Light Reading – Ericsson Board Has Been Asleep at the Wheel – Consultant
Bengt Nordström, currently the CEO at consultancy Northstream and who worked at Ericsson AB (Nasdaq: ERIC) from 1983 to 1989, believes the Swedish vendor has failed to capitalize on its unique position in the industry and has also been too reactive rather than proactive to changing market conditions.
He says that, just like in 2009 when the vendor’s board replaced Carl-Henric Svanberg with Vestberg, the move was a reaction to market pressure and investor unrest. “The board has acted too slow the past two times. With a new CEO you need to see material progress after three or four years,” and, if there isn’t any evidence of progress then start a new search. Vestberg had been Ericsson’s CEO since the start of 2010, having been announced as the incoming chief in mid-2009.
Nordström believes Ericsson should have seen how the mobile networks sector was going into decline and started cutting back harder and faster. Instead, the Swedish vendor has been adding new staff through acquisitions at about the same pace as it has cut jobs and has not trimmed its portfolio to be an efficient company, says the Swede.
