Sandvik has updated its strategy for an increased focus on growth. Six strategic objectives, well-defined measurables and a new purpose are the building blocks of the future.
Sandvik has reviewed its vision, core values and strategy to ensure further progress, value creation and engagement among prioritized stakeholders.
Stefan Widing, President and CEO, explains, “Our previous strategy has served Sandvik well. We have built a strong foundation, and today we are a more stable, profitable and decentralized company. For example, decision-making close to our customers, agility and quick adjustments to changing market conditions are now ingrained in our culture.”
Clarity and focus
The rationale behind the review was to simplify and bring clarity and focus to future Group ambitions. “We wanted to clearly express why we exist, how we do things and what we should focus on to ensure further development and long-term success,” Widing explains.
In the updated strategy much attention has been given to development areas, measurable goals and concrete actions, such as systematic follow-ups to determine customer and employee satisfaction.
Sandvik’s core values – innovation, customer focus, fair play and passion to win – are well embedded in the organization and will stay the same. They define the required behaviors to achieve its strategy and purpose.
The previous vision is now being replaced with a long-term common purpose and narrative statement: We make the shift – advancing the world through engineering.
“The new purpose expresses how our innovative solutions create value not only for our customers and employees, but also for society and the planet, ultimately creating shareholder value,” Widing says. “It will further align and support the Group’s future direction, culture and strategy.”
He explains that a central idea behind the strategy is enabling important shifts in the world, such as digitalization and sustainability. To that end, six strategic objectives are being introduced: “shift to growth, sustainability shift, the digital shift, the customers’ first choice, the employer of choice and agile through the business cycle.”
Increased focus on growth
The increased focus on growth (through acquisitions and organically) is partly a result of Sandvik’s success in reaching and retaining the kind of stability and profitability that permits higher growth ambitions. The plans include a more proactive acquisition agenda and an increased focus on new products and solutions. “We have to grow in areas that are necessary to manage the shift to digitalization and the shift to sustainability,” says Widing, “and at the same time ensure that we maintain a technology leadership in our core areas.”
The digital objective is to be a leader in digital solutions in the industry and to grow the digital customer offering. “Internally we need to ensure efficiency through a seamless flow, supported by standardized business systems at our sites,” he says.
Flexible cost structure
Sandvik should have a cost structure flexible enough to manage economic downturns and allow for quick responses to changing market conditions, Widing says. This flexibility was tested to the extreme when the Covid-19 pandemic dealt the order intake a severe blow in the first half of 2020. But Sandvik managed to weather the storm. “I believe we handled the difficulties very well, holding on to our margins and managing our cost base in an agile way,” he says.
“Attracting the right competencies and a diverse workforce are key requisites for future success,” he says. Customers form another crucial stakeholder group. “We want to advance the way we measure and improve customer value and customer satisfaction,” Widing says. “We need to continuously improve to continue to be our customers’ first choice.”
Sandvik’s six strategic objectives
- Digital shift
- Shift to growth
- Sustainability shift
- Employer of choice
- Agile through cycle
- Customers’ first choice
The strategic objectives will be followed up by systematic measurement, for maximum transparency, accountability and actionability.