New Performance Management

Topics: Performance management, Laundry detergent, Management Pages: 2 (656 words) Published: November 1, 2014

Henkel: building a winning culture
CEO in 2008: Kasper Rorsted, Studied Economics and has experience in technological companies. Management style was based on face-to-face conversations and pushing for more efficiency. Henkel until 2008

Founded in 1876 as a producer of detergent, by 1920 it was a leading German detergent en glue producer. After WWII: company restarted as a producer of detergent, glues and personal care products. In 2008: 14 billion euros sales over 125 countries:

EMEA: 64%
North America: 19%
Asia-Pacific: 11%
Latin America: 6%
Executive team mainly Germans and members of the Henkel Family 3 major business units:
Adhesive Technologies (48%)
Laundry and Home care (30%)
Cosmetics/Toiletries (22%)
Competition: P&G, Unilever and L’Oreal
(See exhibit 1,2,3)
2012 Goals; 14% EBIT Margin
2008: 14 billion in sales (+8%) EBIT-margin (10,3%) => no competitive spirit?! (“The happy underperformer”) 2nd part of 2008: Financial crisis: Price increase by Henkel => growth in all the business units fell. Reaction of Rorsted (CEO): transform the company into a leaner and more performance driven company by setting 4-year 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 winning culture
Rorsted knew that the targets were high, but he wanted to get there by installing “a winning culture” within the company. 3 main strategic priorities:
Achieve the full business potential
Focus more on the customers
Strengthen the global team
2008-2009: investments in top-performing brands and high potential markets: e.g.
- Biggest acquisition ever of 3,7 billion euros for the adhesives and electronic material businesses of the National Starch and Chemical Company. - Dial brand: high investments in North-America => top brand in body wash markets. Selling underperforming brands.

Searching for cost-efficiencies.
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