Strategic Management at Scandinavian Contractors -Creating a research agenda CMB seminar 9. November 2012 Agenda •  •  •  •  Presentation Strategy- What are we talking about? Managers -Who are we talking about? Research themes emerging –  Competences –  Operations Strategy –  Scandivanian Values and Practices (Gender) •  Missing in action: Presentation 2012 Professor Process management and innovation, Chalmers University of Technology 2007-2011 Professor in Technology Based Business Development, Aarhus University, Denmark 1999-2007 Ass. Professor production management, Technical University of Denmark (TUD) 1994-1999 Technology management TUD Education: M.Sc. Engineer TUD Ph.D. Organisation Tilburg Previous Strategy projects Management concepts and their impact on business development (included Lean Construction implementation at large contractor) Strategic Purchasing in a large contractor Operation Strategy at a Contractor Strategy and business development in small Architects, Consulting Engineering and Contractor firms Status of my talk today A new research area: Strategy at the Scandinavian Building Industry What is the present status? Work in progress, half way through a desk study (figures in slides) An invitation to contribute! Stå aldrig til søs! Lad de andre stå! I får stribevis af kors og bånd og stjerner på! Strategy? Strategizing Praxis: A goal directed emergent activity C B Practices: Tools A Practitioners: Managers Jarzabkowski et al 2007 NCC Denmark 2011: New Growth in NCC DK -lost 65% of turnover (dwelling) Mapped 22 market areas 10 task forces of employees and managers -> drivers sustainability and increased efficiency •  Infrastructure unit, •  Public new built Martin Manthorpe, direktør for •  Competences in renovation strategi,salg og forretningsudvikling Contractor? Scandinavian? •  •  •  •  Scandinavia; Denmark, Norway and Sweden Contractors > 1 billion SEK turn over 2010. Legal and financial units (share holder companies, aktiebolag, aktieselskaber) NACE groups: –  41 Construction of buildings –byggande av hus –  42 Civil engineering -anläggsarbetar –  43 Specialised construction activities – specialiserad bygg och anläggsvirksamhet •  CEO, Board of Directors, Board (VD, Ledning och Styrelse) Scandinavian Contractors Företags-‐enheter Total sample Sverige Danmark Norge Mega Topledning CEO/VD 23 15 26 27 131 47 123 121 23 15 26 27 91 422 91 Norske Entreprenörer, gr 41 Byggande av hus Namn Omsätning SEK MIA Anställda 3.8 935 3.44 4 2.1 629 Backe AS 2.7 792 Hent AS 2.4 422 2.15 362 1.3 27 Vista Holding AS 1.6 1 JM Norge AS 1.5 246 Leonard Nissen & Sønner AS 1.1 373 Vedal Entreprenör AS 1.1 41 Funnemark Ejendom AS 1.0 0 Kruse Smith AS BWG Homes ASA Block Watne AS Oslo Bolig og sparelag (OBOS) Fornebu Utvikling (ex ASA) Atrium Ljungberg (SE gr 41) Väkst 2011 : 11,1 %, Omsätning 2,02 mia SEK •  •  •  •  •  •  •  Ingalill Berglund VD Annica Ånäs CFO Helena Martini, HR chef Carola Lavén Affärsutvecklingschef Magnus Alteskog Projektchef Mattias Celinder Affärsområdeschef handel Micael Averborg Affärsområdeschef Kontor B41 Byggande av hus B68 Fastighetsverksamhet 54 fastigheter, 23,5 Mia SEK Kvarteret NOD – en ny mötesplats för bland annat lärande, forskning och näringsliv i Kista Vision: Vi skapar levende möteplatser for människar handel och affär Atrium Ljungberg TL Bygg (100% owned) Turn over 373 mio SEK Employees 113 Verkställande direktör: Johan Edlund Ekonomi : Anders Johansson Kalkyl och inköp: Jonas Persson Entreprenadchef: Tobias Arnoldsson Danske Entreprenörer, gr 42 Civil Engineering Anläggsarbetar Namn OmsätningSEK Anställda Per Arsleff A/S 5.332.799.000 3162 Arkil A/S 1.434.392.000 903 Pankas A/S 1.346.850.000 763 Rohde Nielsen A/S 1.177.321.000 35 Syd Energi Service A/S 979.417.000 504 Eltel Networks A/S 978.546.000 577 Swedish Contractors, gr. 43 Specialised construction activities navn omsätningSEK ansatte Inmet Holding 3 746 279 000 918 One Nordic AB 2 663 899 000 1423 NVS Installation 2 543 316 000 255 NEA Installation AB 1 840 779 000 1859 Bergteamet AB 1 403 930 000 477 Sandå AB 1 382 396 000 1939 Goodtech proj 1 379 607 000 398 Lambertsson 1 086 449 000 501 7770 Norway Sweden ___ 255 ___ 196 ______ 37 Denmark ___ 127 ___ 58 Multinational Nordic Companies 27 enhetar fördelat på •  Skanska (4) •  NCC (6) •  PEAB (5) •  Veidekke (5) •  Bravida (4) •  YIT (3) MNC Formation of a MNC: Bravida 1967 Aktiebolaget BPA Byggproduktion AB bildas. 1993 Installationsverksamheten blir huvudområde. Bygg- och specialföretag avyttras. Peab blir ny huvudägare i BPA. 1995 Renodlingen till ett installationsbolag fortsätter. Försäljning av måleriverksamheten. Köp av DK VVS-företag, Ludvigsen & Herman A/S. 1996 BPA är ett komplett installationsföretag med verksamhet i Sverige, Norge och Danmark. 