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SPARK OF THE CORPORATE

Networked Society! That’s the catch-phrase Hans Vestberg, the workaholic CEO of LM Ericsson Telephone Company (Commonly referred to as Ericsson), seems to carry along with him wherever he goes. That’s understandable. His will and conviction are unquestionable. From, turning upside down the whole long-serving business mantra of the company – equipments (handsets, phones, etc) to a more service-oriented company, to changing perceptions and orthodoxy from its ranks, Vestberg has indeed been the Midas for the once-upon-a-time pioneer of the telecom industry. And what’s more, the man has done it without having the conventional pre-requisites for the top job: he is the first non-engineer to run Ericsson in its 139-year history.

Serendipitous….?

Yes….almost. Vestberg’s ascent (if it can be called thus) could look almost fortuitous. While it was triggered by a chance happening - Carl-Henric Svanberg, CEO of Ericsson until then, could not say no to an offer from to British Petroleum, and decided to move there as its president which would create a void at the top for Ericsson-, his elevation should never have been in doubt had it happened any which way. A person with a very long (two-and-a-half decades) and successful career (only employer all his life, his growth through the ranks, in several countries and in several ranks), across geographies (four counties – Brazil, China, Mexico and the United States), cutting across business segments and, excelling always (barring the gloomy period when they had to cull about 45,000 employees), would make anyone a worthy successor to Svanberg. And as it turned out, it was a sort of blessing in disguise for Vestberg. Or rather, it was a window of opportunity for Vestberg who, although nobody could have guess as being in contention, was the obvious choice.

Education & early career

Hans Vestberg joined Ericsson in 1998, working in the travel expenses department (for Ericsson Cables) in his hometown of Hudiksvall. Not much later, he graduated from the Uppsala University (Sweden) with a business administration & economics degree, in 1991.

So, Ericsson it was…..for the next more than two decades.

It was scripted perhaps that one day the young Vestberg would go on to helm the company that had a great history. Thus, it was that Vestberg, by default or by design, travelled far and across the globe, serving Ericsson in various capacities, in different geographies, and around varied cultures and people. This experience was to stand him in good stead when he would go on to take control and revamp the leadership in the company – shaking off the (apparent) Swedes-only management, and mixing it up well with people from multiple nationalities.

As time passed by, Vestberg seized every opportunity that came his way and made good use of it through hardwork, wisdom, and an almost inexplicit sense of leadership, manifest during the years from 1998 to 2000 when he was CFO for Ericsson in Brazil, then from 2000 to 2002, he was CFO for Ericsson in North America and controller for North and South America, and then as President for Ericsson in Mexico for the next one year.

Prelude to leadership...?

After more than a decade-and-a-half, he was elevated to the position of Chief Financial Officer for Ericsson in 2007, in which position he was to serve until he became the CEO on January 1, 2010, replacing Carl-Henric Svanberg.

The change that no-one expected….

When he became the CEO, he decided it was time to effect some sweeping changes, which he did. But, the most amazing one was changing the business line of the company – no one had even dared to think of digressing from what the company’s founder Lars Magnus Ericsson had envisaged.

After taking charge, with full support and backing of the board, he took the emotionally difficult but strategically very simple (for him) decision to refocus its business away from costly hardware and to be predominantly into software and services. The result is there for anyone to see - in 2004, 73% of the company’s revenues came from hardware, 27% from software and services. By 2014, four years since Vestberg took over as CEO – the ratio had been almost completely on its head.

The next task was a shake-up of the top-ranks. He changed the entire management team on the basis that if Ericsson had to change, it needed a new set of leaders. Since its inception in 1876 up until 2009 (for more than 130 years) it had been run by only Swedish males, and one Swedish female. That was an uphill task to say the least – but he bit the bullet. Today, it is reported that there are 5 females on the 14-member executive team, four are non-Swedes, and more than half of the team doesn’t even sit in Sweden anymore. What a change – for the good of one of the leading business houses of the twentieth century.

The 16th CEO of Ericsson, who really believes in its history and legacy, decided that it will not have any consumer products anymore. Today, under Vestberg, Ericsson operates in 180 countries with a workforce of 113,000, provides 40% of the world's mobile traffic, manages 2.5 billion subscriptions and, has grown to be the world’s largest vendor of 3G and 4G networks.

Aside

Had he not been into telecom, Vestberg, in all likelihood, would have made a career out his pet-sporting passion – handball, having played to a high standard in Sweden's national league. But, as he was destined to lead more than 100,000 people, Vestberg makes-up for the miss by being the chairman of the Swedish Handball Association.

The champion of the concept called Networked Society, Vestberg is always at the fore-front of technology-enabled initiatives aimed at solving some of the crippling problems of the world like poverty, health ailments, etc.

Other affiliations:

He remains the international advisor to the Governor of Guangdong, China.
He has been a Director of United Nations Foundation since June 2015.
He is a Founding Member of the Broadband Commission for Digital Development, established by the International Telecommunication Union (ITU) and UNESCO, where he chairs the task group on the post-2015 development agenda and previously chaired the climate change working group
Quotes
 I'm really proud to lead Ericsson. I know it will be a tough job. It is a business that is changing rapidly." On being appointed CEO of Ericsson (Announced Jun 2009)
 Basically, I worked in supply, logistics, finance, sales, marketing, business units, market units, in all areas of the company except for R&D. I lived in some six or seven countries.
 All the way from how the markets work, we need to change internally. And that's what we are working on right now.
 Usually everyday when I go to work, I have this feeling that this is going to be a great day again.
 Sport has been so close to my heart. I have been in sports all my life, and that was my career until I started working.
 If there is an emergency, they know where to find me. Otherwise I switch off; it’s one of my rules. I have rules for everything.” On switching off his mobile after the time he set per his rules
 But the main question the analysts keep asking is why I’ve grown my hair long. You know, men can’t do much to change; we have to wear suits, although I never wear a tie, apart from in Asia sometimes. So I decided to grow my hair.
 The first revolution was the ICT one. Now we are entering the second: the Networked Society. We predict that in five years 93 per cent of the world’s population will have broadband and there will be around 50 billion different devices connected between people and machines.
 The infrastructure we provide is the same in a remote town in Africa or New York or an archipelago in Sweden: we use the same system and the chips inside the phone are the same. Even if you buy a Finnish, Korean or American phone – it will be Ericsson on the inside.  So it’s about the cost of the handset. As handsets come down – we predict to $40 over the next few years – so the numbers go up. For every $10 drop in the price of a handset, there will be another 100 million or so new subscribers.
 If you lower the average price of a smart phone by $10, 100 million [more] people on Earth can afford it. [In 2010], I think it was 20 countries in the world that had a broadband [Internet access] plan. Now, 144 countries of 193 have a broadband plan. And that’s only the beginning..
 At heart we are an intellectual company. Innovation will always be integral to what we do.
 I said we’re going to leave phones, and so we did. We sold it to Sony..
 Anything that benefits from being connected is going to be connected. Ericsson is going to be a key enabler for all that..
 I believe mobile technology has a much broader role to play. It could solve some of the biggest problems on earth..

Hope viewers caught up the spark…

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