Case 10.1: Electrolux Cleans Up
1. How did Electrolux Chief Executive Straberg break down barriers (and increase communication) between departments? Why did he do this? Explain Straberg began breaking down barriers between the departments and forcing his designers, engineers, and marketers to work together to come up with new products. He recruited executives from companies with strong track records in innovation, including Procter & Gamble (P&G) and PepsiCo. Brainstorming sessions were carried on by Kim Scott, a recent P&G defector, in the following way, “she urged everyone ‘to think of themselves as Catherin.’” Chief Executive Straberg brought together departments which are rarely placed together to produce ideas/products. As Fucco, employee for Electrolux’s fabric care research and development center in Porcia, Italy, stated, “We never used to create new products together…The new way saves time and money by avoiding the technical glitches that crop up as a new design moves from the drafting table to the factory floor.” The illustration described in the previous paragraph is an example of how the company put themselves in the place of the customer in order to not only find out what the needs of that customer were, but how to satisfy those needs. Straberg recruited executives from companies, to include: P&G and PepsiCo, companies who have also been placed in difficult situations, but in the end succeeded.
2. What are the advantages for Electrolux of having individuals from different departments and functional areas work together on product design? Describe. For company veterans such as Frucco, who work at Electrolux’s fabric care research and development center in Porcia, Italy, this dynamic groupthink is a refreshing change: “We never used to create new products together,” he says. “The designers would come up with something and then tell us to build it.” The new way saves time and money by avoiding the technical glitches that crop up as a new design...
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