Volvo Chair: Leadership, crisis management and CEO vs Chair

0:00Hi, everyone, and welcome to the podcast in good company. When I started in finance 30 years ago, the first person I met was Carl-Henrik Svanberg. He was then the CEO of SABLOY, and following that, he's gone on to be CEO of Ericsson, the chair of BP, and he's now the chair of Volvo. We own 8 billion Norwegian kroner worth, or$800 million of Volvo, equivalent to 2 % of the company. Carl-Henrik is one of the leading industries in Europe. In this podcast, we condense 30 years of leadership experience into 45 minutes. Tune in.

0:44Hi everybody, this is a very special day for me because after university, when I started working with finance, one of the first people I met was Carl-Henrik Svanberg. He was then at Assa Abloy and he built Assa Abloy and moved on to become the CEO of Ericsson, then the chair of BP and then the chair of Volvo. I considered Karl Henrik the leading European industrialist. It's a pleasure to have you here. Thank you. Karl Henrik, what is leadership? What is good leadership? Well, I think leadership is how do you get the most out of your people? How do you get them to perform the best they can ever be and move towards a target?

1:29And, of course, leadership is therefore also to have a target, to have an idea where you're heading. And I think everybody that works in a company or in a group, whatever, they love that clear target. Now, just going all the way back, you grew up in a tiny little village up in northern Sweden. Yeah. What has that done to you as a leader? Well, first of all, I moved south when I was 16. We had moved around from different places, but I was born there north of the Arctic Circle. And that created a huge interest for me in the mountains and in the wilderness. And I loved being out there. And I was a lot.

2:09I thought I would spend my entire life in mountains in various ways. But then I moved south, and it was different. But I think my upbringing was quite fostering. It was a demanding life. When you come to a place like that, in principle, you have to do something. You can't just sit through the whole day. You have to do something to get warm, to get food, to make a living. Because it's just before the video games. Yeah, before the video games. But even so, even video game players need to eat and need to stay warm. So it's hardworking people. It's serious people. It's interesting. Many people, many leaders talk about the upbringing of moving around a lot as being instrumental in making them more agile.

3:00Yeah, I mean, that is truly, I've always said that is true for me. Because although I was born in that little village, it's actually, I was there just a few weeks ago. and it's so tiny now that it's like one of those where it says the name of the village is set on both sides of the sign because because you the minute you have entered you're on the way out it's just a few people living there but i moved about 15 times before i was 20 and and moving for me was i think made me develop skills in a positive way i i knew that i i had to sort of make friends in the new place make sure i i i became part of the groups and i adjusted and i still have a bit of a nice feeling when it's time to move packing boxes moving on i am probably a bit of a nomad in my blood by now.

3:59And by the way, I think one should not shy away from that fact when it comes to that I was eight years old as Abloy, then jumped to Ericsson, was a pretty big jump, and then to BP and then to Volvo. I mean, I haven't been nervous. I've been inspired by change. When I met you the first time, you were at Asa Abloy, and you built it up pretty much from nothing, right? Through acquisitions. Yeah. And generally speaking, acquisitions can be, well not many of them are that successful so why how did you manage to make so many successful acquisitions at asa well i can go deep into it but but in well let's go deep yeah we we acquired first asa and and and with sales about 500 million norwegian crowns of 50 million euros dollars uh lots and lots of people and and the is an overcrowded company and the company was making losses we it was what was interesting with lock companies is that they you have so many variants you sell you sell locks that fit into every door if you if you sell a new lock it doesn't fit into the door you have to change the door so we basically produced everything we ever produced and it was a mess in the whole production we did basically a toyota lean manufacturing process work We reduced from basically 1 ,000 people to 500, and the company became very, very profitable.

5:22And that's when we thought this is, you know, we used to say that you didn't know what people was going to buy in the next day because we had 100 ,000 variants. But when the year had passed, we had sold exactly the same as last year, maybe with 2 % plus of growth or something. So we knew that we needed flexibility day by day, but not over a full year. And when we learned that, that's how we simplify the workflows and got to those numbers and high profitability. And then we realized there's a lot of lock companies out there, and they all share the same problem. They were old-fashioned, often family-owned.

