Scott Family Enterprises: Building the Path to Effective Governance SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Scott Family Enterprises: Building the Path to Effective Governance
As founders of First Interstate BancSystem, which held $8.6 billion in assets and had recently become a public company, and Padlock Ranch, which had over 11,000 head of cattle, the Scott family had to think carefully about business and family governance. Now entering its fifth generation, the family had over 80 shareholders across the US. In early 2016, the nine-member Scott Family Council (FC) and other family and business leaders considered the effectiveness of the Family Governance Leadership Development Initiative launched two years earlier. The initiative's aim was to ensure a pipeline of capable family leaders for the business boards, two foundation boards, and FC. Seven family members had self-nominated for governance roles in mid-2015. As part of the development initiative, each was undergoing a leadership development process that included rigorous assessment and creation of a comprehensive development plan. As the nominees made their way through the process and other family members considered nominating themselves for future development, questions remained around several interrelated areas, including how to foster family engagement with governance roles while guarding against damaging competition among members; how to manage possible conflicts of interest around dual employee and governance roles; and how to extend the development process to governance for the foundations and FC. The FC considered how best to answer these and other questions, and whether the answers indicated the need to modify the fledgling initiative. This case illustrates the challenges multigenerational family-owned enterprises face in developing governance leaders within the family. It serves as a good example of governance for a large group of cousins within a multienterprise portfolio. Students can learn and apply insights from this valuable illustration of family values, vision, and mission statement.
Authors :: John L. Ward, Carol Adler Zsolnay, Sachin Waikar
Swot Analysis of "Scott Family Enterprises: Building the Path to Effective Governance" written by John L. Ward, Carol Adler Zsolnay, Sachin Waikar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Family Governance facing as an external strategic factors. Some of the topics covered in Scott Family Enterprises: Building the Path to Effective Governance case study are - Strategic Management Strategies, Boards, Conflict, Leadership, Leadership development, Succession planning and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Scott Family Enterprises: Building the Path to Effective Governance casestudy better are - – increasing transportation and logistics costs, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, there is backlash against globalization, talent flight as more people leaving formal jobs,
increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Scott Family Enterprises: Building the Path to Effective Governance
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Scott Family Enterprises: Building the Path to Effective Governance case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Family Governance, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Family Governance 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 Scott Family Enterprises: Building the Path to Effective Governance can be done for the following purposes –
1. Strategic planning using facts provided in Scott Family Enterprises: Building the Path to Effective Governance case study
2. Improving business portfolio management of Family Governance
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Family Governance
Strengths Scott Family Enterprises: Building the Path to Effective Governance | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Family Governance in Scott Family Enterprises: Building the Path to Effective Governance Harvard Business Review case study are -
Innovation driven organization
– Family Governance is one of the most innovative firm in sector. Manager in Scott Family Enterprises: Building the Path to Effective Governance Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Family Governance has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Family Governance to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Family Governance in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Family Governance
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Family Governance does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the Scott Family Enterprises: Building the Path to Effective Governance Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Training and development
– Family Governance has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Scott Family Enterprises: Building the Path to Effective Governance Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Family Governance digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Family Governance 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.
Successful track record of launching new products
– Family Governance has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Family Governance has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Strong track record of project management
– Family Governance is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Family Governance is present in almost all the verticals within the industry. This has provided firm in Scott Family Enterprises: Building the Path to Effective Governance 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.
Low bargaining power of suppliers
– Suppliers of Family Governance in the sector have low bargaining power. Scott Family Enterprises: Building the Path to Effective Governance has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Family Governance to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Leadership & Managing People industry
– Scott Family Enterprises: Building the Path to Effective Governance firm has clearly differentiated products in the market place. This has enabled Family Governance to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Family Governance to invest into research and development (R&D) and innovation.
Weaknesses Scott Family Enterprises: Building the Path to Effective Governance | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Scott Family Enterprises: Building the Path to Effective Governance are -
Workers concerns about automation
– As automation is fast increasing in the segment, Family Governance 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.
Slow decision making process
– As mentioned earlier in the report, Family Governance has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Family Governance even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Increasing silos among functional specialists
– The organizational structure of Family Governance is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Family Governance needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Family Governance to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Family Governance 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 - Scott Family Enterprises: Building the Path to Effective Governance should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Scott Family Enterprises: Building the Path to Effective Governance HBR case study mentions - Family Governance takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Scott Family Enterprises: Building the Path to Effective Governance, in the dynamic environment Family Governance has struggled to respond to the nimble upstart competition. Family Governance has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study Scott Family Enterprises: Building the Path to Effective Governance 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 Scott Family Enterprises: Building the Path to Effective Governance can leverage the sales team experience to cultivate customer relationships as Family Governance is planning to shift buying processes online.
High cash cycle compare to competitors
Family Governance has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Need for greater diversity
– Family Governance 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.
Low market penetration in new markets
– Outside its home market of Family Governance, firm in the HBR case study Scott Family Enterprises: Building the Path to Effective Governance needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Scott Family Enterprises: Building the Path to Effective Governance, it seems that the employees of Family Governance 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.
Opportunities Scott Family Enterprises: Building the Path to Effective Governance | 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 Scott Family Enterprises: Building the Path to Effective Governance are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Family Governance 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, Scott Family Enterprises: Building the Path to Effective Governance, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Family Governance 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 Leadership & Managing People segment.
Low interest rates
– Even though inflation is raising its head in most developed economies, Family Governance can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Family Governance can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Family Governance in the consumer business. Now Family Governance can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Family Governance to increase its market reach. Family Governance will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Family Governance can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Family Governance can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Family Governance can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Family Governance can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Family Governance has opened avenues for new revenue streams for the organization in the industry. This can help Family Governance to build a more holistic ecosystem as suggested in the Scott Family Enterprises: Building the Path to Effective Governance case study. Family Governance can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Family Governance 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Family Governance 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 Family Governance to hire the very best people irrespective of their geographical location.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Family Governance to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Threats Scott Family Enterprises: Building the Path to Effective Governance External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Scott Family Enterprises: Building the Path to Effective Governance are -
Environmental challenges
– Family Governance 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. Family Governance can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Family Governance can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Family Governance needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Family Governance has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Family Governance needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
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 Family Governance in the Leadership & Managing People sector and impact the bottomline of the organization.
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 Family Governance.
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.
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.
Stagnating economy with rate increase
– Family Governance can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
High dependence on third party suppliers
– Family Governance 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.
Consumer confidence and its impact on Family Governance 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Family Governance can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Scott Family Enterprises: Building the Path to Effective Governance .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Scott Family Enterprises: Building the Path to Effective Governance, Family Governance may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Weighted SWOT Analysis of Scott Family Enterprises: Building the Path to Effective Governance 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 Scott Family Enterprises: Building the Path to Effective Governance 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 Scott Family Enterprises: Building the Path to Effective Governance 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 Scott Family Enterprises: Building the Path to Effective Governance 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 Scott Family Enterprises: Building the Path to Effective Governance 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 Family Governance needs to make to build a sustainable competitive advantage.
