DECEMBER

erry M Christmas & appy H New Year! to all our readers

2014

”Different” is a fine adjective to sum up the situation of our surrounding world. Our Riksbank has introduced zero interest in order to spur the economy and the new government did not receive support for its budget leading to new elections in March. The winds of change blow within the Karnell’s sphere too albeit neither as drastically nor as differently. Kasthall’s new CEO after year’s end and Nordic Vehicle’s new leadership duo of a new CEO and Chair are introduced in this edition of Mindset. Before the holidays, some of our companies share interesting reading tips in the realm of strategic and corporate development. Moreover, Karnell and Iris boast having Sweden’s best chairman in Anitra Steen who with this award is now competing with other Nordic winners for the title Nordic Chair of the Year.

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From rags to rugs Eva Boding changes wardrobe Eva Boding has worked with powerful brands her entire professional life including L´Oreal and Gant. She last came from Filippa K where her role as Brand Director included overseeing the entire business model, strengthening the brand internationally, and adapting the customer experience in every respect to meet the demands of the new digital world, experience that will serve her well in her new role as CEO of Kasthall from February 2015. How will you make use of your earlier experience in your new job? ”I bring experience and a knowledge base that includes most everything: strategy, organization, leadership, business development, brand, product, communication, and sales. Whether success or failure, all lessons are valuable and will hopefully be of great benefit at Kasthall.” What do you intend to do at Kasthall in the short and long-term? ”First I want to learn the business and get to know all employees. Then, I point to the following: Kasthall is an incredibly strong brand with a unique product and a valuable history. The potential is enormous since it is a global product. The challenge as well as opportunity is to position Kasthall for the next step of increased growth. In the short-term, this means focusing all the pieces at the single task of getting the organization to deliver. In order to

establish the long-term plan, we will commence strategic planning aimed at doubling the size of Kasthall.” Do you have any personal connection to the Kasthall product? ”I have both a personal and professional past with Kasthall. My mother worked for 35 years as an interior designer and throughout my upbringing always impressed upon me the importance of beauty and top quality. We had at least three rugs from Kasthall at home and now I have one of them. I also came in contact with Kasthall during my time with Gant and Filippa K where rugs are a part of the store concept. Gant and Filippa K remain Kasthall customers with hopes of long-term collaboration.” Describe yourself as a leader! ”Dedicated, passionate, clear and straightforward. And accessible. To everyone.”

Photo: Fredrik Skogkvist

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What is your philosophy with respect to jobs and meetings? ”I believe that one must feel pride and joy in what one does. Work takes such a large part of one’s life that it must be motivating and stimulating. Then it is easier to get through the inevitable rough patches. If there is pride and passion for what one does, one also gains strength in the organization. With respect to meetings, one must provide for the needs of the employees and group. In a change process, many meetings are needed with the idea of processing through questions as a group. In a decision process, the focus should be on efficiency and decisions. I then prefer a well-prepared agenda and clear decision support. However, when it comes to working out a whole new product strategy for example, I am happy to set aside an entire day just for this one meeting. It can be incredibly rewarding to have open and uninhibited discussions but draining as well were you to get trapped in the wrong discussions. In such event, I am often both clear and straightforward if it looks to be heading off in the wrong direction. I typically always sit in on meetings but very seldom unnecessarily.”

at home in front of a good movie on a Friday night after sharing a good dinner.” Do you have any guiding words in life? ”There are so many sensible guiding words. I just try to follow the best for me which is my husband, Oskar. These words fit well with his philosophy (see the words alongside).” l louise ribbing

How do you relax after work? ”I work out both in order to manage my pace and to relax. I recommend this to all. In addition, family time is valuable. I like to cook. I find it relaxing to do something completely different. Luxury is when the entire family is

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New leaders to steer straight A former welder named Stefan has just received a big new leadership assignment. Guess who? Spot on! Stefan Magnusson is the new CEO of Nordic Vehicle and with the new chairman, he has a solid Axel (shoulder) to lean on.

Stefan Magnusson comes most recently from serving as CEO for Thermo King, a company manufacturing coolant devices for trucks, trailers, and vans. He has thus been long familiar with Ydre Skåp and looks forward to learning about other Nordic Vehicle operations. After focusing on sales and aftermarket a number of years, he is pleased to once again work on the production side. That is where it all began. First as a shop welder for ten years then in various areas of production technology, production manager, and sales director before coming to Thermo King. ”I think my prior production work will be a big advantage in my new role. I am quick to grasp how it works on the shop floor. I am moreover passionate about customer interaction. I am going to spend a lot of time with the customers. It is they, after all, who buy the product,” he says about his new role. As a leader, he describes himself as down to earth, direct, and communicative. The primary focus going forward will be to improve profitability as well as consolidate the position as a strong player in the market. This is a vision he shares with the new chairman, Axel Leijonhufvud.

