Ryohin Keikaku Co.,Ltd. (株式会社良品計画 Kabushiki-gaisha Ryōhin Keikaku?) (TYO: 7453), or Muji (無印良品 Mujirushi Ryōhin?) is a Japanese retail company which sells a wide variety of household and consumer goods.
Muji unique points are its design minimalism, emphasis on recycling, avoidance of waste in production and packaging, and no-logo or "no-brand" policy.
The name Muji is derived from the first part of Mujirushi Ryōhin, translated as No Brand Quality Goods on Muji's European website.
New Features of the Marketing Management 14th Edition
Marketing Insight and Marketing Memo Boxes. Throughout this text, the Marketing Insight and Marketing Memo boxes provide in-depth conceptual and practical commentary.
New in-text boxes: Half are new in this edition. Using actual companies and situations, these boxes cover a variety of products, services, and markets. Marketing in Action Mini-cases: The end-of-chapter sections now include two Marketing in Action mini-cases that highlight innovative, insightful marketing accomplishments from leading organizations.
Today’s economic, environmental, and technological changes in marketing: Throughout the new edition, these three areas are addressed with emphasis on marketing during economic downturns and recessions, the rise of sustainability and green marketing, and the increased development of computing power, the Internet, and mobile phones.
Part 1: Understanding Marketing Management
Chapter 1. Defining Marketing for the 21st Century
Chapter 2. Developing Marketing Strategies and Plans
Part 2: Capturing Marketing Insights
Chapter 3. Gathering Information and Scanning the Environment
Chapter 4. Conducting Marketing Research and Forecasting on Demand
Part 3: Connecting with Customers
Chapter 5. Creating Long-term Loyalty Relationships
Chapter 6. Analyzing Consumer Markets
Chapter 7. Analyzing Business Markets
Chapter 8. Identifying Market Segments and Targets
Part 4: Building Strong Brands
Chapter 9. Creating Brand Equity
Chapter 10. Crafting the Brand Position
Chapter 11. Competitive Dynamics
Part 5: Shaping the Market
Chapter 12. Setting Product Strategy
Chapter 13. Designing and Managing Services
Chapter 14. Developing Pricing Strategies and Programs
Part 6: Delivering Value
Chapter 15. Designing and Managing Integrated Marketing
Chapter 16. Managing Retailing, Wholesaling, and Logistics
Part 7: Communicating Value
Chapter 17. Designing and Managing Integrated Marketing Communications
Chapter 18. Managing Mass Communications: Advertising, Sales Promotions, Events and Experiences, and Public Relations
Chapter 19. Managing Personal Communications: Direct and Interactive Marketing, Word of Mouth, and Personal Selling
Part 8: Creating Successful Long-Term Growth
Chapter 20. Introducing New Marketing Offerings
Chapter 21. Tapping into Global Markets
Chapter 22. Managing a Holistic Marketing Organization
Video Interview by Philip Kotler
one hour 31 minutes
____________
____________
Detailed Table of Contents
(Links are for articles - chapter summaries and concept explanations.)
