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Henkel is a producer of personal care, laundry, and adhesives products based in Germany. In 2008, Kasper Rorsted became its CEO. He was bent on developing the company's corporate culture with the focus on topping its competitors. He implemented an initiative with the view of building a "winning culture". He set up financial targets for 2012 and continued to reaffirm his commitment to these targets. He also introduced a new set of five company values and instituted a simplified performance management system. By 2011, Henkel was near and on its way to achieving its financial targets. This case study discusses how Henkel moved into being a more competitive, "winning" organization.
Robert L. Simons; Natalie Kindred
Harvard Business Review (112060-PDF-ENG)
February 07, 2012
Case questions answered:
- Write down in a sentence or two your definition of a winning culture as described in this Henkel case.
- What do you like about Kasper Rorsted’s approach?
- What are the risks?
- After the 2012 EBIT margin goal has been achieved, how should Rorsted motivate high performance for the next five years?
- Identify the issue.
- Analyze and evaluate the situation.
- Provide a recommendation and alternatives.
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Henkel: Building a Winning Culture Case Answers
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1. Write down in a sentence or two your definition of a winning culture as described in this Henkel case. Be prepared to share your definition with the class.
A winning culture, as described in this Henkel case, exploits the full potential of a company through an entrepreneurial spirit with a focus on performance and continuous improvement, in order to be the number one market leader. Guided by a shared vision and values, a winning culture drives performance through accountability, and daily activities of all employees towards meeting clearly defined ambitious goals.
2. What do you like about Kasper Rorsted’s approach?
In general, I like that he is not scared of tough decisions: he directly states issues and is committed to radical change. His approach to align strategy and business is comprehensive: he pursues (in)organic growth and soft and hard change in many activities: Henkel becomes lean through investments in more divestment in less successful activities, brands, markets, and plants.
I like how ambitious he sets goals and their public announcement, which shows commitment and creates a sense of necessity, urgency, and competitive spirit. I also like the way he set new values and the vision: they are a stable basis required for future decisions and change.
He reduced the values to simplify focus and identification with the culture. The chosen values and goals consider Henkel’s heritage and foster motivation, entrepreneurship, creative innovation, and accountability, and applicant self-selection. Goals and values are well communicated and all employees are involved in executing them through daily action plans.
Further, I like the new performance management: it is comprehensible and simple due to fewer, yet broader KPIs. KPIs are harder to meet, which increases collaboration and innovation. I like that the new evaluation system evaluates…
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