When the major crisis came in 2001, Ericsson was not one company but many. The different units had become states within a state. Different business and market units organized their communications their own way. It was difficult to see any uniformity in the messages. Sometimes they contradicted each other. Some units invested virtually nothing in communication, whereas others had almost unlimited resources.
Svanberg noted that Ericsson’s central communications unit was larger than the entire Assa Abloy head office. The group had more than 17,000 websites on 11,000 servers.
The quality was not as impressive. For many members of the management there was little understanding of the significance of how communication flowed for commercial targets and processes of change.
At his first meeting with Svanberg, Henry Sténson pointed out that he would fully understand if the new CEO wanted to appoint a new head of communications. Svanberg’s comment was: “Let’s try it out for a few months and see how well we work together.”
The two soon discovered that they thought along similar lines, and Svanberg asked Sténson to move to his corridor, where the CFO also had his office.
CREATE ONE ERICSSON
Svanberg says: “Internal and external communication is central to our strategy and also demands immediate reactions. For example, what Carl Olof Blomqvist [head of Legal Affairs] does where legal issues are concerned is just as important but I rarely have to deal with those matters within three seconds. That is why it is convenient to have the head of communications next door.”
The primary goal was to create one Ericsson.
To begin with this demanded centralization. One of the first strategic options was to focus on the top managers. Over the years, Sténson had begun to describe leadership as communication. Or to use his words: leadership is spelt c-o-m-m-u-n-i-c-a-t-i-o-n.
Per Zetterquist, former head of internal information, says: “Leaders are the most important exponents of messages. It is the managers who have to make the messages comprehensible and concrete for their staff. The managers have to tell their staff what a message or a policy means for their unit and for each and every employee in it.”
From now on therefore, particular focus was placed on Executive Forum, the special managerial channel aimed at the 250 top managers in the company. It offers access to a special website and daily information by e-mail and SMS. This extensive information includes a daily summary of telecom news in the media. The top managers must always be as well-informed as possible so that they can pass the messages on and express them in relevant terms.
Communications were not exempt from Ericsson’s harsh treatment. The group’s central communications department was gradually slimmed by almost four-fifths, from a staff of 340 to 72. The resources that remained were concentrated at the Kista head office.
Another strategic choice was to outsource the more hands-on elements of the communication process. This principle had already been tested for internal information in the fixed-telephony division with positive results. The most important reason was to allow Ericsson’s communicators to concentrate on strategy and management.
After protracted negotiations, the Citat Journalistgruppen communications agency was given the task of developing and operating a central news desk at Kista. The contract also required the company to take over about 20 of the communications staff employed by Ericsson. This was the largest outsourcing deal to date in Swedish communications.
Author: Svenolof Karlsson & Anders Lugn