Part 1. Understanding Marketing Management, 2
Chapter 1. Defining Marketing for the 21st Century, 2
The Importance of Marketing, 3
The Scope of Marketing, 5
What Is Marketing?, 5
What Is Marketed?, 5
Who Markets?, 7
Core Marketing Concepts, 9
Needs, Wants, and Demands, 9
Target Markets, Positioning, and Segmentation, 10
Offerings and Brands, 10
Value and Satisfaction, 10
Marketing Channels, 11
Supply Chain, 11
Competition, 11
Marketing Environment, 11
The New Marketing Realities, 12
Major Societal Forces, 12
New Company Capabilities, 14
Marketing in Practice, 15
Marketing Insight: Marketing in an Age of Turbulence, 16
Company Orientation toward the Marketplace, 17
The Production Concept, 18
The Product Concept, 18
The Selling Concept, 18
The Marketing Concept, 18 The Holistic Marketing Concept, 18
Marketing Memo: Marketing Right and Wrong, 19
Relationship Marketing, 20
Integrated Marketing, 20
Internal Marketing, 21
Performance Marketing, 22
The New Four Ps, 25
Marketing Management Tasks, 26
Developing Marketing Strategies and Plans, 26
Capturing Marketing Insights, 26
Marketing Memo: Marketers’ Frequently Asked Questions, 26
Connecting with Customers, 27
Building Strong Brands, 27
Shaping the Market Offerings, 27
Delivering Value, 27
Communicating Value, 27
Creating Successful Long-Term Growth, 27
Summary, 28
Applications, 28
Marketing Concept - Kotler - A Popular article explaining the marketing concept developed by Kotler in a concise manner
Chapter 2. Developing Marketing Strategies and Plans, 32
Marketing and Customer Value, 33
The Value Delivery Process, 33
The Value Chain, 34
Core Competencies, 35
A Holistic Marketing Orientation and Customer Value, 36
The Central Role of Strategic Planning, 36
Corporate and Division Strategic Planning, 37
Defining the Corporate Mission, 38
Establishing Strategic Business Units, 39
Assigning Resources to Each SBU, 42
Assessing Growth Opportunities, 42
Organization and Organizational Culture, 45
Marketing Innovation, 45
Marketing Insight: Creating Innovative Marketing, 46
Business Unit Strategic Planning, 47
The Business Mission, 48
SWOT Analysis, 48
Goal Formulation, 50
Strategic Formulation, 50
Marketing Memo: Checklist for Performing Strengths/Weaknesses Analysis, 52
Program Formulation and Implementation, 53
Feedback and Control, 53
Product Planning: The Nature and Contents of a Marketing Plan, 54
Marketing Memo: Marketing Plan Criteria, 55
The Role of Research, 55
The Role of Relationships, 55
From Marketing Plan to Marketing Action, 55
Summary, 56
Applications, 56
Sample Marketing Plan: Pegasus Sports International, 60
Components of a Modern Marketing Information System, 67
Internal Records, 70
The Order-to-Payment Cycle, 70
Sales Information Systems, 70
Databases, Data Warehousing, and Data Mining, 71
Marketing Intelligence, 71
The Marketing Intelligence System, 71
Collecting Marketing Intelligence on the Internet, 72
Communicating and Acting on Marketing Intelligence, 73
Analyzing the Macroenvironment, 74
Needs and Trends, 74
Identifying the Major Forces, 74
The Demographic Environment, 75
Marketing Insight: Finding Gold at the Bottom of the Pyramid, 76
The Economic Environment, 77
The Sociocultural Environment, 78
The Natural Environment, 80
The Technological Environment, 81
Marketing Insight: The Green Marketing Revolution, 82
The Political-Legal Environment, 84
Forecasting and Demand Measurement, 85
The Measures of Market Demand, 85
A Vocabulary for Demand Measurement, 86
Estimating Current Demand, 88
Estimating Future Demand, 90
Summary, 92
Applications, 92
The Marketing Research System, 97
The Marketing Research Process, 99
Step 1: Define the Problem, the Decision Alternatives, and the Research Objectives, 99
Step 2: Develop the Research Plan, 100
Marketing Memo: Conducting Informative Focus Groups, 102
Marketing Memo: Questionnaire Dos and Don’ts, 104
Marketing Insight: Getting into the Heads of Consumers, 106
Marketing Insight: Understanding Brain Science, 108
