SKF's Tom Johnstone is bearing up under pressure

The president and CEO of SKF, a Swedish industrial group gone global, is a Brit who takes a holistic view of business and believes in opportunities not plans. Exec talks to Tom Johnstone
Written by John O’ Hanlon
Tom Johnstone is a bit unusual, a Scot at the helm of an international group that declares its turnover in Swedish Kronor, over 53 billion of them in 2006. That’s around £4 billion or, at today’s rates, more than US$8 billion. When I first went to Timken, it was more closely comparable with SKF because both of them made steel. Since SKF divested those activities in 2005 they are less head-to-head, but however you look at it, SKF is the biggest bearing group in the world, not counting its other four major divisions, seals, mechatronic systems, advanced lubrication systems and services. Tom Johnstone wields a bigger bat than his Timkken opposite number, Jim Griffith. In fact, although Timken is a major and respected player SKF is probably more aware of the €8 billion Schaeffler Group and the Japanese companies NSK and NTN as direct competitors.
Though Johnstone speaks Swedish, all the corporate business of SKF, even at its headquarters, is conducted in English, so he doesn’t need the vernacular other than socially. His gentle Ayrshire tones have directed a period of major change throughout the business. As well as getting out of steel and restructuring around five customer areas SKF has rolled out Six Sigma throughout the organisation. It was for his leadership in this that Johnstone was awarded the Six Sigma Premier Leader Award by the ISSSP in 1996 for his work in committing the company to continuous improvement. He was the first European corporate leader to receive the prestigious award, sharing the honour with well-known CEO’s such as Jack Welch and Chad Holliday.
Tom Johnstone is no corporate big shot parachuted in to restructure the company. He has worked his way up from making the tea – well almost. “I joined SKF in 1977 as a trainee salesman,” he recalls. “I had a van and delivered bearings and components to customers in the North of England from our sales office in Irvine in Ayrshire.” After 10 years in the UK with SKF he went to Sweden for the first time in 1987, worked there for three years, ran a business area in Italy for a year, then came back to Sweden where he has been ever since. “I worked in different areas, primarily in sales and marketing until the last 12 or 13 years when I moved into general management.” And no, he didn’t set out to be an industrial magnate. “When you start in the West of Scotland you never think you are going to end up in Gothenburg! But now I have spent two-thirds my career in Sweden so I suppose I must be comfortable with how it has turned out!”
He didn’t plan this
His contemporary at Timken, Jim Griffith, is a Stanford MBA and like many American corporate leaders seems to have been on the fast track from earliest college days. The contrast is fascinating, Johnstone always seems to have been more mystified by the planned life than the serendipitous.
Johnstone commented: “I talk to a lot of young people today and they always seem to talk about career planning. I must say I never really planned mine. I just took advantage of opportunities that came along in the SKF Group. For example the opportunity came to come to Sweden happened because a few months previously I had been on my first overseas training course with the company. As part of which I filled out a form that asked ‘would you be willing to work abroad?” I ticked the box: six months later I was given the chance to work over here. At the time I thought I was coming over for three years then I’d move back to the UK, but I have never been back since!”
That is one of the advantages about a company like SKF, Johnstone says, which has always been a bit different. “We have been a global company, with English as our mother tongue within the Group, since the 1960s. And we are into so many markets that you feel as if you have been in different businesses altogether, just under the common umbrella of an international group.”
Innovate or die
Professionally, Tom Johnstone sees his role as keeping his eye on the end goals and not getting bogged down in detail. Six Sigma and technical innovation are just important means to this end. “Innovation is critical to any company. If you aren’t innovating you are harvesting, and you will die. Innovation comes not only in the products you make but also in how you do business. We focus heavily on innovation at SKF. All the main innovations in bearings technology in recent years have come from the SKF Group, and so have the innovations in methodology, all-life programmes and environmental performance.”
“I think there are two dimensions to innovation that are important. Firstly ensuring that your innovation is very much driven from customers’ needs today and tomorrow.” And you don’t always find that out by asking the customer – if you really want to know what he is going to need next year, you had better go to the end user, he believes.
“The other side is technological innovation,” he continues. “This is where you see new materials coming through or new designs that we can develop and bring to the market. Again you are solving customers’ problems, but problems they may not know they had, using technology they might not understand yet!
“I think to keep long term leadership you need to focus on innovation and one of the things we have done is to double our spending on R&D over the next five years to advance our leadership not just in bearings but in all five areas we are in.”
Better than nothing
Part of Tom Johnstone’s big picture is environmental responsibility, which he sees as a huge opportunity as well as an ethical imperative. SKF launched its Beyond Zero programme in 2006 with the aim of reducing carbon emissions. “We have a target of five percent a year CO2 reduction regardless of what happens to production. Last year we increased production by twelve percent but reduced our carbon emission by 2.2 percent.”
Saving CO2 emissions for customers is another key part of Beyond Zero. Projects he cites include supplying ‘a major European transmissions manufacturer’ in Europe with a new hybrid pinion bearing unit to help them reduce energy loss due to the bearings by 30 percent. “That means five grammes less per kilometre driven.”Another is a ‘throttle by wire’ system to control the engines on business jets. “Two business jet manufacturers are using them now and that reduces their fuel consumption by five percent, which means roughly a million litres of fuel saved over the life of one of these aircraft!” He may not deep dive, but he certainly knows his detail.
A high profile project is at the European Parliament building for which SKF developed new actuators to control the temperature in the glass fronted building. “That can save them up to half their energy consumption for heating and ventilation. We are going to document all the saving we have made for our customers in energy saving and carbon emission, and the savings we get from these should be greater than the negative impact across our business. That’s what Beyond Zero means – that we are making an overall positive contribution to global sustainability.”
Everyone wants to tell a good environmental story these days, but when Tom Johnstone talks about it you begin to realise what gets him out of bed in the morning and why this quiet Scot came to head up one of Sweden’s proudest industrial groups.

