Henkel: building a winning culture Essay

Introduction chief executive officer in 2008 Kasper Rorsted, Studied Economics and has experience in technological companies. Management style was base on face-to-face conversations and pushing for more(prenominal) efficiency.Henkel until 2008Founded in 1876 as a pay backr of detergent, by 1920 it was a leading German detergent en glue maker. aft(prenominal) WWII fellowship restarted as a producer of detergent, glues and personal care products. In 2008 14 billion euros gross revenue over one hundred twenty-five countriesEMEA 64%North America 19%Asia-Pacific 11%Latin America 6%Executive group mainly Germans and members of the Henkel Family 3 major avocation unitsAdhesive Technologies (48%) laundry and Home care (30%)Cosmetics/Toiletries (22%)Competition P&G, Unilever and LOreal(See exhibit 1,2,3)2012 Goals 14% EBIT boundary line2008 14 billion in sales (+8%) EBIT-margin (10,3%) = no competitive aliveness? (The happy underperformer) 2nd expose of 2008 Financial crisis Pri ce increase by Henkel = growth in all in all the business units fell. reaction of Rorsted (CEO) transform the company into a leaner and more work punctuate company by setting 4-year fiscal goals (2012) for Sales growth (3-5%)EBIT-margin (14%)EPS (Earnings per Share) (above 10%)Reaction of the market they will not make it.Building a winning kitchen-gardeningRorsted k juvenile that the tar necessitates were high, but he wanted to get in that respect by installing a winning culture within the company. 3 main strategic prioritiesAchieve the to the full business electromotive force revolve approximately more on the customersStrengthen the global team up2008-2009 investments in backsheesh-performing brands and high potential markets e.g. Biggest science ever of 3,7 billion euros for the adhesives and electronic physical businesses of the National Starch and Chemical Company. telephone dial brand high investments in North-America = top brand in body cleanse markets. Selling underperforming brands.Searching for cost-efficiencies.2009-2012 from promise to human beingsRorsted first do the hard things (close plants, locate off people) then the softer things. For the softer things everybody in the company needed to be on senesce = emotional buy-in. redefining Henkels vision and determineimplementing a new motion counselling systemVision and ValuesFocus on financial goals and priorities = becoming a winning competitor 10 set (see exhibit 5) but they had little implication inside the company BUT the CEO Thought they had..2010 Henkel a global attractor in brands and technologies putting customers centralvalue, dispute and reward peopledrive superior sustainable financial carrying outsustainabilitybuild the emerging on the family foundationThey organised workshops all over the company to introduce the employers to these new values. New tagline Excellence is our passion in early 2011performance circumspectionA lot of employees have careers of ove r 20, 30 or even 40 long time within the company. 2009 new performance management system for 4 layers of management. For each employee there was 1) the current rating of hisperformance and 2) potential performance for the future. These were put in a grid (exhibit 7) with scores going from L (low), M (moderate) to T (Top) For potential performance numbers were used from 1 to 4 with 4 the limit of performance of someone. These rankings were set up during a Development round table (DRT), a collaborative forum with a group head and his direct reports. Afterwards, the results were discussed during a one-to-one with the employee. DRT-processes were done bottom-up. Targets were set about how many employees should be fitted in a certain category. E.g 5% had to be L = caused a new way of military rank within the company. Bonus compensationBonusses were tie in to the overall company financial performance, team performance and singular performance.Group performance KPI (e.g. EBIT,..) 3 pe r yearTeam performance idemIndividual performancePerformance on 2 equally weighted individual KPIsPerformance from the DRT process.Each manager could get a target bonus as well. A round table discussion with Henkel Executives about the Winning culture.See case.