Step 3: Collect the Information, 110
Step 4: Analyze the Information, 111
Step 5: Present the Findings, 111
Step 6: Make the Decision, 111
Marketing Insight: Bringing Marketing Research to Life with Personas, 112
Overcoming Barriers to the Use of Marketing Research, 112
Measuring Marketing Productivity, 114
Marketing Metrics, 114
Marketing-Mix Modeling, 116
Marketing Dashboards, 116
Marketing Insight: Marketing Dashboards to Improve Effectiveness and Efficiency, 117
Summary, 118
Applications, 119
What Is Organizational Buying?, 183
The Business Market versus the Consumer Market, 183
Buying Situations, 185
Systems Buying and Selling, 187
Participants in the Business Buying Process, 188
The Buying Center, 188
Buying Center Influences, 189
Targeting Firms and Buying Centers, 190
Marketing Insight: Big Sales to Small Businesses, 191
The Purchasing/Procurement Process, 193
Stages in the Buying Process, 195
Problem Recognition, 196
General Need Description and Product Specification, 196
Supplier Search, 196
Proposal Solicitation, 198
Supplier Selection, 198
Marketing Memo: Developing Compelling Customer Value Propositions, 199
Order-Routine Specification, 201
Performance Review, 201
Managing Business-to-Business Customer Relationships, 201
The Benefits of Vertical Coordination, 202
Marketing Insight: Establishing Corporate Trust, Credibility, and Reputation, 203
Business Relationships: Risks and Opportunism, 203
New Technology and Business Customers, 204
Institutional and Government Markets, 205
Summary, 207
Applications, 208
Chapter 8. Identifying Market Segments and Targets, 212
Bases for Segmenting Consumer Markets, 214
Geographic Segmentation, 214
Demographic Segmentation, 216
Marketing Insight: Trading Up, Down, and Over, 218
Psychographic Segmentation, 225
Behavioral Segmentation, 227
Bases for Segmenting Business Markets, 230
Market Targeting, 231
Effective Segmentation Criteria, 231
Evaluating and Selecting the Market Segments, 232
Marketing Insight: Chasing the Long Tail, 235
Summary, 236
Applications, 237
Part 4. Building Strong Brands, 240
Chapter 9. Creating Brand Equity, 240
What Is Brand Equity?, 241
The Role of Brands, 242
The Scope of Branding, 243
Defining Brand Equity, 243
Brand Equity Models, 245
Marketing Insight: Brand Bubble Trouble, 248
Building Brand Equity, 249
Choosing Brand Elements, 250
Designing Holistic Marketing Activities, 251
Leveraging Secondary Associations, 252
Internal Branding, 253
Brand Communities, 253
Measuring Brand Equity, 255
Marketing Insight: The Brand Value Chain, 255
Marketing Insight: What Is a Brand Worth?, 257
Managing Brand Equity, 258
Brand Reinforcement, 258
Brand Revitalization, 259
Devising a Branding Strategy, 260
Branding Decisions, 261
Brand Portfolios, 262
Brand Extensions, 263
Customer Equity, 267
Marketing Memo: Twenty-First-Century Branding, 267
Summary, 268
Applications, 269
Chapter 10. Crafting the Brand Positioning, 274
Developing and Establishing a Brand Positioning, 275
Determining a Competitive Frame of Reference, 276
Marketing Insight: High Growth Through Value Innovation, 278
Identifying Optimal Points-of-Difference and Points-of-Parity, 280
Choosing POPs and PODs, 283
Brand Mantras, 284 Establishing Brand Positioning, 286
Marketing Memo: Constructing a Brand Positioning Bull’s-eye, 287
Differentiation Strategies, 289
Alternative Approaches to Positioning, 291
Positioning and Branding a Small Business, 293
Summary, 294
Applications, 294
Chapter 11. Competitive Dynamics, 298
Competitive Strategies for Market Leaders, 299
Marketing Insight: When Your Competitor Delivers More for Less, 300
Expanding Total Market Demand, 301
Protecting Market Share, 302
Increasing Market Share, 304
Other Competitive Strategies, 305 Market-Challenger Strategies, 305 Market-Follower Strategies, 307
Market-Nicher Strategies, 308
Marketing Memo: Niche Specialist Roles, 309
Product Life-Cycle Marketing Strategies, 310
Product Life Cycles, 310
Style, Fashion, and Fad Life Cycles, 311
