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PROFILE—Ericsson’s ?ke Persson adapts to San Diego’s cultural and corporate challenges

The world around & #313;ke Persson is in a swirl.

From an intellectual property fight to a major corporate acquisition to employee retention, Persson, president of San Diego-based Ericsson Wireless Communications, Inc., has seen his share of challenges in the Southland.

It’s been that way since the day the Swedish telecom giant Ericsson made him point man for negotiations with San Diego-based Qualcomm Inc. What started as an attempt to work out disputes over Code Division Multiple Access, or CDMA, technology in the spring of 1998 turned into talks to buy Qualcomm’s infrastructure unit.

Qualcomm sold. Then the 100,000-employee Swedish company had to find someone to run the place.

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The rivalry between Qualcomm and Ericsson, and more than 1,000 employees in the California high-tech atmosphere, made it seem like a formidable assignment to the Ericsson executives in Sweden.

“Nobody was daring enough to go over,” Persson says with a laugh. “So I said, ‘OK, I’ll do that. Sounds great to me.'”

San Diego became world headquarters for Ericsson’s CDMA unit, and Persson stepped into the swirl. He inherited a corps of staffers unhappy they were no longer working for Qualcomm and angry about losing a chance to get Qualcomm stock options. Employee turnover was coupled with the job-hopping common in the local high-tech industry.

Still, roughly 16 months after he took over, Persson said things are going well.

The Qualcomm stock option issue created “unhappiness and disruptions” early in his tenure, Persson says. He called it the major frustration in his career here. Litigation over whether the former Qualcomm employees should receive some sort of compensation continues.

“I think we have managed to get through that in a very smooth way, given the dimension of the whole thing,” Persson says.

Gaining Lost Ground

He acknowledged losing some employees, including some “very bright” managers. Yet he says the company has hired more people than it lost and is promoting employees who have turned out to be motivated, energetic managers.

Over the last 12 months attrition has been on par with California’s high-tech industry as a whole, he notes.

One would probably expect more, “given where we’re coming from,” he says. And that, he adds, is evidence Ericsson is working things out with its staff. Company executives are listening to employees and holding team-building exercises.

“And we’re delivering 100 percent upon our promises to our employees,” he says. “Which means that we don’t promise that which we can’t deliver, but what we promise we do deliver.”

Balancing Qualcomm’s entrepreneurial spirit with Ericsson’s desire for order has been tricky, he says.

“You have to bring structure and order into the company, and control, without pushing out the enthusiasm, the fun part,” he says. “It should still be fun.”

Persson draws on his 30 years’ experience at Ericsson as he works to retool the culture in the San Diego unit, fine-tune its products and grow Ericsson’s CDMA business to 20 percent of the market share.

Knowing The Right People

Acquisitions, Persson says, are hard to develop successfully. And, he observes, there is nothing easier for a company to do than ignore them. Fortunately, he says, he has an ear in corporate headquarters.

“All of my former colleagues and friends are in corporate management today,” he said. “Which is very helpful. I’ve got a very good network. And that’s very good for me; it’s good for my employees.”

Mary Walshok, associate vice chancellor at UCSD and a founder of its Connect program, says she is impressed with Persson’s flexibility and his responsiveness to California’s unique business environment.

“He brings a genuine respect for the innovation, entrepreneurship and risk-taking culture our region offers to a traditional company like Ericsson,” she says.

Persson has also helped Ericsson “become a visible corporate citizen,” Walshok says. “He was quick to understand the importance of corporate responsibility and philanthropy in the local community.”

While Americans may take that attitude for granted, it is not as prevalent in Sweden, she says, since the job of providing cultural and social services more often falls to the government.

Persson has spent practically his whole career with Ericsson.

A native of Sweden, Persson went to the University of Uppsala, north of Stockholm, where he received a degree that mixed theoretical physics, mathematics and computer science.

“It was all geared to become kind of a computer engineer if you like, more on the software side,” he says. “I was very interested in numbers and theories. I thought I would become one of those clever engineers one day.”

Common Corporate Ladder

He went to work for Ericsson in 1970 in the division that developed public switching and radio systems. He spent more than 10 years at it.

Then someone suggested he move to marketing. It’s a common trajectory in the company. Frequently, “you find that the relationship with the customer is more challenging or interesting,” Persson says.

Up he went: general manager of Cellular Telephone Systems in 1982; a vice presidency in 1985. Then Persson took a leave of absence in the early 1990s to work for a customer, a New York City outfit that built a mobile network reaching 95 percent of the U.S. population (it has since been sold to Bell South).

From there it was on to North Carolina, where Persson was vice president of business development for Ericsson GE Mobile Communications. He returned to Sweden in 1995 to become vice president for marketing and sales for Ericsson Radio Systems AB.

The Qualcomm negotiations followed soon after.

Persson declined to discuss the specific challenges of negotiating with Qualcomm.

“It all goes back to some disagreements on who owned the technology for CDMA,” he says. “And that was resolved. There was also disagreement about future standards.” Qualcomm then suggested a sale.

“It was an important deal,” Persson says.

Negotiations took a while.

“We were talking. We were talking for about nine months. Sometimes intensely, sometimes more casually . There were periods where we didn’t talk at all. I guess we were going about our own respective businesses,” he says with a laugh.

The deal closed in May 1999.

Persson and his wife, Lisbeth, now make their home near Del Mar. She is a middle school and high school teacher who is taking a respite from nearly 30 years in the classroom. The two enjoy an occasional game of golf. Persson has no favorite course; he said he likes to play “anywhere.”

Dealing With San Diego’s ‘Distractions’

He marvels at the amount of things there are to do near his home. There is the beach, the race track, polo, soccer , all within easy reach. The distractions are available anytime, so he puts them off.

“You sort of, kind of push it away,” he says. ” That’s human, I guess.”

While natives may be oblivious to the California attitude, it has made an impression on Persson.

“Everybody’s playing around,” he says. “Everybody’s playing here. It’s not minus-20 and you don’t need your fur hat and your long underwear. It’s different here. I think that’s one of the reasons why Silicon Valley actually happened, became so successful. I mean, the engineers seem to find this to be a nice place to be.”

Stockholm is actually a less expensive place to do business, he says, when one considers the cost of San Diego real estate and a San Diego payroll.

But like Silicon Valley, San Diego buzzes with excitement.

“The reason you want to be there is because everybody else is there and because all the talent is there,” Persson says. “And everybody’s stealing talent from each other. People are moving around from one company to the other.

“Which is a little bit of a circus,” he adds with a laugh. “I’m not sure it’s really benefiting the industry all the time.”

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