David Howells, Group CEO of Pacific International Executive Search, sits down with Eric Alström, Pacific’s Advisory Board Member, for a fireside chat exploring what 2025 taught the best-performing industrial companies, and how leaders can turn those lessons into a winning strategy for 2026 and beyond. Together, they unpack the pivotal shifts, capabilities, and priorities that will define resilience and competitive advantage in the years ahead.
TRANSCRIPT – Fireside Chat: David Howells with Eric Alström
David Howells:
Eric, welcome to Pacific’s Advisory Board. We’ve been speaking for a couple of months now, and it’s great to have you formally join us. This short fireside chat is about looking back at 2025 and ahead to 2026. Let me start with the first question:
How would you summarise 2025 in three words, and why?
Eric Alström:
Thank you, David. I’m really excited to join—having known you and Pacific for a long time, this feels like a natural next step.
If I had to describe 2025 in three words, they would be: uncertain, yet promising.
Uncertain because so many external factors—tariffs, wars, geopolitical tensions—created a challenging environment for industrial companies and, frankly, most businesses. These issues made planning tough.
But I also say “promising” because I genuinely believe we’re beginning to see the light at the end of the tunnel. I’m optimistic by nature, but I do see positive indicators emerging, particularly in Northern Europe. The investment climate in countries like Sweden, Finland, Denmark, and even Norway is noticeably more positive than in parts of Central Europe right now. Those are important industrial nations, and their momentum is encouraging.
David Howells:
When you talk about that shift in investment, are you seeing it in both public and private sectors?
Eric Alström:
Primarily on the private side—industrial companies and privately held businesses are showing more confidence. And we’re seeing that reflected in executive search as well, with demand picking up. That’s always a sign that companies are ready to invest in growth again.
David Howells:
Looking back at 2025 and thinking about the companies you advise and your broader industry experience:
What’s the one thing the best-performing industrial companies did differently to show resilience? And how should others emulate that in 2026?
Eric Alström:
It’s hard to choose just one, but two stand out.
First, they flexed cost intelligently while retaining key talent. They used the downturn to improve performance—addressing low performers when necessary—and strengthening teams for the eventual upturn. That balance between cost discipline and talent retention is crucial.
Second, they focused on supply chain resilience. The past few years taught us that global supply chains come with significant vulnerability—whether from tariffs, container shortages, or geopolitical instability. Companies that invested in resilient, regionalised supply chains are now in a far stronger position.
David Howells:
Yes, we’ve seen that too. When the tide goes out, you see the rocks—and 2025 showed companies where the rocks were.
Eric Alström:
Exactly. When I worked in Japan, we called it the “Japanese lake”—you lower the water level to reveal the spikes you need to address. That’s what 2025 was for many companies.
David Howells:
What’s one market shift or disruption leaders are underestimating right now?
And what should they be doing in 2026 to turn it into a competitive advantage?
Eric Alström:
There are two.
First, supply chain risk and regionalisation. Many companies learned the hard way that relying on long global supply chains is risky. We’re seeing companies intentionally diversify suppliers and bring supply closer to production and customers. Not necessarily fewer suppliers—but more regional ones. For heavy, bulky items, global sourcing in the traditional sense is essentially over.
Ultimately, if you can’t supply, it doesn’t matter how good your price is.
Second, AI. There’s a lot of hype, but also real opportunity. The risk is that companies chase overly complex AI initiatives that don’t add value. Most organisations would benefit far more from focusing first on practical use cases: customer service, HR processes, internal workflows. There are huge gains to be made by improving quality and speed in those areas before diving into major AI moonshots.
David Howells:
And on the supply chain side: is globalisation dead? Are we moving firmly into local or regional sourcing models?
Eric Alström:
It depends. For small, lightweight components—electronics, sensors—you can still air-freight globally. But for heavy and bulky items, traditional global sourcing is over. The risk is simply too high. Companies now need to evaluate supply chain risk with the same rigor they once applied to cost. If you can’t get the product, the cost advantage is irrelevant.
David Howells:
Let’s turn to the future. If you were leading an industrial company today,
what would be your top strategic priorities for 2026 to stay ahead and prepare for 2027?
Eric Alström:
Two priorities again.
- Prepare for the upturn.
Demand will return—maybe not in early 2026, but certainly by late 2026 or 2027. When it comes, it will come fast. Companies should be ready: resilient supply chains, the ability to flex production, and suppliers aligned for rapid scaling.
- Strengthen bench strength.
Now is the time to make sure you have the right team, especially in supply chain, innovation, product development, and HR. When the upturn hits, you’ll need your best people in place. The companies that prepare their talent now will be the ones that win later.
David Howells:
And AI plays into that—use cases first, scaling second.
Eric Alström:
Exactly. Now is the time to build differentiation through flexibility, quality, and speed. The leaner and more prepared you are, the more competitive you’ll be when the market accelerates.
David Howells:
Let’s talk about talent.
What capabilities and skills should industrial businesses be developing today to position themselves well over the next two years?
Eric Alström:
Three areas:
- Software and connectivity skills.
Everything is connected today—machines, sensors, systems. Companies need strong internal software and connectivity expertise to manage and leverage that information.
- AI capability.
You need internal AI experts who understand where AI adds value. You can’t outsource this understanding forever. AI will increasingly support product development, software, and innovation.
- Product development and R&D talent.
Winners in industrial manufacturing will be the ones that continue investing in innovation. But this is a competitive space—you need strong ties to universities and industry networks to attract the best people.
If you’re strong in these areas, you’re well-positioned for what’s coming.
David Howells:
Last question—professional or personal:
What are you most looking forward to in 2026?
Eric Alström:
I’m very optimistic about 2026. Professionally, I look forward to working with you and the Pacific team, and continuing my board roles, which are deeply rewarding. I also enjoy mentoring executives—something I’ve valued throughout my career because I benefited so much from strong mentors early on.
Personally, mentoring is a way of paying it forward. When you take a chance on people and support them with coaching and guidance, they can go further and faster. That’s something I’m passionate about continuing in 2026.
David Howells:
Fantastic, Eric. Thank you for your time. Wishing you a relaxing holiday and a successful 2026. I’m looking forward to working closely together.
Eric Alström:
Likewise, David. Thank you.
For a confidential chat about how Pacific International can assist you with your Executive and C-suite hiring or Diversity challenges, please contact David Howells or one of our Heads of sector.