Axel recently spent seven years in management positions with Cargotec. In recent years, he was CEO for HIAB and has significant big industry experience including ABB, Saint-Gobain, Weibulls and Ruukki Engineering. In addition to leadership roles in big and medium-sized companies, he had his own consultancy as PE advisor and with development of leadership groups. ”Stefan and I complement each other well. We are operational, know the basics, and are experienced with both small and large operations. Together, we can work toward establishing a stable foundation of the operation and a cohesive team. A good team can conquer mountains.” The work with Nordic Vehicle appeals to Axel Leijonhufvud since it is in a field he knows well and in a market he believes in. He also finds it exciting to take hold of the great improvement potential he sees in the company. ”As an active chairman, I wish to have open and honest discussions where we examine the possibilities and make decisions based on facts. I want to have a Board that is explicit with management and can provide clear direction. In the end, it is my goal that we find solutions and suggestions that result in customers that are satisfied with our products and services,” he says. l louise ribbing

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Holiday reading suggestions Three of Karnell’s companies share their suggestions for interesting strategy reading and talk about how they themselves have employed these methods with good results.

Dag Furtemark, COO, Wermland Mechanics: Lean thinking for active engagement Did you believe that ”lean” was a concept just for auto-makers? Think again, suggests Dag Furte­ mark, COO at Wermland Mechanics who has applied ”lean thinking” for a number of years. He thinks that lean is a fundamental system to assure that the operation is continually developing. ”With lean, we gain a broad commitment in the organization which is the actual engine behind the continual development of the business. If we get 110 percent effort with respect to initiative, problem-resolution, and process improvement as opposed to more typical levels of 80-90 percent then it is with these last percentage units that we create a unique competitive edge in our market.” According to Dag, the great value in lean is ”a journey without end”, to be able to get everyone in the operation actively engaged using structured common sense. When everyone is involved, the leverage on corpora­te profita­

bility becomes huge. The lean strategy at Wermland Mechanics has been given the name SMART which is the company’s own cobbled-together production system based largely on Toyota’s 14 basic principles. ”Since we are a manufacturing corporate group, our value stream is to manufacture, deliver, and sell our products. This therefore becomes a priority for the entire company. Everything else within the company is ”just” about supporting that value stream. This is an important view to establish. The results are positive. Over the years, Wermland Mechanics has been profitable, even uniquely so in its industry, and this despite all manufacturing taking place in Sweden. ”We look at this as the only way to meet the competition”, says Dag Furtemark. For the company only just positioned to adopt lean thinking, he recommends the book Lean in Management with the subtitle Challenge the Entire Organization! It is easy to read, adequately comprehensive, and written to those not yet totally immersed in lean. The book also emphasizes that lean isn’t just right for automakers. In fact, the approach enters all normal functions of the company, not just production. ”The book is a teaser for those who are considering lean as a strategic path for their business development. It places great emphasis on what values ought to be in company leadership, how they should act as leaders and

2 x Lean what they should direct their focus at. It is a good introductory guide to working with lean. The one who is then bitten can improve themselves in the sequel: The Valuable Commitment. There the emphasis is on a high commitment and how this is created. Dag Furtemark suggests enlisting a mentor when working on change and implementing Lean Thinking in the organization. ”We used Swerea IVF and their program, ”Produktions­ lyftet,” conducted together with Chalmers. It is a two year project wherein one receives guidance on getting the thinking into the organization and a base structure on how it should be operationally activated.” l louise ribbing

Lean i ledningen Utmana hela organisationen! Richard Berglund, Björn Westling; Swerea IVF 2009 Det värdefulla engagemanget En guide för Lean och andra strategier för utveckling. Richard Berglund, Mats Karling, Claes Mellby; Swerea IVF 2011

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Holiday reading suggestions

Good to Great Patrik Elfwing, CEO of Silva: We choose to be successful What makes some companies gear up from being good to becoming great? That is the question that management writer and Stanford educator Jim Collins asked himself. The answers were gathered via a five-year research study and published in the book, Good to Great, a book that influenced Patrik Elfwing, CEO of Silva: ”The book begins by revealing one of the most important success factors to be the hiring of the right individuals before deciding what to do. I am not in favor of such a one-sided methodology but it still stresses the importance of having the right personnel with the right attitude and qualifications. Good to Great leaders are incredibly discerning about who they work with. I applied this at Silva. I have not compromised in finding the right people with the right attitude, energy and culture. Of course I have made some few individual errors but quickly moved to correct them.”

Jim Collins introduces us to the Hedgehog Concept. The metaphor comes from the hedgehog with just a single mean of responding to danger. Good to Great companies have just a single strategy for their development and cling to it. The strategy is summarized in three questions: 1. What can we be best in the world at? Not as a goal, plan, intention, or strategy but as a sharp understanding of what we should be able to be best at. 2. What drives our economic engine? Good to Great companies often had just one key figure that could be comprehended by all and meticulously followed. 3. What are we deeply passionate about? If one is not passionately interested, one should give up the idea of going from Good to Great.

