At its best, business is about innovating to meet society's needs and to build a profitable enterprise. But many corporate leaders are struggling to achieve those twin goals. In a study of more than 30 companies that have succeeded in creating so-called shared value, the authors identified five mutually reinforcing elements: (1) Embedding a social purpose. This may involve reemphasizing a firm's founding mission, as Danone's CEO did in 2000 to refocus the company on its origins as a manufacturer of healthy food. (2) Defining the need. Some firms conduct extensive research to develop a comprehensive view of the social problem. Before launching a micronutrient-reinforced spice product for low-income consumers in India, Nestle studied nutritional deficiencies in the country and visited 1,500 households to understand cooking customs and diets. (3) Measuring shared value. To monitor an initiative in Brazil to increase the employability of youth, Coca-Cola spent months planning how to achieve business and social goals and then established intermediate measures to track progress. (4) Creating the optimal innovation structure. The right structure for a social enterprise depends on whether the firm already has a clear social purpose, understands the targeted problems, is able to solve them, and builds a strong business case for doing so. (5) Co-creating with external stakeholders. Effective social innovators enlist external stakeholders in their efforts to understand social needs and to execute their strategies.
During the past decade, some of Japan's most dominant companies have been quietly turning their supplier relationships into a tool that helps them innovate faster while radically cutting costs. This is the new keiretsu--a modern version of the traditional system in which buyers formed close, collaborative associations with suppliers. Toyota provides a compelling example of how keiretsu, which lost luster during the cost-cutting of the 1990s, is being revived and reinvented. The company today has vendor relationships that are more open, more global, and more cost-conscious than traditional keiretsu ever were and that provide even stronger bonds of trust, cooperation, and educational support. The authors examine the evolution of Toyota's keiretsu and explore the numerous lessons for developed-world and emerging-market companies seeking to improve their supplier relationships for lasting gain. Such companies should think short-term and long-term; know their suppliers well and develop trust with them; balance implicit and explicit communication; identify the suppliers most worth improving; and involve suppliers in developing new products. Those elements are critical even in a hypercompetitive, cost-obsessed environment, because as they speed production and boost innovation, they reduce the hidden costs of the arm's-length supplier relationships prevalent in the West.
More hours in the day. It's one thing everyone wants, and yet it's impossible to attain. But what if you could free up significant time--maybe as much as 20% of your workday--to focus on the responsibilities that really matter? The authors have spent the past three years studying the productivity of knowledge workers and discovered that they spend, on average, 41% of their time on activities that offer little personal satisfaction and could be handled competently by others. On the basis of their research, the authors have come up with a process to help knowledge workers make themselves more productive. It involves thinking consciously about how they spend their time, deciding which tasks matter most to them and their organizations, and dropping or creatively outsourcing the rest. The tasks to be dropped are sorted into quick kills (things you can stop doing now, without any negative effects), off-load opportunities (work that can be delegated with minimal effort), and long-term redesign (work that needs to be reconceived or restructured). Once the tasks are disposed of, the freed-up time is spent focusing on more-important work. When 15 executives tried this, they were able to reduce desk work by an average of six hours per week and meetings by two hours per week. They filled the time with value-added tasks like coaching and strategizing.
Brazilian medical-devices maker Bosi e Faora has seen its prices decline as its sales reps scramble to sign up clinics by offering steep discounts. The company aims to turn things around with a "solutions" strategy that, along with medical equipment, offers ideas and training to health care providers that want to improve patients' overall health, not just purchase hardware. When one semirural but influential customer resists the upsell at a high-stakes meeting, blood pressures flare and a 15-year business relationship is on the line. This fictional case study is written by Eric T. Anderson and features expert commentary from David Mok, of DePuy Synthes Spine (a Johnson & Johnson company), and Nandakumar Jairam, MD, of Columbia Asia Hospitals.
Lorne Michaels, the creator of "Saturday Night Live," has launched the careers of comedians from Eddie Murphy to Kristen Wiig. Here he talks about the power of absolute deadlines, resolving creative differences, what he looks for in new talent, and more.
