IMD business school for management and leadership courses

In June 2022, pharmaceutical giant Novartis AG announced it was cutting 8,000 jobs, i.e., 7% of its global workforce, as part of a restructuring plan that involved integrating its pharmaceuticals and oncology units into an Innovative Medicines business. By reorganizing as separate US and international commercial setups, making operational improvements and reducing duplications in the business, the company’s goal was to increase focus, strengthen competitiveness and drive synergies. According to market analysts, Novartis stock was undervalued. CEO Vasant Narasimhan was driving a strategy for Novartis to become a 100% medicines company powered by advanced therapy platforms and data science. He carried out bolt-on acquisitions, investing approximately $30 billion since 2018 in more than 10 deals. However, the company faced several challenges: integrating the acquired companies, stiff competition from peers, a looming patent cliff, setbacks in clinical trials of innovative drugs, scandals around kickbacks, data falsification and price collusion, and a recent overhaul of the top management team following the restructuring moves. While the makeover of Novartis was underway, the CEO had to chart the strategic roadmap to power the next phase of innovation, growth, productivity and value creation. What would the roadmap look like? What should the company prioritize for the short term and initiate for long-term success?

Over the past decade, Asian companies have been launching accelerated and wide-ranging digital transformation initiatives. This has enabled some of them to become leading national and even international players, as well as digital pioneers in their respective industries. This case examines the successful digital transformation undertaken by the Chinese company Midea, one of the world’s leading home appliance manufacturers. By digitally transforming the company, Midea improved its financial performance and reshaped its business on a wider scale. While many cases that address digital transformation focus on the early phases of the process, Midea’s case illustrates a successfully completed digital business transformation. This allows participants to have an overview of the entire digital transformation journey and see what the potential outcomes might be.

Henkel, a 145-year-old family business, had unintentionally started its digital transformation journey in 2013. Only a few years later it had reached such a level of digital maturity that digital became a decisive element of the company’s strategic framework and one of the key drivers to achieve growth. In less than ten years, Henkel received international recognition as a global leader in using Industry 4.0 technologies to transform factories, value chains and business models. The first part looks at how this journey started, what it had to do to reach this impressive level of digital competence and to make the journey self-sustaining. Can Henkel also build on the success of this digital transformation to make its products carbon-neutral during production and consumption? This is the question that will be explored during the second part. Henkel had made good progress to reduce its own operational CO2 emissions, but realized that this represented less than 5% of the total. Two-thirds occurred during consumption and one-third during the production of raw materials. Making a 50,000+ workforce and operations digitally savvy is one thing, but reducing carbon-emissions at stages of the process over which Henkel had no direct control is something else. The dilemma facing Henkel was where it should focus on to reduce its overall CO2 emissions. Should it continue to prioritize making its own production sites carbon-free, in the knowledge that this represents only a fraction of the total emissions, or should it prioritize making its products carbon-free in the other parts of the value chain where the impact on our planet is higher? Prioritizing the latter would make sense, but what could Henkel actually do to change the attitudes and behaviors of thousands of suppliers and hundreds of millions of consumers?

Throughout its 60-year history, luxury carmaker Lamborghini had been consistently visionary, innovative and inspiring. Bold entrepreneurial moves – such as bringing the attributes of a racing car to mainstream, non-racing vehicles, or pioneering a luxury SUV – became an intrinsic part of the company’s DNA. Yet, entering the 2020s, the unfolding social, geopolitical, environmental and industrial transitions presented luxury players, including auto companies, with monumental challenges. Sustainability – and, in the car sector, electrification – came to define the new decade. In an effort to push for net-zero climate-change targets, between 2021 and 2022 EU legislators announced a virtual ban on the sale of traditional combustion engines past the year 2035. Future-proofing the organization for the challenges ahead required (i) reinventing the iconic brand so that it remained desirable in what will be a radically different automotive space, based on sustainability targets, new materials, and digital technologies; (ii) shifting the workforce composition and culture from one that was firmly rooted in engineering, precision, and a parochial, heads-down, male-dominated outlook to one that emphasized cross-functionality, diversity of backgrounds, curiosity, hyperawareness, and shared organizational and social values; and (iii) maintaining a position of thought, industry, technological and innovation leadership, alongside the timeless quality of the made-in-Italy label, at a time when customers as well as society at large are looking to global brands to come up with a renewed, compelling vision of purposeful luxury.

When SASCAR was acquired by Michelin in 2014, it was barely staying afloat, selling telematic services on price. The case describes how the new CEO and CMO turned SASCAR around in five years. Without explicitly referring to it, they used customer-centric principles: they focused on customer benefits (value conception), achieved buy-in from customers and third parties (value delivery) and got beyond the fixed-pie mindset (value capture). The results were startling: despite the growing competition, SASCAR evolved from a money losing, “me-too” local fleet management firm into a profitable leader in a growing market. The case goes on to discuss issues that the company will need to address, including performance-based business models, a branding strategy, international expansion and relations with Michelin.

Case B, a video case, reveals the identity of the company and its two protagonists. Via an interview technique, students learn about the starting situation and the reasoning behind the transformation. In three segments, Nadine Borter and Thomas Fresnard reveal how they transformed the organization – and the details are compelling The intricate design of the mobile office, the choice of locations and the change in service portfolio are inspiring. The creativity the protagonists demonstrate in transforming their organization matches the (creative) industry they are in. This means this is also a case about values, authenticity and congruence of leadership and organizational purpose.

Digitalization has dramatically changed the advertising industry. Short life cycle projects and melting profit margins were shaping the environment in which a Swiss marketing agency transformed itself radically and uniquely. This case explores how Contexta AG responds to market challenges with a change mindset, by initializing portfolio change to match the company’s values and by creating a “nomadic office.” The critical questions start with the possible competitive advantage of nomadism, but then delve more profoundly into the crucible of leading a truly customer-centric organization. Reflections on the necessary leadership capabilities, such as empathy, humility, and courage, conclude the discussion. For didactic purposes, the case is split into case A, a short, anonymous introduction; and a video case B. Case A is a crisp pre-class read, with a brief characterization of the advertising market in Europe and an anonymous introduction to the two protagonists – Nadine and Thomas, owner and CEO of the advertising agency. The case digs into the challenges posed by digitalization and the disruption/disintermediation of value chains.The objective is to reflect on possible strategic responses and ignite the discussion on how to create a truly customer-centric organization.