Thoughts on Winning and building a business abroad – a Future opportunity for Sweden ?

I am getting old and grumpy – or maybe it is my personality. When I founded Incentra back in 1989 that later became Extend, my first consulting business it was the old uncles being 45yo or above who did not know how to adopt to changing business conditions. They took in advisors with a brand but no thinking – and we made loads of money fixing what they did not get from the advisors. Now it is all these young kids lacking experience and insights to judge the risks and rewards – that are being judgmental about old uncles! They tend to see no option than to working with big fancy firms with crowds of like-minded but even younger kids who create fancy presentations that will blow away any board of directors. Boards mostly populated by even older uncles just by their appearance and the Steve Jobs mimicked presentation style. These kids are influencing decisions and implement them. Decisions that my experienced friends and I have to come in and fix when all of it go south…Talking about South…make me think about warmer climate than the Swedish at this time of the year… 

The defense industry has been regarded as a cornerstone in most countries industries. Not only as a means of strengthening the country financially but also to strengthening ties with friends and friendly nations. Not forgetting the competence and skills that spin off. Historically a Swedish defense industry has been a guarantee for a certain level of independency – experiences gained during the first and second WW. Not so today. Now the defense industry is considered by many politicians as politically incorrect.I think that many smaller and developing countries would be very happy to have the type of industry that has been built up in Sweden. It has provided with a political tool, a strong industry with many employees and technology leadership in many areas. To build up such an industry takes many years and you will receive little help from abroad. What company would be interested in assisting you to build up a competing business in a global market?! What country would allow that?

The defense industry is a business with heavy upfront investment requirements that when implemented and launched will generate revenue and profits for decades. This means that there is a need for strong financial muscles to get started but the result will be long term both from a revenue and a political perspective.

Sweden and Swedes have one unusual characteristic that is truly differentiating – we have a holistic perspective when we implement a complex system solution. We are resourceful and time efficient and we get things done. There are probably a number of cultural and other underlying reasons to this. To me these are abilities and capabilities we do not leverage from enough today. Swedes are good in project delivery. But we do not always bring these rather unique abilities to a long term advantage being rather poor at marketing both our abilities as our products. And adding complex political considerations to the table hamper even further our potential for success against fierce competition for business (an long term prosperity) in export markets.

Saab is something like number 30-35 in size among the defense contractors world-wide. Swedish defense industry, or rather Saab (they are almost equivalent in this context) do have some very competitive products for the world market. Sweden need strong armed forces capabilities and a successful export industry. The defense industry could bring mega Business to Sweden – if we were agile and creative (not even innovative). What Saab sometimes lack is critical size and even more so the very importantly political support. This makes me frustrated when I see the opportunities and the lack of initiatives taken from key actors. To overcome this alliances and collaborations are sought and formed. 

A number of customers/countries has taken the opportunity using this as a means to strengthen their own industry by demanding offset deals. This is of course a good way to support local industry and in some cases also demanding local assembly as part of the deal for the products/systems traded. But it is very difficult to step up from assembly and maintenance to full product design and manufacturing. That is a totally different ball game.

In the defense sector one of the companies I am working with are going for a USD 30 billion opportunity – we are a midget ant compared even to Saab. And the potential for our technology when applied in commercial products is many times larger. We address the market from a local and project / solution perspective rather than a product sales one. We have a lot of traction and we receive a lot of attention doing this.

In the project development business we are typically looking at international projects from USD 100 million up to a couple of billions. Viewed as a portfolio of business it adds up very well. If we had more capital and some additional resources with support from external stake holders we could do even more. These are multi year and in some cases multi decade projects. The defense business as such is actually a derivative from the project business blended with experiences from a product business. These are very big development projects that are transitioned into products when handed over to maintenance. But in maintenance a continuous development is run updating parts and subsystems soon replacing the main part of the original design.

To develop, capture and deliver such business you need to be prepared to move outside the traditional and comfortable markets. To leave the air conditioned offices and get out in the dusty, noisy, smelly, crowded realities of the globe. You need to be able to consider other ways of seeing and evaluating things, thinking and doing business. One of the most important factors is to understand the context, the local systems and the actual needs of the customer and stakeholders in the eco-system. 

Today and for the last five years I have been and are involved in competing with the best and largest defence contractors in the world – and winning. We are applying a similar strategy in this highly regulated sector as we do in our project development business. We bring technology, innovation, creativity, competences, resources and external financing together to accomplish something well defined – from a holistic perspective. We think in terms of cyclic and sustainable economy perspective, use and user scenarios, build based on technology and system architectures that are product and supplier independent – leveraging existing state of the art subsystems. We apply technology and know-how from many fields to accomplish something someone badly need. If we can others can – it is a leadership and attitude opportunity.

The potential – well, I strongly believe it would be a way to transition and grow the whole Swedish economy and to give Sweden the competitive edge the country need. There is a need for willingness to put in hard work, ability to have a vision and to be able to take calculated risks. Some bold decision making based on complex and uncertain facts!

Sweden could do it – and gain the piece off the pie – a much bigger slice than our limited resources would indicate – given the opportunity!


Comments are closed.

%d bloggers like this: