The Business Book

(Joyce) #1


to help meet targets. Browne caused
more of a stir when BP launched
a new brand identity in 2000. The
bright green Helios logo, named after
the sun god of ancient Greece, was
accompanied by the slogan: “Beyond
Petroleum”. It represented the
company’s acknowledgement that it
needed to provide more, and smarter,
types of energy. It also sent a clear
message that the company was not
complacent; it was prepared to
confront and adapt to difficult issues.
However, after Browne left
BP in 2007, the new CEO pursued
a different strategy, and the
alternative energy business was
closed down. Any environmental
credibility the company had built
was lost when an oil well exploded
in the Gulf of Mexico in 2010.

Conquering complacency
In the late 1990s, UK retailer Marks
& Spencer (M&S) took almost the
opposite stance to John Browne at
BP. Board members largely ignored
the changing UK and global retail
environments, and chose to focus on
internal issues. The company was
hierarchical and employees were
expected to follow orders. In The
Rise and Fall of Marks & Spencer,

author Judi Bevan describes a
traditional business environment
with carpeted executive offices,
waiters with white gloves, and
staff rules governing punctuality,
efficiency, and politeness. M&S did
not have a marketing department
and its executives believed it did not
need to advertise. Stores did not
accept credit cards, and payment
was possible only with cash or
M&S’s own charge card.
When rival retailers appeared
with a more modern vision and fresh,
contemporary designs, M&S’s


clothes and stores began to look
old-fashioned. Consumers started
to shop elsewhere, but still M&S did
not change course, despite a sudden
drop in sales and profits. UK profits
continued to tumble from a record
high of $1.6 (£1) billion in 1997 to
$232 (£146) million four years later,
and the share price dropped by two-
thirds. It was not until the emergency
appointment of CEO Stuart Rose in
2004 to fend off a takeover that the
dramatic decline was halted.
However, the recovery did not
last: M&S once again risked
complacency with a run of eight
successive quarters of falling
clothing sales to 2013. In response,
the company announced it would
invest in store revamps, logistics,
and IT, and unveiled plans to turn
M&S into an international,
multichannel retailer, connecting
with customers through stores, the
Internet, and mobile devices.
This is the challenge for all
organizations. Businesses must
contend with accelerated change in
a highly competitive, multichannel,
global market, and guard against
complacency—or risk losing out to
competitors who are able to stay
one step ahead. ■

Andy Grove Andrew (“Andy”) Stephen Grove
was born in 1936 to a Jewish
family in Budapest, Hungary, as
András István Gróf. He hid from
the Nazis during their occupation
of Hungary, survived the Siege of
Budapest by the Soviet Red Army,
then fled to the US during the
uprising of 1956. Once there, he
took the name Andrew Grove,
graduated first in his engineering
class at college and then studied
for a PhD in chemical engineering
at the University of California,
Berkeley. He relocated his parents
to San Francisco, and worked at
Fairchild Semiconductor (1963–67),

before helping to found the Intel
Corporation in 1968. He became
its president in 1979, CEO in
1987, and was Chairman from
1998 to 2005. He is credited with
the company’s success; during
his tenure as CEO, Intel’s stock
value rose by 2,400 percent,
making it one of the world’s most
valuable companies.
A dedicated philanthropist,
Grove has donated millions of
dollars to cancer and neuro-
degenerative disease research.
He also serves on the board of
overseers of the International
Rescue Committee.

BP’s Helios logo demonstrated its
commitment to finding new types of
energy sources. Company responses to
10X changes, such as climate change,
need to be communicated to the market.
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