Marketing Strategies: Introduction Stage and the Pioneer Advantage, 312
Marketing Strategies: Growth Stage, 313
Marketing Strategies: Maturity Stage, 313
Marketing Strategies: Decline Stage, 315
Marketing Insight: Managing a Brand Crisis, 316
Evidence for the Product Life-Cycle Concept, 316
Critique of the Product Life-Cycle Concept, 317
Market Evolution, 317
Marketing in an Economic Downturn, 318
Explore the Upside of Increasing Investment, 318
Get Closer to Customers, 318
Review Budget Allocations, 319
Put Forth the Most Compelling Value Proposition, 319
Fine-tune Brand and Product Offerings, 320
Summary, 320
Applications, 321
Part 5. Shaping the Market Offerings, 324
Chapter 12. Setting Product Strategy, 324
Product Characteristics and Classifications, 325
Product Levels: The Customer-Value Hierarchy, 326
Product Classifications, 327
Product and Services Differentiation, 328
Product Differentiation, 329
Services Differentiation, 330
Design, 332
Product and Brand Relationships, 333
Marketing Insight: Marketing Luxury Brands, 334
The Product Hierarchy, 336
Product Systems and Mixes, 336
Product Line Analysis, 337
Product Line Length, 337
Marketing Insight: When Less Is More, 339
Product Mix Pricing, 342
Co-Branding and Ingredient Branding, 344
Marketing Memo: Product-Bundle Pricing Considerations, 344
Packaging, Labeling, Warranties, and Guarantees, 346
Packaging, 346
Labeling, 348
Warranties and Guarantees, 349
Summary, 349
Applications, 350
Chapter 13. Designing and Managing Services, 354
The Nature of Services, 355
Service Industries Are Everywhere, 356
Categories of Service Mix, 356
Distinctive Characteristics of Services, 358
The New Services Realities, 361
A Shifting Customer Relationship, 362
Achieving Excellence in Services Marketing, 365
Marketing Excellence, 365
Best Practices of Top Service Companies, 366
Differentiating Services, 368
Marketing Insight: Improving Company Call Centers, 369
Managing Service Quality, 370
Marketing Memo: Recommendations for Improving Service Quality, 372
Managing Customer Expectations, 373
Incorporating Self-Service Technologies(SSTs), 375
Managing Product-Support Services, 375
Identifying and Satisfying Customer Needs, 376
Marketing Memo: Assessing E-Service Quality, 376
Postsale Service Strategy, 377
Summary, 378
Applications, 378
Chapter 14. Developing Pricing Strategies and Programs, 382
Understanding Pricing, 383
A Changing Pricing Environment, 384
Marketing Insight: Giving It All Away, 384
How Companies Price, 386
Consumer Psychology and Pricing, 386
Setting the Price, 389
Step 1: Selecting the Pricing Objective, 389
Step 2: Determining Demand, 390
Step 3: Estimating Costs, 392
Step 4: Analyzing Competitors’ Costs, Prices, and Offers, 395
Step 5: Selecting a Pricing Method, 395
Step 6: Selecting the Final Price, 402
Marketing Insight: Stealth Price Increases, 403
Adapting the Price, 403
Geographical Pricing (Cash, Countertrade, Barter), 404
Price Discounts and Allowances, 404
Promotional Pricing, 405
Differentiated Pricing, 406
Initiating and Responding to Price Changes, 407
Initiating Price Cuts, 407
Initiating Price Increases, 408
Responding to Competitors’ Price Changes, 409
Summary, 410
Applications, 410
Part 6. Delivering Value, 414
Chapter 15. Designing and Managing Integrated Marketing Channels, 414
Marketing Channels and Value Networks, 415
The Importance of Channels, 416
Hybrid Channels and Multichannel Marketing, 416
Value Networks, 417
The Role of Marketing Channels, 418
Channel Functions and Flows, 418
Channel Levels, 420
Service Sector Channels, 421
Channel-Design Decisions, 422
Analyzing Customer Needs and Wants, 422
Establishing Objectives and Constraints, 423
Identifying Major Channel Alternatives, 424
Evaluating Major Channel Alternatives, 426
Channel-Management Decisions, 427
Selecting Channel Members, 427
Training and Motivating Channel Members, 428
Evaluating Channel Members, 429
Modifying Channel Design and Arrangements, 429
Channel Modification Decisions, 429
Global Channel Considerations, 430