5:56One of the oldest JPM from 1649 have always made locks. And we bought one after the other. We rationalized, and we grew. Well, you bought 100, right? Yeah, and we grew from about this 500 million that we were first to about 25 billion. there's a lot of companies required and steady growth so what's the first thing you do when you buy a company so now I have a Lox company Nikolaj Tangen Lox 100 years old because he was founded by my grandfather the guy before him what do you do? the first thing you do basically the day after the press release we would go to that company and we would say to management and we had And we had very often bonded quite a lot with management.

6:42So they trusted that we were coming with a positive story. And we basically said, let's meet everybody. And some said, you mean the whole management team? No, me and everybody. Ah, the white collar workers. No, everybody. But then we have to go to a sports house or something, a handball stadium or something. Yeah, that's a good idea. Let's do that. And we talk with everybody because, you know, there's an old saying that if you are, in order to be a happy child, you need to be seen, you need to be loved. And if you're a son, you probably want to be a little better than your father. And it's the same thing here.

7:24Now you get acquired. What does this mean to me? They acquired us. We just had a strategy conference. Does that matter? and I just became the sales head? Does that matter? So you have lots of questions and the whole momentum in the company stops. But if you then go and see them, you go up on stage and say, hey, Uncle Henrik, this is my buddies here and I'll tell you how we work and what we would like to see and we think you could be part of a great story. And it was like sort of, it was a little bit like when you know when you boil spaghetti and you put a little oil in, the whole boiling slows down and the water gets much calmer.

8:07And all the nervousness... So you were the oil? We were the... I think we were the olive oil.

8:20When I speak to other CEOs, they mention you as one of the people who have this incredible ability to create trust. What's the key to create trust in a situation like that? I think it is that you speak the truth. That you have, and that might seem easy, but when you acquire, it's also a matter of you have to thought through what your strategy is and you have to be, whatever you say, if you start to walk back on that, it's not going to be easy. And we were very clear. I mean, we think we can create an absolutely wonderful company and we can be well-leadied together and this and that. But of course, change means that we probably have to do layoffs.

9:03We have to become more effective because that's how we create the resources so we can invest and become an even stronger company. But you don't have to be brutal. It's almost self-generating momentum that carries the company and the group forward. Well, you say you don't have to be brutal, but then you took over as CEO of Ericsson, which was just after the dot company. And some people would say that reducing the staff from 110 ,000 to 47 ,000 is pretty brutal. Yeah, the brutal comment was about Asai Bloch. Okay. So you were not brutal there, but then at Ericsson, tell us about that experience.

9:41Yeah. And let me first say that when it all hit, the dot-com burst there, we were about 110 ,000 people. And there was targets. We were 85 when I got in. And we said we continued to reduce until we were down to$47 ,000. That was massive. We took out$50 million of cost every week for 100 weeks. This was huge. But the thing is that those that work in a telecom company like Ericsson, they know what the market is like. So you didn't have to explain why we needed to do it. It was more about how to do it. And it was, of course, tough. And we had continuously agreed on numbers that we needed to reach.

10:34And the people in the management team, they had to sign. They got the quota. They got the papers. And they did it. If you look at it at the end of the whole process, these were very skilled people. So basically, I don't think many of those that we laid off were unemployed for very long. They very quickly were absorbed by other companies, which doesn't mean that you kick the can down the pitch. So others, maybe the opportunities got lost. But so if you think about that, laying off 60 ,000 people, 30 ,000 in Sweden, and you say that it's three jobs in every job Ericsson has, it creates three other jobs.

11:13You're over 100 ,000 and then you take families on top of that. So this was a huge thing. It was tough. What did it do to you psychologically? Well, I think we were so determined to get it right. And we were the only of all our competitors that actually, I think, got through it in a decent shape. So it became a bit of an inspiration also. And I got an email from a co-worker that wrote to me that when we had, after I think beginning of Q4, in 2004, when we had a positive result that said, today I did not take off my badge when I jumped on the subway on the way home. I mean, people were proud of the whole change.