2000 BPA och Telenors installationsverksamhet går samman och Bravida bildas. 2003 Bravida förvärvar Semco A/S. (DK) 2004 Verksamheterna IKT, Telecom och Geomatikk som tillfördes av Telenor säljs och renodlingen till en installationsverksamhet inom el, vs och ventilation påbörjas. 2006 Private equity-företaget Triton blir ny huvudägare. 2009 Bravida köper Siemens Installation AS i Norge. Bravida Holdco S.A.R.L (lux) se se no dk Turnover SEK 10,768 Bravida AB 5,698868 Bravida Sverige AB 0,922818 Bravida Norge AS 1,428192 Bravida Danmark Employees 7955 3854 1768 1315 Bravida Ledning Bravida ledning •  •  •  •  •  •  •  •  •  •  •  •  •  •  •  Mats O Paulsson Vd och koncernchef Staffan Påhlsson Vice koncernchef och divisionschef Syd Per Leopoldson Ekonomi- och finansdirektör Bent Andersen Divisionschef Danmark Eirik Frantzen Divisionschef Norge Göran Lindfors Divisionschef Nord (Sverige) Filip Bjurström Divisionschef Stockholm Mattias Johansson Tf divisionschef Syd (Sverige) Magnus Hamerslag Chef för produktionssystem Petter Håkanson Chef affärsutv., IT och information Mats Jaarnek Personalchef Lars Korduner Inköpschef Magnus Liljefors Bolagsjurist Anders Meldalen Talent Manager Rikard Wiedenborg Affärschef för service Possible research questions -Overall strategy formulation and implementation- the ”how” -Integration and/or diversification of business areas (real estate and contractor, energy and contractor) Corporate organisation and management: -Tensions (”overindependence ”) between business areas, product groups, geographical business units, topics and people -Federal, national, integrated etc organisation models -The role of the board (styrelsen) Strategy and Competences •  •  •  (who?) Portrait- what are the present status of competences Carrier patterns (snicker, ingeniör, akademiker, konsult) Clashes, hybridication and synergies of operational competences, business school text book, and engineering NCC Corporate Governance NCC sample figures Business Unit Turnover SEK Employees 52,535 17459 Se NCC AB (publ) Se NCC Roads AB 4,78758 1822 No NCC construction 4,56761 1191 DK NCC construction DK 2,71871 1139 DK NCC Property develop 0,77023 25 DK NCC Roads A/S 2,3332 1072 Education NCC Snapshot five business units : NCC AB, NCC Danmark, NCC Norge, NCC Roads Sem NCC Roads DK. 23 ledera, varav 13 med ingeniörutbildning, varav 2 hybrider och 7 erhvervsökonomisk utbildade. •  7 civilingeniörer •  2 civilingeniörer och MBA •  4 ingeniörer (B.Sc.) •  0 teknikere •  1 håndvärker •  4 civilekonomer •  1 civilekonom och MBA •  2 jurister •  4 andre Klaus Kaae CEO NCC DK •  •  •  •  •  •  •  •  •  •  1985 Civilingeniör Byg (26 år) 1985 ansat i Rasmussen & Schiøtz som produktionsleder. 1993 udnævnt til afdelingsleder. 1994 - 1996 projektchef for gennemførelsen af Frederiksberg Centret som blev udført i konsortium med Monberg & Thorsen A/S og Højgaard & Schultz a/s. 1996 underdirektør 1999 direktør med ansvar for Byg Øst. 2001koncerndirektør i 2001 i NCC Construction Danmark A/S. 2006 General Management Programme 81 CEDEP/ INSEAD 2009 viceadm. direktør. 2012 konstitueret adm. direktør. ”Snickaren tar över! - som vd” ”En snickare som gillar action. Sådan är Skanskas nye koncernchef. Som vd vill han satsa på grönt byggande och mångfaldsrekrytering.” Byggvärlden 2008 om Johan Karlström Ledning Utbildning SKANSKA Snapshot five business units: Skanska AB (publ), Skanska Sverige AB, Skanska International Holding, Skanska Norge. 22 ledara, varav17 med ingeniörutbildning, varav 2 hybrider och 4 erhvervsökonomisk utbildade och 2 kvinder. •  15 civilingeniörer, varav 1 CEO med håndvärkerbaggrund •  2 civilingeniörer och MBA •  0 ingeniörer (B.Sc.) •  0 teknikere •  0 håndvärker •  2 civilekonomer •  0 civilekonom och MBA •  2 jurister •  1 andre Managers education Education Subgroup Engineer Number Typical function (Exceptions) 71 M.Sc. (44) Hybrid (MBA) (6) B.Sc. (20) Hybrid (Craftsman) Business Economist (2) 26 Economist CEO Product/region managers (COO) (Business Dev) (Veidekke 2-5) (4) Business Law 7 Corporate law Other Academics 9 Communication, HR Others 5 Total Sample 118 (422) Hybrid competences Case Strategic Purchasing (Inköp) Hybrid ; engineering, site experiences, management -> how to make projects and corporate headquarter support each other -> a need for a stronger integration….. Operations strategy? Chief operation Officers •  Magnus Hamerslag, Chef för produktionssystem, Bravida AB, SE •  Ole Feet, COO, BWG Homes NO •  Henrik Mielke, Direktør COO, Enemärke og Petersen (DK) •  (Jens Nyhus), Koncerndirektör COO MTH (DK) (tentative) Operations strategy Operation Strategy as a discipline and