Tennant, a leading producer of floor cleaning equipment, must determine the business model to use for its new chemical free cleaning technology. In 2005, Tennant Company had developed an innovative, environmentally friendly, cleaning technology that could potentially revolutionize cleaning. Historically, Tennant was a producer of floor and carpet washing machines for industrial and commercial markets. Over time, it became clear that the technology had applications far beyond Tennant's core markets. In mid-2009, the company set up a new venture to develop the technology's promise. In 2010 this venture was wholly owned by Tennant and run by a Tennant manager. The case examines the decisions the CEO and new venture head must make to best structure and position the venture to succeed.
The case follows Mel Young, founder and president of Homeless World Cup, a nonprofit organization whose mission is to eliminate homelessness around the world. Homeless World Cup organizes annual football (i.e., soccer) tournaments in host cities and through its grassroots partner organizations recruits and trains homeless people to play in the events. The case highlights the early days of founding and building the organization, including Young's inspiration for the idea, and also covers the importance of branding and marketing and the organization's relationship with Nike.
Cypress Sharpridge, a REIT investing in agency securities, launched its IPO just before the collapse of the subprime mortgage market. The IPO failed. In June 2009, an IPO window seemed to be opening. Should the company try again? CEO Kevin Grant knew that his company's survival depended on differentiating itself from discredited real estate investment strategies and raising permanent capital. But if its IPO failed again, the company might lose any remaining credibility and be forced to fold.
In March 2007, the vice-chairman and managing director of Eureka Forbes Ltd. is reflecting upon 25 years of market leadership in the water purifier business in India, but is troubled by the very low penetration compared to potential. In 25 years, the company has undergone significant evolution in all of its key strategic levers - technology, brands and channels. Can the company use its vast market learning and experience to achieve a breakthrough in penetrating the mass market for water purifiers in India? Other external pressures also apply. With climate concerns reaching a crescendo globally, water sustainability issues are in the spotlight, especially in large and rapidly industrializing countries such as India. This presents both enormous challenges and opportunities for Eureka Forbes. The vice-chairman and managing director is looking to his top 150 managers who will assemble at the company's annual strategic planning meeting to come up with fresh market strategies.
The case is woven around the decision dilemma faced by the second generation managing director of Ujwal Bharati Pharmaceuticals, a mid-size business. He had to decide whether to retain his non-family CEO or not. There are other issues related to corporate and family governance covered in the case as well. This case was written in the context of the major efforts made by Indian family businesses in recent years to professionalize their operations. This is particularly so among mid-size businesses. In this case, while the director appreciates the need to professionalize and successfully recruit non-family professionals, he is not able to retain them. The director's major dilemma is not only to delegate but to simultaneously find a way of making use of his time. Indirect opposition to changes from the old guard causes problems and the board, consisting of professionals, is ineffective. The director's elder brother, without any male heir, is non-interfering and the director's only son is not well-groomed for the position. The case is best suited for a session on professionalization of management of a growing company but is also appropriate for courses such as family businesses, organizational behavior, strategy implementation and entrepreneurship.
The case deals with issues of corporate social responsibility (CSR) and sustainability in the specific setting of a medium-sized enterprise (Host Europe) in the IT industry. Host Europe is the third largest web hosting company in German-speaking Europe. In recent years, the company has put substantial efforts into living up to its CSR and improving sustainability. The case presents the IT sector in Europe and Germany and highlights several industry-related issues such as "green IT" (especially in terms of greenhouse gas emissions and e-waste) and the digital divide. Host Europe has already implemented a couple of measures, such as building a new energy-efficient green data center, switching to renewable energy, promoting virtualization, introducing several workplace measures, pursuing efforts to improve family friendliness, and publishing a sustainability report. However, there are still some challenges ahead and students are asked to think about further efforts of Host Europe to complete its path to becoming a responsible and sustainable medium-sized IT company.The case can either be used as an introductory case for CSR in medium-sized businesses and sustainability in the IT industry, or in advanced-level CSR and sustainability courses. As an introductory case it provides in-depth insights into a company that has already put substantial efforts into becoming a responsible and sustainable IT company. Students learn about various sustainability and CSR issues and measures in the specific context of a medium-sized enterprise. As an advanced case for CSR and sustainability, it can be used to build upon the existing knowledge of students and to ask them to come up with other ideas and a sophisticated strategy to pursue further CSR and sustainability. For example, since Host Europe is not certified according to environmental or social standards yet, students could come up with a detailed and customized plan on how to implement such a management system for the company.