Channel Integration and Systems, 431
Vertical Marketing Systems, 431
Marketing Insight: Channel Stewards Take Charge, 432
Horizontal Marketing Systems, 433
Integrating Multichannel Marketing Systems, 433
Conflict, Cooperation, and Competition, 435
Types of Conflict and Competition, 435
Causes of Channel Conflict, 436
Managing Channel Conflict, 436
Dilution and Cannibalization, 438
Legal and Ethical Issues in Channel Relations, 438
E-Commerce Marketing Practices, 438
Pure-Click Companies, 439
Brick-and-Click Companies, 440
M-Commerce Marketing Practices, 441
Summary, 442
Applications, 442
Chapter 16. Managing Retailing, Wholesaling, and Logistics, 446
Retailing, 447
Types of Retailers, 448
The New Retail Environment, 451
Marketing Decisions, 453
Channels, 454
Marketing Memo: Helping Stores to Sell, 458
Private Labels, 459
Role of Private Labels, 460
Private-Label Success Factors, 460
Marketing Insight: Manufacturer’s Response to the Private Label Threat, 461
Wholesaling, 461
Trends in Wholesaling, 463
Market Logistics, 464
Integrated Logistics Systems, 464
Market-Logistics Objectives, 465
Market-Logistics Decisions, 466
Organizational Lessons, 469
Summary, 469
Applications, 470
Part 7. Communicating Value, 474
Chapter 17. Designing and Managing Integrated Marketing Communications, 474
The Role of Marketing Communications, 476
The Changing Marketing Communications Environment, 476
Marketing Insight: Don’t Touch That Remote, 476
Marketing Communications, Brand Equity, and Sales, 478
The Communications Process Models, 480
Developing Effective Communications, 482
Identify the Target Audience, 482
Determine the Communications Objectives, 482
Design the Communications, 484
Marketing Insight: Celebrity Endorsements as a Strategy, 486
Select the Communications Channels, 486
Establish the Total Marketing Communications Budget, 488
Deciding on the Marketing Communications Mix, 490
Characteristics of the Marketing Communications Mix, 490
Factors in Setting the Marketing Communications Mix, 492
Measuring Communication Results, 494
Managing the Integrated Marketing Communications Process, 494
Coordinating Media, 495
Implementing IMC, 496
Marketing Memo: How Integrated Is Your IMC Program?, 496
Summary, 497
Applications, 497
Chapter 18. Managing Mass Communications: Advertising, Sales Promotions, Events and Experiences, and
Public Relations, 502
Developing and Managing an Advertising Program, 504
Setting the Objectives, 504
Deciding on the Advertising Budget, 505
Developing the Advertising Campaign, 506
Marketing Memo: Print Ad Evaluation Criteria, 509
Deciding on Media and Measuring Effectiveness, 510
Deciding on Reach, Frequency, and Impact, 511
Choosing among Major Media Types, 512
Alternate Advertising Options, 512
Marketing Insight: Playing Games with Brands, 516
Selecting Specific Media Vehicles, 516
Deciding on Media Timing and Allocation, 517
Evaluating Advertising Effectiveness, 518
Sales Promotion, 519
Objectives, 519
Advertising versus Promotion, 519
Major Decisions, 520
Events and Experiences, 524
Events Objectives, 524
Major Sponsorship Decisions, 525
Creating Experiences, 526
Marketing Memo: Measuring High Performance Sponsorship Programs, 526
Public Relations, 527
Marketing Public Relations, 527
Major Decisions in Marketing PR, 528
Summary, 530
Applications, 530
Chapter 19. Managing Personal Communications: Direct and Interactive Marketing, Word of Mouth, and
The Benefits of Direct Marketing, 536
Direct Mail, 538
Catalog Marketing, 539
Telemarketing, 539
Other Media for Direct-Response Marketing, 539
Public and Ethical Issues in Direct Marketing, 540
Advantages and Disadvantages of Interactive Marketing, 540
Interactive Marketing Communication Options, 541
Marketing Memo: How to Maximize the Marketing Value of E-mails, 543
Marketing Memo: Segmenting Tech Users, 545
Word of Mouth, 546
Social Media, 546
Buzz and Viral Marketing, 549
Opinion Leaders, 551
Marketing Memo: How to Start a Buzz Fire, 552
Measuring the Effects of Word of Mouth, 552
