Oscar Stege Unger, 44, is a director at the Wallenberg Foundations, created by a Swedish banking and business family more than 100 years ago to fund basic research and education in Stege Unger’s native country. The foundations manage about $15 billion worth of business enterprises and investments to an average of more than 10% annual return, and Stege Unger says the 16 foundations together grant about $250 million a year to Swedish universities — making Wallenberg among the largest private funders in Europe. The dedicated musician and father of three was drawn to the Stanford Executive Program in 2018 to learn more about management and leadership.
What specifically do the Wallenberg Foundations fund in terms of philanthropic work?
It has evolved tremendously over the years. Currently we focus less on specific areas, but more on excellent scientists. Much of the money goes to younger researchers between 35 and 45 years old. They get five to 10 years of funding. We evaluate them with the help of international peer reviewers, and when they get funding they have complete freedom to engage in whichever type of research they’re curious about.
Sort of like the MacArthur Foundation “genius” grants in the U.S.?
Yes. Groundbreaking research is done by people who have freedom to pursue their craziest ideas, or something that pops up as a mistake in the lab. We really focus on that. But we do more classical projects as well. That’s 70% of what we fund; the remaining 30% goes into more strategic programs where we look at what’s lacking in critical competencies in science in Sweden. The founders wanted to make sure the family’s money would improve Swedish society and in the long term will benefit our society.
What drew you to that, rather than pursuing a more commercial investment career?
I’m a more entrepreneurial personality, and that’s how I started out my early career. I was with an industrial holding company, but dreamt about starting my own business. At the holding company I worked with one of the Wallenberg cousins, and he made me promise to let him know when I wanted to do something else. In 2013 he and his cousins asked me to start work with them, based at the foundations. The philanthropic and scientific side attracted me, but I also wanted to continue to work on the business side and to be part in continuing to build the fantastic ecosystem established by the family.
What strengths did you bring to that role?
My impact is mostly on strategy, ownership, and the communications side of it. I’d say 80% is on the investments and business side, and 20% on the philanthropic side. What’s fantastic about where I am is that this family has been around for 160 years. I also work with educating and inspiring the next generation of the family to continue to serve the country. I have great freedom to pursue what we believe are the right things to do in the long term.
Have certain types of investments proven particularly beneficial to the foundation?
In my time, and historically, what works well for us is to invest in already strong companies with strong cultures that we can help scale even further internationally and continue to build with an eternal ownership horizon. We don’t buy companies and try to restructure them or sell them for parts and move out. We look for solid international companies based in the Nordic region that we can continue to build for next 30, 40, or 50 years. Leaders in niche markets, that’s our sweet spot.
You say your returns at the foundation have averaged more than 10% per year during the past 20 years. To what do you attribute that consistency?
We have a reasonably well-balanced portfolio, with many really strong companies with strong market positions. As owners, we prioritize making investments into R&D, new markets, and new geographies. Our asset base has been quite stable. Of course, we’ve had 160 years to refine this model and get into strong positions with great companies that continue to renew themselves and create strong returns. This is a fight every day to make sure we stay in good shape. We’re always worried that we’re not transforming our companies fast enough, not investing enough in new technologies, or that we’re not agile enough and the cost base is not flexible enough. This is something we live and breathe.
You’re investing for 10- to 20-year horizons. Given the speed of change in the world, that must be challenging. What guides those decisions?
The motto of the family since 1946 was written by one of the more visionary brothers: “The only tradition worth keeping is to go from the old to the new.” If you have an eternal time horizon, it doesn’t mean you’re passive. It means you must dare to take risks. You can endure short-term pain, and we do from time to time. We pursue things the market doesn’t like. It’s tough, but that differentiates us as owners from the institutional capital and the shorter-term mindset. And of course, you have to be paranoid every day that you’re on plan and not getting complacent. That’s the balancing act.
You describe your management style as that of a “gentle change agent.” Why do you feel that’s the best approach?
The Wallenberg family doesn’t hold the wealth themselves, they’re custodians of this ecosystem. Yes, there is some sort of ultimate say, but we want to attract the best people and make sure the stakeholders and society respect us, so we need to work in a way where people find us inspiring but at the same time challenging and empowering.
What have you learned about leadership along the way?
You have to be able to think past your own tenure, and people who can do that are often quite humble, because it’s not only about them. They want to build something for someone who comes after.
Has that changed over the years?
Ten, 15, or 20 years ago a good leader typically was someone strong who had answers to everything. What we see now is a leadership emerging without pretending to have all the answers. They’re more analytical and can think more broadly, providing the platform for creative and intelligent people in the organizations to solve problems. These leaders are more laid back, and maybe not as impressive when you meet them for the first time. But they’re able to build environments where people can grow, and they lead by design. As a leader, you have to have the self-confidence to step back and allow for more innovation, for more failure, and let other individuals shine more and lead things.
You like to spend time in “alternative environments,” such as music and nature, for stress relief and creative inspiration. How to you build that balance into your life?
I do things in fragments due to a busy schedule. Writing music for example, I work half an hour with a song, then let it sit. Then I go back to work. Or when I’m on the bus or riding the bicycle home from work, I listen to the music I’m writing and get additional idea or two. And then I pick it up at night at home. Or I’m with my guitar around the kitchen table while my kids eat dinner. Two of the songs I just released, I wrote sitting by my 7-year-old taking a bath. Five minutes here, half an hour there. It’s like a painting, you go back and forth to it. And then when I’m 70% done, I go to a professional studio to record, and I’m out of reach in a music bubble while recording songs for two days. After that, I won’t touch instruments for six months until I get inspired again.
You recently had a family health scare. What impact did that have on your work and life perspectives?
A little but not fundamentally, since my wife and I have spent a lot of time thinking about how we want to live our lives already ahead of cancer hitting us. We didn’t do a 180-degree turn in our life, but certain priorities became much sharper in our minds. I will never again be in a situation where I’m stressed out due to work or something that’s not as essential as my health or my family. It’s a much clearer line that I know I will never cross. I’ve had to think about a lot of dark scenarios, and when you’ve done that you know what’s really important. Life becomes blacker and whiter, and that makes for easier decisions.
Any particular professors, books, classes, or experiences at SEP that influenced the way you do your job?
There’s one thing I think about every day. It’s a quote from one of the case studies that went something like, “Most managers spend about 1% of their time recruiting, but around 75% of their time managing their mis-recruits.” That was spot on, and I felt that will be my mission. We need to have a more professional way of evaluating and developing people. That should be the first question in every staff meeting: Did you meet anyone interesting this week? Give me that name. We still spend too little time on people, and that’s a big mission we have.
Photos courtesy of Oscar Stege Unger