
"However, when the industry is facing a situation where it is being disrupted, the ability to rapidly adapt, learn, and adopt new ways becomes a matter of survival."
This is where large corporations can learn by following growth-stage companies. By doing this, they can learn well in advance about potential industry changes and the timing of such changes, and can make preparations to deal with the changes.
Not many have scaled an R&D team from one person to 2,000. You have. What did you learn?
I was the first person on the Nokia S60 smartphone software team, so I got to see and lead the evolution from 1 person to 50 people, then 300 people, then 2,000+ people. One key lesson I learned in the process was that maintaining productivity (what a single person can do) and agility as you grow is very difficult. This means that you really need to think carefully about both how you structure your teams and how you structure your software products.
In addition, scaling your structure and practises, and developing necessary competencies are critical. When software goes through multiple releases, it ends up being used in multiple places, on multiple devices and with 3rd parties building on top of it. This causes maintenance problems – you have to maintain variants of the software, which further eats into productivity.
Should every company try to be as agile as, say, Spotify?
Spotify's agile software development model emphasizes a very specific type of customer-centric, exploratory innovation model, where conducting rapid experiments within maximally autonomous teams is essential. But simply copying that model won't work for every industry. Fortunately, there are plenty of good agile development methodology variants in today's world. The trick is to first understand what agile development is all about, then determine how it can be applied to your industry and company, and, only then, start to look for a suitable methodology and the supporting tools to implement it effectively.
What skills do CTOs and CIOs need, both in 2020, and beyond the current COVID-19 crisis?
From a CIO/CTO perspective, you need to balance the acquisition of new competencies and capabilities with the need to cost-effectively support and maintain the relatively stable existing IT system that underlies the business.
There is a wide range of approaches. Some CIOs and CTOs are highly technical and savvy about the technologies and the ways of working that can be applied to digital transformation in their companies. Other CIOs have outsourced almost everything; they understand the IT, but more in terms of the high-level value it provides to the business than at a deeper technical level. These companies are likely to procure these services from vendors.
In either case, digital transformations need to be built in a value-focused way; the company needs to first identify opportunities within the enterprise, both in the customer interfaces as well as in the core business processes, that can actually benefit from digital technologies. Inspiration from outside their own company and industry is very helpful to imagining what is and what will become possible with the advances in both technological and business-model innovation. This is why large-enterprise CIOs and CTOs need to look at what growth companies in their markets, and in adjacent markets, are doing.
Markus, welcome aboard our global team!