Designing the Sales Force, 553
Sales Force Objectives and Strategy, 554
Sales Force Structure, 555
Marketing Insight: Major Account Management, 555
Sales Force Size, 556
Sales Force Compensation, 556
Managing the Sales Force, 556
Recruiting and Selecting Representatives, 556
Training and Supervising Sales Representatives, 557
Sales Rep Productivity, 557
Motivating Sales Representatives, 558
Evaluating Sales Representatives, 559
Principles of Personal Selling, 560
The Six Steps, 561
Relationship Marketing, 562
Summary, 562
Applications, 563
Part 8. Creating Successful Longterm Growth, 566
Chapter 20. Introducing New Market Offerings, 566
New-Product Options, 567
Make or Buy, 567
Types of New Products, 568
Challenges in New-Product Development, 568
The Innovation Imperative, 568
New-Product Success, 569
New-Product Failure, 570
Organizational Arrangements, 570
Budgeting for New-Product Development, 571
Organizing New-Product Development, 572
Managing the Development Process: Ideas, 573
Generating Ideas, 573
Marketing Memo: Ten Ways to Find Great New-Product Ideas, 574
Marketing Insight: P&G’s New Connect + Develop Approach to Innovation, 574
Marketing Memo: Seven Ways to Draw New Ideas from Your Customers, 576
Marketing Memo: How to Run a Successful Brainstorming Session, 577
Using Idea Screening, 578
Managing the Development Process: Concept to Strategy, 579
Concept Development and Testing, 579
Marketing Strategy Development, 582
Business Analysis, 583
Managing the Development Process: Development to Commercialization, 585
Product Development, 585
Market Testing, 585
Commercialization, 588
The Consumer-Adoption Process, 589
Stages in the Adoption Process, 589
Factors Influencing the Adoption Process, 589
Summary, 590
Applications, 591
Chapter 21. Tapping into Global Markets, 594
Competing on a Global Basis, 595
Deciding Whether to Go Abroad, 597
Deciding Which Markets to Enter, 597
How Many Markets to Enter, 598
Developed versus Developing Markets, 598
Marketing Insight: Spotlight on Key Developing Markets, 600
Evaluating Potential Markets, 602
Deciding How to Enter the Market, 603
Indirect and Direct Export, 603
Licensing, 604
Joint Ventures, 605
Direct Investment, 605
Deciding on the Marketing Program, 606
Global Similarities and Differences, 606
Marketing Adaptation, 607
Marketing Memo: The Ten Commandments of Global Branding, 608
Global Product Strategies, 608
Global Communication Strategies, 610
Global Pricing Strategies, 611
Global Distribution Strategies, 613
Country-of-Origin Effects, 614
Building Country Images, 614
Consumer Perceptions of Country of Origin, 614
Deciding on the Marketing Organization, 616
Export Department, 616
International Division, 616
Global Organization, 616
Summary, 617
Applications, 617
Chapter 22. Managing a Holistic Marketing Organization for the Long Run, 620
Trends in Marketing Practices, 621
Internal Marketing, 623
Organizing the Marketing Department, 623
Marketing Memo: Characteristics of Company Departments That Are Truly Customer Driven, 624
Relationships with Other Departments, 627
Building a Creative Marketing Organization, 628
Marketing Insight: The Marketing CEO, 628
Socially Responsible Marketing, 629
Corporate Social Responsibility, 630
Marketing Insight: The Rise of Organic, 633
Socially Responsible Business Models, 634
Cause-Related Marketing, 634
Marketing Memo: Making a Difference: Top 10 Tips for Cause Branding, 637
Social Marketing, 638
Marketing Implementation and Control, 640
Marketing Implementation, 640
Marketing Control, 641
Annual-Plan Control, 641
Profitability Control, 642
Efficiency Control, 642
Strategic Control, 643
The Future of Marketing, 643
Marketing Memo: Major Marketing Weaknesses, 647
Summary, 648
Applications, 648
Appendix Tools for Marketing Control, 650
Appendix: Sonic Marketing Plan, A1
1881 Herman Staudinger
1881 Roger Martin du Gard
1907 Daniel Bovet
Engineering
1857 – Elisha Otis's first elevator is installed at 488 Broadway New York City.