In 2000, Dr. Gary Kaplan became CEO of the Virginia Mason Medical Center in Seattle, Washington. The hospital was facing significant challenges: It was losing money for the first time in its history, staff morale had plummeted, and area hospitals presented ardent competition. Considerable change was imminent. Within his first few months, Kaplan had rallied the organization around a new strategic direction: to become the quality leader in health care. What Kaplan and his administrators lacked was an effective tool to execute their strategy. Soon thereafter, a series of serendipitous events led to the discovery of the Toyota production system, and the Virginia Mason Medical Center became entrenched in an overwhelming challenge: how to institute a production model in health care.
After nearly violating its loan covenants in 2009, Momentive Performance Materials, backed by its financial sponsor Apollo Global Management, took a variety of actions to restructure its debt. The restructuring steps included an open market repurchase of publicly held notes; a notes exchange; a loan-covenant waiver; and, finally, an attempted loan amendment that sought to extend the maturity of the loan used to finance the Momentive buyout. This case allows students to see different debt-restructuring options in one setting. The case protagonist is a fund investment manager at a large hedge fund that holds 3 percent of Momentive's syndicated loan. The decision point in the case is whether the investor should vote to amend the loan. The perspective of the investor allows students to understand tensions underlying the restructuring process. The case serves as a vehicle for discussing contractual and institutional differences between public debt and syndicated loans, and challenges in the restructuring of such debt.
Ever since he had heard her speak at a private equity conference, Babatunde Omotoba had wanted to work for Venita Fields, co-founder and senior managing director of private equity firm Smith Whiley & Company. He wrote and asked her for an informational interview, and was excited to receive her invitation to meet with her at the firm's regional office in Evanston, Illinois. After the interview, however, Omotoba came to the grim realization that despite all his preparations-researching private equity firms, studying the types of deals they make, and evaluating the analytical tools used to perform due diligence on companies and make investment decisions-he did not have a full grasp on the actual day-to-day work private equity professionals perform. He spent time reviewing materials from the career management office about private equity, and he meets two Kellogg alumni for informational interviews. He also reviews the investment process. The case ends with Omotoba having a broader perspective on the human aspect of private equity, beyond the analytical and financial aspects, as he anticipates meeting Fields again, hopefully to get the job offer.
Studies from around the globe consistently link entrepreneurship with rapid job creation, GDP growth, and long-term productivity increases. That's why the new holy grail for governments in both emerging and developed countries is to create an environment that nurtures and sustains entrepreneurship. Unfortunately, many governments take a misguided approach to building entrepreneurship ecosystems. They pursue some unattainable ideal and look to economies that are completely unlike theirs for best practices. However, today the most effective practices often come from remote corners of the earth, where resources-as well as legal frameworks, transparent governance, and democratic values-may be scarce. Drawing from lessons learned in such countries as Rwanda, Chile, Iceland, Israel, and Colombia, this article defines nine principles for building a successful entrepreneurship ecosystem: (1) Stop emulating Silicon Valley. (2) Shape the ecosystem around local conditions. (3) Engage the private sector early. (4) Favor the high potentials. (5) Get a big win on the board. (6) Tackle cultural change head-on. (7) Stress the roots. (8) Don't overengineer clusters; help them grow organically. (9) Reform legal, regulatory, and bureaucratic frameworks. Each of these is critical to entrepreneurship-yet insufficient to sustain it. They key is to integrate them all into one holistic system.
