Inventing a new Corporate Organizational Structure, Interview with Olli Sarekoski, CEO, Veikkaus
We have all read about the exciting merger of the three Finland games-of-chance operators (Fintoto, Slot Machine Association RAY, and Veikkaus) with great interest. How will the merger benefit the players, and society in general?
Yes, we have indeed been living in very exciting and interesting times! The political process for realizing the potential merger was launched in December 2014; the analysis of the process was begun in spring 2015 and finally, on 1 January 2017, the new Veikkaus started its operations.
Thanks to the merger, we not only achieve a win-win situation but a win-win-win-win situation. To our customers we can now offer the best games and services and we can in fact do that by using the one-counter principle. To our beneficiaries the change offers the steadiest and most optimal development prospects. From society’s point of view, the merger makes our national gaming system stronger. As regards CSR, the one-counter principle enables us to adopt new operation models in the prevention of gaming-related detriments and provides us with new powerful tools for gaming control.
What aspects of the merger do you think may not be properly understood and you could add insight for us?
The first thing that may not be understood is what we accomplished in 2016. It was a truly hectic year for the staff of the gaming operators. The preparations for the merger were in full swing throughout the year and hundreds of our employees were involved in them. Yet, at the same time, the staff of all the three gaming operators were able to carry out their daily duties in their respective companies. We performed incredibly well in the middle of a most hectic merger process. As the three operators published their financial reports for their last year of operations, 2016, the titles were as follows: “Fintoto’s sales developed favourably”, “The best result in RAY’s history” and “A record-breaking final year of operations for the old Veikkaus”. The three operators left behind the best possible legacy to the new company. We are in great shape at the very beginning of the new company! Huge thanks to the staff for working so hard!
Another issue to be noted is the scope of the merger. On our to-do-list, we have Finland’s largest webstore, the new company’s brand work, organising 2,000 employees, 7,000 points of sale, one international casino, 90 arcades, dozens of ICT projects, combining the game offerings of the three operators, launching new products, two million loyal customers, building the new company’s customer loyalty programme, etc. etc. The workload is enormous: every one of us as Veikkaus employees will become familiar with the entire field of gaming. At the same time we feel that we are truly privileged. We get to experience a totally unique journey!
Does the merger of Ray, Fintoto, and Veikkaus enhance the ability to enforce regulations against illegal games-of-chance operators?
From the company’s point of view, we are only aiming at a successful merger process and success for our new company. The possible measures taken by our regulator to fight illegal operators are not connected to the merger of the gaming operators in any way. Besides, from Veikkaus’ perspective, the situation is most clear. The gaming system decisions are political. As a company, we comply with the rules society lays down. Naturally, as part of our community relations work, we communicate how important it is that the regulation should enable Veikkaus in particular to retain its competitive capacity. That way we can continue to channel gaming consumption towards the legally operated Finnish alternative.
What kind of market environment is the new Veikkaus facing?
There is no doubt that the company’s toughest competition resides in the digital channels, against international operators. Entertainment and the global leisure time market set the level of requirements for the products and services on the gaming market. Almost all of the growth comes from the Internet, especially the mobile applications. At the same time, the customers seek experiences that are more and more entertaining and games that have high event frequency. The successful operators of the future’s digital gaming market, which Veikkaus unquestionably needs to belong to, are expected to offer completely new types of products and services. Products and services shaped by what the consumers have gotten used to on the entertainment and leisure-time market.
How are you integrating three different corporate cultures to forge a dynamic, integrated, and unified culture and organization? Is that a difficult task?
The corporate culture of the new company, and efforts to build it, are in key position. Everyone has to accept the fact that it will take years before we have a shared corporate culture, shared identity, and shared vocabulary. Of course, our shared value basis helps us a great deal: we work in the best interest of our beneficiaries. The situation is also clear as a whole: The new Veikkaus Oy is owned entirely by the Finnish State and has the exclusive right to operate all gaming in Finland. The gaming revenue continues to be used for good causes, to support social and health care organisations, art, sports, science, youth work, as well as the equestrian sports and horse breeding. Whilst building shared corporate culture, we also need to ensure that we share a view of our mission and operating environment.
The merger has been prepared for a long time and the work will continue for a long time. We have three theses in Veikkaus, which we apply all the time: 1. Respect: Treat your new colleagues the way you would like people to treat you. 2. Zero tolerance: Respect towards what happened before the merger. The old companies’ ways of operating are not subject to criticism. 3. A new optimum: All choices are only reflected against the objectives of the new company.
I value dialogue that is as open as possible, before making a decision. We need to have a culture where people are not afraid to express themselves. Otherwise some views may go unnoticed. Let’s remember Thomas Aquinas’ famous quote: “Beware of the person of one book”.
During Q2/2017 we will have unified player management, so soon there will be “only” veikkaus.fi. We will also have a single native application for our players. During Q3/2017 we can provide single player experiences using only one wallet. I want to give you all a sneak peak focusing on our digital channel – the key figures are impressive: we will have approximately 600K weekly players and the GGR for 2017 is estimated to reach over €500 million.
Veikkaus has always been a pioneer, especially in digital and the development of the interactive relationship with consumers. What is the next frontier that you are working towards?
Veikkaus is moving to a new era. We are developing our own machine-learning based personalization software. We have been using commercial products before, but now we firmly believe that we can offer more individual user experiences by controlling our own algorithms and the predictors behind them. Last year we already had 940 million personalized decisions at veikkaus.fi and this figure is naturally rapidly growing. This year we are also connecting our own personalization engine to digital marketing and e-mail marketing to create really unique digital experiences for our customers.
One of the frontiers I also want to focus on is bilateral and multilateral innovation and co-operation between the EL Members. We need to join forces to be able to offer attractive products and services to European customers.
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