1895 Charles Jenkins patented a motion picture machine.
1895 Louis Lumiere patented a motion picture machine. Lumiere invented portable motion-picture camera, film processing unit and projector called the Cinematographe.
30,000 Active Companies - Employees 4.6 Million - Revenue $2 Trillion
As of 2014, there were over 30,000 active companies founded by living MIT alumni, employing 4.6 million people and generating annual world revenues of nearly $2 trillion.
The revenue of these 30,000 companies, is higher than the GDP of the 10th-largest economy in the world (the country is India).
The report was written by Professor Edward Roberts, the Martin Trust Center's founder and chair, Fiona Murray, Associate Dean for Innovation at the MIT Sloan School of Management, and doctoral student J. Daniel Kim and was published in 2015. It continues the work started in Entrepreneurial Impact: The Role of MIT which was first published in 2009 by the Kauffman Foundation. An updated version of the study was published in 2011 by the journal "Foundations and Trends in Entrepreneurship."
CEO can be an external recruit or an internal recruit. But people expect changes in the organization. At the same time, they have self respect and feel proud of what they have done till that day under the guidance of the outgoing CEO. How should the new CEO go about his job?
In a guide to transformation, BCG defines a transformation as a profound change in a company’s strategy, business model, organization, culture, people, or processes. A transformation is a sustainable, quantum improvement in performance, altering the trajectory of its future.
Stakeholders expect changes to occur when a new CEO is hired.
An insider CEO may not be able to change things quickly, yet through demonstration of quick and decisive actions—even before taking the top job—new internal CEO can seize the opportunity and put their company on the right trajectory for success.
The guide breaks the new CEO action-transformation process into four steps: the 100 days before officially starting, the first weeks on the job, the first 100 days, and the first 18 months.
Three important steps in the action-transformation process
Finding the Resources for the Journey. Launch short-term, no-regret moves to establish momentum and to free up resources to fuel new growth engines.
Winning in the Medium Term. Modify business model and operating model to increase competitive advantage.
Building the Right Senior Management Team, Organization, and Culture. Develop a transformed business model and operating model to set up the organization for sustainable high performance.
Incoming leaders should talk with as many critical stakeholders as possible, both inside and outside the organization, in order to educate themselves about the company:
Employees, to determine if there is a consensus regarding the changes that are needed; ideally, leaders should speak with 30 to 50 employees from across all units and at all levels
Customers, to get opinions of the company’s products and services in addressing their needs
Industry and functional experts, to understand the company and the complexities or disruptions in the market
During these conversations, a new CEO should primarily listen, encourage open and honest discussion, and make sure that all possible dynamic factors and all possible solutions are being brought to the forefront. Through this dialogue process, the CEO must start to diagnose problems and create hypotheses regarding which aspects of the company require improvement. This step will determine immediate areas to focus on and indicate transformation opportunities in specific functions, markets, or divisions.
