Rocketing Finnish IT business: less bureaucracy saves our spare time

You immediately get the feeling motormouth Tomi Ruotimo and his business represent something different. Their initial meeting with a customer is a 90 minutes long introduction called Harakiri in which the leadership team is told the ugly truth about their own company's poor project model. If the customer doesn't like the first impression he can simply tear up the bill. If the project is carried forward but the customer is unhappy with the software the contract can be cancelled there and then and the customer gets a free trip to the Niagara Falls for her troubles. 

The customer list shows there are at least a few who are still not on their way to take in the waterfall just yet. Houston develops digital services for banks, media companies and telecoms operators. 

"We're about to penetrate the public sector in addition to our existing key customers.”

Unnecessary documentation

The company employs forty people but is growing fast. Ten new people came on board in January. Annual growth of more than 50 percent might put the employees' patience to the test, but the boss claims Houston's workers are more efficient per hour than any of their competitors because they don't need to execute time-wasting and often unnecessary documentation of projects. 

Documentation, budgeting, test periods, spreadsheets - words that are like a red flag to a bull for the head of Houston. Leadership tools which were invented over a century ago have no place in today's world, he says. Ruotimo's  style of leadership is intuitive, he says, and he is against "engineer-led Excel leadership".

It's all about profitability and constant improvement. The program development is structured like a sprint with deadlines every other week. The teams working with the customers cut to the chase and always begin with the measures which will give the best return. 

"A supple strategy allows you to do U-turns if the market so commands," says Ruotimo, and this is at the essence of Houston's challenge. Developing software means you cannot be tied to long-term plans - you must be ready to adapt to challenges which pop up during the process. It's the same with budgeting: the financial plan is a nuisance which ties people down far too much."

Tomi Ruotimo has adapted 'agile software development' i.e. agile methods for the development of software with a focus on what is beneficial to the company. The philosophy behind agile development was presented in an American manifesto in 2001:

• Individuals and interactions over processes and tools
• Working software over comprehensive documentation
• Customer collaboration over contract negotiation
• Responding to change over following a plan

Tomi Ruotimo ran companies in Scotland, England, Germany and Saudi Arabia for many years before returning to Finland. Even when his company is running red hot he claims his employees only work 7.5 hour days. And himself?

"I had a customer meeting yesterday which ended around midnight. Then I read in bed until 3 or 4 in the morning. I read a lot of books."

Stress research

Houston Inc. takes part in a research project on stress among programmers run by the Finnish Institute of Occupational Health, Åbo Akademi University and Tekes - the Finnish funding agency for technology and innovation. Even though the job is hectic it should be carried out within normal working hours, with as little overtime as possible and with a focus on continuous learning. What stresses Ruotimo is customers who want to buy Houston's services when there aren't enough resources to produce them.

So how do the personnel policies work in a company with such close focus on what benefits the business? Houston Inc. employees are allowed to spend 10 percent of their working hours on private projects. This falls short of Google's 20 percent, yet it is still something of a revolution in the Finnish software trade. Google is without doubt one of the role models even though Tomi compares the search engine giant to the Chinese Communist party: all Communists are similar yet none are direct copies. There is space for variation. Constant improvement is another Google heritage, but it is called 'The Houston Way'. 

Women get more

Employees are mostly young diploma engineers educated within the American consulting company Accenture. Tomi jokes that Accenture has become an education institution for Houston Inc. because 85 percent of all his employees come from there.

"There are a lot of men. I'd like to get more women, right now we only have four".

How will he do that?

One carrot would be the salary. Houston Inc. offers women 20 percent more money than men. 

The company also tempts recruits with all kinds of activities, from sleighing and pea soup days for the entire family to restaurant VIP cards, iPhones, Macs, and comprehensive health care plans. 

Flat structure

"I am the only boss here."

Workers have employee performance conversations twice a year, and are encouraged to attend courses and seminars, read books and improve their career prospects.

"The point of performance conversations is to put new steps in the ladder."

Most people who leave the company do so to start their own business, but Tomi believes this is most often about realising a life dream and to achieve freedom more than doing something which actually creates growth.

"We're talking about businesses for people to realise their own potential. I live, therefore I have a business. They think they are industrialists, when they really are businesspeople: a one man show."

Houston Inc. has no leadership, only a group of advisors, and Tomi acknowledges that he depends on free advice from a number of acquaintances when it comes to making strategic decisions - a kind of crowd sourcing. Future plans still consist of finding ways of ensuring continued growth without the use of risk capital or share issues to the public. Instead the employees will share the fruits of the economic progress.