There has been a lot of speculation about why Nilsson was named as CEO. The initiative did not come from Ramqvist, says Jan Hedlund: “It was the major shareholders who did not want the new boss to come from too close to Ramqvist. The trade union candidate for the post was Kurt Hellström.”

From his first day as CEO, Nilsson found himself in an impossible situation. For Ramqvist and some of his fellow board members, the top priority was moving Ericsson’s head office to London. A campaign to win over Nilsson and his wife was launched at the dinner after the annual general meeting.

“I thought the idea was crazy,” Nilsson says. When he proposed major changes in the organization in the autumn of 1998, Ramqvist refused at first to approve them if they did not include moving the head office. The relationship between the two soon became untenable.

Nilsson: “I had to struggle all the time to get access to my boss and he never gave me any support. He had believed that I would be a compliant errand boy.” 

Ramqvist: “The CEO could probably always get hold of me even though I moved my office away from Ericsson so as not to get in his way. A lot of people will tell you that I was always there when he needed me and easy to get hold of, irrespective of where I happened to be.”

Nilsson eventually identified what he describes as a powerful group that opposed him as CEO, the managers of the large local Ericsson companies; they had turned themselves into “presidents of the mini corporations” they had created, he said. “It was profitable for them to go on sitting there with AXE-based deals being done and they resisted any idea of organizational change that would weaken their positions.”

ASKED TO RESIGN

In June 1999, it was announced that the board had asked Nilsson to resign. Ramqvist took over the operational management briefly as an executive chairman. Nilsson spent 15 months as CEO, but at least this was long enough to set Ericsson more firmly on course towards IP.

In an interview in 2008, Nilsson says himself that in 1998 he was not “the right type” to be CEO of Ericsson. “There are always a lot of politics in major companies and I had no experience of political intrigues at this advanced level.” But on the basis of what he knows now, he says he should have adopted a firmer line with the board and its chairman. “I did not fight hard enough for my ideas.”

 

Author: Svenolof Karlsson & Anders Lugn

© Telefonaktiebolaget LM Ericsson and Centre for Business History

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