New CEOs need to start identifying rapid, no-regret moves—initiatives that are relatively easy to implement in the first 100 days and that can generate results in 3 to 12 months. These no-regret initiatives should close performance gaps in a few critical areas, reduce costs, improve top- and bottom-line performance, and free up resources in order to fuel longer-term initiatives.
During The First Weeks: Energize the Organization
New CEOs must make efforts to energize the organization and build momentum for the collective transformation ambition.
The CEO should acknowledge the company’s heritage and the hard work of employees, and at the same discuss external factors (such as the customer base, competitors, and capital markets), internal metrics (for example, operational and organizational performance and employee engagement), and the necessary measures the company needs to take in response.The case for change can be made to internal stakeholders in various venues, such as workshops and town hall meetings through a questioning process as attempted in sales dialogues.
The First 100 Days: Prepare and Launch the Transformation
The new CEO kicks off the rapid, no-regret moves that will deliver impact within 3 to 12 months, creating and enabling initiative teams, setting up the overall governance.
Leaders must put the foundation for transformation in place during this time, balancing development of a long-term vision with day-to-day reality. As the transformation plan takes shape and the case for change becomes clear, the CEO must shift gears from planning the transformation to actually leading it.
The no-regret initiatives build momentum for the larger effort, win over internal skeptics who may doubt that change is actually happening, generate credibility for the new leadership team, and often free up resources that can be used to fund subsequent measures. As a result, these initial initiatives when successful further help energize the organization.
The four primary levers for releasing resources for supporting the new initiatives of the journey are revenue, organizational simplicity (delayering), capital efficiency, and cost reduction.
Leaders should not abandon the initial initiatves prematurely declaring victory and moving on to other priorities. It is critical to maintain focus and ensure that initiative teams are on track to achieve results. Project tracking has to be in place and everybody must have full transparency into the progress of each initiative. Regular review sessions, facilitated by the program management office (PMO), should provide sufficient information for leaders to know whether—and how—they need to intervene to sustain the progress of new initiatives.
Winning in the medium term requires initiative like driving growth, modifying business model, revamping commercial processes or operations.
The medium term initiatives are usually more difficult to conceptualize. They require breakthrough thinking, usually in areas that are less familiar for the current organization members. These initiatives are also harder to staff and implement, and they call for involvement across functions and business units. But this is essential for the CEO to establish the credibility of coming out with totally new models and processes.
Setting the New Strategy and Operating Model. Aong with driving short-term and medium-term initiatives, the CEO has involve the senior management team to look at their overall strategy and operating model. A targeted workshop-based approach with the senior leadership team—and the appropriate data and analysis—can lead to a strong outcome and do so in a highly efficient manner and it does not distract the leadership team from executing the current operations and initiatives. This approach ensures that there is buy-in from the top team and that the strategy change paths are identified. At an appropriate time more involved strategy creating exercise can be initiated.
Building Sustainable Performance. Many organizations that deliver results during the first year have a tough time sustaining their hard-won performance improvements. The goal of every new CEO should be to achieve success during the first 18 months of the transformation program and then maintain it well beyond that point. It is imperative for a CEO to own this phase and closely involve the chief human-resources officer and other influential leaders across the company to communicate to the people inside.
Changes to the Organization
There are five important aspects to developing the right people and organization required to support a successful, sustainable transformation:
Ensure the commitment of the executive team and enhance their capabilities, including their ability to set the right priorities, mobilize and energize initiative teams, and hold themselves accountable for the results.
Deploy change-management tools and processes (such as an activist PMO, roadmaps, and rigor testing) to engage stakeholders and deliver results. (For more on rigor testing, see “The Hard Side of Change Management,” Harvard Business Review, October 2005.)
Install an HR team that participates as a transformation partner, anticipating talent and leadership needs, rather than as a mere service provider.
Build a talent pipeline that can help fill crucial roles, and develop capabilities in areas critical for the transformation.
Simplify the organization and culture to sustain high performance in conjunction with the new strategy.
