Svanberg’s career after graduating in engineering from Linköping University had comprised eight years at Asea in Västerås, eight years at Securitas and eight years at Assa Abloy. While he was working at Asea he spent his evenings studying for a degree in economics from Uppsala University.
In 1986, Svanberg was appointed CEO of Securitas’s alarm operations, becoming vice-president of the group in 1988. After rapid expansion, in 1994 the group spun off its lock-making operation, Assa, which was publicly listed and merged with Abloy. As head of the Assa Abloy Group, Svanberg was involved in the acquisition of about a hundred companies all over the world. Turnover rose during the period from SEK 3 billion to SEK 27 billion and profit from SEK 50 million to SEK 2 billion.
When Schörling, Ehrnrooth and Svanberg met to talk about Assa Abloy’s targets it emerged that Svanberg and the Swedes “had a more aggressive growth policy than we had in Finland – and it proved to be the right one,” says Ehrnrooth.
BOUGHT A HOLDING
As chairman of the board, he had to keep close track, of course, of how well the CEO was managing: “I quickly got the impression that Carl-Henric was a good boss. It was interesting that he also wanted to be involved as an owner. He bought a major holding and borrowed a lot of money to do so – the other owners helped him arrange the loan. This was important for the company and it was important for Carl-Henric as well.”
Stock was first offered to the public at a price of about SEK 20. Svanberg later sold some of his holding for SEK 150–160 – after a four-way split. Not a bad yield, in other words.
Ehrnrooth recalls that Virtaala was anything but pleased at not becoming head of Assa Abloy. But it did not take many months before it became clear that Svanberg and Virtaala got on well.
“They had a mutual respect for each other and could cooperate well. That is when my attention was drawn to Carl-Henric’s ability to identify what was important. He did not stride in imperiously but always based his approach on the question of ‘what can we give each other?’ He had the correct, unassuming attitude, and showed Matti that his opinions were important. It was interesting to hear that Matti soon began to say what a sensible person Carl-Henric was.”
Assa Abloy’s countless acquisitions also put another side of Svanberg to the test. Ehrnrooth says: “Each time, Carl-Henric’s approach was not to walk in and lay down the law but to listen and point out that everyone had something to contribute. He met the management teams in the companies we bought up, told them about his own career, listened to them and asked what their achievements had been, what Assa Abloy could learn from them. He involved everybody.
“Another thing you can say about Carl-Henric is that he has a fantastic head for figures. That meant that he did not have to keep referring to documents during negotiations. His own personal computer [his brain] could supply the most important figures about any unit at all in the company. On the whole he was right; I checked the figures myself sometimes, and could see that only rarely did he get anything wrong.
“Carl-Henric’s knowledge of his company, his mastery, impressed his staff. And it helped them understand that they had to make great demands of themselves as well. Those who could not cope left the company and were replaced by fresh blood.”
What was Ehrnrooth’s impression of the forces driving Svanberg?
“Carl-Henric has an enormous need to do things well and a tremendous sense of responsibility – doing things well gives him great satisfaction. He is a down-to-earth and fair person – and at the same time terribly result-oriented. And I do not feel that Carl-Henric considers money unimportant.”
Ehrnrooth does not believe everything went smoothly between Treschow and Svanberg in the beginning. “Michael was an extremely hands-on chairman and Carl-Henric was used to a great deal of freedom. Gradually, however, Michael saw Carl-Henric’s leadership qualities and did step back a bit. I know that initially Carl-Henric was hesitant – would he have enough scope?”
Author: Svenolof Karlsson & Anders Lugn