New Balance Corporation Financial by nzp33714


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									New Balance Case Study –
Business Transformation

Paul Kennedy
HR Director
  Our Mission
“To be recognised as the world’s leading manufacturer of high
performance athletic and active lifestyle products while operating
in a socially responsible manner”
NB Famous for………
 World cup -1982   Euro Champs 1996
•   Established 1906
                                            In Multiple
                 Cushion made
                 Arch Supports

                                                          Welcome the

                          World marathon
                          Record 1999                     RC 1001
                          Khalid Kanouchi                 Tecnological
                          RC 110                          Advances
EMEA Region- Key Facts
                                 •46 countries
                                 •750 million people

                                 •2005- NB 1% market share
                                 •Break Even at best
                                 •High Cost structure
                                 •Chaotic Leadership
                                 •Culture of failure and poor execution
                                 •Everything was complicated

    25 Years of European Operation and Under Achievement
                           Need to make
                          contribution to                 Retail
Consumers                   our future                 environment
   more                      success                    changing

                          The Argument
                          for Change?
 Need to
fulfil our                                                Need to
potential                                                    be
                                                          e about
         Continuing to                                   execution
                                       Pressure to
        work the way we             reduce costs and
         work today is              improve speed to
         not an option                   market
 Map the future
• Right Leadership on board
• Z corporation exercise
• Cultivate the Culture
• Organisation design
• Create the lean and winning machine
BY 2012
• £250 Million company
• No 1 in Performance Running
• No 1 in Performance Apparel
• Top 3 in Lifestyle
• Top 100 employers to work for
• 15% ROS
• And….Marathon world record in NB shoes
Can we get to our goal by carrying
on as usual?
     So we need to change …

                    “If we keep doing what we’re
                    doing, we’re going to keep
                    getting what we’re getting”
 NO!                            Stephen R Covey
                         NB Transformation
                           Z corporation
                                    Leadership                     Culture of
                                  Fit for Purpose            Executional Excellence
  Focus our time on
                                                                In all that we do
Value Added Activities

                           Facilitate Change to Understand
                                  Value as seen by the

      European Centre of                                        Simplify and
          Excellence                                             Standardise
                                                              ‘Partners that are
                                                               Fit for Purpose’
                Product/Consumer Focus

Organisation                                Customer Service

               The Focus For Executional

Revenue Growth                            Profit, Margin/Costs

Stages of change commitment

How people commit to change                                  Institutionalise    We have to keep it going

                                                        Adoption         Let’s do it

                                              Installation       Let’s test it

                            Positive perception     This is good

     Understand the need for change         I see the implications for us

          Aware of change           I know What it is

       Contact        I’m being told about something
       Risk of loss of change commitment
Commitment Phase                                                                            8) Internalisation
                                                                               7) Institutionalise

                                                                      6) Adoption

                                                             5) Installation

Acceptance Phase
                                              4) Positive

                            3) Understand
                            the need change

Prepare Phase      2) Aware of

      1) Contact

                Unaware          Confused     Negative      Decision not       Aborted after Aborted after
                                              Perception    to support         Initial use   Extensive use
Results 2007
• On target – 25% growth
• New Organisation
• 5 Key shoes ‘never out of stock’
• 72 hours replenishment for key customers
• Simplify and Standardise Everything we do
• Customer and Associate Surveys

• 2006
• 1.4 Million Shoes
• 6-4 Person Teams
• 22% Productivity Improvement
• 25% Space Reduction
• Executional Excellence Well

• Use the resources you have
• Focus on where you want to go
• Measure your improvement not just in financial results
• Ensure you have senior management support and
• Involve everyone
     We are what we repeatedly do.
Excellence, then, is not an act, but a habit.


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