12:05And drive change when you know it is necessary is not hard because the alternative is harder. When you look at the telecom sector today, what do you think? Well, I don't know too much in detail. Of course, Ericsson goes through certain troubles that are not necessarily related to the sector per se. Some of them are maybe self-inflicted, and they say so themselves. what's interesting with Ericsson that's been around since 1874, and they had mechanical systems, electromechanical systems, they had electronic systems, transistor-driven, integrated circuits, and then came software. Every time companies have been lost among their competitors, and Ericsson keeps going through, has an incredible ability to keep driving through and driving with change.

13:06And I think it has a lot to do with this also, that if you're nervous about change, then you shouldn't be at Ericsson. But if you're at Ericsson, you're nervous about not changing because they know, everybody are engineers, they know that doing no change is going to take us down. So you have to change. I had one of my fellow co-workers there that came out of a meeting they had when they reorganized the division, one of the biggest divisions. And he came enthusiastically out of the meeting, and I wasn't part of the meeting. And he said, hi, how are you doing? That was fantastic. We have completely new organizations.

13:47It's going to be fantastic. What are you going to do? I have no idea. I'm sure I'm going to find something. And when you can get that spirit in the company, then you can go through a very dramatic change. And I think that's the reason why Ericsson is still around after 140 years. Now, I love change, but how do you find people who like change? How do you screen for them? Well, I think you foster them, actually. I mean, in Ericsson, everybody is so used to it. If you take, on the other hand, if you take BP, which was much more difficult because they were, if anything, they were totally committed to supplying the world with energy.

14:26and doing so with fossil fuel. And they were determined that this is going to be for a long, long time. And their change, more dramatic change, was clearly a threat to the company's existence. Well, let's talk about BP. So you took over as the chair, and then after two weeks, bang! Deepwater Horizon catastrophe. Biggest oil spill the world has ever seen. Yeah. Tell us. No, it was, of course, I mean, first of all, I was elected two weeks before, but in the first AGM, but I had joined as chairman a few months earlier. But obviously, I didn't know much about the industry, so that was tough. But again, there's a kind of raw strength in a company like BP to deal with the changes.

15:20People left their homes with a packed bag to go for two weeks and before they could come from Ghana or Angola or they could come from Azerbaijan and they just needed to go over and help and they would eventually be there for half a year or something with whatever they brought for two weeks. I mean, there was such a company spirit, such a company strength. But it was obviously a very challenging time for the company. And my little knowledge, there were some pluses in being new. Because if you go to America, and BP at the time was bigger than Exxon in America in oil and gas production. But the present management gets incredibly questioned.

16:12And it gets hard to sort of stay. And like the Americans say, it happened during your watch, so I'm sorry. and they are used to that. So, but I was a new guy. So I guess that gave me a bit of a leeway. It was tough. We also, we had - If you split it in two then, so internally, what do you do internally? Would you have, I mean, you need to inform, inform, inform, inform, and focus on what the key stakeholders here, the employees need to inform them all the time. You need to inform the board members. The board members that came from all over the world, if they were sitting watching CNN and they saw the spill going, I basically called every board member every day for 100 days.

16:58Just short update, 5-10 minutes, just saying what was happening. So they were in the loop. They knew what was happening. And the investors. Newspapers are brutally tough. But newspapers write what, for example, shareholders wants to hear. So if you have shareholders on your side, you can deal with the papers. But if you don't have shareholders on the side, then you are on a limit. What's the key here to the external side of this crisis? Well, the problem we had, which was almost impossible to manage successfully, but Fukushima was a little bit the same. I mean, here we have a rig that is on fire, and everybody was convinced we can turn out the fire.

17:51But a rig with these four pillars that it's floating on, open on the upside. So as the fire brigades were pumping in water, eventually it sank. So now you have a rig that has sunk, and it sank to the bottom, but there was no leak. and then after five days you start to see cracks in the pipe, the oil pipes that goes from the seabed up to the platform. When you crush that, it's like a Coca-Cola store that you crush and bend in three, four ways. And in the beginning, those bends hold, but after time they start to crack. So you have a situation with the burning rig. A week later, it sinks. A week later, two weeks later, it starts to see some leakage.

18:38of course in the beginning it was just muddy water after it had sunk and the seabed was stirred up but but so the the this one of those that whatever you said of a situation update it was worse the next day or the next week and it's just worse and worse and worse and and that's you you chase your tail it's to to you can either say nothing and look like an idiot or you say something and look like an even worse idiot the next day because things are not what you said so so this was about as tough as it gets, I think, as a crisis. Who did you call for advice? Well, I had several board members that were really sort of involved in all the discussions I called them, and they were very, very supportive.

