OPINION: Earth to Ericsson – Come back!

Stephen Hinton 2016
Photo: Maj-Lis Koivisto

Ericsson just lost its CEO and with no-one at the helm of this giant spaceship of a technology company I’d like to offer the board some insights and advice. I’m biased as I worked there for a while; it was a period of personal growth for me and a lot of fun. My basic message is that the company needs to get back to its Swedish cultural roots and back to doing what it does best: providing needed advanced services and technology to people in societies that aim for social and environmental good.

The failings of capitalism have been with Ericsson from the start

The year Ericsson was founded was a few years after the publication of Karl Marx’s first chapter of Das Kapital. Marx made it clear that the effectiveness of the paradigm of competing firms with their capital owners, workers and customers would eventually fade. He predicted it would become increasingly difficult to make a profit and firms would resort to oligopoly, corruption, financial tricks and pressing down wages. Let’s face it: we are there already. And the board and management along with its best strategists have to deal with it. This is a moment in time where a large firm needs to rethink its long-term relationship with the financial system as well as keep afloat in the short-term.

Ericsson has brought out the very best talent and the best of Swedish culture

From small beginnings in 1876 Ericsson has been part of a planetary revolution that has now connected over 80% of the people on Earth with each other. The technical challenges Ericsson has risen to encompass most of what we call modern hi-tech: building large structures, handling high voltage electricity, advanced infrastructure switching, millimeter precision in supply chains, digital and information technology that works on the move and small intelligent handsets packed with processing power. Ericsson has been in retailing, business to business as well as selling to large national telecoms. The company has in it, although probably buried in obscure department prefixes, blinding talent and capability. Many people in Ericsson would go the extra mile, give it all they had to deliver on promises. Part of the reason for this was that they felt secure, even if they lost their job the Swedish safety net would provide.

It’s the state of mind not only the technology

When it all comes down to it, technology comes and goes so you need to keep the course clear. That is extremely difficult and getting downright impossible as the economic system grinds into slow motion. Technology and infrastructure companies earn money on installed systems and maturing products whilst working on new things to both expand the market and replace old technology. As it is all networked together and evolving keeping track of the smallest changes and spare parts and configurations is a challenge. And making money on it is even more of a challenge, but Ericsson does it.

Has Ericsson’s view of people narrowed – become to elitist?

Here I have to ask: what is Ericsson’s general view of people – the ultimate customer and raison d’être for the firm?  A company of engineers all pursuing technological goals risks missing out people. The giant connected network is in place and the human project should be more than chasing Pokemon figures or aspiring to create the next shiny ap. Ericsson needs to review the way it sees people – and that is a critical factor for choice of new CEO.

Taking the human project forward, rekindling the power of vision

It is telling that Ericsson’s slogan is taking you forward. It reflects the Swedish culture’s recent shift to extreme individualism to even talk about “you”. We are sitting on one planet, connected together and we are all in the same boat. We have to move together, especially given the challenges we face.

A recent  NASA study (quoted here) came to the conclusion that there are two key social features that contributed to the collapse of every single advanced civilization from the past: “the stretching of resources due to the strain placed on the ecological carrying capacity”; and “the economic stratification of society into Elites [rich] and Masses (or “Commoners”) [poor]” These social phenomena have played “a central role in the character or in the process of the collapse,” in all such cases over “the last five to fifteen thousand years.”

Going green and with equity and welfare is the challenge. Partnership is the way forward

We need to be much better stewards of the planet and we need to take care of each other better. We have this giant technological network to hand and all this talent. And we have the Swedish government burdened with a country with the highest living standards and the highest environmental impact. Add to that the current GDP to private debt ratio among the highest in the world. And now is not the time to reduce the number of jobs given the recent rapid rise in immigration and refugee reception. It is the time for partnership and to make most of the money that is in the system. Once in time Sweden had a tripartite relationship – the federation of industry, the government and the labour unions – that basically charted the course for the development of Swedish society. Only a company as large and important to Swedish society can reconvene such a constellation. It would need modernizing into a platform that included land owners and land stewards, industry, government, municipal and civil society.

Finance for the Earth Ericsson would need to come from the Swedish people. A new form of investment instrument – not shares – and new forms of payment streams – are all needed.

The ingenuity needs to go into economics, environment and social development

With the monetary system broken, the environment in need (areas of Swedish soils are listed by UN organizations as being most degraded) and social challenges on the rise I would offer a strategic direction for Ericsson: forge a new social partnerships, use the power of the network to release new economic models (the sharing economy has only just begun, and digital complementary currencies could provide a safety net should the current system falter more), put the environment in focus (the technology is there to map, monitor and control) to provide a vision for Sweden of the high-tech society that went green being an even better place to live and work.

What are the alternatives?

Of course, coming back down to Earth is not the only alternative for the future of Ericsson. The telecoms world will see a last-men-standing fight between the largest players for supplying new bits of the network. Played right Ericsson could be one of them. The spaceship would have to jettison a lot of what it is carrying, and plans for that are well under way.

Given this situation the board needs to be extra clear about the task for the new CEO as to how they want the spaceship steered. And of course, who they choose to put at the helm.




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