MANAGEMENT

Evergreen Project – What really works?Objectives: Why do some companies consistently outperform their competitors? Which business tools and techniques help a company become great?

Process: 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 Understand your customer / Think like your customer

Dollar General (merchandise selection, store location) Stapes (store layout, easy button)

Clear & Consistent 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 Intel (memory chip to microprocessors) Gillette (launch of sensor shaving system)

Communicate your strategy Poor employee communication can undermine the best laid strategy

Execution

Process, Models, Challenges and Examples

Execution 99% of the effort/energy goes into executing the strategy Keys to getting the job done

Develop a model for execution Choose the right metrics Don't forget the plan Assess performance frequently Communicate

HP turnaround led by Mark Hurd Operating margin increased from 4% to 6.9%

Southwest Airlines 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?

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