Leadership in the face of adversity: an interview with CEO and Chairman Per G. Braathen
Leadership in the face of adversity: an interview with CEO and Chairman Per G. Braathen
We are grateful and proud that so many in our network are reaching out and sharing their experiences in these unprecedented times. It helps to share different perspectives on what it means to do business as usual, in unusual times. We recently interviewed Per G Braathen, entrepreneur, investor, CEO and Chairman of Braganza.
Below follows a transcript of the interview
You are involved as owner, chairman and investor in many exciting companies, including airlines and amusement parks, many of which came to an abrupt halt during the pandemic. Take us back to that time?
In 2019, we had record years on most of the businesses but all of a sudden it all stopped; not because we had done anything wrong but because the world was closed. It’s not something you expect as a leader – but you have to come to terms with very quickly.
So in the midst of this perfect storm, surrounded by anxious managers, worried investors, clients demanding refunds – where do you find your strength?
Motivation is the key. For me this means going for a goal that you can achieve and from there go on. In this situation it is about survival on a weekly basis. With the airline it was how to survive in a full cost environment with no passengers. What is fair to ensure survival and what is not? Basically, it involved making some bold decisions with limited knowledge.
No one knew how long this would go on for, but I have been working with tour operators and airlines and some have had their problems along the way. So, in a way I was used to handling problems – not existential ones like this, but problems, nonetheless. It was important to keep spirits up.
Did you rely on your entrepreneurial spirit and optimism to get you through?
I think that helps to take a positive stance – in this case, it was about as bad as it could be – so it could only get better right? However, now it has gone on so long, around 14 months with just problems. I am very motivated to get the companies back to a new normality. I am much more triggered now because I know we are at the tail end of the pandemic.
When you couldn’t see an end, you still had to persuade your team that they had to go to work, and that they were still part of a success story. What did you say to them?
In all the businesses I said: “This is not our fault, we have not done anything wrong, let’s get through this together.” My assumption was that it was going to take a long time.
A company cannot survive with costs and no revenue – so how did you survive?
We looked at each business individually. We quickly decided on a Chapter 11 for the airline – a drastic measure, but we knew we wouldn’t be able to fly for a long time – we reduced employees from 1100 to 25. For Scandic we had to recapitalise and get the costs down. It was a question of looking at each business and seeing whether it could or should survive and how.
Now you have a new holding company for the businesses what is the ethos behind this?
Not least from the lessons learned through the pandemic it is around agility, being bold and taking decisions and opportunities as they come along. We have a long-term strategy for each of the businesses but we have to be more ready to adapt now.
How do your management and employees feel about the future now?
Of course, in general everyone wants to be successful, but personality plays a part in this situation. People have to be motivated to get through and that comes down to the individual. Those that aren’t motivated leave or cant cope., so this is a crucial moment in seeing whether the right people are in place.
So it is a case of short term goals and a long term vision?
We have to break even, we have to survive but what about the future? Take the airline – sustainability is here to stay; we are going to do ‘sustainability for real’ – work towards net zero, use biofuel – adapt for the future.
How will you adapt your leadership style for the new normal?
It can be difficult to change leaders that are older and I am in that category, but I have learned a lot over the past year or so, good and bad. I am making personal changes. I’ve sold my personal jet because I recognise that it is bad for the environment. Going forward other leaders need to vote for sustainability by supporting businesses with a genuinely sustainable approach.
What about the hotel business Scandic? What are the changes that are coming for them?
So conferences and business travel clients might not come back – but looking at the chain, property by property it is about adapting to capture the leisure market.
You lead mainly through boards now – how was leading and board work through the pandemic without the face-to-face meetings?
In Scandic we would normally have 8-10 meetings a year – from March until June we had 25. They were quite intense and I decided early that I needed to see people face to face. I probably travelled more than most to have in person meetings – as the chairman of company with 25000 employees it was a big responsibility and I spoke to the CEO on a daily basis which is not normal but we needed the mutual support to survive. If increasing my involvement will help Scandic survive then that it what I am going to do.
What about creativity and strategy meetings in the boardroom – were they casualties of the pandemic?
Naturally – but we are planning a new strategy now – one for the new normal and our plans for the future.
You have had to be courageous – where do you find this in the midst of the pandemic?
I don’t know *laughs* Ask my wife! I have a lot of energy and that helps. My advice to others has always been: “get up in the morning, do your work, don’t complain and make as much money as you can.” It seems very logical, but people tend to forget this. During the pandemic I would add that you have to get up a few hours earlier! We have all lost a bit of our autonomy over our time, particularly with digital meetings that land in my inbox, what seems like, every few seconds – I would like my life back.
When ‘you get your life back’ what are you looking forward to the most?
I took up mountain biking 5 years’ ago, single track. If you don’t concentrate you will fall off and hurt yourself badly. I enjoy going out by myself and being completely focussed and not thinking of anything else. I also enjoy doing it with friends and I look forward to this the most. Socialising has been a catastrophe – I am very happy I have a wife and we get along, because we are seeing each other 24/7.
In five years’ time what do you think the history books will write about the pandemic?
For most businesses, the financial crisis was a hiccup compared to this. The key is to adapt; adapt both cost levels and strategy. I will be working hard over the next 5 years to ensure that my businesses adapt and survive. We can gain market share if we do this correctly. Who will win? I don’t know but I love to compete – not in sports but in business. The only way to base your thoughts is on facts – and at the moment I am looking at the vaccination programmes in Israel and the UK and I think this is the way things will go. Europe will be ok, the USA is doing ok coming back from a terrible position, but what will happen in Asia – I don’t know. I hope that mobility will increase in Europe soon, but it is very unpredictable.
Is this unpredictability fun and exciting?
It’s terrible! *laughs* You want the world to be predictable, but you have to accept that it’s not. I would rather have last year’s figures as a reference – but there are no figures for last year.
But aren’t there also opportunities?
You can take much more risk if you are bold, but whether that good or bad – who knows? I think institutionalised businesses that are used to predictability, have a problem with the pandemic. You need to start training your people that the world is increasingly unpredictable; especially given global warming. We are living in an uncertain world.
Where do you look for the facts to base your decisions on?
Well, even though I hate to spend time on reading the news, I do more in order to at least take a view on what’s going to happen. You can learn much more in a microenvironment than you can in a macro environment. Learning how changing X impacts on Y and what happens to Z as a result. That is the way to get proof that changes are working. We conducted research on whether people would be happier to pay more for environmentally friendly flying than before – yes, they were. So we can base a future on that assumption. We also look at the people who take a path before us and see how they are doing.
Are there business leaders, entrepreneurs or companies that you particularly admire?
I research net zero quite extensively and there are two ambitious companies in that area: Ikea and Apple, Microsoft too, but they are software so its easier. If Ikea and Apple can do it – then we can do it. We should become net zero before them because we are a small company. As long as our passengers come with us on this journey of really doing something rather than just talking about it.
So after all this you remain optimistic for the future?
Well what are you going to do? You can either shut up shop, file for bankruptcy and go home -or you can find a way to beat this, and that is more fun. We lost 50,000 flights so far as a result of Covid, we had 26 planes and now we have 3 – but the passengers are happy and that is fantastic.
Per G. Braathen, Known Norwegian investor and Chair of Scandic Hotels Group. Since 1992, Per is the owner, Chair and CEO of Braganza, a holding company, where amongst others, BRA Airlines is part of the portfolio.
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