SMALL-SCALE OPERATIONS ON A LARGE SCALE BRING SIMPLICITY AND EFFICIENCY
In a decentralised and entrepreneurially-driven Group such as Addtech, it is possible to drive change on both smaller and larger scales – generating benefits in terms of both business development and sustainability.
Addtech has a unique model: It is both largescale and small-scale at the same time. The fundamental notion is that the best business decisions are made by those who live close to the market. For this reason, the organisation is decentralised to the greatest possible extent and entrepreneurially oriented, enabling the companies to focus on their operations.
“We’re not really that complicated. We buy companies, we support development and we work hard with our corporate culture. This simplicity is precisely what I find so unique with the Addtech model,” explains Malin Enarson, CFO at Addtech, who is also responsible for issues of sustainability.
“Historically, we have, of course, proven clearly that we are able to grow both durably and profitably. I believe we are successful because we have a very clear organisational structure and targets and because of our core values. We have a very flat organisation, in which we work together and help one another, on matters of sustainability, for instance.”
Addtech demands as little as possible from the companies with regard to reporting or other central directives. The instruction is, instead, somewhat simplified: Do what you should, how and when you want – but keep the deadline and explain all deviations.
“The guiding principle is that things should be easy for our companies, not for us at the head office. We do not, for example, demand detailed budgets from our subsidiaries. Instead, we have development plans, in which we set targets for the coming year.
These primarily involve sales and margins, which help us determine whether each company is on the right track or not,” says Malin Enarson.
At the same time, the Group always maintains a close dialogue with the companies. How does this fit with the decentralised model? The answer is partly in the division into business areas and their business units.
“Bringing together companies with adjacent operations provides several benefits. Firstly, this opens opportunities for companies operating in the same niche, to get to know one another. We know from experience that when people find themselves in the right environment, they start to collaborate.
This means that our internal network can lead to exchanges of experience and to voluntary collaboration, which provides, in turn, positive leverage effects on both the development of our businesses and on our earnings,” says Malin Enarson.
“Secondly, the model also ensures that we get a very good connection with our companies,” she continues. “Each business unit has its own manager who also sits on the Board of Directors of the companies in that business unit. In this way, we get to know the companies and their niches very well, enabling us to coach the companies, and not least, capture opportunities for further acquisitions and add-ons. This insight also means that we can constantly fine-tune, develop and optimise the operations.”
Another important advantage of decentralisation and culture of simplicity is that: Operations can quickly be realigned. This was particularly noticeable in the autumn of 2019, when 80 of the Addtech companies suffered a large-scale cyberattack (read more in the Administration Report).
“This was truly an example of the organisation’s capacity. Despite extremely difficult circumstances, the companies managed to switch to alternative methods and still deliver a strong financial result,” says Malin Enarson, emphasising that the same adaptability was a major advantage in the spring of 2020, when the COVID-19 pandemic altered the conditions of the entire global economy very quickly.
The close relationship between the Group and the companies also provides a favourable foundation from which the Group’s sustainability is developed. In 2019/2020, the Group initiated a long-term process to adapt its efforts to the UN’s global goals. In practice, however, many of Addtech’s companies have already achieved substantial progress on issues of sustainability, simply because they have seen that this benefits their business. This applies to climate issues in particular. In the Power Solutions business, Craig & Derricott in the UK develops, manufactures and markets low voltage appliances and subsystems for markets in the UK, Europe and the Middle East.
“Reducing our energy consumption is extremely important to us,” says Kevin Miller, Managing Director of Craig & Derricott. “Our own company specific target is to progressively reduce our energy consumption by 10 percent annually. However, our own products also need to be sustainable to meet our customer’s increasing sustainability demands. Today, we offer high-tech energy control and reduction products that are truly sustainable and have minimal environmental impact.”
Another Addtech company, Compotech, is also seeing a raised level of ambition among its customers, suppliers and employees in terms of sustainability and environmental awareness.
“We mapped our environmental impact some time ago and set a target, among others, to reduce carbon dioxide emissions by 30 percent by the spring of 2020,” says Michael Ullskog, former Managing Director of Compotech in Stockholm and now business unit manager for Components Sweden within the Components business area.
“We looked at a number of aspects, such as our transports, our business trips and product purchasing, and we did manage to reach the target. Today, we prioritise business that contribute positively to the climate, for example within electrification. Naturally, we cannot save the planet alone – but we can purposefully and continuously identify new ways of combining profitable business with ambitious sustainability work,” Michael Ullskog explains.
Another sustainability target is to increase the proportion of women in Addtech to reflect, as a minimum, the general gender distribution within the technology sector. Addtech seeks to improve in this regard, and the pursuit of equality is therefore a particularly highly prioritised area.
“The technology sector as a whole faces major challenges in securing future talent. We cannot, of course, have operations that predominantly attracts employees from only 50 percent of the population – men that is. We want to recruit talented people, regardless of gender. It is therefore crucial that we think and behave right, so that more women choose the technology sector in general and Addtech in particular,” says Hans Andersén, head of the Energy business area and responsible for pursuing issues of diversity within the Group. He believes that the laddish image of the technology sector may still prevail – despite the reality having changed.
“In my view, the best teams are the diverse ones. They are often innovative and creative, perform well and bring together different perspectives and experiences. Accordingly, striving for an even gender distribution plays a key part in achieving this diversity. But, as a Group, we must also dare to demand results from our subsidiaries and we must be clear about what we want to achieve and how it should be measured.”
There is also already commitment on this matter among employees. One example is the Group-wide AddQ network, which was established in 2018 by a number of female salespeople to encourage more women to choose sales as a career path in the Addtech subsidiaries.
“Technology sales is a really fun job, in which it doesn’t matter if you are a woman or a man,” says Kristina Kristoffersson, Key Account Manager at Compotech and initiator of AddQ. “Today, we are far too few women, however, which is why AddQ is working to establish female role models, for example, to significantly increase the proportion of female salespeople at Addtech, and to also retain them longer.”
She points out that technology sales involve multiple tasks – from selling individual components, such as equipment power cables, to extensive project sales spanning longer periods.
“Personally, I have worked with technology sales for more than 30 years, primarily focusing on project sales. Although I am very interested in technology, which is both essential and rewarding, I believe my ability to listen and understand customers’ real needs is perhaps my most important characteristic in my role as a salesperson. For many women, building good relations is easy, meaning that many more women ought to accept all of the stimulating challenges that technology sales present,” says Kristina Kristoffersson.