Managing Change Enquiry and Action

In the late 1980s Percy Barnevik was CEO of Swedish firm ASEA, an engineering company employing some 71 000 staff globally. He had overseen a dramatic improvement in ASEA's performance, quadrupling sales and increasing profits by a factor of 10. By 1988 he was looking for ways to continue the growth of the firm, and he led ASEA into a merger with a larger Swiss firm, Brown Boveri, which employed around 97 000 staff. At the age of 46 Barnevik became the first CEO of the newly merged company ASEA Brown Boveri, or simply ABB, with a combined staff of some 160 000 people operating in 140 countries and combined sales of $15 billion. From the moment it was formed, ABB became a major player in the global engineering and technology sector.

Barnevik had big plans for the new firm, and within months of taking office as ABB's CEO he held a gathering of a few hundred senior ABB managers to set out his vision for the future. He introduced what he called the ‘corporate policy bible’, which included details of the firm's approach to change. He described the company's strategy at that point as being ‘a two-stage rocket: restructuring then growth’ (Barham & Heimer, 1998). Over the next few years he delivered both restructuring and spectacular growth. Although he was not a native English speaker, Barnevik insisted that English had to be ABB's corporate language, and he created a new corporate identity for ABB to deliver his strategy. He focused hard on making a huge corporate organisation feel like a much smaller one, citing his early experiences in his father's small business, which had employed only 15 people. His mantra was to create small, customer-facing business units in which the entrepreneurial flair of staff could be released. Decentralising and individual accountability through distinct and separate profit centres were the order of the day. What followed was a period of tremendous change in the organisation.