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• Teaching Note | HBS Case Collection | December 2018

  Revenue Recognition at HBP

  Siko Sikochi and Paul Healy

  In early 2014, Corporate Learning, one of three business units at Harvard Business Publishing (HBP), was in the process of revamping its flagship product, Harvard Manage-Mentor (HMM) from version 11.0 (HMM11) to version 12.0 (HMM12). The revamped software would be hosted exclusively on HBP’s server, allowing updates to take place continuously. Given the change, accounting standards required HBP to change the recognition of revenue from the date of software delivery (for HMM11) to ratable recognition over its contract life (for HMM12). As Paul Bills (CFO of HBP) and David Wan (HBP’s CEO) discussed the accounting change, they recognized that its impact on Corporate Learning’s and HBP’s performance could be material and would have to be reflected in the budget. In addition, they wondered how the new accounting would affect the company’s policy for awarding sales incentive compensation on HMM, as well as how they communicated with employees and the firm’s sole shareholder, the Harvard Business School.

  Keywords: Accrual Accounting; Budgets and Budgeting; Revenue Recognition; Financial Reporting; Publishing Industry; Education Industry; United States;

  Citation:

  Sikochi, Siko, and Paul Healy. "Revenue Recognition at HBP." Harvard Business School Teaching Note 119-015, December 2018.  View Details

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• Case | HBS Case Collection | November 2018

  Governance Transition at Anadolu Group

  Paul M. Healy and Esel Y. Cekin

  Kamil Yazici and Izzet Ozilhan founded and built Anadolu Group Holding; a family business that grew into a multi-billion-dollar regional powerhouse. For 57 years they were equal partners in running the company. They then handed over a leadership role to a next generation family member; Izzet’s son Tuncay; who became the CEO and later also chairman. Under Tuncay’s leadership; the company was primarily run by professional managers; supplemented by a limited number of second- and third-generation family members in senior executive positions. However; in 2017; when the number of next-generation family members reached 85; Kamil and Tuncay began work on a governance structure they hoped would sustain the company when they left. Under their plan; family members would no longer be allowed to hold general management positions. As a result; Tuncay retired as CEO and other family members with senior executive roles resigned. A holding company was created to bring all the company’s subsidiaries under a common structure. And a process was created to allow some members of the two surviving families to hold board seats. Although the stock market reacted positively to the increased transparency brought about by the changes; it remains to be seen whether the new formula will achieve its goal of successfully transitioning the company from a family-managed business to professionally-run company.

  Keywords: family-managed business; professionally-run company; second-generation; third-generation; governance; governance changes; succession planning; corporate culture; shareholders; board of directors; long-term sustainability; conglomerate; Family Business; Corporate Governance; Change Management; Management Succession; Leadership; Transition; Organizational Structure; Consumer Products Industry; Turkey; Central Asia; Middle East;

  Citation:

  Healy, Paul M., and Esel Y. Cekin. "Governance Transition at Anadolu Group." Harvard Business School Case 119-048, November 2018.  View Details

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• Case | HBS Case Collection | November 2018

  Swissgrid: Enterprise Risk Management in a Digital Age

  Robert S. Kaplan and Anette Mikes

  Kurt Meyer, chief risk officer of Swissgrid, the Swiss national electricity transmission system operator, reflects on the risk management system he installed after the deregulation and liberalization of the European energy market. With 41 connections to other European networks, a failure in Swissgrid’s network could interrupt the supply of electricity in Switzerland and much of Europe. Meyer describes the periodic interactive risk workshops conducted at each business unit to identify, assess, and mitigate risks. Executive Risk Workshops of the CEO and the company’s leadership team discuss the business units’ risk profiles and risks that cut across the units, such as safety, weather, and regulatory changes. New and emerging risks are discussed at Extraordinary Risk Workshops. Meyer recently deployed an app on employees’ smartphones for them to easily report anomalies or concerns. Reports from the app are embedded in a new real-time crisis management platform used by several Swiss companies, federal authorities, and the Swiss Army. Despite a full array of risk management tools and processes, Meyer remains concerned about risks yet to be identified.

  Keywords: enterprise risk management; energy transmission; Risk and Uncertainty; Risk Management; Energy; Energy Industry; Utilities Industry; Switzerland;

  Citation:

  Kaplan, Robert S., and Anette Mikes. "Swissgrid: Enterprise Risk Management in a Digital Age." Harvard Business School Case 119-045, November 2018.  View Details

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