Case | HBS Case Collection | January 2017 (Revised March 2017)

Royal DSM: From Continuous Transformation to Organic Growth

by William W. George, Carin-Isabel Knoop and Amram Migdal

Abstract

Royal DSM CEO Feike Sijbesma was pondering the challenges of shifting DSM’s global organization from the constant transformations of the past 100 years to creating organic growth. When Sijbesma took the helm as CEO in 2007, he further pushed and completed the company’s final moves away from commodity chemicals and toward more sustainable businesses whereby DSM could create value with differentiated offerings. Sijbesma emphasized innovation and moving into “sunrise” businesses that would fuel future growth by playing a positive role in the broader society. Sijbesma asked himself, did DSM’s current portfolio in life sciences and materials sciences provide sufficient growth opportunities to sustain consistent and superior performance? Would DSM’s 21,000 employees worldwide embrace the DSM Strategy 2018: “Driving profitable growth through science-based sustainable solutions,” anchored via the Lead & Grow support and development program for key managers of the company? Should DSM continue making moves in mergers and acquisitions (M&A) to complement organic growth, or could its growth goals be achieved by focusing on organic growth for now, followed later by M&A activities again? What new markets should it look to in order to ensure sustainable growth? Sijbesma felt that after a decade of transformations (divestments and acquisitions), it would be healthy for the company to focus fully on organic growth for several years. During that period, the company had already indicated it would divest three of its major holdings in joint venture companies, which would generate the financial capacity for M&A activities again in later years. In the meantime, Sijbesma wanted the company to prove it could grow organically as well.

Keywords: organic growth; Organizational change; M&A; mergers and acquisitions; divestment; Business Ventures; Business Divisions; Business Growth and Maturation; Restructuring; Change; Change Management; Transformation; Transition; Engineering; Chemicals; Mining; Ethics; Values and Beliefs; Finance; Capital Markets; Financial Markets; Food; Globalization; Global Strategy; Globalized Firms and Management; Globalized Markets and Industries; Health; Nutrition; History; Leadership; Leadership Development; Leadership Style; Leading Change; Management; Business or Company Management; Growth and Development Strategy; Growth Management; Management Practices and Processes; Management Style; Organizations; Corporate Social Responsibility and Impact; Mission and Purpose; Organizational Change and Adaptation; Organizational Culture; Organizational Design; Ownership; Public Ownership; Performance; Strategy; Adaptation; Consolidation; Corporate Strategy; Value; Value Creation; Biotechnology Industry; Chemical Industry; Food and Beverage Industry; Mining Industry; Pharmaceutical Industry; Europe; Netherlands;

Citation:

George, William W., Carin-Isabel Knoop, and Amram Migdal. "Royal DSM: From Continuous Transformation to Organic Growth." Harvard Business School Case 317-063, January 2017. (Revised March 2017.)