Skanska
Oslo November 23, 2011 Petter Eiken
Adm.dir. Skanska Norge
How to cope with a multinational project business
Facts about Skanska AB
Skanska is a leading international project development and construction company. By combining our expertise and financial strength, we develop offices, homes and
public-private partnership projects. We create sustainable solutions and aim to be a leader in quality, green construction, work safety and business ethics. Of course, we also aim to
maximize the potential of Skanska with regard to returns. - Revenue 2010: SEK 121,4 billion
- 4,000 recurring customers - 50 000 employees
- 4 business streams
The Skanska Group
Skanska Financial Services Group staff units Senior Executive Team
Residential Development Commercial Development Infrastructure Development Construction
Skanska Finland
Skanska UK
Skanska Latin America Skanska USA Civil Skanska USA Building
Skanska Commercial Development Nordic Skanska Infrastructure Development Skanska Sweden Skanska Poland
Skanska Czech Republic
Skanska Commercial Development Europe Skanska Residential Development Nordic Skanska Norway Skanska Commercial Development USA Skanska Industrial Production Nordic Skanska Residential Development UK Skanska Residential Development Poland
Skanska in the Nordic region
− 50 bill. SEK revenue (Swe, Fin, Nor - Danmark)
− 5 Business units
− 70 regions
− 200 districts
− 22000 employees
An increased need for profesionals
that have an overall view
Some consequenses of our multi national
organization
− Enormous availibility of competence and experience
− You can’t do to much in parallell
− Focus on targets and incentives
− We have much to learn when it comes to structure and long term focus
− We can contribute a lot when it comes to enthusiasm and involvment
Managament / meetings / follow up
− Senior Executive Team (SET)
− Strategy − Targets − Synergies − Follow up − Finance − CoC − HR − Project approval
− ORA (Operational Risk Assesment)
− Development projects
Meeting points
− Management Meeting (yearly)
− Board meetings in the BU’s
− 4 times a year
− Management Review
− 2 times a year
− Quarterly Review (finance and other targets)
− 4 times a year
− Cluster meetings
ORA
− ”Heat maps” in all BU.
− ”Bid projects” are approved on certain organizational levels depending on
− Size
− Complecity
− Segments
− Experience
− SRT – SET Review Team
− Experienced specialists
− STB – SET Tender Board
− Standard ”templates” for structured information
The five zeroes
0 0 0 0 0
Zero loss-making projects Zero environmental incidents Zero accidents Zero ethical breaches Zero defects”The six big rocks”
− Live Our Values
− Be Market Makers
− Explore New Horizons
Work Smarter
Learn and Lead in Safety
Confidential
Construction
− Chinese construction companies have grown rapidly in recent years
− Now 3 out of 5 of ENRs Top Ranking 2010 of largest contractors in the world are Chinese
− Huge domestic market
− All large Chinese contractors have approx 90% of their revenues within China and the rest mainly in Africa (Skanska. 20% of revenues in Sweden)
− Annual investments in the rail sector will peak around 2013 which will leave the Chinese players with enormous spare capacity. They are already offering highly competitive prices and a package of cheap financing
− 5 Year plan puts expectations on Chinese construction companies to grow in developed markets, such as the US. Example
− China State Construction has recently hired Goldman Sachs to help them acquire civil contractor(s) in the US.
− We visited several spectacular office buildings and the quality looked good
− Safety is not near our standards
”Torpedoes in the sea”
− Public sector in southern Europe have to save money
− Construction capacity will go North
− Norway is a small nation – but with a big budget
− We have to expect more competition
− It is important to compete in a way that the society develops in a sustainable way
Some challenges
− Quality issues
− Too high price focus migth ruin predictability and quality
− Social standards – and safety
− What can we accept when it comes to conditions for foreign workers
− Do we want to be part of the whole value chain in Norway
Public sector in Norway
− Conservative (too rich)
− 429 municipalities are 200 to much
− The sector is important for the construction industry – without knowing
− I see progress - and better communication
− Hopefully they will in an increasingly pace act as a demanding client – getting value for their money – and developing a responsible construction industry
Population - Our
Shrinking
Earth
Skanska HQ USA
Empire State building, 32 floor Energy saving >38%
LEED Platinum Certified Built in 1932
Productivity
Production Waiting Moving40%
30%
30%
Skanska Xchange is a Nordic program
Large difference in production cost – Multi
Building cost
kEUR per sellable area (m2)
Sweden Finland** 0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 Norway
Waste
Construction is one of the most inefficient industries when it comes to consumption of finite resources
Example – Multi in Mäntylinna
Waste during production
Target waste level in Skanska Fin 5 kg/m3 Average level in Skanska Fin – south 5,8 kg/m3 Mäntylinna 1,4 kg/m3
Learnings
− We will move more production to factories
− We have to standardize the components that does not affect the design
− We have to benchmark projects based on cost and time
− We have to create “best practice”
− Products
A Great Boss is passionate about people
− Sets clear expectations
− Builds diverse effective teams
− Adjusts communication style
− Listens
− Assesses peoples strengths and weaknesses
− Assesses peoples potential
− Develops and implements development plans
− Coaches rather than directs
− Confronts performance problems
− Provides feedback often - very often
− Shows understanding of others thoughts and feelings
