Case Study

Managing strategic initiatives at Tetra Pak

7 pages
October 2011
Reference: IMD-3-2206

In 2007 Ralph Geiger, head of program management at Tetra Pak, had assessed the corporate strategic plan for the year. There were 15 initiatives under way in process improvement: 10 designed to turn the business into a world-class provider and five in master data. There were another 17 strategic initiatives and many smaller projects also jostling for attention. All of these initiatives affected the market organizations in one way or another. Lack of coordination was a commonly heard complaint – sometimes up to eight initiatives would hit the markets at once. This in turn meant that the same people were under constant pressure as they were pushed to introduce all of these initiatives in accordance with the corporate timeline. This had to stop, he realized. He took an overview of all the initiatives and found that for roughly 10% of them, there was limited data available. Many of the other initiatives – some 45% – had no real business case. He also found that initiatives used between one and twenty full-time equivalents (FTEs), cost anywhere between €1 million and €20 million, and took up to six years to implement. The total estimated initiative costs amounted to around €100 million, with process and IT implementation comprising up to 60% of this cost. Finally, governance was at best scattered. Most initiatives had an owner, a leader and milestones with end dates in place, yet about 30% had no steering group assigned and 25% did not use any progress tracking. In response to this situation, in 2008 Tetra Pak launched a portfolio management approach to strategic initiatives that would allow the development, launch and management of strategic initiatives to be kept separate from the management of the product portfolio. Two years later, Geiger reviewed the multi-layered project governance. Was this the appropriate solution to strategic initiative follow-up?

Learning Objective

Strategic initiatives often compete for resources and attention with market-led initiatives and other corporate initiatives. As such, lack of coordination can prevent their successful implementation. How can companies most effectively manage their strategic initiatives? Is a program management approach or a line management approach more appropriate, and under which circumstances? This case provides an example of one innovative approach to the governance of strategic initiatives undertaken by Tetra Pak.

Keywords
Portfolio Management Approach, Project Governance, Program Management, Benefit Realization, Prioritization
Settings
Global
2007-2008
Type
Field Research
Copyright
© 2011
Available Languages
English
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