19:24You need to understand that you have the support of your board. I had also an outside crisis consultant, if you like, that dealt with all the big crises that we saw in the world and very, very experienced. And especially for me, because I just arrived in London. So, I mean, I didn't know journalists. I didn't know the investors. So this consultant, what did he tell you? What kind of advice? Well, he said, focus on those that can fire you. Focus on shareholders, focus on the board and focus on the employees. And that was true. And I did that. Now, Obama could have fired you too, in a way. Well, yeah.

20:07Because he was the president. Yeah, he was. I guess he could. But, you know, Obama was new as a president.

20:23He had just had his health bill. He tried to do his first attempt on Obamacare. And that had failed. And his next big thing was now the energy field. And he opened up new drilling and further out up in the northern waters and Alaska. And then this obviously again failed. And he had the midterm elections coming up half a year after the explosion. So, I mean, he wanted to show progress. And, of course, he was out there and said all those things. I mean, I will make sure BP pays and all of that. But we were determined almost from the beginning there, of course, take some time to gather your thoughts, but we, whatever happens, we need to find an agreement with the American administration.

21:15We cannot have this biggest oil spill and then at the same time be in some form of battle with the administration. So when it was written as I was summoned to the White House, that was after six weeks of continuous pushing for a meeting. And what we agreed in the meeting with the fund, 20 billion for all those that were affected by this bill, that we would clean up and that we would have an independent adjudicator, which ended up being Ken Feinberg, who did 9-11 and such, so that people that were affected wouldn't have to go to courts and go through court systems. he would deal with the claims immediately and start to distribute money.

21:56That was all our suggestions.

22:03What's the key to rebuilding reputation after a situation like that? Yeah, I mean, first of all, I guess one has to understand that you are walking on a thin line here. You can't have anything more. So you need to be exceptionally careful. and I would say the way the company worked through we had BP you know was from the old days and one of the first to find oil and then then when all the crown colonies broke through Iran and Egypt Nigeria and all that happened it became a rather small British company that had started to look for oil in in the North Sea and found oil and started to rebuild from there and then found oil in Alaska, in Prudhoe Bay.

22:50So it had started to grow back up again. And eventually, through the acquisitions of Amoco and Arco, became the biggest oil and gas producers in the US. So it was a serious blow for the company. But because we had a bit of a history by acquiring different places, it also meant that if you took an oil driller in Azerbaijan and moved him to the Gulf, the protocols may not be exactly the same. So when we started to move in people to help with the spill, that became the driver of a complete overhaul of every way we worked so that it was completely harmonized throughout the company. So the company, as it normally is, became stronger and better after the accident.

23:48Now, then you moved on to Volvo. What's been your priorities at Volvo? Because you've been going through a lot of change there. We have gone through a lot of change. The first priorities were obvious because if you compare to our competitors, be it Daimler or Scania at the time, Trayton today, we always had a lower level of earnings and we also were much worse in in trying to follow the cyclicality which is typical in our industry of course and and of course they both related because the company was what quite quite bureaucratic was not slim lined trimmed and And so the first thing was to really drive down, simplify, simplify, simplify, and drive down the break-even level to a level where we could make much more money and therefore could be much more on the offensive.

24:50Because we also knew that any transformation was around the corner. And of course, there was a lot of cost being driven out. And Martin Lundstedt, the new CEO, was actually probably as successful a hire as you can make. Because he was, Skada, which was much smaller, but was absolutely a trimmed, well-run company, exemplary company. And typically in the auto industry, you come up either through sales or you can come up through development or you can come up through production. But very few actually rotate around and learn all the different traits. But Martin had. He had done all of it. So he came more or less fully trained for taking on this much bigger job.

25:38And we were actually lucky in that sense that we were absolutely in good form when the COVID hit. and there we showed that we really could take that swing. And then we have, and after that I think we demonstrated we continue to sort of do better and better in every aspect. But that was also key to deal with the third challenge, which is climate change. Talking about being fully trained, what are the experiences that you've taken from your previous jobs into the chair of Volvo? Well, there are several, I think. But one is, first of all, this is a changing world. Will always be. And you have to create a feeling in a company of trust in its own abilities so that you think you can excel in change.

