Case Study Description of Kit Hinrichs at Pentagram (A)
This case focuses on Kit Hinrichs, a 65 year-old partner at Pentagram, a privately-owned multidisciplinary design firm. One of the world's most prestigious design firms, Pentagram was founded by five designers from different disciplines in London in the 1970s. By 2008, Pentagram remained small, with less than 30 partners, each a veritable star in his or her own right. Pentagram had two founding principles, the first of which was equality. The equality principle meant that leadership was evenly distributed; partners with seniority had no greater formal authority than newer partners, and the only formal leadership role was a chairman position, which, after being held with a founder for 30 years, was rotated every two years. Further, Pentagram had no corporate office; each partner was expected to manage their own financial, marketing, and human resource functions. Pentagram's second principle was generosity. All partners were equal shareholders in the firm. Pentagram branched out to New York in the early 1980s, and in the late 1980s, Hinrichs established a San Francisco location. This case traces Hinrichs as he builds Pentagram's San Francisco office, and it also details the evolution of Pentagram itself. In addition, this case offers a thick description of Hinrichs and his team working with a client. This case can be used in business and executive education courses on professional service firms, leading a creative organization, and the role of design in business. It should also be used by schools of design.
Swot Analysis of "Kit Hinrichs at Pentagram (A)" written by Linda A. Hill, Emily A. Stecker includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Pentagram Hinrichs facing as an external strategic factors. Some of the topics covered in Kit Hinrichs at Pentagram (A) case study are - Strategic Management Strategies, Collaboration, Creativity, Diversity, Organizational structure and Organizational Development.
Some of the macro environment factors that can be used to understand the Kit Hinrichs at Pentagram (A) casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels,
technology disruption, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Kit Hinrichs at Pentagram (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Kit Hinrichs at Pentagram (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pentagram Hinrichs, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pentagram Hinrichs operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Kit Hinrichs at Pentagram (A) can be done for the following purposes –
1. Strategic planning using facts provided in Kit Hinrichs at Pentagram (A) case study
2. Improving business portfolio management of Pentagram Hinrichs
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Pentagram Hinrichs
Strengths Kit Hinrichs at Pentagram (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pentagram Hinrichs in Kit Hinrichs at Pentagram (A) Harvard Business Review case study are -
Innovation driven organization
– Pentagram Hinrichs is one of the most innovative firm in sector. Manager in Kit Hinrichs at Pentagram (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Pentagram Hinrichs is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Organizational Development field
– Pentagram Hinrichs is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Pentagram Hinrichs in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Pentagram Hinrichs is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Linda A. Hill, Emily A. Stecker can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Cross disciplinary teams
– Horizontal connected teams at the Pentagram Hinrichs are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Learning organization
- Pentagram Hinrichs is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Pentagram Hinrichs is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Kit Hinrichs at Pentagram (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Pentagram Hinrichs
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Pentagram Hinrichs does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Pentagram Hinrichs is present in almost all the verticals within the industry. This has provided firm in Kit Hinrichs at Pentagram (A) case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Pentagram Hinrichs digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Pentagram Hinrichs has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
High switching costs
– The high switching costs that Pentagram Hinrichs has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Ability to recruit top talent
– Pentagram Hinrichs is one of the leading recruiters in the industry. Managers in the Kit Hinrichs at Pentagram (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Pentagram Hinrichs has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Kit Hinrichs at Pentagram (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Kit Hinrichs at Pentagram (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kit Hinrichs at Pentagram (A) are -
Workers concerns about automation
– As automation is fast increasing in the segment, Pentagram Hinrichs needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Increasing silos among functional specialists
– The organizational structure of Pentagram Hinrichs is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Pentagram Hinrichs needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Pentagram Hinrichs to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Pentagram Hinrichs, firm in the HBR case study Kit Hinrichs at Pentagram (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Pentagram Hinrichs has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Kit Hinrichs at Pentagram (A), it seems that the employees of Pentagram Hinrichs don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Aligning sales with marketing
– It come across in the case study Kit Hinrichs at Pentagram (A) that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Kit Hinrichs at Pentagram (A) can leverage the sales team experience to cultivate customer relationships as Pentagram Hinrichs is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Kit Hinrichs at Pentagram (A) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Pentagram Hinrichs 's lucrative customers.
Need for greater diversity
– Pentagram Hinrichs has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Kit Hinrichs at Pentagram (A) HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Pentagram Hinrichs has relatively successful track record of launching new products.
Products dominated business model
– Even though Pentagram Hinrichs has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Kit Hinrichs at Pentagram (A) should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– After analyzing the HBR case study Kit Hinrichs at Pentagram (A), it seems that company is thinking about the frontier risks that can impact Organizational Development strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Opportunities Kit Hinrichs at Pentagram (A) | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Kit Hinrichs at Pentagram (A) are -
Building a culture of innovation
– managers at Pentagram Hinrichs can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Organizational Development segment.
Manufacturing automation
– Pentagram Hinrichs can use the latest technology developments to improve its manufacturing and designing process in Organizational Development segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Pentagram Hinrichs is facing challenges because of the dominance of functional experts in the organization. Kit Hinrichs at Pentagram (A) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Pentagram Hinrichs to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Pentagram Hinrichs to hire the very best people irrespective of their geographical location.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Pentagram Hinrichs can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Pentagram Hinrichs to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Pentagram Hinrichs can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Kit Hinrichs at Pentagram (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Pentagram Hinrichs in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Pentagram Hinrichs in the consumer business. Now Pentagram Hinrichs can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Pentagram Hinrichs has opened avenues for new revenue streams for the organization in the industry. This can help Pentagram Hinrichs to build a more holistic ecosystem as suggested in the Kit Hinrichs at Pentagram (A) case study. Pentagram Hinrichs can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Pentagram Hinrichs can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Kit Hinrichs at Pentagram (A) suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Loyalty marketing
– Pentagram Hinrichs has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Using analytics as competitive advantage
– Pentagram Hinrichs has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Kit Hinrichs at Pentagram (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Pentagram Hinrichs to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Kit Hinrichs at Pentagram (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Kit Hinrichs at Pentagram (A) are -
High dependence on third party suppliers
– Pentagram Hinrichs high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Pentagram Hinrichs in the Organizational Development sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Pentagram Hinrichs can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Pentagram Hinrichs with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Pentagram Hinrichs is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Environmental challenges
– Pentagram Hinrichs needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Pentagram Hinrichs can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Increasing wage structure of Pentagram Hinrichs
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Pentagram Hinrichs.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Pentagram Hinrichs.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Pentagram Hinrichs needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Consumer confidence and its impact on Pentagram Hinrichs demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Pentagram Hinrichs will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Weighted SWOT Analysis of Kit Hinrichs at Pentagram (A) Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Kit Hinrichs at Pentagram (A) needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Kit Hinrichs at Pentagram (A) is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Kit Hinrichs at Pentagram (A) is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Kit Hinrichs at Pentagram (A) is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Pentagram Hinrichs needs to make to build a sustainable competitive advantage.