MANAGEMENT
Evergreen Project – What really works?
Objectives:
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Why do some companies consistently outperform their competitors?
Which business tools and techniques help a company become great?
Process:
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160 companies - 4 similar companies in each industry group
Market cap between $100m to $6b
Ten year data - two 5 year periods
Classification – Winners, Climbers, Tumblers, Losers
The 4 + 2 Mantra
Primary Management Practices
•Strategy
•Execution
•Culture
•Structure
Secondary Management Practices
•Talent
•Innovation
•Leadership
•Mergers and Partnerships
Winning Strategy
Winning Strategy
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Understand your customer / Think like your customer
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Clear & Consistent
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Wal-Mart (everyday value)
Target (good value & experience)
The Limited (Express, the Limited, Lerner)
HP (goal-shifting - competing with Dell on price, then service)
Continuous evaluation and fine-tuning
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Dollar General (merchandise selection, store location)
Stapes (store layout, easy button)
Intel (memory chip to microprocessors)
Gillette (launch of sensor shaving system)
Communicate your strategy
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Poor employee communication can undermine the best laid
strategy
Execution
Process, Models, Challenges and Examples
Execution
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99% of the effort/energy goes into executing the strategy
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Keys to getting the job done
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HP turnaround led by Mark Hurd
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Develop a model for execution
Choose the right metrics
Don't forget the plan
Assess performance frequently
Communicate
Operating margin increased from 4% to 6.9%
Southwest Airlines
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No baggage transfers, Serves no meals, No boarding passes, Uses one
type of airplane, Faster turnaround at the gate
Discussion Questions
What does the "What Really Works" article,
combined with the Drucker article tell us
about effective management?
 Why 4+2 ?
 Do you agree with the Primary/Secondary
practices?
 Personal experiences related to
strategy/execution
 How to compete with Starbucks?
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Competing with Starbucks
•11000 locations
•Revenue: $6.4b
Source: http://www.sba.pdx.edu/faculty/tomg/marseille/Starbucks/sld004.htm
Green Mountain Coffee Roasters
•Be Green (organic coffees)
•Focus on office business
•Sales of organic lines grew by 51%
•www.greenmountaincoffee.com
•HQ: Waterbury, VT
•Year Founded: 1981
•2005 Revenue: $162m
Coffee Bean & Tea Leaf
•Keep innovating
•Invented ice-blended coffee drink
•Popularized chai latte
•Rapid growth in Israel
•www.coffeebean.com
•HQ: Los Angeles
•Year Founded: 1963
•Outlets: 400
•2005 Revenue: $150m
Costa Coffee
•Head East (India, China & Middle East)
•Adapted menu to Indian tastes
•www.costa.co.uk
•HQ: London
•Year Founded: 1971
•Outlets: 617
•2005 Revenue: $270m
Peet’s Coffee
•Go upscale
•Half the sales comes from whole beans
•www.peets.com
•HQ: Emeryville, CA
•Year Founded: 1966
•Outlets: 120
•2005 Revenue: $175m
Caribou Coffee
•Sell a lifestyle
•Company’s motto – “Life is short. Stay
awake for it.”
•Frontier and Maxjet airlines serve
Caribou coffee
•www.cariboucoffee.com
•HQ: Minneapolis
•Year Founded: 1992
•Outlets: 416
•2005 Revenue: $198m