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CREATING NEW GROWTH PLATFORM. Group-2: Alven Desnecmen, Calvin Gelgel, Fera Damayanti, Liza Widyasari. BY DONALD L. LAURIE, YVES L. DOZ, AND CLAUDE P. SHEER Oyster International 12-year Research | Harvard Business Review. Building Corporate Growth – MME 34- 12 November 2009. GROWTH. - PowerPoint PPT Presentation
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BY DONALD L. LAURIE, YVES L. DOZ, AND CLAUDE P. SHEER
Oyster International 12-year Research | Harvard Business Review
Gro
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: A
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: A
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Calv
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Dam
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Building Corporate Growth – MME 34- 12 November 2009
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Forces of ChangeForces of Change
High Growth Industry High Growth Company
High Growth Industry High Growth Company
Industry Growth Rate Slowed
Company Growth Performance Gap
Industry Growth Rate Slowed
Company Growth Performance Gap
Extending Business Model to areas where they did
not fit well
Developing business models the companies were unable to operate
Acquisition, which destroyed more value than they create
Growth DeclineGrowth Decline
Question: where does new
growth come from, real, profitable,strategic growth
that leverages the corporation’s capabilities
and know-how?
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Turn AroundTurn Around
1. Redefining profit driver2. Building better business model 3. Moving into Adjacency (contoh paling kuat
Nokia).4. Breaking Compromises (compromise =no
choice). 5. Creating New Growth Platform (NGP)
High Growth Industry High Growth Company
High Growth Industry High Growth Company
Industry Growth Rate Slowed
Company Growth Performance Gap
Industry Growth Rate Slowed
Company Growth Performance Gap
New Growth Platforms•Top Management Commitment
•Independent senior level NGP unit
New Growth Platforms•Top Management Commitment
•Independent senior level NGP unit• build families of products, services, and businesses
• extend their capabilities into multiple new domains
• Acquisition: acquiring specific capabilities, assets, and market knowledge
Significant & Lasting Growth
Significant & Lasting Growth
Question: where does new
growth come from, real, profitable,strategic growth
that leverages the corporation’s capabilities
and know-how?
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Research Project “The CEO Agenda and Growth” to 24
companies with significant organic growth
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Forces of Changes
Identifies potential NGPsIdentifies potential NGPs
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Back to slide 6
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Capabilities needed for NGP
ACQUISITION AND INTEGRATION OF CAPABILITIES
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Capabilities needed for NGP
Purchase INTEGTo apply IDNT to Inverness’ Diabetes Testing
ProductsMaintain 10 employees whose recommended skills, and focusing them on the
Project
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Identifies potential NGPsIdentifies potential NGPs
1900s: small parcel delivery Mid 1900s: industry maturing, low GDP growth
UPS growth gap $1Bio
Need for “new strategic positioning” and “new growth platforms
What UPS CEO Oz Nelson did? established an organization of direct reports = NGP Group
Consist of smart, credible people; led by Mike Eskew: sr operating executive senior people who had diverse backgrounds, credibility within the
organization, and the strength to frame and address issues that cut across business and political interests (not up-and-coming middle managers or innovative misfits
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Questions: Who are we?
We know we deliver packages, but we are also a technology company, an airline (the ninth largest airline worldwide), an insurance company, and one of the largest purchasers of railcar capacity in the world
What are our capabilities, know-how, and assets? UPS’s strengths were its unique market position of providing the
physical connection between buyer and seller, as well as operational excellence, network planning, and global infrastructure
Next: identify the trends that could shape opportunities in UPS’s various market spaces in which the company searched for customers’ unmet needs. customers needed to understand and control the flow of goods during
transport Enabler: technology that could globally integrate information,
transportation, and payment.
