Corporate Case Studies

Quaker Oats Company:
Determining Core Competencies

An American household name, Quaker has diversified well beyond it’s iconic oatmeal in the barrel package – one of the first efforts to brand a commodity. Besides producing cereals, it produces snacks, Aunt Jemima, Gatorade, and pet foods, Like many major corporations, Quaker had seen the need continually re-interpret its corporate values and to build on diversity of opinions through teams. But when they tried to reach consensus on what their major corporate strengths or so-called core competencies[i] were, it seemed their differences brought only problems.

The Challenge
They were unable to bring their diverse points of view together to define a future direction for the firm and kept coming up with what seemed like contradictory, mutually exclusive ideas, or things that didn’t fit together.

The Process
Working through a long list of questions beginning with Corporate Bearings to get at the deeper issue of bringing divergent viewpoints together to the benefit of the company, Determining answers to several key questions.

The Result
The group came to agree on a set of core competencies, but, more important, they came to appreciate their different points of view, and saw how diverse opinions can actually build on each other and be a source of strength, when handled in a supportive environment like the PathFinder process.

[i]This important focus in business is being led by Prahalad and Hamel, as articulated particularly in their article “The Core Competence of the Corporation” published in the Harvard Business Review, May-June, 1990. pp. 79-91..

Levi Strauss & Co.

This 150-year-old company (LS&CO.), the originator of the iconic blue jean which is the most successful clothing product ever developed, ran into trouble in the late ’90s as sales fell from over $7 Billion in 1996 to slightly over $4 Billion in 1999.

The Challenge
One assumed the cause of precipitously falling sales, in the minds of many critics, was that Levi Strauss focused more on employee-oriented values and being “socially responsible” than serving their retail customers and consumers. One leading business journalist even stated that Levi Strauss was a “failed utopian management experiment.”  (To which the incoming CEO said: “Baloney!).

The Process
The Worldwide Leadership Team (WLT) looked at the Values of LS&CO. from the perspective of the marketplace — what are the values behind the iconic Levi’s and Dockers brands?  They inquired into what society expects and what did the company want to contribute to society.  Lastly, they inquired into what employees expected today and how the values have been lived, formed and tested by reflecting on the LS&CO. history of operations and decisions over decades. The WLT was asked to reflect on their own values in business and how they had been formed and tested.    

Interpreted the evidence of the inquiry they saw that four values emerge:
Empathy, Originality, Integrity, and Courage.

Based on these values, the core purpose of the organization became clear:
“People love our clothes and trust our company.
We will market the most appealing and widely worn casual clothing in the world.”

And from this emerged an aspirational goal which is unique to LS&CO.:
“We will clothe the world!”

The largest challenge facing LS&CO. at this time, and the cause of much of the sales decline, was the well-documented massive shift in consumer purchase patterns of clothing from department stores and chains to the so-called “value channel” – Wal-Mart, Target, etc.  Prior to the PathFinder inquiry, the organization was divided on the merits of going to the value channel, risking the negative response from present distribution and the potential damage to the brand in the eyes of design and style conscious consumers.

However, the decision to go to the value channel, when based on the Values and Vision, was enthusiastically embraced by all employees and was understood by the distribution customers and consumers as a way to reach the broad mass market which is the historic strength of who LS&CO. was and is as a company.
The Development of the LS&CO.
Collaborative Leadership Principles and Model.

These statements were presented as the “LS&CO. Way”, where the values, core purpose and goals emerged from the story;  the history of the company.  LS&CO. now had a statement to guide their behavior, decisions and actions.

After the “LS&CO. Way” − Statement of Values, Core Purpose and Goals − was written, the WLT wanted to be sure the statement would drive business strategies and behaviors, decisions and actions and not be empty words on a wall somewhere.

Time Magazine:
Assign a new sales strategy

Time magazine is one of the world’s great magazines pioneering the newsweekly format.  It has a strong editorial content and was one of our most successful magazines in terms of advertising revenues.  However, with the proliferation of news media, maintaining profit margins had been difficult. Jack Haire, the new Time publisher, needed to address the issue and had some concerns.

The Challenge
Focusing the sales force on more creative, relationship-oriented clients, who would better fit with Time’s editorial strengths rather than clients just interested in buying “tonnage”—advertising at the lowest price.

The Process
Use CORPORANTES PathFinder Notebook in a process that will articulate Jack’s hypothesis and then test it against the evidence that he had seen.

Jack wrote instructional notes in half of the sections, paying particular attention to the Explore sections where he could gather his evidence to support or challenge the hypothesis that he had listed under Begin.

The Results
Working through the method of inquiry over the next several weeks, Jack was able to make clear what he felt was the right answer and articulate his reasoning to his sales force so they could think along with him, test and affirm or change the evidence, and reach a joint conclusion.