26:36And if you get 100 ,000 people to understand that it is all about change, then you get nervous when you stand still. So you're getting positive momentum for change. That, I think, I've learned from Ericsson. But I also learned from, we were almost religious in Asa Abloy in driving the workflows and simplifying the companies and took almost every company up 10 % profit margin points just by simplifying in best practice and everything. So I think ASA was a good school in general manufacturing, in productivity, in getting everything, every calorie out of the company and its abilities. But Ericsson was the opposite.

27:24And I used to joke with my guys at SABLO. I said, Ericsson is like whitewater river rafting, while ASA is more like fly fishing. It's very predictable.

27:41Moving on to something slightly different, the role of the chair. Now, what's the most important thing a chair does? There are a few things that I think are really key. You can never get away from the fact that you are the ultimate responsible of recruiting the right CEO. Because you can have the greatest ideas, whatever, you have to find the right CEO. And you have to find a role where you are able to challenge the CEO to stretch without the CEO feeling stressed or questioned or something and create an atmosphere that we are here to do the right thing and have fun at work. But the other thing is, of course, to use the board as effectively as you can.

28:30And I think it's important that the CEO in a company can look up at his board members to someone that has done something similar. Taking a company through a dramatic change, taking companies through technology shift, whatever, so you know you have somebody to learn from. It doesn't work if the CEO looks, I don't mean look down in a way that you're negative to the person itself, but is much more experienced than the person that is in the board and in theory is supposed to advise you. So to get the right people around the board table in the boardroom is key. And then how do you then let the discussion go in a room so that you get the most out of everybody's skills and experiences?

29:26And I often say to Martin and say to anybody that from time to time, the CEO presents an idea. And then the discussion starts to go. and you realize after a while that this is not going to go the way that maybe the CEO had thought. And you may say, well, I may say or Martin may say that maybe we should take this another turn and come back in a quarter. At that time, it is so important that Martin doesn't feel, the CEO doesn't feel that this was a failure. You want him to feel, wow, I was lucky to have that discussion with the board. I'm so grateful. And now I'm going to work on it and come back to make it a much better choice.

30:19I think this is something of importance. And that takes, of course, skill from the CEO, from the chairman. It takes also maturity for the board members. And it takes maturity, cleverness from the CEO. So supposedly one of the most important things for a chair is to remember that he or she is not the CEO. Yeah. Is that a problem for you? No, I don't know. I've never felt it like that. And it depends a little bit also how you work. When I go back to Asa Abloy, it was just companies everywhere. So my role, while you may recall me as the CEO of Asa Abloy, which of course was, but I was often in the chair position versus them.

30:59And so I think I have never been the person necessarily on the barricades with swinging the flag and such. I may have been that in a more theoretical way because I think it's so important that the CEO must lead the discussion about the vision and the direction of travel and all of that. How do chairs waste their time? What's the most common way they waste their time? They waste their time. Well, I think, first of all, there is a way, if you think about that you're going to be, if you are a chairman for, say, 10 years or whatever, every day where you don't feel that the company's making some form of meaningful progress, even if you will have a downturn and downsizing and all sorts of difficulties and what have you.

32:02But every day that you don't do the utmost of advancing the company's position or sort of help advancing that, inspire that, it's a waste of time. The same goes with the CEO, I guess. Yeah, the same goes for the CEO. It's actually interesting when you think about it because the company, the CEOs, I think, are among the most long-term looking people you can find in society. People are saying that we are working on a quarterly sort of leash from shareholders. Well, you have to perform quarterly in relation to the circumstances. Otherwise, the shareholders might get angry or irritated. Why did you do that?

32:45But let's not fall into the trap that that's the life of a CEO. Martin Lundstedt, or when I was at Ericsson, whatever, your focus is 10, 20 years out. What is coming? The division managers may look a year out or two years out, but you look five, ten years out. Of course, Martin is thinking a lot about where is battery technology going and where is. And a board, what's interesting with a board is that a CEO changes from time to time. The board never changes. The board is an institution. People in the board rotate, but the board is there for a long time. with that forever. And that also means that the board has, if you take culture in a company, for example, impossible to change your field, impossible to change culture in a company from the board seat.

