There was a score of possible candidates to replace the retiring CEO Lars Ramqvist. The board chose a carpenter’s son from Malmoe, Sweden, who quietly had done well as a manager for the American mobile phone market. At the end of March 1998, Sven-Christer Nilsson took over as CEO and group manager for Ericsson.
Nilsson began his career at Ericsson in 1982. With a degree from Lund University in, among other things, numeric analysis with focus on computer construction, he began as marketing and sales manager for Rifa, which later became part of Ericsson Components.
At the end of the 1980’s Nilsson was lured away briefly by Philipsons, the general agent for the Mercedes brand, but he was soon back at Ericsson, “I feel at home with High Tech,” he said.
From 1992 on he built the confidence he would need for his coming CEO position as manager for the business division for the American standard mobile system.
With Nilsson in charge, the American market went from a turnover of 3.5 billion to 21 billion in a six year period. He also enhanced sales of the American mobile system throughout the world.
“When I began, the USA accounted for 80 percent of sales. When I left, it accounted for 20 percent. The rest was sold in other parts of the world,” explains Nilsson in an interview from 2008.
It was good business, good sales and good profit. Three good reasons for Lars Ramqvist to call on him for the CEO position. Nilsson took a long week before he decided to accept.
“My American colleagues wondered if I was crazy. One does not ponder over such an offer. One says yes right away. But I hesitated for several reasons. I had come from way down in the company and did not have a great deal of knowledge about the political minefield that is always present in large companies. I was also a bit put off by the publicity and becoming a public person. I don’t like to stand on the barricade, but in the CEO position nothing else is accepted. I would be compelled to step up. That is why I hesitated.”
During Ramqvist’s time as CEO, Ericsson was managed by a small group of three or four people that worked closely together. Nilsson chose to set up a larger group, consisting of 13 people, a change that was not so popular with the board of directors. Who really takes responsibility for every decision?
But the biggest change made under Sven-Christer Nilsson’s short period as CEO concerned strategy. His ability to think strategically had to do with production as well as technology. He predicted that voice and data communication would more and more take place through IP based networks (Internet protocol) rather than via the traditional tele-networks that had much lower capacity. Therefore he concentrated on integrating the telecommunication world with the computer world. This would be hastened by the acquisition of an American computer company.
When interviewed in 2008, Sven-Christer Nilsson said: “The way I saw it, the problem was that Ramqvist and I had an entirely different point of view regarding how management should be organized for such a large company. I flattened the organization and to a large extent allowed right of self determination down to the product level. The former organization had subsidiaries that were more valuable than others, and I changed this. I appointed regional managers that could make decisions.”
According to Ramqvist, Nilsson’s big problem was that the new strategy took power from the daily work of focusing on customers. The board was not happy with the production and launch of new products – “we can’t show a new phone to the customer if it is not available in the stores” – and that the large re-organization and extensive rationalization had taken too long to implement.
At an extra board meeting held in July, 1999, the board decided to implement new management for Ericsson, and Sven-Christer Nilsson was let go immediately. However, the strategies that Nilsson implemented still live on. The chairman of the board himself, Lars Ramqvist, took over the position of group manager, and Sven-Christer Nilsson’s old boss, Kurt Hellström, took over as CEO.
After leaving as CEO, Sven-Christer Nilsson founded the risk capital company, Startupfactory. Ten years after his short time as group manger for Ericsson, Sven-Christer Nilsson is self critical about part of his work for the telecom giant.
“I don’t think I was the right type of CEO for this company. Politics are always quite extensive in large companies, and I had no experience of politics played out at such a high level.”
Would you take the job today if you knew then what you know now?
“If I was ten years younger. Absolutely.”
What would you do differently?
“I would have asserted myself more than I did. There was a lot of input from the board and the chairman. I did not fight for my ideas hard enough.”
Sven-Christer Nilsson thought of the company as dynamic with a constant effort to develop after 130 years of unbroken hegemony in a variable branch.
“In this branch you are in a crisis every 20 years. If you have gone through five or six large technical changes that have worked out very well because the organization is inclined to develop, you tend to see possibilities instead of problems. You are leading the development, you are many years ahead of the competitors by finding a way to work and then organize the company accordingly.”
Author: Hans Wigstrand