Is your organization capable of making the transition to an ownership state of mind, focusing on the kinds of practices and processes that foster and sustain employee and customer owners? This chapter provides a tool for assessing your ownership capabilities. The ownership audit is intended as more than just a checklist of "must do's" to achieve a higher level of employee and customer ownership in your organization. It is designed to be used periodically to track progress in the various inputs that lead to the results reflected in the ownership quotient itself.
In February 1995, Banc One faced the replacement of the "Uncommon Partnership," a basic operating strategy that had served it well for years. Leadership now struggled with the new protocols for replacement operating strategies.
The world's largest manufacturer of woolen outerwear garments seeks to extend its retailing network to the United States from its base in Europe. A number of issues concerning marketing, manufacturing, and logistics strategy are raised by the proposed move along with specific questions about how the move should be managed. The case describes a well-thought-out, functionally integrated strategy for Europe in a way that allows assessment of its applicability for a proposed U.S. effort.
The management of the Benetton Group includes senior executives advocating two different strategies: 1) expanding manufacturing to develop economies in order to grow Benetton's sales in those markets, and/or, 2)find ways to provide additional support to retailers, some of whom are operating in developed markets against sophisticated competitors and are increasingly embattled. Includes color exhibits.
Boost Your Employee OQ: Employee Ownership Leads to Increased Customer Satisfaction and Profitable Growthby James L. Heskett W. Earl Sasser Jr. Joe Wheeler
Beyond satisfaction, loyalty, and commitment, employee owners experience real pleasure in their ability to deliver value to customers. They offer suggestions for improving the business and making it a better place to work, and they identify and recruit other high-potential employees. This chapter discusses the ways you can foster value and a sense of ownership for employees.
Why is it that many of the same companies appear on lists of the best places to work, the best providers of customer service, and the most profitable in their industries? What do managers at the best places to work understand that others don't? They understand that the identification of organization values is meaningless without a determination of the behaviors, measures, and actions that reinforce the values. They understand that strong and adaptive cultures can foster innovation, productivity, and a sense of ownership among employees and customers-all important elements in leveraging value over costs. This flexibility gives them a much higher probability than less adaptive organizations of producing extraordinary growth and earnings.
A strong customer and employee ownership quotient starts with developing a strategy that delivers differentiated, customized value to these parties. To build a strategy that fosters ownership, you need to think systematically about questions such as these: which customers do you want to serve? What specific, customized results are you trying to deliver for them? Will your approach differentiate you from competitors? Will your customers and employees find value in the work you choose to do? And will you be able to deliver that value profitably? An organization that can answer these questions appropriately has taken its first steps toward developing its ownership quotient.
Calveta Dining Services contracts with senior living facilities (SLFs) for the management of food service to residents. Created by Antonio Calveta and built on his passion for food and traditional family values, the firm had enjoyed three decades of strong growth when Antonio retired and named his eldest son, Frank, CEO. Frank Calveta now struggles to carry out his father's directive: double revenues within five years while maintaining the humanistic and emphatically pro-employee company culture. Should he expand beyond the SLF market? Can he continue to maintain the quality level for which Calveta is renowned? Can he contend successfully with organizational and communications challenges?
The founders of Cinemex, the largest capitalized venture start-up in Mexican history, are debating several issues concerning the operations of their new chain of motion picture theatres in Mexico City. The first concerns whether some seats should be left unsold to improve customer service. The second involves limits on advertising to be shown at each presentation. Others include possible investment in an expanded ticketing service and live entertainment.
An Internet service provider, INS, in which Cisco Systems has a minority ownership stake, receives an offer of $3.1 billion from Cisco's rival Lucent. Cisco's management has to decide whether to act on a request from INS management that Cisco make a counteroffer. The decision requires that Cisco's highly successful strategy be revisited.
Going far beyond previous empirical work, John Kotter and James Heskett provide the first comprehensive critical analysis of how the "culture" of a corporation powerfully influences its economic performance, for better or for worse. Through painstaking research at such firms as Hewlett-Packard, Xerox, ICI, Nissan, and First Chicago, as well as a quantitative study of the relationship between culture and performance in more than 200 companies, the authors describe how shared values and unwritten rules can profoundly enhance economic success or, conversely, lead to failure to adapt to changing markets and environments.With penetrating insight, Kotter and Heskett trace the roots of both healthy and unhealthy cultures, demonstrating how easily the latter emerge, especially in firms which have experienced much past success. Challenging the widely held belief that "strong" corporate cultures create excellent business performance, Kotter and Heskett show that while many shared values and institutionalized practices can promote good performances in some instances, those cultures can also be characterized by arrogance, inward focus, and bureaucracy -- features that undermine an organization's ability to adapt to change. They also show that even "contextually or strategically appropriate" cultures -- ones that fit a firm's strategy and business context -- will not promote excellent performance over long periods of time unless they facilitate the adoption of strategies and practices that continuously respond to changing markets and new competitive environments.Fundamental to the process of reversing unhealthy cultures and making them more adaptive, the authors assert, is effective leadership. At the heart of this groundbreaking book, Kotter and Heskett describe how executives in ten corporations established new visions, aligned and motivated their managers to provide leadership to serve their customers, employees, and stockholders, and thus created more externally focused and responsive cultures.
