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A Swedish Solution

Friday, October 1, 2010 - 08:50

Alastair Sorbie, the UK-based head of global IT company IFS, says companies need to service their customers better and deal with the pace of change. By Richard Jones

The arts of cross-cultural communication and integration are not always easy to practise. In Australia, many of our blue chip companies are or have been headed up by people from other nations and cultures. In less isolated places like Europe, this is far more common, and brings with it the type of culture-based issues you'd expect.

One such person is Alastair Sorbie, President and CEO of IFS, a global software company. IFS is involved in infrastructure, specialist manufacturing and defence business software application projects in 50 countries.

The UK-born Sorbie admits that running a global Swedish company presents an array of interesting challenges.

"As a company, IFS still very much retains its 'Swedish style': and the Swedish mentality is consensus," he says. "If you put a group of Swedes in a room, the first thing they do is have a cup of coffee, then you have to agree on every single thing as a team.

"That's completely different to the Anglo style, and certainly the US style, which is much more direct.

"Having said that, once the Swedes do agree on something, they go for it, flat out." Sorbie admits, however, that he doesn't always go for consensus.

"In order to cut through, I've sometimes ruffled a few feathers, but it had to be done."

Sorbie's varied career leading to his current role has included starting out as a geologist, working in the North Sea oil industry.

"Working as a young graduate in the North Sea was quite a responsible job. It deep-ended me in responsibility and the tough lifestyle. I found that quite a good baptism of fire."

From the North Sea he moved into manufacturing and became a materials manager, and then a manufacturing consultant, implementing manufacturing systems around the world.

Another move from there into software before he eventually started his own company in the UK, which was acquired by IFS.

"I built up the UK operation for IFS, and I ran the EMEA region, which included Europe, the Middle East, and Africa." He was appointed CEO in 2006.

Modern management

Sorbie is of the opinion that the requirements of modern management have changed significantly in the past 10-20 years.

"For example, the term Enterprise Resource Planning (ERP) used to be all about materials and resource planning. But, today, when you're actually running a business, you don't have to worry too much about materials and labour, because you can just move it to a low-cost environment.

"What you have to invest in now, because of the global market, is the whole show: getting your product to market, maximising its return, maintaining your customer loyalty, and planning the new product coming out."

Sorbie says it's more about planning activities against the time line to get a return on investment.

"Today, ERP is not necessarily the right sort of terminology, and a lot of people are using project thinking just to launch products into the market, and to create operations in new countries.

"I'd say also that virtually all the companies I talk to through IFS are companies running international roll-outs in many countries, including Australian companies operating on a worldwide basis. At the moment, the big issue for these guys now is to get a business system in and up and running in a country quickly, so they can take their particular products and services to market quickly.

"If they get held up by IT, rather than enabled by it, that's a serious problem. What IFS does that I believe makes us successful, is to recognise a change in what people are buying, and react to it quickly."

Leadership keys

When it comes to managing a business, Sorbie believes it is all about selecting the right people, making expectations very clear and allowing them the freedom to execute within the parameters.

"I think it's empowerment really, but you need to have very tight reporting controls, so if something is going off the rails, you are very quickly on top of it."

Employing the right staff, according to Sorbie, is a question of judgement, and identifying the right characteristics of an individual.

"The danger is that if you don't apply the right sort of selection criteria when recruiting, you could end up with the wrong type of person.

"I think the attraction of our company is that it's a nice company to work for; it's one where you can feel part of the solution, and big enough to give career opportunities and excitement, but it's also small enough to actually be part of."

Sorbie admits that staff retention is a global issue in the IT industry. He says India is a problem, with horrendously high turnover as a result of the enormous size of the market.

"In our wisdom, IFS put its R&D operation into Sri Lanka; the result has been that we don't have staff turnover issues. We have about 700 staff based in Colombo, and the staff turnover there is much lower.

"Because of the troubles in Sri Lanka for the past 20 years, no large IT company has gone in there except for ourselves. So we were the No.1 IT employer in Sri Lanka. Being first, it got us a good profile and good people want to come and work for us."

Looking after customers

While a cliche, IFS strives to look after its customers, something Sorbie believes business needs to generally do a lot more of.

"The customers bring you more and more business and the people you employ look after the customers, so it's a virtuous circle.

"I think you've also got to focus the business where the real payback comes from. For example, when I joined IFS we were selling general manufacturing systems, and there was no real differentiation in that market. If you want to fast track your opportunities, you have to specialise.

"And that's what we did. We specialised in this whole project area; enterprise asset management, specialist manufacturing and defence.

"This put us into a space where we could become very strong, and that has given us the impetus going forward. Had we stayed in general manufacturing where we started 10 years ago, we would have been in deep trouble."

Key learnings

Sorbie points to a number of key business learnings over the years.

One, is to let the business follow the market; don't try and push the business into the market. Two, is to listen to the customers, identify the trends, and then get in quickly with the solution to that trend. Three, is the importance of a flat, efficient management structure; reducing the layers.

Sorbie also believes it is essential that the whole organisation has a clearly identifiable goal and everyone knows that they have to contribute to this.

"People have to believe in the business and believe in their own capacity to deliver, because they'll be judged on that."