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This case illustrates a CEO-led organizational transformation driven by stretch goals, performance measurement, and accountability. When Kasper Rorsted became CEO of Henkel, a Germany-based producer of personal care, laundry, and adhesives products, in 2008, he was determined to transform a corporate culture of "good enough" into one singularly focused on winning in a competitive marketplace. Historically, Henkel was a comfortable, stable place to work. Many employees never received negative performance feedback. Seeking to overturn a pervasive attitude of complacency, Rorsted implemented a multi-step change initiative aimed at building a "winning culture." First, in November 2008, he announced a set of ambitious financial targets for 2012. As financial turmoil roiled the global economy, he reaffirmed his commitment to these targets, sending a clear signal to Henkel employees and external stakeholders that excuses were no longer acceptable. Rorsted next introduced a new set of five company values-replacing the previous list of 10 values, which few employees could recite by memory-the first of which emphasized a focus on customers. He also instituted a new, simplified performance management system, which rated managers' performance and advancement potential on a four-point scale. The system also included a forced ranking requirement, mandating that a defined percentage of employees (in each business unit and company-wide) be ranked as top, strong, moderate, or low performers. These ratings significantly impacted managers' bonus compensation. In late 2011-the time in which the case takes place-Henkel is well on its way to achieving its 2012 targets. Having shed nearly half its top management team, along with numerous product sites and brands, Henkel appears to be a leaner, more competitive, "winning" organization.
Hurricane Island Outward Bound, a small, nonprofit school that helped pioneer experiential education in the United States, has recently recovered from a financial crisis. Students take the role of the school's new marketing manager, who is preparing his first marketing plan for the organization. Faced with a tight marketing budget, students must choose among several marketing programs by evaluating their past performance and further potential. Alternately, students may shift pricing or the course mix to generate additional marketing funds. Case explores appropriateness of marketing tactics relative to strategy, appropriateness of strategy, pricing and service mix issues, and marketing's management of demand in an extremely seasonal business.
Sustaining competitive advantage requires that organizations continually innovate to create new products, services, and processes. Exceptional innovation capabilities determine industry leaders. This chapter identifies high-level objectives and associated measures for four innovation processes, including identifying opportunities for new products and services, and bringing new products and services to market. A case study follows the chapter.
Outstanding professional service firms are consistently able to identify, attract, and retain star performers. This chapter outlines some of the book's key concepts and introduces the central question of why some professional service firms succeed through the ups and downs of the business cycle while others fall behind.
1980 was a critical time for John Hancock with high inflation, high interest rates, increased competition, and the desertion of policy holders seeking new investment opportunities. A new lower level (of vice presidents) task force was set up by the executive committee (also struggling to build cooperative teamwork) to come up with new strategic visions and directions. The task force has group problems. A rewritten version of an earlier case.
Two competitors in the Northeast steel service center industry have made very different choices with regards to logistics and operating strategy. One distributes from a large central location; the other operates seven widely scattered warehouses. Students can diagnose and discuss the significant impacts of these choices, especially in an economic downturn.
Describes a situation in which the manager in charge of a major development project at Honda needs to make a decision about the technical specification of the product. The decision has profound implications for the product concept and strategy, as well as for the technical feasibility and challenges of the design. The students need to evaluate different options and estimate their impact on the success of the final product. Underlines the importance of choosing an option that is consistent with the overall concept of the product and the company's design and philosophy.
Having installed an activity-based system, the division is now exploring the insight provided by that system. In particular, it is studying the economics of lot-size process planning and product mix management.
On January 18, 2012, President Obama rejected TransCanada's application for a "national interest" determination to approve construction of the Keystone XL Pipeline. Keystone XL was a 1,700 mile long, 36-inch diameter pipeline to transport 1.1 million barrels a day of Canadian heavy oil from Alberta (and shale oil from Montana) to the American Gulf Coast. But the American environmental community had focused all its resources on stopping Keystone XL-to them, a symbol of the nation's refusal to deal with climate change. Now the head of Keystone had to figure out what had gone wrong, and decide what to do next in order to get the project approved.
Highlights how word-of-mouth is crucial in the acquisition of new customers. Specifically, it shows the existence of both internal (to the firm) and external markets for customer leads.
Describes the history of Honda Motor Company from its beginning through its entry into and subsequent dominance of the U.S. market as seen through the eyes of Honda executives. The history of Honda's successful entry into the U.S. market is viewed as highly adaptive and fraught with error and serendipity. Honda (A) and (B) are designed to be used together to contrast two differing views of major events in a company's history, both of which are important for a general manager to understand.