Brazilian medical-devices maker Bosi e Faora has seen its prices decline as its sales reps scramble to sign up clinics by offering steep discounts. The company aims to turn things around with a "solutions" strategy that, along with medical equipment, offers ideas and training to health care providers that want to improve patients' overall health, not just purchase hardware. When one semirural but influential customer resists the upsell at a high-stakes meeting, blood pressures flare and a 15-year business relationship is on the line. This fictional case study is written by Eric T. Anderson and features expert commentary from David Mok, of DePuy Synthes Spine (a Johnson & Johnson company), and Nandakumar Jairam, MD, of Columbia Asia Hospitals.
Brazilian medical-devices maker Bosi e Faora has seen its prices decline as its sales reps scramble to sign up clinics by offering steep discounts. The company aims to turn things around with a "solutions" strategy that, along with medical equipment, offers ideas and training to health care providers that want to improve patients' overall health, not just purchase hardware. When one semirural but influential customer resists the upsell at a high-stakes meeting, blood pressures flare and a 15-year business relationship is on the line. This fictional case study is written by Eric T. Anderson and features expert commentary from David Mok, of DePuy Synthes Spine (a Johnson & Johnson company), and Nandakumar Jairam, MD, of Columbia Asia Hospitals.
Scoot is a new subsidiary airline of the Singapore Airlines Group (SIA) launched in November 2011. It is a low-cost, medium to long-haul carrier that is independently operated and based out of Changi Airport in Singapore. The low-cost carrier model is thriving as income levels continue to rise throughout the Asia-Pacific region, where more people are travelling by air for the first time. However, this phenomenon has led the airline industry to experience commoditisation and greater price-based competition. Full-service Singapore Airlines - an established premium brand with a long history - has a business model inappropriate for this kind of environment. Scoot's raison d'être is to take advantage of opportunities in the rapidly growing budget-travel segment. Campbell Wilson, a 17-year veteran of Singapore Airlines, is seconded as CEO to startup Scoot. In the year following the launch, criticisms of the new airline begin to appear. In October 2012, an editorial in a prominent publication claims that Scoot will contaminate the Singapore Airlines brand and cannabalise sales. How should Wilson address these claims?
John Leader, president of Simsbury Children's Hospital, was reviewing the recommendations put together by his senior management team to resolve the growing problems his hospital was facing. The recommendations, totaling some $10 million, could put the hospital back on a sound financial footing. But John was unsure which of the recommendations made sense and should be implemented. He was particularly interested in understanding the financial, operational and political impact of each one. He was due to meet with the senior management team that afternoon to develop an action plan.
This Industry Note examines the state of the digital signage industry in 2010. The industry came into being to meet the emerging commercial and communications need for more dynamic messaging. It is a nexus between two industries - those who manufacture the equipment and those who create the messaging content. Together, they created an industry that provides instantaneous messaging at the speed of light. In 2010, the industry was a technically complex, multi-product, multi-segment, multi-channel, highly fragmented market with few dominant firms, rapidly-evolving technologies, and relatively low entry barriers for many segments of the industry. Global opportunities exist and multi-national electronics firms are entering the market. The Note reviews the industry's external environment, the forces that are shaping the industry, its competitive landscape, the emerging industry structure, and the near-term future of the industry. Those firms that emerged as dominant competitors tended to have higher levels of vertical integration, greater financial strength, and greater breadth in their product lines; served multiple market segments; and had the design and engineering capabilities to provide high-level product customization. Increased capabilities in design, product engineering, fabrication, and technology integration led to broader and more diversified product lines and the ability to meet demanding customer requirements in multiple market segments.
Daktronics Corporation made score boards and large displays for sports venues. The company had been the "Cadillac" of the industry and commanded nearly 70 percent share of the college and professional sports venue market for large displays. Recently, however, increasingly complex, technological installations and maturing manufacturing processes and sourcing had enabled new players to enter the market. Further, buyers in the large sports venue market had been including consulting firms in the decision process. Where Daktronics had often been the unchallenged choice, they were now being challenged by greater competition and channel influences that threatened both share of market and gross margins. Jay Parker, Daktronics Sales Manager for Large Sports Venues, was trying to understand the new market realities and devise an approach that would maintain Daktronics' market leadership and profits.