CEOs tend to believe that company structure is closely tied to performance, so it makes sense that nearly half of all CEOs reorganize their companies during their first two years on the job. But Marcia W. Blenko, Michael C. Mankins, and Paul Rogers of Bain & Company report that of 57 reorganizations they studied between 2000 and 2006, less than one-third saw significant performance improvement. This failure, they believe, is rooted in a misunderstanding about the link between structure and outcome. In truth, a company's structure only results in improved performance if it allows the firm to make key decisions better and faster than the competition. Making sure this is the case requires a shift in the way we manage organizational change. We must start with an audit of assets, capabilities, risks, and weaknesses and move toward a decision audit, in which the goal is to understand which set of decisions are key to the success of the company's strategy and at what organizational level they should be made. If there is alignment between structure and decisions, then the organization will work better and performance will improve. To reorganize around decisions, leaders should follow six steps: Identify their firm's key decisions, figure out where in the company those decisions should happen, organize the macrostructure based on sources of value, determine how much authority decision makers need, align the rest of the organizational system with that related to decision making, and help managers acquire the skills they need to make decisions quickly and well.
Companies are experiencing a crisis in employee engagement. One of the problems is all the pressure companies are putting on employees to produce. Workers are trying to get more done in less time-and are burning out. But while time is finite, energy is not; people can increase their reserves of personal energy. The key is to establish rituals-such as shutting down your e-mail for a couple of hours a day so you can focus on priorities, or taking a daily 3 p.m. walk to get a breather-that renew your physical, emotional, mental, and spiritual energy. These behavioral changes are sustainable, though, only if leaders at the most senior levels of an organization are willing to set a context for them, both by creating their own rituals and by setting a tone where people feel safe taking time out of the day on a regular basis. This is just what the leaders of Sony Pictures Entertainment did. Working with Tony Schwartz of the Energy Project, they implemented energy management training that has reached nearly half the company so far. To date, the reaction to the program has been overwhelmingly positive. Eighty-eight percent of participants say it has made them more focused and productive. More than 90% say it has helped them bring more energy to work every day. Eighty-four percent say they feel better able to manage their jobs' demands and are more engaged at work. Sony's leaders believe that these changes have helped boost the company's performance. Despite the recession, Sony Pictures had its most profitable year ever in 2008 and one of its highest revenue years in 2009.
No one disputes that firms have to make organizational changes when the business environment demands them. But the idea that a firm might want change for its own sake often provokes skepticism. Why inflict all that pain if you don't have to? That is a dangerous attitude. A company periodically needs to shake itself up, regardless of the competitive landscape. Even if the external environment is not changing in ways that demand a response, the internal environment probably is. The human dynamics within an organization are constantly shifting--and require the organization to change along with them. Over time, informal networks mirror the formal structure, which is how silos develop; restructuring gets people to start forming new networks, making the organization as a whole more creative. It also disrupts all the routines in an organization that collectively stifle innovation and adaptability. Finally, restructuring breaks up the outdated power structures that may be quietly misdirecting a company's resource allocation. All these processes--silo formation, the accretion of deadening routines, and the emergence of corporate baronies--take place all the time. But when everything is going well, you tend not to notice them, just as many seemingly fit people don't realize that their arteries may be dangerously clogged. A simple questionnaire can serve as a kind of cholesterol test for your company, enabling you to see if your regimen needs minor or major adjustments.
Some employees are more talented than others, and nearly every company has its method for identifying their high-potential managers. So how can you get on your company's high-potential list? Douglas A. Ready, of the talent-management research center ICEDR; Jay A. Conger, of Claremont McKenna College; and Harvard Business School's Linda A. Hill have studied programs for high-potential leaders for 15 years. They have found that the rising stars who make the grade are remarkably similar in their core characteristics, the most intangible of which they call "X factors": a drive to excel, a catalytic learning capability, an enterprising spirit, and dynamic sensors that detect opportunities and obstacles. The authors' in-depth interviews with high potentials, their managers, and their HR departments reveal how you can develop your four X factors and, if you manage to get on your company's high-potential list, how to avoid falling off. The article also discusses the pros and cons companies face as they decide whether to make their high-potential lists transparent.
The pressure to grow the top line is so intense that most companies pay too much attention to expansion, and not enough to building strong internal capabilities. A few companies start from the other direction: They figure out what they're really good at and then develop those capabilities (three to six at most) until they've created a set of complementary, best-in-class competencies. For them, strategy then becomes a matter of aligning what they do well with the right marketplace opportunities-and the market rewards them with sustainable, superior returns.