33:42Well, it is, but you have a responsibility to understand if the culture is sort of right. You cannot expect that a new CEO, every new CEO changes the culture of a company. so who is responsible for the culture well i think the board carries a big responsibility to understand is this right if it isn't you need to think hard about how you can change it but it's a culture takes a long time more than a tenure of a ceo to change yeah can the chair and the ceo be the same person you think or should it i on that i would say if you take take the american way where that where they are and for example when motorola i think gonna like i don't know exactly the details but principally say they on a monday announced that they are going to sell their patent portfolio and on the friday google have bought it i mean in in ericsson i mean would take months for us to work up the acceptance from a board to do something like that and so on So you can act much faster because you have a sort of strong man at the top.

34:56But on the other hand, it's much harder to challenge the chair and the CEO. That person becomes a very strong-headed person at the top. And I think that has some serious negative sides as well. I mean, we advocate against it. Do you think that makes sense? I think it makes sense. Although from time to time, there are examples when every system can have its examples of where it's really worth. If you take the British system, where the CEO and the chair is much more active. I was expected to be three days a week at work, and I was expected to travel myself, have all employee meetings, meet partners, and what have you.

35:34And if the CEO would say that I think the new strategy is really getting accepted, it works really well. than when you have what we call an executive session with only the non-execs. They would say, Carl Henrik, you heard what Bob said. Do you see that? And I was expected to be out and feel that. That system is not bad in theory. It's actually quite good. If the two work really well together, it can work really well. But it's hard to find a good chairman. It's hard to find a good CEO. So the likelihood that they couple together, that's an additional complexity that that works. is maybe not so high, but if it does, it's great.

36:14If you take the Swedish system, when the chair is definitely non-executive, I think that's a very good system. It's a safe system. It has a lot of check and balance in there.

36:30Moving on to corporate culture, you said that it's difficult to change the corporate culture during one CEO period. now corporate culture is one of the things I spend a lot of time on I think it's incredibly interesting when you look at corporate cultures what characterizes a good corporate culture I think in today's world I think ability and appetite for change is very important and a culture where you talk about issues I I used to always push something I call seek the truth because you have a lot of corporate truths. They may say, and Ericsson, everybody knows that we don't make any money on broadband.

37:18Okay. Good question. Let's sit down. Let's take this from the beginning to the end. Make sure that we understand we're making money on broadband. So we can either stop doing it or change our view on how we're doing. I mean, to seek the truth and not get into these kind of statements, but you are serious. I think that's very important. I think it's important in the management team that you really work through issues so that it's a high ceiling in the boardroom. And every question is key. But once you're out there, you are representative of that team and you stick together. You are sort of, so there's, if one person in the management team says something, another one says something else, then you leave the company in confusion.

38:11So really go to the bottom of the issues, work them through, and then stay strong. And then spend enough time on sort of making sure you inform the company so that everybody comes along and understand what the direction of travel is. I think these are... And if you take culture, if you take risk, what is the appetite for risk? Risk is something positive if you take a calculated risk. And without a willingness to take risk, you will never win. How do you get people to take risks? By really talking through the issues. Because taking risk, it's not a good risk-taking to throw yourself out of an airplane and hope you find a parachute on the way down.

39:04I mean, that's stupidity. So risks need to be calculated and needs to be open for debate. So you know what you're doing. And sitting still is also a risk. So you have to understand that the future involves risk. What are the most important cultural changes you have implemented? I would say, I used to say, I have a couple of mantras, but one was that seek the truth and know your numbers. If you can organize a company in such a way that everybody understands their financial targets and they can talk about them, truly understand the numbers and not just going around with different kind of statements or whatever, but it's not founded on reality.

39:50So know your number. Numbers are key. I think to know your job, have respect for the job. And as a CEO, you're the highest person in the company. You see competitors. You see all the different activities you have. You see customers. You see everything. You have a huge responsibility to gather all of that knowledge and put it together into a strategy. you can visualize to people so that they see the picture you know this thing with the the the the guys that are building this temple you may have heard about but you see in on a cartoon that people are cutting stones yeah and you ask a guy what are you doing we're cutting a stone and you ask the other one he says we're building a temple if you can have help everybody to see the temple to see the goal.

