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  • February 2012
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Henkel: Building a Winning Culture

By: Robert Simons and Natalie Kindred
  • Format:Print
  • | Language:English
  • | Pages:20
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Abstract

This case illustrates a CEO-led organizational transformation driven by stretch goals, performance measurement, and accountability. When Kasper Rorsted became CEO of Henkel, a Germany-based producer of personal care, laundry, and adhesives products, in 2008, he was determined to transform a corporate culture of "good enough" into one singularly focused on winning in a competitive marketplace. Historically, Henkel was a comfortable, stable place to work. Many employees never received negative performance feedback. Seeking to overturn a pervasive attitude of complacency, Rorsted implemented a multi-step change initiative aimed at building a "winning culture." First, in November 2008, he announced a set of ambitious financial targets for 2012. As financial turmoil roiled the global economy, he reaffirmed his commitment to these targets, sending a clear signal to Henkel employees and external stakeholders that excuses were no longer acceptable. Rorsted next introduced a new set of five company values—replacing the previous list of 10 values, which few employees could recite by memory—the first of which emphasized a focus on customers. He also instituted a new, simplified performance management system, which rated managers' performance and advancement potential on a four-point scale. The system also included a forced ranking requirement, mandating that a defined percentage of employees (in each business unit and company-wide) be ranked as top, strong, moderate, or low performers. These ratings significantly impacted managers' bonus compensation. In late 2011—the time in which the case takes place—Henkel is well on its way to achieving its 2012 targets. Having shed nearly half its top management team, along with numerous product sites and brands, Henkel appears to be a leaner, more competitive, "winning" organization.

Keywords

Performance Measurement; Performance Appraisals; Human Resource Management; Values; Organizational Transformations; Pay For Performance; Strategy Execution; Values and Beliefs; Work-Life Balance; Organizational Culture; Human Resources; Performance Evaluation; Compensation and Benefits

Citation

Simons, Robert, and Natalie Kindred. "Henkel: Building a Winning Culture." Harvard Business School Case 112-060, February 2012.
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About The Author

Robert Simons

Accounting and Management
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Related Work

    • June 2012 (Revised February 2017)
    • Faculty Research

    Henkel: Building a Winning Culture

    By: Robert Simons and Natalie Kindred
    • October 2013 (Revised October 2013)
    • Faculty Research

    Henkel's CEO Kasper Rorsted: On Building a Winning Culture

    By: Robert L. Simons
    • June 2015
    • Faculty Research

    Henkel: Building a Winning Culture (B)

    By: Robert Simons and Natalie Kindred
    • February 2022 (Revised October 2022)
    • Faculty Research

    Henkel: Building a Winning Culture (D)

    By: Robert L. Simons and Carolyn Deller
    • October 2022
    • Faculty Research

    Henkel: Building a Winning Culture (C)

    By: Robert L. Simons and Carolyn Deller
Related Work
  • Henkel: Building a Winning Culture By: Robert Simons and Natalie Kindred
  • Henkel's CEO Kasper Rorsted: On Building a Winning Culture By: Robert L. Simons
  • Henkel: Building a Winning Culture (B) By: Robert Simons and Natalie Kindred
  • Henkel: Building a Winning Culture (D) By: Robert L. Simons and Carolyn Deller
  • Henkel: Building a Winning Culture (C) By: Robert L. Simons and Carolyn Deller
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