Volvo CEO Olof Persson Leverages Countdown Period to Embark on Ambitious Shake Up Starting Day One
Posted by Robert Hargrove
Most CEOs spend their first 100 days getting settled in. Not Olof Persson, who became CEO of Volvo in September of 2011 and has embarked on one of the most ambitious shakeups in decades. The key has been how he has handled the preparation period before he started the job.
According to an interview in 3D-Car, Persson said: Although I officially took over as Chief Executive on 1st September, I have been concentrating on this role since May, when I became deputy CEO. I spent that interim period travelling around the Group, visiting facilities that I’d not seen during my five previous years at the Volvo Group, and speaking with a whole lot of new people.
This process not only helped fill gaps in my knowledge about the Group, the discussions also acted as a valuable sounding board for my ideas. So by 1st September, when I officially took over, I already had my plans for moving the company forward in place and was ready to go.
Persson went around asking a lot of questions, but in the process he went beyond seeking answers and came to what I call the moment of true insight. Says Persson, I have always believed that the Volvo Group was a company filled with an enormous amount of talented and committed people.
My travels and conversations have confirmed this view. I have been surprised by the number of good initiatives – and by the level of enthusiasm and engagement I have seen during my visits. Our big strength is, of course, the Volvo culture, which is well aligned throughout the company. This, and the ‘Volvo Way’ philosophy, is a universal foundation for how we work, how we treat customers and each other.
In going through this period of rigorous active inquiry, Persson saw Volvo’s strengths and weaknesses, and then focused on what was missing. The previous CEO, Leif Johansson, had made Volvo into a global company, with multiple brands, and divisions from cars, to trucks, to airplanes and construction. Persson’s insight about what was missing involved modernizing the structure of the company – as he puts it: one where we take advantage of all that growth by maximizing economies of scale and leveraging synergies.
Persson’s background, which includes restructuring Volvo construction equipment and making it one of the most successful in its industry in terms of both profitability and size, makes him uniquely qualified to do this.
Instead of being divided into four brands (Volvo, Mack, Renault and UD), Volvo’s truck operations will be organized into three geographic units. The aim is to improve coordination. Persson also has changed the talent line up in the organization, bringing in seven new people and adding three new women to the top team.