40:45And in all that, I also think that we had as a code word in Arizona or as a cornerstone was respect. You need to deal with all your people with respect. If you have people that, you have bosses that come into a room where people are sitting and they talk for a while and when they go out, everybody's exhausted and think we need to take a break here. We have other bosses that comes in and people are ready to fly to the moon. They get so energized. So you have people that eat energy and you have bosses that create energy. What's the difference between them? What is the key to create energy? Well, I think it is.

41:28I mean, is it something you can train or is it innate? I think it starts with a clear understanding of what the challenges lie, what capabilities you have, what the vision of the company is. And if you can describe that and you can describe the strategy and you can take people on your journey, that I think is the winning formula. It's not very complicated, but I think it requires that a boss truly takes on the leadership. I am now the boss of this company and I am responsible for making sure that we have a direction of travel that I can explain so many comes aboard. You have others that come in as a boss and say, well, they had to choose one, they choose me, and I'll do the best I can.

42:15How do you make sure that there isn't too much bureaucracy in a company? Well, I mean, I think it's sort of for me, bureaucracy is just something that shouldn't be bureaucracy. You need to take all that out. That is how you sort of clean the company, clean the P &L from all. The workflows needs to be straight. Anyone that, I mean, there shouldn't be anyone in the company that isn't contributing every day to where you want to go. You know, it's a good question. I've thought about it for a long time. But also it kills the company. You have to just clean it out. It's not easy, huh? No, and we used to joke about it when I was back in the old ABB where there was so much reports and people said, Just stop sending in the data for the report and see if anybody asks.

43:11And nobody ever has. Not so sure that would have gone down so well in this fund, but hey, we'll give it a go. But this is back to the end of the 70s, so Bjorn Rosengren, I'm sure, is far beyond that. Yeah. Now, moving on to leadership. One can split between being an effective leader and an efficient leader. They are, in a way, two, a bit different things. Now, how is a leader most effective? Well, first of all, I would say that effective is really the name of the game. Efficient, you know, I think when I started in the end of the 70s, beginning in the 80s, you had this idea of the monster leaders that worked two hours a day, and then they could speed read something, and they could do absorb, and they were dictating letters while they were at the dentist's office or whatever clinic.

44:02I think the effectiveness is your ability to engage and inspire people around a target that everybody shares. And how do you do that? Well, I mean, there is no, you have to, don't complicate your strategy, make it easy, make it easy, explainable. Make sure you have the meetings where everybody can hear it firsthand. I mean, we had in Ericsson, because it was so fast, the whole strategy development or the whole development of the industry. So we had, every year we set up that we had three, four workshops with maybe 75 people, 100 people each in three, four parts of the world. And we constantly mapped all the, everything everybody saw.

44:53What was it they were, what was the experience? What was it they were missing? what should we think about and all that that was put together as a as as a strategy approach and then we had worked on that hard in the management team then we invited the 300 top leaders in the company and and over a three-day session and then we went through every single aspect of the company and and everybody could talk for eight ten minutes and someone said to me i cannot i cannot explain the radio strategy and ericsson for eight minutes that's not serious and i was to say to them give cnn three minutes and they can explain the second world war how it started how it ran and how it ended in a mean way that we can understand we're gonna have 60 minutes i'll promise you that people will stop listening after eight seven eight whatever so condense it down to something you can understand area by area by area and then it ended up with a slide series of maybe 30 slides or 40 slides that were what we were going to do for the next year.

45:52Then all of these 300 went home and ran all employees meetings with 300 each. Within a week, we could reach 90 ,000 people and everybody run the strategy. So, I mean, the trust in the company that they don't need to worry that there are other ideas that we should consider more. They know that every year we are vacuum cleaning the world from ideas and putting together a strategy. Now, Karl-Henrik, you, of course, look exactly the same as you did when you first met 30 years ago. Yeah, so do you. We're a little thin-haired. But the fact is we are 30 years older. Are you a better leader now? Yeah.