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How they found the customers’ unmet need One customer approached with a problem: A major PC manufacturer’s customer service representatives request of one-day
and same-day delivery Shipping location: US=4, EU=4, Asia=2 Work: overseeing central stock, field stock, transfer and returns
OPPORTUNITY: Managing Flow of Goods for Customer Action:
Met with PC company to understand computer industry value chain From customer calls to inventory and logistic management To installation at the customer location
Identified which activities the PC company wanted to manage and which it was willing to outsource
Develop solution: forming SPL(Service Parts Logistic) Prototyping & Market Test
New Growth Platform: supply chain management service Action:
creating a warehouse in action to manage inventory in supply chain
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SPL solid capabilities in supply chain management services
Finding other applications and opportunities to other industries with similar issues: Medical Research and Health Care Supplies Business Customer’s needs: quickly
transport goods needed on very short notice
Action: acquisition of Livingston
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Originally: focus on Pacemakers Change agent: CEO Bill George and CEO Art Collins New platforms:
Products assisting in the treatment of cardiovascular, neurological, spinal diseases, diabetes
Independent and embedded NGP Unit in Metronic Implantable Cardioverter Defibrillator
Established an independent business unit an led by high-potential manager To develop ICD technology No pressure on delivering short-term financial result Without oversight of traditional approaches Collaborative relationship with pacemaker unit
Leaders’ role Referee and enable functional interaction, resource allocation, and
priority setting (Griffin) Champion the organization structure and resource allocation and
making it received the same level of attention from CEO as the larger unit by
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Originally: branded consumer goods manufacturer Change agent: CEO A.G. Lafley NGP Unit: FutureWorks
stand-alone BU to build growth platforms and search for opportunities between and beyond of existing BU
Challenge of Platform 1. Put credible chief growth officers in charge
2. Believe that the team is more important than the idea
3. Have NGP units that are independent and embedded
4. Guarantee financial independence
5. Systematize the NGP creation process
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Believe that the work is important Establish business innovation as a priority Take the best people Become engrossed in the work Feel that he will learn and the answers will come
Common trap for CEO:Focus on the performance and morale of the large core businessesCommon trap for CEO:Focus on the performance and morale of the large core businesses
If a CEO didn’t comment on poor package handling, workers and supervisors might conclude everything must be all rightIf a CEO didn’t comment on poor package handling, workers and supervisors might conclude everything must be all right
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Lead in identifying the revenue gap Spend time with customers Be an active participant in the NGP unit’s discussion Spend significant time (50%) for NGP
Delegate responsibility on the core business to others
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“Now when we identify a new product opportunity, we examine it through the new platform lens. We are looking for the products, services, or businesses that can be created from this innovation that we had not yet begun to consider. By doing that we accelerate time to market and generate hundreds of millions of dollars in additional revenue.”
(Gil Cloyd – Chief Technology Officers of P&G)
“Now when we identify a new product opportunity, we examine it through the new platform lens. We are looking for the products, services, or businesses that can be created from this innovation that we had not yet begun to consider. By doing that we accelerate time to market and generate hundreds of millions of dollars in additional revenue.”
(Gil Cloyd – Chief Technology Officers of P&G)
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Finding New Growth Platforms
Finding New Growth Platforms
•Establish NGP Unit
•Top Management Commitment
•Explore NGP
•Customer Problem: WHERE
Unmet - Dissatisfaction
•Market Trend’s: WHAT
Faster or Bigger
Process (HOW)
NGP ExecutionGood
CompanyGood
Company
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Turnaround: The recovery of a company’s
economic performance following an existence threatening decline
The dynamic of Declining Performance Strategic frames becomes blinders Process harden into routine Relationships become shackle Value harden into dogmas
Pemecahan masalah: Turnaround
Cari Key performance, petakan performancenya over time.
Yg membuat penyebab penurunan kinerja tidak terlihat adalah sbb:
Pandangan yg membutakan (arogan), ct.IBM dulu believe komputer terkecil yg akan pernah ada adalah ukuran 2ton seperti yg mampu dibuat IBM krn dia believe yg paling pintar ada di IBM
Hub dg customer menjadi terbelenggu, terlalu lekat dg customer yg sama sementara consumption rate turun, ct kasus bir kirin (tentara) vs asahi (anak muda)
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The recovery of a company’s economic performance following an existence threatening decline
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The management fails to listen to warning signs and believes only its own rhetoric
The management makes a poor choices or no choice at all Management makes misrepresentation to the outside
world
(melihat dunia tidak boleh bersaing)
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The management breaks down The employees concentrate on their own agenda
Some people began to do minimum, showing up at work just to earn their end-of-year bonus
As problems mounted, people tended to either blame or avoid one another
People’s time and energy were spent on self protection instead of joint problem solving
It became rare for all the senior executives to sit down in one room together
Finally, people become passive and helplessness
Sign to turnaround
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Is a person who has the ability to convince others to follow the path he or she decides
The role is to change a company for the better The function is to save the company
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1. Who they are
The turnaround leader should be able to lead and manage all the critical ingredients that make up a good turnaround
Turnaround executive is a spectrum ranging from those:
“who specialize in crisis stabilization” to “who undertake the complete turnaround” Crisis stabilization, recovery, and return to growth
2. Who they are Crisis Stabilization Executives:
aim is to ensure that caused the crisis is in the first place Complete turnaround Executives:
aim is to deal with the underlying caused of decline and bring the conmpany return to growth
Initiate and lead refocusing company’s strategy, process improvement, and organizational change
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Recognize performance declined Asses financial condition
Stabilization Conserve cash (amankan uang kita, krn so far blm pernah ada
kredit utk turnaround process)
Safeguard assets (jaga aset)
Foster open communication Reorganization
Review business strategy Review management process Sales of business (utk dapatkan uang)
Return to growth Develop and implement new business strategy
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Cri
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Sta
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Cri
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Com
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Com
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