Engineer Ownership Through Anticipatory Management: Address Employee and Customer Needs Before They Ariseby James L. Heskett W. Earl Sasser Jr. Joe Wheeler
Organizations that engineer customer and employee ownership learn to predict and respond to customers' needs before they arise. Technology and information systems can be a great help in this endeavor. But just as important are the combined efforts from all parts of the organization-especially marketing, operations, human resources, and information technology-working seamlessly together to help frontline employees deliver value to customers. This chapter demonstrates how employees and customers benefit from the set of concepts at the core of anticipatory management.
The Fairfield Inn, an economy hotel venture by the Marriott Corp., has developed a novel method for selecting and measuring the performance of its hotel personnel that fits the company's strategy. Because it faces the need to grow rapidly, questions have arisen as to whether to offer franchises and in what form, considering the need to protect its unique concept.
Jack Welch and the Corporate Executive Council of General Electric are faced with a decision about whether and how to implement a six-sigma quality-improvement effort in the context of many other initiatives already undertaken at GE in recent years.
HandsOn Bay Area, an organization devoted to the performance of (and development of leaders for) community service, is undergoing a significant (and internally controversial) shift in its business model from "retail" projects involving individual volunteers to "wholesale" projects with for-profit partners from the San Francisco Bay Area. Its CEO has to decide whether and how to respond to a request from Google to engage 5,500 Google employees in community service activities during a one-week period. It's a far larger project than the organization has ever undertaken and one requiring many added resources. Among the risks is the possible damage to the HandsOn reputation among Silicon Valley partners if the effort does not succeed.
The CEO of ING Direct (U.S.) has to decide: (1) whether and how to coordinate his organization's branding effort with its parent, ING Group, and (2) how fast to grow the business. Includes color exhibits.
A customer owner is one who tries a product or service, is so satisfied that she returns to buy more, states a willingness to tell others of her experiences, actually convinces others to buy, provides constructive criticism of existing offerings, and even suggests or helps test new products or ideas. A customer who behaves like an owner is worth more than a hundred typical price-sensitive customers over the customer owner's lifetime with your organization. Similarly, the lifetime value of an employee who can promote customer ownership is priceless, and an organization that learns how to cultivate an ownership attitude creates a self-reinforcing relationship between customers and frontline employees. This chapter introduces the service profit chain, which will help you develop the preconditions for ownership in your organization, and describes how to measure the ownership quotient of your customers and employees.
Industry and Background Note
The Hartford Steam Boiler Inspection and Insurance Co. (HSB) dominates the market segment in which it operates. Its success comes largely from the company's service delivery system, a joint product of HSB's marketing and operating managers. Vital to strategy implementation is involving the employees who deliver the service. Successful companies focus on shared values, control by peer groups, generous incentives, and--where possible--a close relationship with the customer. Using databases imaginatively permits many of these businesses to substitute information for assets that both enhance service effectiveness to existing customers and attract new ones.
Organizations that foster customer and employee ownership gain an edge on the competition by designing their operating strategies and systems to leverage value over cost. They carefully align all the elements of the strategic value vision to create a unified, self-reinforcing enterprise focused on ownership-and in the process they achieve enviable margins. They pay particular attention to what the authors call "deep indicators," or key value levers that most influence future performance.
The head of Manchester Bidwell Corp. ponders what it will take to replicate its social services in 100 cities across North America and internationally--an effort that ultimately would cost several hundred million dollars.
Focuses on the strategic and organizational challenges that confront growing enterprises and the entrepreneurs who lead them. Provides an overview of how a new venture needs to change as it passes from the initial start-up to the growth phase. Explores how a venture's leadership, strategy, and execution need to evolve to deal with rapid growth. A rewritten version of an earlier note.
A basic note to be used at the beginning of the introductory marketing course to familiarize students with the arithmetic techniques, concepts, and terms that are typically employed in the analysis of a first year marketing case.
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