The EVA Challenge: Implementing Value-Added Change in an ...

More documents

Recommendations

Info

28 The EVA Challenge Briggs & Stratton Corporation provides a useful case study of the interplay between strategic innovation and the EVA discipline in restoring prosperity to an old-line company that had lost its way. With $1.3 billion in sales, B&S is the world’s largest producer of aircooled, gasoline engines. The company, founded in Milwaukee in 1908, had a colorful past and decades of prosperity after World War II—until 1989, when it plunged into the red for the first time since the 1920s. That led to dramatic changes. First, some background. Innovation always characterized Briggs & Stratton. Its founders were Stephen F. Briggs, who was 23 in 1908, and Harold M. Stratton, who was 29. Briggs, an electrical engineer, was one of those inspired tinkerers who keep the U.S. Patent Office prosperous; Stratton was already a seasoned businessman with interests in the grain trade. What brought them together was a design by Briggs of a six-cylinder, two-cycle auto engine that they apparently thought would sweep the industry. It soon became clear, however, that it would be too costly to produce. But Briggs & Stratton were not about to be denied their flyer into the auto business. This was an era, after all, when ambitious machine shops were turning out cars all over the country. So the two partners decided to build a four-cylinder car from parts purchased from various vendors—engine, frame, body, everything. Never modest, they called their product the Superior, but the project failed and they produced only two touring cars and one roadster. Still determined to participate in the burgeoning auto business, they then became parts suppliers. Briggs designed an electrical engine-igniter, which went on the market in 1909 and sold well. Other electrical parts followed; an all-purpose switch became a best seller. They also bought the rights to the “motor wheel,” developed it further, and advertised it widely. A small gasoline engine attached to a wheel, its widest use was as a third wheel to power bicycles, but it also propelled sleds and became the power source for the Flyer, a
The Need for a Winning Strategy and Organization 29 minicar that consisted of a wooden-slat floor, four wheels, two seats, a steering column, and the motor wheel in back; it had no roof or doors. Some 2,000 were sold before the contraption was discontinued in 1924. The motor wheel, while a financial failure, did lead to the development of a small, stationary gasoline engine, which went through various model changes and won acceptance as a power source for garden tractors, lawn mowers, pumps, and other small farm equipment, as well as washing machines, for which there was a great demand in rural areas that lacked electricity. Another winner, starting in the 1920s, was a line of automobile locks which the company manufactured for years until the operation was spun off in 1995. After World War II, the massive population shift to suburbia powered Briggs & Stratton’s success. As millions discovered the joys of greensward and garden, there was a great demand for lawn mowers, especially those driven by engines. B&S’s aluminum die-cast engine, lighter and cheaper than its predecessors, was introduced in 1953 and became wildly popular. The company’s expansion was rapid. By the mid-1980s, B&S had a two million-square-foot factory in Wauwatosa, a suburb of Milwaukee, and was employing 10,000. The workforce was unionized, labor costs were high, productivity was hamstrung by onerous work rules, and the company suffered a series of costly strikes. To reduce labor costs, B&S spent a fortune on automated equipment during the 1980s. Automation was one of the greatest “cash traps” of the era. Whatever the “issue du jour” was for CEOs, the automation peddlers were there to offer the solution: “We will automate you to competitiveness”—“We will automate you out of your labor problems”—or “We will automate your quality problems out of the process.” If you just had faith, automation would change your economic life forever. But was it costly! The experience of Briggs & Stratton was representative of that of many other capital-intensive
Page 2 and 3: The EVA Challenge Implementing Valu
Page 4 and 5: Advance Comments on The EVA Challen
Page 6 and 7: This book is printed on acid-free p
Page 9 and 10: Chapter 1 The Problem Back in the e
Page 11 and 12: The Problem 3 for systems to get ma
Page 13 and 14: The Problem 5 for a building, but i
Page 15 and 16: The Problem 7 Not only does EPS dis
Page 17 and 18: The Problem 9 significant and growi
Page 19 and 20: The Problem 11 admiring articles in
Page 21 and 22: The Problem 13 few years. Forstmann
Page 23 and 24: Chapter 2 The Solution What is Econ
Page 25 and 26: The Solution 17 There is a signific
Page 27 and 28: The Solution 19 than projections. E
Page 29 and 30: The Solution 21 (R&D) costs, (2) ad
Page 31 and 32: The Solution 23 capital, Tate & Lyl
Page 33 and 34: The Solution 25 is usually the chie
Page 35: Chapter 3 The Need for a Winning St
Page 39 and 40: The Need for a Winning Strategy and