practice deals with “the total pattern of decisions which shape the long term capabilities of any type of operation and their contribution to overall strategy, through the reconciliation of market requirements with operations resources” (Slack & Lewis 2002) Deep Change; Successfull companies make the connection happen (ex Dell) (Michael Hammer 2002) Time line for an OS •  •  •  •  •  •  •  •  •  •  •  1999 Lean is introduced to Danish Building Industry (Bertelsen) 2000 A major contractor reputated to use Lean Construction (MTH) 2000 William Demant Dormitory 2001-2002 Attempt to sell it to other departments 2002 HQ unit commence advocating Lean 2003 Building East and gradually other departments uses lean 2004 Top management backup (lean placed under industrialisation) 2005 Four main departments uses lean in 50% of their projects 2006 40% of all building projects since 2003 used Lean 2008 Most of HQ back up is fired, dwelling drops 65% 2008 New strategy: public new built, infrastructure, green buildings (partnering – lean an element) The first projects William Demant dormitory: last planner (the bucket game, post it planning) ”I had the original schedule in my drawer, so I could follow whether we complied with the milestones, but it was not necessary at all; the common process plan worked a lot better” (PM) two other projects did Not go as well Vanlöse And Randers…. But William Demant was used as succes example Top management backup? 2004 Top management get a presentation and a business case for using Lean Top management backs up Lean placed under industrialisation, i a tripod strategy: -partnering -industrialisation -HR 2005 Top management reorgasines HQ ; lean is placed under production support an external expert hired as manager 2008 Top management fires most of the lean experts reorientation of business; public sector, infrastructure, green Learning points on OS •  •  •  •  •  •  •  •  An early project as test field for interested project managers - External consulting engineer as driver - Danish building community interested Appropriated version of Lean in play (Praxis <-> Practice) Early promoter alliance of lean - one project unit HQ unit involved in community activities on Lean and commence advocating More business units are involved Top management sanctions the concept Expertise and knowledge is built (but less good examples occur) Market turns away from dwelling What does it tell us? •  •  •  About Strategy formulation About Strategy implementation About project based organisations (Winch model 1998) Strategy Dynamics Adoption Environment Firm Implementation Learning Project Environment Problem solving (adapted after Winch, 1998) Scandivanian Values and Practices Geographical proximity of business and market areas (diversification and or integration) And/ or Similarities in values and practices? •  •  •  •  Codetermination and participation (dialogue) Public Client, Societal development Gender Sustainability Strategy for Equality? ”Av samtliga X-anställda i Sverige är cirka 8 procent kvinnor. Enligt SCB är andelen lika låg inom byggindustrin totalt. X eftersträvar att nå en jämnare könsfördelning vid nyrekrytering” (Årsrapport 1996) “Approximately 90 % of the employees at X are men. Among blue collar workers the share of women is 2%. X’s ambition is for the proportion of female employees to match the percentage of female graduates and graduates enrolled in engineering programs at technical colleges, which is approximately 30 % in Sweden. X works actively to recruit and retain female employees (Annual Report 2011)”. Norway Women representation Number Board NACE of comp men women % Board of Directors men women % CEO men women % 41 12 67 13 16,25 43 12 21,8 11 1 8,3 42 7 38 8 17,4 31 11 26,2 6 1 14,3 43 7 34 5 12,8 23 1 4,2 7 0 0 NMC 7 55 8 12,7 42 3 6,7 7 0 0 Ialt 33 194 34 14,9 139 27 16,3 31 2 6,1 Individual Educa-‐ tion Company Environment Legal frameworks Top level manage ment Greening/ Transition How are Scandinavian Contractors Emerging in the transition process? How do they tackle the public-private Interaction? How to reform large companies? Research Themes summary •  •  •  •  •  •  •  Strategy formulation and implementation (”How”) Sector Diversification and Integration Strategy in a projectbased industry Competences and Carrier paths for strategic managers Greening of Contractors (cleantech leadership) Operations Strategy Scandinavian approach; Societal drive, Gender and Participation Missing in action: •  •  •  •  •  •  •  •  SME strategy, Globalisation opportunity Architectural and Consulting Engineering companies. Strategic Alliances and Partnerships Innovation Business model and Business Development Leadership IT-strategy