Henkel: Building a Winning Culture

Case Solution

Robert L. Simons, Natalie Kindred
Harvard Business School ()

This case illustrates a CEO-led organizational transformation driven by ambitious goals, performance measurement, and accountability. When Kasper Rorsted became CEO of Henkel, a German-based manufacturer of personal care products, lingerie and adhesives, in 2008, he was determined to transform a corporate culture that was “good enough” into one that focused solely on concentrated victory in a competitive market. Historically, Henkel was a comfortable and stable workplace. Many employees have never received negative feedback on performance. To overcome an ever-present complacency, Rorsted launched a multi-layered change initiative aimed at building a “winning culture.” First, in November 2008, he announced a series of ambitious financial targets for 2012. When financial market turmoil rocked the global economy, it reaffirmed its commitment to these goals and gave Henkel employees and external stakeholders a clear signal that excuses were no longer acceptable. Rorsted then introduced a new set of five corporate values ​​that replaced the previous list of 10 values ​​that few employees could recite by heart. The first emphasized customer focus. It also introduced a new streamlined performance management system that rated managers’ performance and advancement potential on a four-point scale. The system also included a mandatory qualification requirement that stipulates that a defined percentage of employees (in each business unit and throughout the company) must be classified as superior, high, medium or low performance. These ratings have had a significant impact on manager bonus payments. End of 2011 Case time Henkel is well on its way to achieving its 2012 goals. Now that Henkel has cut almost half of its senior management team and numerous websites and product brands, Henkel appears to be a more agile, competitive and competitive organization. “Winner”.

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