It was December 2007, around this time of the year.
Sunny and warm during daytime. I was sitting outside in a T-shirt. The scent of rosemary bushes on the porch and jasmine climbing the house facade filled the air.
Suddenly, I received a message on my mobile there in Antibes, France, where K and I had had our summer house for the past five years.
”Take a flight to Stockholm as soon as you can,” the message urged, providing an address that seemed to be for some kind of estate. A conference center, maybe…
Surely something important, I thought, as the message came from Henry Sténson at Ericsson – one of the clients I had highly regarded over the years.
He was secretive and wouldn’t reveal the purpose. ”You’ll find out when you get here,” he wrote.
We had been working together for a long time, since October 16 in a crisis management situation.. On that day, Ericsson unexpectedly issued a profit warning. The stock plummeted by as much as 30%, finally settling at minus 23.8% – the sharpest decline since April 2004. The freefall continued with record lows well into November.
This led to persistent and escalating media criticism of Ericsson’s CEO, Carl-Henric Svanberg, and Communications Director Henry Sténson.
”Heads will roll,” read the headlines. Renowned journalists, along with several analysts, demanded Svanberg’s resignation. Intensive efforts were made to get Chairman Michael Treschow to express criticism. If successful, Svanberg’s position could have become untenable.
But within Ericsson, the leadership was confident that profits would rebound. Large investments and low billing rates were considered the cause of a more temporary dip.
The challenge was to weather the storm while being very vigilant about external reactions. Sténson used Mattias Ronge’s and my former agency, Ronge Kommunikation, to meticulously analyze media coverage day by day, while the same scrutiny took place from his own team. This way, he gained a very comprehensive perspective ”in stereo” and eliminated the risk of ”bunker mentality.” It was a new and creative approach for me.
Our review, led by Mattias, was tough and unvarnished. Here’s an initial report:
”Several journalists/columnists speculated that Carl-Henric Svanberg and Henry Sténson would be forced to resign. Ericsson’s information delivery was criticized from various angles.
Initially, journalists questioned how Ericsson’s internal information procedures could be so inadequate regarding additional sales to existing customers.
In step two, Ericsson was criticized for lying, claiming they had informed the market late and the board early.
Ericsson also went public in DN, expressing a desire for reduced information frequency, which stirred some criticism, including from Carina Lundberg Markow and Mats Qviberg.
Likely, in journalists’ and analysts’ perception of Ericsson’s information delivery, one could also discern a historical anger based on predecessors’ information efforts. When Ericsson falters in information, old memories are simply resurrected.”
It wasn’t straightforward to quickly get back to Sweden. We usually flew between Arlanda and Nice Terminal One with Norwegian. Now, because quick action was required, I needed to take Air France via Terminal Two and change in Paris.
During the flight, I had time to contemplate and become increasingly curious. Had Sténson gathered a crisis team at the training facility that I needed to coordinate with? What was expected of me, exactly?
Upon arriving at Arlanda, I gave the address to the taxi driver. He started driving but became more and more uncertain. Finally, he pulled over and called Taxi Stockholm’s switchboard. ”They can’t find the address,” he said. ”Strange, they usually always know…”
I called Henry. ”Okay,” he sighed. ”I’ll be a little late. Which road are you on?”
I told him. ”Okay, then the driver should continue until that road ends. There’s a high gate. That’s where he should drop you off. Eventually, you’ll be let in.”
It was probably close to 9 PM, and it had gotten dark. But everything matched. I paid and got off at the heavy gate. Stood there, shivering in the cold. After a while, a young man appeared.
”Hi, I’ve been at the gym. I think you’re here to meet my dad. He’s not here yet. But I’ll let you in.”
I was allowed in, and the son disappeared up a staircase with his gym bag. I found myself in a large living room, very bright and nicely furnished. On the sofa and chairs, several gnomes were placed. Through panoramic windows, I could see directly out to the water, and a large pier was barely visible.
I’m not good at environmental descriptions, and in this situation, my head was burning with questions. Then Henry Sténson called: ”We’ll be there in a moment. You’ll talk to Carl-Henric and tell him as much as you can about media logic and what it means for the situation we’ve ended up in. And answer any questions he might have.”
My contacts with Henry had been intense for a long time, but this was the first time I was alone with Carl-Henric Svanberg. After a while, Henry came back, and we continued together.
It was very much about how to act in the Goliath role. Almost all journalistic storytelling in crisis situations means defining villains and perpetrators, victims and heroes, and experts who can explain why things turned out the way they did.
You should try to ”swing on the ropes,” listen to criticism, and embrace what’s right in it. Not get upset and show anger whatever happens.
You mustn’t take the Goliath role personally but realize that you are a commodity in the media industry. Like timber coming into a paper mill that can come out as beautiful handwriting paper or as toilet paper.
”Journalists always want to be on the side of the little person, the voice of the ”small people” against authority,” I said.
The first thing that strikes me about the duo Carl-Henric and Henry is their professionalism. The second is humility.
Carl-Henric had a metaphor, if I recall correctly, that in a crisis, he sits in the barber’s chair and lets the information professionals work. When he makes a decision, he has the best possible foundation. Imagine if more people did that, how much pain and unnecessary embarrassment could be avoided!
Christmas stories are supposed to end happily, and this one does. Carl-Henric Svanberg survived this crisis and later left under orderly circumstances. In 2010, he got the top job as BP’s chairman – the fourth-largest company in the world. There, he had a few days of peace before the worst environmental disaster in modern times occurred: when the oil rig Deepwater Horizon collapsed in the Gulf of Mexico. Month after month, the oil incessantly flowed out. The crisis affected wildlife, tourism, businesses, everything. He survived that too and reached an agreement directly with then-President Barack Obama, which amounted to a staggering SEK 158 billion in 2015.
After negotiating in the White House, he came out and told the assembled press:
”We care about the small people.” Listen to it in Swedish (if you understand the language ): ”Vi bryr oss om den lilla människan.” Nothing someone would be lynched or ”canceled” for, right? A direct translation but not optimal in the USA, where it sounds a bit patronizing. There, they prefer to say ”the average person.” Better to be an underdog than a victim.
But in Sweden, journalists believed that Svanberg, who had had English as a working language for decades and who lived in London had language problems. So maybe everything was my fault, because of my reasoning about Goliath and David and ”the small people” there in the house in Sigtuna.
But Svanberg apologized (though I didn’t think he needed to), and the indignation quickly subsided. Perhaps that’s the twist in this story – media is media and shouldn’t be taken so darn seriously.
Paul Ronge
Footnote:
This is an exception; I rarely take examples from real crisis management. So, I of course, asked Henry Sténson for permission.
Here’s how he responded via text:
”I’m happy about that. However, I would never think to have opinions on a text you plan to write. Write what you think. In addition, I can possibly express that it often comes down to how two people fit together and accept each other. I can say that the many years I had with CHS have been fantastic. I got the opportunity to develop a world leader. Not many get that. Beyond that, I got a friend for life.”