The Hunter Business Group (HBG), a direct marketing consulting firm specializing in reorganizing the sales and marketing efforts of industrial firms, uses integrated customer contact technologies (including field sales, telephone, and mail) as a means of "revolutionizing the face of business-to-business (b2b) direct marketing." The firm operates under the theory that a seller's communications provide genuine value to a customer, and that successful direct marketing programs result in solid relationships, high retention rates, and increased profitability for the customer. This case highlights, in detail, HBG's implementation of its approach for Star Oil's tire, battery, and accessory (TBA) business that has been facing declining market share and profitability in the face of ever-increasing competition.
How quickly and effectively a company can develop and implement novel process technologies increasingly shapes the overall cost, timeliness, and results of new product introductions, and the overall competitive success of the company. This chapter examines the strategic role of process development capabilities and discusses the significant influence of these capabilities on the company's competitive fortunes.
For most people who launch new ventures, it takes some up-front cash to open shop, and getting that cash is rarely easy. Investors worry about risk. Will the new venture make it in spite of the long odds? What is the potential return on their investment? As an entrepreneur, you are trying to figure out how to get started with as little investment as possible. Developing an investment model is a real challenge for most new ventures. But some companies--like Skype and Europe's Go airline, featured here--have built investment models that enabled them to generate surprising, even stunning, results on very modest investments. How can you do the same? In this chapter, the authors illustrate why leaner is generally better. They also look at some of the trade-offs involved in taking capital from external investors. This chapter was originally published as Chapter 7 of "Getting to Plan B: Breaking Through to a Better Business Model."
Florentino Perez, the president of Real Madrid, a leading European soccer team, is preparing for a press conference in which he will be asked about his plans for the coming season. Economic success and some sports mishaps during the prior season represent the scenario in which planning decisions are made.
In October 2011, Zhang Yuping, founder and chairman of Hengdeli, the largest Swiss watch retailer in the world, wondered how to work more closely with its key suppliers-Swatch Group, Richemont Group, LVMH Group, and Rolex Group-to maintain strong growth in the Greater China region. Specifically, how could Hengdeli manage the relationship with these suppliers to ensure getting more supply in a market where demand outgrew supply? How could Hengdeli balance the needs of these competing suppliers without being overreliant on one or two suppliers? How could it continue to expand its retail network to enhance its value and position? How could Hengdeli rationalize the portfolio management to maximize the return in the long-term?
Describes the history of Honda Motor Company from its beginning through its entry into and subsequent dominance of the U.S. market. The history is explained primarily in terms of strategic factors and quoted from two sources: an earlier case and Boston Consulting Group report on the motorcycle industry. Should be used with Honda (B).
Once an organization has committed to a change program, the next phase is implementation. Effective implementation requires some front-end work, a strategy, and prior planning. This chapter identifies six activities that are essential for a seamless, companywide implementation.
Follows Kevin Simpson, a second-year Harvard Business School 1990 student, through his job search to his final decision between two very attractive but different job offers: a job as an international marketing manager at Eli Lilly and Co., a leading multinational health product corporation; and a position as the assistant to the president of Haemonetics, an entrepreneurial company in the biomedical equipment field. Addresses the factors Simpson should consider when making job choices as well as the issues he faces as an African-American professional.
In March 2012, Hon Hai Precision Industry Company, Ltd. (Hon Hai) announced its investment in the Sharp Corporation (Sharp). The deal was structured in two parts: the first had Hon Hai investing in Sharp, and the second involved Hon Hai founder and chairman and CEO Terry Guo personally purchasing a stake in Sharp's unprofitable Sakai manufacturing plant. This case explores the dynamics of the deal and specifically focuses on valuation of the investment in the Sakai plant as well as the structure of the deal. It presents a vehicle by which to consider net present value (NPV) calculations and corporate deal structuring.
Most organizations are rightly proud of the decentralized structures that keep managers close to customers and markets, ahead of competitors, and accountable for results. However, relying on unfettered decentralized organizations with highly autonomous silo units is no longer competitively viable. The world has changed. There is too much at stake to allow silo interests to inhibit or prevent the effort toward achieving strong brands and effective marketing. This chapter outlines the specific problems or missed opportunities that are created or worsened by the silo structure and the new role that the CMO must play in conquering these problems.
"The Adventures of an IT Leader" invites readers to "walk in the shoes" of Jim Barton, the new CIO of the fictional IVK Corporation, as he spends a difficult year learning effective information technology leadership, sidestepping the pitfalls that make the CIO job the most volatile, high-turnover job in the business. Barton is asked to assess IT's current approach to resource allocation and propose improvements to increase return on investment. In IT, this means understanding and improving processes for figuring out which projects deserve investment. This chapter follows Barton as he considers the worthiness of a project to improve data security--and encounters unforeseen challenges along the way. This chapter is excerpted from "The Adventures of an IT Leader."
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