Source: Exec Digital UK

CAN YOU MAKE YOURSELF HAPPIER, OR YOU ARE STUCK WITH WHAT YOU ARE?

The debate over this question is intensifying. With each new week, a novel angle on the exploding field of positive psychology, the science of happiness, makes news. How solid is the new science? If happiness turns out to be serious business, it's much too relevant to real life to leave in the hands of academics. Let's take a peek at this new field and talk about the implications for our system of education and, yes, our own happiness.In the 1960s, Abraham Maslow challenged his fellow psychologists with a Copernican shift in perspective. Instead of pondering what makes sad people sad, he suggested we think about what makes happy people happy.Since the 1980s, numerous studies by "positive psychologists" such as Ed Diener and Martin Seligman have tried to place the study of human well-being on a scientific foundation. Many of these studies have homed in on small groups of "very happy people" and analyzed their lifestyles and personalities through multiple questionnaires and interviews.They found that, to a certain extent, the happiness that people can intentionally generate through their thoughts and actions can "psych out" genetic gloominess.Seligman's bottom line is that happiness has three dimensions that can be cultivated: "The pleasant life" is realized if we learn to savor and appreciate such basic pleasures as companionship, the natural environment and our bodily needs. We can remain pleasantly stuck at this stage or we can go on to experience "the good life," which is achieved by discovering our unique virtues and strengths and employing them creatively to enhance our lives. The final stage is "the meaningful life," in which we find a deep sense of fulfillment by mobilizing our unique strengths for a purpose much greater than ourselves. The genius of Seligman's theory is that it reconciles two conflicting views of human happiness - the individualistic approach, which emphasizes that we should take care of ourselves and nurture our own strengths, and the altruistic approach, which tends to downplay individuality and emphasizes self-sacrifice. Granted, the debate between the positive psychologists and their critics is far from over. Yet it is time to think about integrating the study of human well-being into our school curriculums. After all, as the Declaration of Independence suggests, the pursuit of happiness qualifies as a national goal. If our children have the right to pursue happiness, shouldn't they be educated about how to do it? Millions of parents are taking drugs to escape from misery; why aren't we teaching their offspring about the habits and virtues conducive to peace of mind? Many secondary school educators express deep frustration over the so-called "values vacuum" in the curriculum. Yet they feel powerless to do much about it in a multicultural society. Who is to say what is good or bad?The positive psychologists provide a growing body of data indicating that certain virtues and personal strengths are fairly universal. What is more, these virtues are not necessarily good or bad. They are simply conducive to deep feelings of satisfaction and self-worth.Because the quest for happiness is a universal one, studies of human well-being can promote a genuinely global education. It is worth bearing in mind that the psychology of happiness is not a monopoly of Western academia. It began in China, India and Greece nearly 2,500 years ago with Confucius, Buddha and Aristotle. In a world rent at its ethnic seams by mutual ignorance and suspicion, we need affective as well as intellectual education. We need to know the facts about our neighbours in the global village, but as much as we can, we need to put ourselves in their shoes. The best way we can share their dreams and aspirations is by learning more about the values that they treasure, particularly on personal growth and happiness, as well as their economic and political histories. If we do, we may discover that the intuitions of the great thinkers resonate in surprising ways with the discoveries of Positive Psychology. And if they conflict on some issues, so much the better. In the West, the debate between the claims of positive psychology and its skeptics is far from over. But that's okay. These contrasting perspectives on the pursuit of happiness between East and West, and between positive and traditional psychology, provide great opportunities for critical and comparative thinking. Those differences can awaken that magical power young people seem to have to absorb diverse perspectives and autonomously recreate their own views. The urgent task is to design lively, readable materials that can catalyze such critical thinking. The next step is to integrate these into high school and university curriculums.In a society that spends more than $25 billion a year on psycho-pharmaceuticals (that's $85 per person) and untold billions dealing with family dysfunction, education on human well-being should take priority.

(Inputs from - Persuit to Happiness)