Page 59 and 60: Chapter 4 The Road Map to Value Cre
Page 61 and 62: The Road Map to Value Creation 53 T
Page 63 and 64: The Road Map to Value Creation 55 i
Page 65 and 66: The Road Map to Value Creation 57 r
Page 67 and 68: The Road Map to Value Creation 59 o
Page 69 and 70: The Road Map to Value Creation 61 b
Page 71 and 72: Value Creation Capital Structure
Page 73 and 74: The Road Map to Value Creation 65 m
Page 75 and 76: The Road Map to Value Creation 67 2
Page 77 and 78: The Road Map to Value Creation 69 c
Page 79 and 80: Chapter 5 The Changes Wrought by EV
Page 81 and 82: The Changes Wrought by EVA 73 and t
Page 83 and 84: The Changes Wrought by EVA 75 all d
Page 85 and 86: The Changes Wrought by EVA 77 Even
Page 87 and 88:
The Changes Wrought by EVA 79 Reduc
Page 89 and 90:
The Changes Wrought by EVA 81 hardl
Page 91:
The Changes Wrought by EVA 83 prese
Page 94 and 95:
86 The EVA Challenge mechanical cou
Page 96 and 97:
88 The EVA Challenge company fired
Page 98 and 99:
90 The EVA Challenge skirmishes of
Page 100 and 101:
92 The EVA Challenge but the reduct
Page 102 and 103:
94 The EVA Challenge We now move on
Page 104 and 105:
96 The EVA Challenge employees, man
Page 106 and 107:
98 The EVA Challenge 3,500. The thr
Page 108 and 109:
100 The EVA Challenge with economic
Page 110 and 111:
102 The EVA Challenge November 1998
Page 112 and 113:
104 The EVA Challenge their drawbac
Page 114 and 115:
106 The EVA Challenge to establish
Page 116 and 117:
108 The EVA Challenge It is helpful
Page 118 and 119:
110 The EVA Challenge Managing for
Page 120 and 121:
112 The EVA Challenge After a coffe
Page 122 and 123:
114 The EVA Challenge EVA 101, the
Page 124 and 125:
116 The EVA Challenge facilitator t
Page 126 and 127:
118 The EVA Challenge The classroom
Page 128 and 129:
Herman Miller—Continental North A
Page 130 and 131:
122 The EVA Challenge in an organiz
Page 132 and 133:
124 The EVA Challenge In the modern
Page 134 and 135:
126 The EVA Challenge efficiencies
Page 136 and 137:
128 The EVA Challenge A company tha
Page 138 and 139:
130 The EVA Challenge units and imp
Page 140 and 141:
132 The EVA Challenge Witter’s re
Page 142 and 143:
134 The EVA Challenge $70.8125 eigh
Page 144 and 145:
136 The EVA Challenge companies wer
Page 146 and 147:
138 The EVA Challenge design, manuf
Page 148 and 149:
140 The EVA Challenge you can lose
Page 150 and 151:
142 The EVA Challenge Allen-Bradley
Page 152 and 153:
144 The EVA Challenge Disadvantages
Page 155 and 156:
Chapter 9 EVA Incentives We revert
Page 157 and 158:
EVA Incentives 149 EVA incentive pl
Page 159 and 160:
EVA Incentives 151 For a typical di
Page 161 and 162:
EVA Incentives 153 bonus by 10, div
Page 163 and 164:
EVA Incentives 155 these approaches
Page 165 and 166:
EVA Incentives 157 quarters of the
Page 167 and 168:
Chapter 10 How EVA Can Fail What mo
Page 169 and 170:
How EVA Can Fail 161 created by a d
Page 171 and 172:
How EVA Can Fail 163 Stern Stewart
Page 173 and 174:
How EVA Can Fail 165 pay. Monetary
Page 175 and 176:
Chapter 11 New Frontiers: Real Opti
Page 177 and 178:
New Frontiers: Real Options and For
Page 179 and 180:
Page 181 and 182:
Page 183 and 184:
Page 185:
Page 188 and 189:
180 The EVA Challenge conflict betw
Page 190 and 191:
182 The EVA Challenge Question 2. W
Page 192 and 193:
184 The EVA Challenge managers will
Page 194 and 195:
186 The EVA Challenge Question 6. M
Page 196 and 197:
188 The EVA Challenge framework suf
Page 198 and 199:
190 The EVA Challenge problems ofte
Page 200 and 201:
192 The EVA Challenge Only after th
Page 202 and 203:
194 The EVA Challenge followed by a
Page 204 and 205:
196 The EVA Challenge There are two
Page 206 and 207:
198 The EVA Challenge floor, the fi
Page 208 and 209:
200 The EVA Challenge Consider the
Page 210 and 211:
202 The EVA Challenge 5. Provide bo
Page 212 and 213:
204 The EVA Challenge degree, but t
Page 214 and 215:
206 The EVA Challenge annual sales
Page 217 and 218:
Epilogue EVA and the “New Economy
Page 219 and 220:
EVA and the “New Economy” 211 W
Page 221 and 222:
EVA and the “New Economy” 213 b
Page 223 and 224:
EVA and the “New Economy” 215 a
Page 225 and 226:
EVA and the “New Economy” 217 d
Page 227 and 228:
EVA and the “New Economy” 219 i
Page 229 and 230:
EVA and the “New Economy” 221 h
Page 231 and 232:
EVA and the “New Economy” 223 L
Page 233 and 234:
EVA and the “New Economy” 225 W
Page 235 and 236:
EVA and the “New Economy” 227 O
Page 237 and 238:
EVA and the “New Economy” 229 a
Page 239 and 240:
EVA and the “New Economy” 231 o
Page 241 and 242:
Acknowledgments This project has be
Page 243 and 244:
Acknowledgments 235 monitoring mana
Page 245 and 246:
Acknowledgments 237 Approximately s
Page 247 and 248:
Acknowledgments 239 business and pr
Page 249 and 250:
Acknowledgments 241 seemingly insur
Page 251:
Acknowledgments 243 assignments to
Page 254 and 255:
246 Index Competitive positions (Po
Page 256 and 257:
248 Index Incentive plans based on
Page 258:
250 Index Takeover artists, 11 Tate
show all

The EVA Challenge: Implementing Value-Added Change in an ...

Create successful ePaper yourself

Delete template?

Save as template?