Patrik Elfwing’s chief lesson from the book is that success is a choice. ”We have chosen to be successful at Silva… period! We also choose to express ourselves when articulating our values: We choose to be Unstoppable. We choose to be Dedicated. We choose to be an I-team. l louise ribbing

Good to Great Jim Collins Brookhouse Publishing, 2001

It is in the answer to these questions where all focus should be placed if your company is to make the journey from Good to Great. That which one can be best at may not, in fact, be what one has always done. Several of the Good to Great companies peeled off parts of their old core business before reaching the breakpoint. The study of Good to Great companies showed it to be a slow and patient process – four years on average before the breakpoint is reached. The companies took one step at a time, not with great transformations and kick-offs but rather, with encouragement of all the progress along the way.

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Holiday reading suggestions

Blue ocean strategy Anders Hvarfner, CEO of Iris: Create new markets without murderous competition In red oceans, competitors hunt like sharks and the water is stained red. In blue oceans, competitors have become irrelevant and cannot reach you and you swim undisturbed. That is the summation of the message in the book, Blue Ocean Strategy. Anders Hvarfner first heard of it in a leadership held by IMD in Lausanne and immediately found it enticingly simple, understandable and strategically applicable. Once back in Sweden, he was able to immediately put it to use in the creation of the corporate health management company, Manpower Hälsopartner. ”We created a unique value proposition renewing our field. When the company physician had contributed to the individual’s rehabilitation, we linked the staffing company’s knowledge of the labor market to facilitate a return to work. Contact avenues to the labor market became

our own blue ocean in which our competition could not compete.” By creating new markets, the blue ocean companies do not need to match the competition. Instead, one increases value and at a lower cost. By creating a strategy vision that answers four questions, one builds the only management tool that the company needs. The questions to be answered are: what shall we eliminate, reduce, increase, or create in order to achieve value innovation? ”The method is both involving and solution-focused with participation by all managers. When we laid out our strategy and business plan for Iris, our starting point was our value curve relative to what our customers wanted. How does our products and services offering look? Can we do it in some other unexpected manner in order to create our own uncontested market space? How we approach this is especially relevant in our field where price pressures must be met by creation of value-added. This journey must take place together with our customers without cautious glances at the competition. One of several tips on how to best answer these questions is to first look at how companies in other fields work and transfer this to the own operation. For instance, the fashion retailer Zara copied methods from the logistics field in order to reduce lead time between production and end sale. The book also offers a great deal of advice on implementation of the new strategy. l louise ribbing

Blue Ocean Strategy W. Chan Kim, Renée Mauborgne Harvard Business Press, 2005

Big difference between red and blue oceans Red oceans Compete in existing market spaces Win over competitors Exploit existing demand Increased/decreased costs provide higher/ lower value Blue oceans Create an uncontested market space Make competitors irrelevant Create and retain new demand Sever the cost/value connection

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Chairman of the year: Anitra Steen Anitra Steen has been honored Chairman of the Year 2014. Among other board assignments, she is chairman of Karnell’s portfolio company Iris.

Awarded for the seventh time, Anitra Steen is the first woman to receive the prize. The contest is arranged by Företagsekonomiska Föreningen. Prior winners include Fredrik Arp, Melker Schörling, Fredrik Lundberg, and Carl Bennet. As winner, Anitra Steen is also competing with other Nordic winners for the distinction as Nordic Chair of the Year. In 2013, the honor fell to Niels Jacobsen, chairman at LEGO. Anitra Steen chairs the board at Svenska Spel, AFA Försäkring, Telge Inköp and Iris. She is a member of the

Photo: Svenska Spel

board at PostNord and Oral Care. She finds it both interesting and fun to work with strategic and development matters and to always be seeking new ways to develop a business thereby creating value. When she considers whether to accept an appointment, it is important to her what sort of business it is as well as to what extent her own qualification matches the needs. ”As chairman, I assume that the owner had a wellfounded basis for the composition of the Board. The chairman serves as a link between owner and board and so should expect to make full use of the qualifications of the remaining board members.” Get the board members to feel involved Anitra Steen sees the chairman as a team leader whose role it is to create a good group spirit thus laying a foundation to good board accomplishment. All members should feel involved and free to state their views. This creates space for discussion and ultimately, a positive development for the company. ”Then the chairman is a link between the Board and executive management. It is therefore important that the chairman creates clear expectations for the CEO.”

All boards have lives of their own but some principles are nevertheless important, according to Anitra. The board should not be too large. There should be room for dialogue permitting each member to share what they think and feel. Another important part is the administration surrounding the work of the board. ”It is important to have a skilled secretary able to write clear minutes that summarize meetings and can be used for follow-up. The role of the secretary is often neglected in board training,” according to Anitra. Take care of the results She also says that there is a lot of talk about the code for corporate governance and board evaluations but that one often forgets to mind the results of the evaluations, develop an action plan, and implement measures. ”Being honored as Chairman of the Year is huge,” says Anitra: ”We mortals appreciate recognition of our work and, of course, so do I. It is especially fun when it is my board colleagues whose evaluations led to my being honored as Chairman of the Year. l louise ribbing

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