The most important gathering of Ericsson’s top managers is called the Global Management Conference, or GMC. Carl-Henric Svanberg’s first GMC took place during three intensive days in 2003 and was different in character from those that had gone before.

The venue was Stenungsund on Sweden’s west coast. Just over 200 managers had been invited and they gathered outside the headquarters at Telefonplan in the south of Stockholm to board the coaches for their journey of just over 500 kilometers to the conference center.

About two hours later, it was time to stop for lunch. This was at a McDonald’s just outside Linköping 180 kilometers away. Afternoon tea was later served at Stadshotellet in Ulricehamn. As the journey continued, complaints were voiced about the low standard of refreshments. One or two commented in response: “And how much have you been able to make in the past six months?”

In his inaugural address to the GMC, however, Svanberg adopted another tone: “I believe we are beginning to see an end to this difficult period. 

“There are several signs that the downturn in the market is over. It also feels good to be able to say that now our finances are in order. On the other hand, we have still not sorted out our profits.”

The first PowerPoint slide displayed one of Svanberg’s favorite mottos:

WE ARE A WORLD LEADER

BUT

WHAT BROUGHT US HERE

WILL NOT KEEP US HERE

This slide expressed two important messages.

The first was that there was no desire to criticize the previous management. What had been done then was both sound and necessary. The second was that the market was continuing to change rapidly. You could not possibly survive on your previous merits, neither as a company nor as an individual manager.

One obvious theme for the conference was the new, simplified organization that had been announced a few months earlier and that was to take effect at the beginning of 2004. Svanberg had made a name for himself as an opponent of reorganizations:

“I think you have to be very cautious about changes. It normally takes three, four years before a reorganization is in place completely. If you make changes often, people at the periphery are never really sure what’s what.”

CLARITY AND RESPONSIBILITY

Now, however, change was necessary, Svanberg explained. “I have met so many customers who have been frustrated at not knowing who to turn to and who really makes decisions in the Swedish sections of the organization. And I have encountered the same frustration internally. We need to create an organization that is characterized by simplicity, clarity and responsibility. There should never be any doubt at all about who is responsible for what.”

A key point in the new organization was the removal of the regional and coordinating marketing functions. The more than 20 marketing units that remained were to report directly to the executive management team. And Ericsson got its first sales director for the entire group, Bert Nordberg. After a few years heading first the services business then Business Unit Systems, Nordberg was given the job of running the new group-wide Sales & Marketing division.

Kurt Jofs was also given a group-wide role, being appointed to head part of the mobile network division. Later he was to become head of all the network operations. Jofs was the only external recruitment. He had been production manager at various Ericsson units between 1983 and 1988 and then became president of Linjebuss before it was bought up by Connex from France. (“At Linjebuss, I bought the Stockholm underground on behalf of Connex. You don’t find yourself buying an underground system every day.”)

Håkan Eriksson was appointed to succeed Jan Uddenfeldt as head of technology.

Author: Svenolof Karlsson & Anders Lugn

© Telefonaktiebolaget LM Ericsson and Centre for Business History

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