Peter Gossas was no stranger to action plans and change programs when, in 2003, he was named president of Sandvik Materials Technology, a leading producer of advanced alloys and ceramic materials. SMT supplies customers in a broad range of industries with products and systems solutions.

Gossas, 57, had spent his entire career in the steel sector. Over decades of chronic industry restructuring, he became convinced that companies will survive and prosper in the long term only through constant operational improvement. He had also learned that in most organizations, the potential for excellence is far greater than managers think. At age 28, as production head of a melt shop threatened with closure, Gossas had been stunned by the energy and creativity unleashed—and the results achieved—when everybody in the shop, from managers to furnace operators, worked together as a team to improve efficiency and ensure survival.

At Sandvik Materials Technology, Gossas faced a very different challenge: an 8,000-plus entity composed of some 50 production units and more than 30 sales units spread across the globe. Although SMT’s financial performance was not on par with those of Sandvik Tooling and Sandvik Mining and Construction—Sandvik’s other two business areas—it was still making decent profits....