Henkel: building a winning culture Essay

inductionCEO in 2008 Kasper Rorsted, Studied Economics and has experience in technological companies. Management style was based on face-to-face conversations and pushing for to a greater extent efficiency.Henkel until 2008Founded in 1876 as a producer of detergent, by 1920 it was a track German detergent en glue producer. After WWII companionship restarted as a producer of detergent, glues and personal concern products. In 2008 14 trillion euros sales over 125 countriesEMEA 64%North America 19%Asia-Pacific 11%Latin America 6%Executive team primarily Germans and members of the Henkel Family 3 major business 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 Margin2008 14 billion in sales (+8%) EBIT-margin (10,3%) = no competitive constitution? (The happy underperformer) 2nd part of 2008 Financial crisis Price add by Henkel = growth in all the business units fell. chemic al reaction of Rorsted (CEO) read the company into a leaner and more than consummation driven company by situateting 4- yr financial 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 agreeable cultureRorsted knew that the targets were high, but he wanted to get there by installing a winning culture within the company. 3 master(prenominal) strategic prioritiesAchieve the full business possibleFocus more on the customersStrengthen the global team2008-2009 investments in top-performing dirts and high potential markets e.g. Biggest acquisition ever of 3,7 billion euros for the adhesives and electronic material businesses of the National stiffen and Chemical Company. Dial brand high investments in North-America = top brand in body wash markets. Selling underperforming brands.Searching for cost-efficiencies.2009-2012 from promise to ingenuousnessRorsted first do the hard things (clos e plants, lay off people) then the softer things. For the softer things everybody in the company needed to be on board = emotional buy-in. redefining Henkels vision and valuesimplementing a new cognitive operation precaution constitutionVision and ValuesFocus on financial goals and priorities = becoming a winning competitor 10 values (see exhibit 5) but they had wee meaning inside the company BUT the CEO Thought they had..2010 Henkel a global leader in brands and technologies putting customers centralvalue, challenge and avenge peopledrive excellent sustainable financial performancesustainabilitybuild the futurity on the family foundationThey organised workshops all over the company to hold in the employers to these new values. New tagline Excellence is our passion in early 2011performance managementA lot of employees have careers of over 20, 30 or even 40 years 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 make headway going from L (low), M (moderate) to T (Top) For potential performance numbers pool were used from 1 to 4 with 4 the limit of performance of someone. These rankings were set up during a Development Roundtable (DRT), a collaborative assembly with a group head and his direct reports. Afterwards, the results were discussed during a one-to-one with the employee. DRT-processes were through bottom-up. Targets were set about how many employees should be fitted in a current category. E.g 5% had to be L = caused a new way of evaluation within the company. Bonus compensationBonusses were linked to the overall company financial performance, team performance and individual performance.Group performance KPI (e.g. EBIT,..) 3 per 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 backchat with Henkel Executives about the Winning culture.See case.