Case Study Description of Camp Dresser & McKee: Getting Incentives Right
"If you try to use money to motivate behavior, you are in a powerful and dangerous place, especially with engineers and scientists," remarked Tom Furman, CEO of Camp Dresser & McKee, Inc. (CDM), a consulting environmental engineering firm. Historically, CDM had followed an "egalitarian" management bonus program based on qualitative measures. As industry growth decelerated and competition intensified since 1991, management changed the incentive plan to tie it closer to the achievement of business objectives. This case describes the bonus and incentive compensation system and the evaluation process. It ends with Furman reflecting on how to interpret the CDM system to reward four CDM executives suitably.
Swot Analysis of "Camp Dresser & McKee: Getting Incentives Right" written by Ashish Nanda, M. Julia Prats includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cdm Dresser facing as an external strategic factors. Some of the topics covered in Camp Dresser & McKee: Getting Incentives Right case study are - Strategic Management Strategies, Human resource management, Leadership, Motivating people, Supply chain, Sustainability and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Camp Dresser & McKee: Getting Incentives Right casestudy better are - – talent flight as more people leaving formal jobs, increasing transportation and logistics costs, geopolitical disruptions, wage bills are increasing, increasing energy prices, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies,
supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Camp Dresser & McKee: Getting Incentives Right
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Camp Dresser & McKee: Getting Incentives Right case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cdm Dresser, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cdm Dresser 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 Camp Dresser & McKee: Getting Incentives Right can be done for the following purposes –
1. Strategic planning using facts provided in Camp Dresser & McKee: Getting Incentives Right case study
2. Improving business portfolio management of Cdm Dresser
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 Cdm Dresser
Strengths Camp Dresser & McKee: Getting Incentives Right | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cdm Dresser in Camp Dresser & McKee: Getting Incentives Right Harvard Business Review case study are -
Diverse revenue streams
– Cdm Dresser is present in almost all the verticals within the industry. This has provided firm in Camp Dresser & McKee: Getting Incentives Right 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.
Analytics focus
– Cdm Dresser 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 Ashish Nanda, M. Julia Prats 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.
Superior customer experience
– The customer experience strategy of Cdm Dresser in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Leadership & Managing People industry
– Camp Dresser & McKee: Getting Incentives Right firm has clearly differentiated products in the market place. This has enabled Cdm Dresser to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Cdm Dresser to invest into research and development (R&D) and innovation.
Strong track record of project management
– Cdm Dresser is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the Camp Dresser & McKee: Getting Incentives Right 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.
Ability to recruit top talent
– Cdm Dresser is one of the leading recruiters in the industry. Managers in the Camp Dresser & McKee: Getting Incentives Right are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Cdm Dresser 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.
Highly skilled collaborators
– Cdm Dresser 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 Camp Dresser & McKee: Getting Incentives Right HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Cdm Dresser
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Cdm Dresser does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Cdm Dresser in the sector have low bargaining power. Camp Dresser & McKee: Getting Incentives Right has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cdm Dresser to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Cdm Dresser digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cdm Dresser 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.
Weaknesses Camp Dresser & McKee: Getting Incentives Right | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Camp Dresser & McKee: Getting Incentives Right are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Camp Dresser & McKee: Getting Incentives Right, is just above the industry average. Cdm Dresser needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cdm Dresser is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Camp Dresser & McKee: Getting Incentives Right can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Cdm Dresser 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 - Camp Dresser & McKee: Getting Incentives Right should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Camp Dresser & McKee: Getting Incentives Right, it seems that the employees of Cdm Dresser 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Cdm Dresser 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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Cdm Dresser supply chain. Even after few cautionary changes mentioned in the HBR case study - Camp Dresser & McKee: Getting Incentives Right, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cdm Dresser vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Camp Dresser & McKee: Getting Incentives Right 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 Cdm Dresser has relatively successful track record of launching new products.
High cash cycle compare to competitors
Cdm Dresser 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.
Capital Spending Reduction
– Even during the low interest decade, Cdm Dresser has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High operating costs
– Compare to the competitors, firm in the HBR case study Camp Dresser & McKee: Getting Incentives Right 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 Cdm Dresser 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Camp Dresser & McKee: Getting Incentives Right 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 Camp Dresser & McKee: Getting Incentives Right can leverage the sales team experience to cultivate customer relationships as Cdm Dresser is planning to shift buying processes online.
Opportunities Camp Dresser & McKee: Getting Incentives Right | 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 Camp Dresser & McKee: Getting Incentives Right are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cdm Dresser in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Manufacturing automation
– Cdm Dresser can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
Leveraging digital technologies
– Cdm Dresser can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Cdm Dresser 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 Cdm Dresser to hire the very best people irrespective of their geographical location.
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 Cdm Dresser in the consumer business. Now Cdm Dresser can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Cdm Dresser 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cdm Dresser can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Cdm Dresser can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Camp Dresser & McKee: Getting Incentives Right 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.
Using analytics as competitive advantage
– Cdm Dresser 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 Camp Dresser & McKee: Getting Incentives Right - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cdm Dresser to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Cdm Dresser can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cdm Dresser 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, Camp Dresser & McKee: Getting Incentives Right, 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 Cdm Dresser 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.
Developing new processes and practices
– Cdm Dresser can develop new processes and procedures in Leadership & Managing People industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Threats Camp Dresser & McKee: Getting Incentives Right External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Camp Dresser & McKee: Getting Incentives Right are -
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 Cdm Dresser.
Regulatory challenges
– Cdm Dresser needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Leadership & Managing People industry regulations.
Shortening product life cycle
– it is one of the major threat that Cdm Dresser is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Cdm Dresser can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Cdm Dresser 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.
Stagnating economy with rate increase
– Cdm Dresser 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 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. Cdm Dresser needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cdm Dresser in the Leadership & Managing People industry. The Leadership & Managing People industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
High dependence on third party suppliers
– Cdm Dresser 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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cdm Dresser with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Cdm Dresser 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. Cdm Dresser can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Technology acceleration in Forth Industrial Revolution
– Cdm Dresser has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Cdm Dresser 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.
Weighted SWOT Analysis of Camp Dresser & McKee: Getting Incentives Right 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 Camp Dresser & McKee: Getting Incentives Right 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 Camp Dresser & McKee: Getting Incentives Right 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 Camp Dresser & McKee: Getting Incentives Right 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 Camp Dresser & McKee: Getting Incentives Right 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 Cdm Dresser needs to make to build a sustainable competitive advantage.
