02. The power of ABB Way Operating model

ABB Way decentralized operating model - accountability, transparency and speed

ABB continues to evolve into a more agile and efficient company where accountability, transparency and speed are fostered through the implementation of our decentralized operating model ABB Way.  This is founded on the belief in:

• operating decisions made in the businesses, close to customers
• strong performance management system
• select common processes
• collaboration & synergies where it makes business sense

Each business should benefit from being part of the Group and ABB Way, under which our people are expected to collaborate to benefit from synergies where it makes sense for the business. Our remuneration system encourages the internal mantra of “smart people collaborate”. 

16 Divisions with full operational accountability

Divisions have full ownership of their respective businesses, including strategy, R&D, CapEx, and M&A

For more information on our Divisions, please see the ABB factsheet

Evolution of our decentralized operating model

During the autumn of 2025 we completed pushing accountability even deeper within the organization, empowering Business Line leaders with strategic mandates and corresponding incentives. This will further enhance transparency, performance and operational speed across the organization.

Stricter focus on delivery by mandate - "Beauty of mix" to further improve group performance.

We have put in place a more transparent and systematic framework for how we assess and use the strategic mandates internally to further drive performance. We have implemented a transparent KPI framework for each strategic mandate. This clear and disciplined approach now enables a sharper link between remuneration and delivery on mandate.

Optimize mix through stricter focus on performance delivery by mandate

Strong performance management system

We strive for continuous improvements, building on a systematic and transparent performance management framework, which balances our decentralized set-up. Our business leaders are given the accountability to run their operations, and in return we ask for performance transparency.

ABB's targets are developed from the bottom up and are underpinned by detailed business plans from each Division, ensuring they are realistic, accountable, and aligned with our strategic priorities. Furthermore, our remuneration system encourages the mantra of "smart people collaborate", as our employees are expected to generate synergies where it makes sense for the business.

Transparency through performance management system

Portfolio management

Each Division makes operating decisions based on their respective strategic mandate prioritizing stability and profitability before grwoth. Mandates are continuously reviewed and held for at least one year.

Managing the business portfolio is a continous journey. We apply a systematic portfolio management process across our whole portfolio down to the product group. All Divisions acquire to fill gaps in technology, but only Divisions with a growth mandate consolidate the market.

Make M&A part of our ABB Way performance culture - Strategic fit and future value creation is key

Our strong balance sheet and robust Free cashflow generation provides the foundation for growth for acquisitions. All Divisions pursue acquisitions to strengthen technology portfolios, while only those with a growth mandate consolidate the market. M&A resources have been fully integrated into the Divisions, barring for some supportive sources on Group level.