46:31I mean, I think you are a leader in different ways. I was more energetic then probably. It doesn't mean I don't have energy, but I'm probably more thoughtful. So there is so much... Tell me the trade-off between energy and thoughtful. Yeah, you know, but I give you the example that you probably are aware. Somebody called to me the time after 50, the time to be wise. You've had your successes, you've had maybe your failures. And if you're sitting here in the room with, say, 10 people around and discussing something, you will from time to time know, I have this great argument coming here. and somebody else is talking, I need to jump in first because I want to say this.

47:14And you realize that this guy or woman over there, they're about to say the same thing. So you want to come forward to make sure you get in. And you come to a point where that's no longer important. Why is that, you think? I just think you get your ego is maybe coming down a bit. I mean, let's face it in this time of jobs, If you don't have an ego, if you don't, there's something that drives you to spend totally disproportional time working and lots of worries and successes, but also failures and all of that. There's a drag in that. And if you were to be completely honest, what's been your dragon?

47:58My dragon? Well, I don't know. I, it's a little hard to say because there are, you have constantly challenges. I think I am probably wiser, less self-certain. I have, I have an ability to quite quickly understand the situation. Yeah, but the driver, what's been the driver? Is it coming from a tiny village, you think? You mean what's the driver? Well, I mean, I don't know. We are all different. But I've had this, I don't get tired easily. I've always had this drive of doing things, not on my own. I'm not the guy that will walk up on Mount Everest alone or sail alone like Frenchmen do in a boat around the world.

48:57But I get my inspiration from taking a team and really energizing the team and reaching great targets that we have sort of set. But who do you want to show? I mean, you mentioned that it's important to be a little bit better than your father. Yeah, you know, I mean, if I really dig into my soul, I had a sister that was diabetic from nine, got diabetes in 1957. She was born in 1959, 49. And she got blind when she was 25, and she had to transplant the kidney and amputate feet and stuff and passed away when I was 46. And this was, I mean, I hardly recall any time when my parents sort of didn't always want to talk about my sister and the issues she had and all of that.

50:00And I, from early on, I always felt that I will always make them proud. I will not add to the burden. I've always believed that that in a way have contributed to my drive and my wish to always perform. Would that have been the same anyway? But I'll tell you another interesting story because I can't. Do you think that's the reason why you've been operating in Sweden so much? You could have gone anywhere in the world and now you are going back to Sweden. I'm coming back to Norway. We're doing something that we think is good for the country. Well, I have a, maybe it's because we moved around 15 times.

50:46So I love Sweden. I mean, Sweden has so many issues. But I love king and country, doing the right things. I mean, I'm 71. I should have stopped a long time ago when I left my CEO job when I was 57. I mean, I would have been, if I wanted to be financially better off, I should have continued as a CEO. But I like to be in companies. You know, if you think about Ericsson in energy or in telecommunications and BP in energy involved in transportation, they all play a very important part in society and that's uh that's been but if we are in this soul searching mode i must tell you a story because i think it's a cool story when i became ceo as a abloy and i came from very simple circumstances and my mother and father they lived in in norrköping south of stockholm 150 kilometers south of stockholm and and they told me that I was going to get 120 ,000 US dollars, 1201.2 million Swedish.

51:53I was going to get that as my salary. And I mean, for me, that was, I mean, my head was swinging. How did I end up here? How could this be? So what do you do? 42 years old. I called my mother and said, are you home tonight? Of course they were because they never went anywhere. So I drove down then 20 kilometers, 150 kilometers and I sat there during the dinner and I tried to get into the topic I mean my father I think he had 14 ,000 a month in pension and my mother had 5 ,000 or something and I was sitting there I was trying to get into the topic and I couldn't get them there and then my mother eventually said how much you're going to make and I said one put two million and she says wow that's fantastic Then my father looks at me and says, is that really necessary?

52:44And, you know, I must have thought about that. Is that really necessary? Hundreds of times. And I don't think it is. I'm not sure it is. So what is necessary? I don't know. But, I mean, the thing is that is it necessary for, is it necessary for Johaug to make money? Is it necessary for the plant is to make money? No. But if you want to sort of buy Haaland, you have to give him a good salary because everybody's after him. And it's not mainly that it's like him. So where do you get the real pleasure from? It is definitely from achieving things together with the group. That's the whole thing for me.

53:34Well, Con-Henri, you have achieved some amazing things. congratulations and a big thanks for being here today thank you thanks a lot