This case focuses on the necessity of developing a human resource strategy for downsizing Daktronics, Inc., a company that was founded in 1968 in Brookings, South Dakota as a small producer of scoreboards for collegiate wrestling matches. By 2009, the company was generating a half billion dollars in revenue annually by producing electronic scoreboards, programmable display systems, and large screen video displays using light emitting diode (LED) technology. The dream of the founder was to grow the company to a billion dollars in revenue. However, by the spring of 2010 the recession that the United States had been suffering since 2008 had now produced negative earnings for Daktronics. Carla Gatzke, VP of Human Resources, realized that she needed a strategy to further reduce personnel costs during the duration of the recession, yet respect company culture and its relationship with communities. The plan would also need to position the company strategically for continued growth.
For over forty years, Daktronics, Inc. had been one of the world's leading suppliers of electronic scoreboards, large electronic display systems, digital messaging solutions, software and services for sports venues, commercial and transportation applications. After decades of producing its products using a batch system, the multi-million dollar company made a formal decision to pursue lean manufacturing in February, 2006. The lean initiative took on even greater importance due to sluggishness in the U.S. economy and slowed sales in 2009. Now in 2010, four years after the lean project's initial launch, readers are asked, how successful has the lean conversion been, including the transition from a batch system to a high mix, flow line system? Is the firm poised and ready to extend its lean initiative to nonmanufacturing areas? By using clues within the case and detailed exhibits, the case provides a rich opportunity for readers to trace and evaluate an original equipment manufacturer's (OEM) lean journey. Ultimately, they should be able to answer questions, such as: What kinds of things did Daktronics appear to do correctly? What kinds of things could Daktronics have done differently... or better? What recommendations might follow from their experience for other OEMs that seek to implement lean manufacturing? What are the pros and cons of implementing lean techniques in nonmanufacturing areas?
In early March 2010, Bill Ritterath, Chief Financial Officer of Daktronics, Inc., was meeting in his office with Jim Morgan, CEO, and Alered (Al) Kurtenbach, Chairman of the Board, about increasing dividend payments to shareholders. Daktronics was the world's leading supplier of electronic scoreboards, large electronic display systems, and digital messaging solutions for use in sports, transportation and communications. The company had been going through a difficult period the past three years with the downturn in the national economy and the sudden reversal in the company's operating and financial performance. Sales were projected by security analysts to fall from a high of approximately $581 million in 2009 to an estimated value of $424 million for fiscal year 2010 ending in May [1]. Stock price had also fallen from a high of $38.66 per share on December 1, 2006 to $7.72 per share on March 3, 2010. But with the economy showing some signs of recovering from the recession, Dr. Kurtenbach thought it was time to review Daktronics' current dividend policy: "We can afford to return some additional cash to shareholders given our confidence that the company is turning around and business is improving." Cash balances were growing rapidly and the outlook for future cash flows was positive. In making the decision, Dr. Kurtenbach wanted it to be based on an assessment of the company's current cash position and future cash flow projections: "I don't want this dividend to reward short- term holders at the expense of our long-term shareholders" Dr. Kurtenbach asked Mr. Ritterath to make a recommendation at the next Board meeting (in four weeks) on a new dividend distribution, including both the amount and form of the distribution.
The Daktronics ("Dak") case draws attention to what a company can do in the midst of recessionary forces when sales have declined significantly and the company's leadership position may be headed for additional erosion. The case is as of FYE 2010 (May) and examines this B2B firm which is the leading score board design and manufacturing firm. Dak has significant opportunity in various countries abroad, but when and where the company should undertake additional strategic action is not clear. The company's executive team and board confront increasing competition and press pressure. Should the firm wait out the recession or undertake a bold strategic move? Founded in South Dakota by two South Dakota State University engineering professors. Dak produces videographic displays plus related products and services that lead in the sports arena market installations and have applications across a variety of institutional and commercial markets. Among the commercial markets that offer opportunities are digital business advertising venues. To date, the firm has pursued a conservative, but path-breaking technology leadership position in its market. Dak is a B2B case that provides examples of applications which will be of interest to and useful with both graduate and undergraduate level students.
This is part of a case series. The case focuses on how a senior executive assesses the opportunity to drive innovation in his division. Jim Slater, Managing Director of Costa Enterprises, is thinking about a management consultant's offer to build the next generation coffee machine for his division. The company's business model has historically been built on incremental improvements, but this proposal would involve a 'step change' in how new products are developed. Costa Enterprises rolls out self-service vending machines ('concessions') that deliver quality coffee to customers in areas not served by premium high street cafes. The proposal Slater is considering is to build the next generation concession. However, handing over control of such an important, venture to an outsider seems like a significant risk for Slater to take.