the net - business

Electrolux, IDEO, and Talent Management

While doing some googling on talent management I found this article. Electrolux had been featured in Edersheim’s book The Definitive Drucker (one of my fave books from 2007), and I recently finished reading about IDEO, so it was neat to find both converging together on the topic of talent management. I just love when things I’ve read pop up in other books and articles – they are mini ah-ha moments in themselves when I discover such a cross-reference!

I loved these excerpts:

Fast-forward to 2006, and Electrolux is morphing into a very different company. It uses a series of innovation metrics to measure unmet consumer needs and how well new products meet them; how products are developed and launched; and whether the right product and marketing managers are in the right jobs. Hjertonsson simply calls this “talent management.”

Hjertonsson wields both carrots and sticks. Bonuses are based on how well managers adapt to the new system at Electrolux. The evaluation process includes a series of 30 questions aimed at figuring out how well managers are adapting to the regime. Electrolux uses three basic measures. First there is what they call “value market share” which is the portion of the consumer’s wallet going to Electrolux versus other competitors. It is determined by the volume of appliances multiplied by the average price. Electrolux also looks closely at growth of profit margins and at average prices. The purpose of all three of these metrics is to shift focus to higher-value products and de-emphasize those that have become commoditized.


One of the biggest changes in Electrolux is the switch from using marketing surveys that ask consumers what they want to actually visiting consumers in their homes to see how they use their appliances. “We never ask the consumer what they want,” says Hjertonsson. “We do anthropology. We study the consumer.”

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