"If we didn’t write this book, we would be dying to see it published. Whenever one reads about ABB in the management literature, there is a ‘no questions asked’ quality of ‘if ABB has done it, why can't you, it must be the right thing to do. This is the way to do it, this is what ABB have done.’"- Claudia Heimer & Kevin Barham
There is almost an ABB doctrine that fascinates both scholars and managers. Why is ABB so interesting to managers and gurus alike? Why is it the world’s favorite case study? Why is Percy Barnevik possibly ‘the most influential manager in the world’ (according to the Observer newspaper)
In June 1987, Beat Hess, head of the legal department of the world-famous Swiss electro-technical firm BBC Brown Boveri, was about to take his family on a well-earned week’s holiday to Italy. He was suddenly told by BBC’s chairman Fritz Leutwiler and chief executive Thomas Gasser, to prepare a full draft agreement for the ‘unthinkable’ - negotiations for a merger with long-time rival ASEA, the Swedish power engineering firm that had been gaining ground on Brown Boveri ever since a new CEO, Percy Barnevik, had taken over in 1980. If it came off, this would be the largest cross-border merger in history.
Hess was told to go ahead with his holiday if he wanted to, but that the agreement had to be completed by the first week in July. The handwritten draft with its coffee and suntan lotion stains that Hess brought back from Italy was to be the basis for what has now become a legend of corporate history.
ABB has grown to be the leading power engineering company in the world. It doubled its size in six years and is now a $31 billion corporation employing 213,000 people in 50 or more countries, including all the major markets, around the globe. According to the last three years’ surveys in the FT, it is Europe’s most admired company and Percy Barnevik, Europe’s most admired CEO.
How do we make sense of what ABB has achieved? Their success, in one of the most fiercely competitive industries in the world, a success which is all the more remarkable for a company which pioneered a new form of global organization. Percy Barnevik has described the paradoxes that ABB has tried to resolve as the simultaneous attempt to be ‘global and local, big and small, and radically decentralized with central reporting and control.’
In essence, Barnevik and his senior colleagues at ABB have tried to resolve these contradictions by creating what we call a ‘globally-connected corporation’, a loose-tight network of processes and partners which can only be held together by highly committed people and strongly-held principles.
The gurus fell in love with ABB very quickly...
Tom Peters calls ABB a ‘buckyball organization’ and says that Percy Barnevik is the most insistent enemy of bureaucracy that he has ever met.
Manfred Kets de Vries has described the challenge of managing ABB as ‘making a giant dance’,
While it may not be a model for every other company, it is certainly an example of what most companies can achieve.
ABB The Dancing Giant gives its reader the exciting opportunity to look through the keyhole and hear from some very interesting people around ABB, both in the corporate headquarters and locations world-wide.
It will also satisfy their curiosity about the heritage of Percy Barnevik, who has almost come to personify the company. It will look at how the company is doing now that he has passed on the role of CEO to Göran Lindahl. You will be able to look behind his image and public statements and find out what other people in the company think, how they lived the story of the merger, and what life is like for them in the organization.
ABB the Dancing Giant has not been written simply for the sake of a fascinating history, which it certainly is, but to ask ourselves what other managers who are faced with the challenges of globalisation can learn from the story. It will :
- document the story of the merger and of ABB's growth and global expansion
- catch a greater glimpse of the real story behind the company's on-going success
- raise some key questions for the future of ABB - how is Göran Lindahl preparing ABB for the next Millennium?
- highlight some lessons from ABB's experience for managers in other organizations facing international and global challenges
- be a frank look at the good and bad of ABB and what other managers and companies can learn and implement from this story.
Authors:
Kevin Barham is Director of the Ashridge Center for Management and Organization Learning and a founding partner of the Global Development Partnership. His research has focused on the development of international managers - a topic where ABB itself has much to teach other organizations.
Claudia Heimer is Business Director and a member of the management team of Ashridge Consulting, where she has been interested in the cultural, strategic and IT implications of globalisation
Outline Contents
Part One : The Birth of a Modern Giant
The story of the two companies that came to form ABB, ASEA of Sweden, and BBC (Brown Boveri Corporation) of Switzerland. Includes insights into the details of the merger talks, the high emotions involved and the way that Percy Barnevik drove the negotiations to a successful outcome.
Part Two : Giant Steps to the Globally-Connected Corporation
Looks at ABB’s global expansion and looks at ABB through a number of different lenses. Looks at ABB as the ‘globally-connected corporation’ and sets ABB in the context of the global transitions that more and more firms are having to make to compete in a globalised world. Includes an overview of four of the most important analyses of ABB by leading management gurus.
Part Three : Reaping the Harvest
The organization a decade after the merger - find out how the masterplan has worked out so far. Looks more closely at why ABB has become the world’s favorite case study and at why it is an example of that rare organizational breed, a successful cross-border merger.
Postscript : The Future of ABB
ABB has successfully completed its first decade of existence and occupies the corporate Mount Olympus together with General Electric and Microsoft, but what does the future hold? How can ABB sustain and build on their success? How will Göran Lindahl shape up now Percy Barnevik has given him control?
ABB is a highly celebrated corporation which has become somewhat of a cult case. Built from, at the time, a surprising merger between ASEA of Sweden and BBC (Brown Boveri and Company) of Switzerland, the success story is well documented. Described by the authors as "the world's favourite case study" and lead by Percy and Barnevik--"the most influential manager in the world"--ABB is a $31 billion power engineering corporation employing 222,000 in more than 50 countries. Its fame is associated with a rather unique organisation which, if we are to believe the management gurus, is one which at the same time is global and local, big and small, and centralised and decentralised. Quite an achievement!
How is this oxymoronic cocktail brought off? Barham and Heimer have done their best to make sense of it. Nevertheless it is difficult to disentangle the role of a rather remarkable CEO and the actual organisational form. The book is based upon extensive interviews, often quoted at length, and is written by gurus for gurus so we are assailed by a rich array of management speak. Nevertheless, a good read, though I doubt we are in a position to know why ABB has experienced the success it has. --Peter Abell
