Setting A New Course

In late 1996, when he knew he would be succeeding European management legend Percy Barnevik as president and CEO of the Zurich-based ABB Group, Gran Lindahl began to think about the company's responsibilities to customers, shareholders, employees, and society. He wanted to determine what was "right" for the business, he says. "I made what I would call a master plan of what would be the ideal direction on various issues," Lindahl recalls. The result was a four-year, deliberately directed repositioning of ABB. From Jan. 1, 1997, when he succeeded Barnevik, until this past Dec. 31, when Jrgen Centerman succeeded him as president and chief executive, Lindahl moved US$24.7 billion ABB away from power generation and other heavy-industry sectors to higher-profit, technology-intensive business segments, such as industrial control systems, as well as to financial and other services. In the process of succeeding a manufacturing CEO legend Lindahl learned some very valuable lessons. "We have basically no training in how to address journalists or the market at large, the investors and others," he confesses. "I learned very quickly that, most of all, you have to be very consistent . . . and the best way to be consistent is to always go back to some kind of facts." And speaking of facts, another lesson Lindahl mentions is the importance of acting quickly once the facts are clear. His example: the Asian economic crisis that began in mid-1997 with the collapse of Thailand's currency. "Very few people, including myself, had any sort of expectation that would come." However, once the crisis was apparent, he and his management team had to recognize it was real and "act immediately," says Lindahl. In a strategy that surprised analysts and investors at the time, ABB intensified its activities in southeast Asia to take advantage of lower-cost sources of supply.