The day Norway closed down

CEO of Virke Ivar Horneland Kristensen. Photo: Virke
THE NORWEGIAN MODEL ‘I’m impressed by the political efforts that were made across the parties. It shows the strength of the Norwegian model. There are short lines of decision-making, and we communicate with each other,’ says CEO of Virke Ivar Horneland Kristensen. Photo: Virke
By Ove Sjøstrøm

1 July 2020 12:21

The day Norway closed down

The risk of mass unemployment is not over for the trade and service sector, which employs more than 1.4 million people. NHH economist and CEO of Virke Ivar Horneland Kristensen has been caught in the middle of the Coronavirus storm.

It's Thursday, 12 March 2020. At the headquarters of Virke, the Federation of Norwegian Enterprise, at Solli plass in Oslo, people are talking in the corridors. There is no longer talk about dark clouds on the horizon, however; the Coronavirus pandemic has become a reality. Figures and forecasts paint a bleak picture of the state of the Norwegian economy in the coming months. CEO Ivar Horneland Kristensen decides to activate the crisis management team.

Parts of the Norwegian business sector remain open for a few more days. Then things start happening in quick succession. The decision to close schools and kindergartens is made already in the evening of 12 March. Then Virke’s member enterprises and others in the trade and service sector start closing.

‘The decision had a seismic effect on the Norwegian economy; it was unprecedented in history. When we activated the crisis management team, we quickly realised that we had to prioritise three things,’ says Horneland Kristensen, listing the three:

‘We had to be there for our members. We had to ensure that measures the enterprises needed to survive the crisis were implemented, and of course, we also had to take care of our own staff.’

‘The Government estimated that 20,000 would be furloughed over the course of the year. We saw figures that were completely different.´

CEO of Virke, Ivar Horneland Kristensen

Turned out to be right

In the days that followed, forecasts were presented for how many employees were likely to be affected by the crisis.

‘The Government estimated that 20,000 would be furloughed over the course of the year. We saw figures that were completely different, however: We determined that more than 400,000 workplaces were in danger. It turned out that 420,000 ended up being furloughed during the worst period.

‘How did you arrive at this number?’

‘The reason we managed to be so precise was that we immediately recognised that the trade and service sector would be hit the hardest. And that is where most of us work,’ he says and maintains:

‘The issue here is not a failure in supply and demand, but a close-down of businesses. That was a situation we could not have foreseen, and that had dramatic consequences.’

He praises the politicians for reacting quickly when the crisis hit.

CEO of Virke, Ivar Horneland Kristensen. Photo: Virke
‘The MBA has been very useful for me at Virke, especially the part about management culture and the international aspect. That's always relevant,´says Ivar Horneland Kristensen. Photo: Virke

‘I think that, in the initial uncertain phase, no one knew what was going to happen. But the relief scheme for businesses came quickly into place. I’m impressed by the political efforts that were made across the parties. It shows the strength of the Norwegian model. There are short lines of decision-making, and we communicate with each other.’

A moment of truth

Virke has more than 24,000 member enterprises that employ around 280,000 employees. You find them at work everywhere: in shops, the cultural scene, sports centres, technology companies, in voluntary services, travel and tourism and in the country’s many cafés and restaurants – to mention just a few.

‘I suppose there are many who depend on you and Virke to do your job now?’

‘Yes, and it’s quite dramatic when you talk to the business managers who must make difficult decisions concerning redundancies and lay-offs. Some people's life work is about to disappear,’ says Horneland Kristensen, and underlines:

‘On the other hand, these have also been the most meaningful and interesting months of my professional life. Working hard to help others is extremely motivating, and it's a moment of truth for us at Virke.’

And so far, Horneland Kristensen and the rest of Virke's 138 employees have done a good job, if we are to believe the figures.

‘The interest in membership has exploded after the Coronavirus outbreak, which means that we are highly relevant for many people. Not only is the membership increasing, but people's knowledge of the organisation has gone up from 38 to 58 per cent during these months,’ he says.

The next phase

The Coronavirus crisis has entered a new phase. Norway is re-opening. The status in the middle of July is that four out of ten businesses within Virke’s area of business have not managed to maintain profitability due to a low level of activity. Horneland Kristensen warns against the risk of mass unemployment.

‘It’s good news that 20,000 sports centre employees were recently able to return to work, but we have to give priority to relief efforts, such as wage subsidies and an extension of the lay-off regulations. There is still a real risk of a lot people losing their jobs.

The next phase will be about restructuring to create new jobs,’ says Horneland Kristensen. New needs for expertise, digitalisation and the green shift are drivers of the new labour market.

‘Every crisis brings opportunities for change, and we have to create new jobs. It's very important to emphasise that the sustainability challenge is still present, and that we have to work hard to bring Norway into the circular economy in the years to come.

The other thing I would like to point out is that the trade and service sector is a sector that's growing. Eight out of ten people now work in this field, and soon it will be nine out of ten. In other words, politicians must be equally knowledgeable about the framework conditions for the trade and service sector as the taxation system for the oil and gas sector,’ says Horneland Kristensen with enthusiasm.

The thirst for new knowledge

The Virke CEO has a varied educational and professional background. He has been the secretary general of Tekna, worked at Econa and been the CEO of Nordic Innovation before ending up as the CEO of Virke. The native of Haugesund has a degree in business economics and also holds an MBA in Seafood Management from NHH Executive.

‘You chose to pursue an MBA in Seafood Management. Why?’

'That's a very good question. Everyone I talked to recommended that I study something related to management, but being from Western Norway, I’m of course drawn to the sea,’ says Horneland Kristensen and smiles.

He elaborates:

‘I've always enjoyed learning new things, and now was the right time to do something that could give me more insight into this field. The course is also very international, in the sense that you get to travel abroad several times. I didn’t know enough about the sector, and it turned out to be two amazing years with highly capable fellow students as a bonus.’

‘Is the course relevant for what you’re doing now?’

‘The MBA has been very useful for me at Virke, especially the part about management culture and the international aspect. That's always relevant, and I was lucky to have an opportunity to update my knowledge, which is something I wouldn't mind repeating in a couple of years,’ says Horneland Kristensen.

‘Do you have any advice for people who would like to embark on an MBA at a mature age?’

‘You should go through the plan for the programme beforehand with your family and employer to ensure that you have the flexibility and time to complete it.’