ABB Successfully Transforming a Global Player - Case Study

ABB, with its sprawling array of businesses accumulated over the years through acquisitions and organic growth, had reached a point of reckoning. The conglomerate’s mosaic of businesses, some thriving, others fading, presented a unique set of challenges. It was a jigsaw puzzle that needed a guiding hand, a unifying vision, and an unwavering commitment to transformation. The momentous task fell to a new leader, Björn Rosengren, who stepped into the role of CEO in early 2020 with the weight of history and the promise of change on his shoulders.

On June 10, 2020, marking his 100th day as CEO, Rosengren stepped forward to outline his strategic priorities, a framework he dubbed the "ABB Way". The ABB Way is the common operating model for all divisions, business areas and lean corporate center. It defines “how” value is created and builds on four elements: business model, people & culture, brand and governance.

Particular was the decentralization into a lean corporate parent, four business areas and 18 autonomous divisions (20 by 2023), with individual P&L responsibility in the business lines within the divisions. ABB prioritized stability and profitability over growth and therefore employed active portfolio management by divesting businesses lacking a connection to the company purpose and underperforming the profitability goals set by top management. Lastly, Rosengren expressed the company’s commitment to $500 million in cost savings through rigorous cost cutting and a streamlined organization.