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 - – competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, wage bills are increasing, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, geopolitical disruptions,
technology disruption, increasing transportation and logistics costs, 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 -
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.
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.
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.
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.
Innovation driven organization
– Cdm Dresser is one of the most innovative firm in sector. Manager in Camp Dresser & McKee: Getting Incentives Right Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Cdm Dresser has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Camp Dresser & McKee: Getting Incentives Right 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.
Successful track record of launching new products
– Cdm Dresser has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cdm Dresser 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.
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.
Ability to lead change in Leadership & Managing People field
– Cdm Dresser 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 Cdm Dresser in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
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.
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 -
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.
Need for greater diversity
– Cdm Dresser 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 Cdm Dresser, firm in the HBR case study Camp Dresser & McKee: Getting Incentives Right needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Ashish Nanda, M. Julia Prats suggests that, Cdm Dresser is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Skills based hiring
– The stress on hiring functional specialists at Cdm Dresser has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Camp Dresser & McKee: Getting Incentives Right, in the dynamic environment Cdm Dresser has struggled to respond to the nimble upstart competition. Cdm Dresser has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
No frontier risks strategy
– After analyzing the HBR case study Camp Dresser & McKee: Getting Incentives Right, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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.
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.
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 -
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. Cdm Dresser 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. Cdm Dresser 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.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cdm Dresser can use these opportunities to build new business models that can help the communities that Cdm Dresser operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
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.
Creating value in data economy
– The success of analytics program of Cdm Dresser has opened avenues for new revenue streams for the organization in the industry. This can help Cdm Dresser to build a more holistic ecosystem as suggested in the Camp Dresser & McKee: Getting Incentives Right case study. Cdm Dresser can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Cdm Dresser to increase its market reach. Cdm Dresser 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.
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.
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.
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.
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 -
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Camp Dresser & McKee: Getting Incentives Right, Cdm Dresser 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 .
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.
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.
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 Cdm Dresser in the Leadership & Managing People sector and impact the bottomline of the organization.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cdm Dresser 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 Camp Dresser & McKee: Getting Incentives Right .
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.
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.
Increasing wage structure of Cdm Dresser
– 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 Cdm Dresser.
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.
Consumer confidence and its impact on Cdm Dresser 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.
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.