Deutsche Telekom: A Transformation Journey (A) Harvard Case Solution & Analysis

This really is a classic transformation instance, made more complex by the truth that it involves a huge organization directed by a youthful company insider, Rene Obermann. The two-part case study covers the period from 2006 to 2010. The case begins in late 2006, soon after Obermann was promoted to replace Kai-Uwe Ricke at Deutsche Telekom (DT), among the standard-bearers of the German economy. When he took over as chief executive, the former state-owned telecom monopoly was in bad shape.

Having long been one of the dominant players in Europe, DT's share price had failed in just a few years, as had its grip on its home market. Shortly before Obermann was appointed, DT's share of new broadband customers in Germany - its traditional stronghold - dropped to below 10 percent. And with its 260,000 powerful work force, DT's the compared to sales were up of labor to twice as high as those of its main European rivals. Still living on past glories, the company was distended and greatly siloed. Few employees felt a strong need for anything more than incremental change while its structure was not satisfied to the new market realities.

Yet many analysts foresaw break-up or insolvency for DT within a matter of three or four years. Under Obermann's direction, DT experienced a remarkable transformation, regaining its dominant position in the large national market within three years - but it stayed too early to declare a full-fledged turnaround. Deutsche Telekom's competitive challenges are described by case A prior to Rene Obermann's appointment as CEO. Case B covers the next period of the recovery and the ongoing drive of DT to overcome opposition to develop one integrated business and to encourage new behaviours. Learning objectives:

The cases cover three key topics:

  1. ) The benefits and drawbacks of a strong organizational culture.
  2. ) The process of organizational transformation and also the challenge of building on success.
  3. ) Some of the mental challenges of leadership.

PUBLICATION DATE: April 14, 2011 PRODUCT #: IMD509-PDF-ENG

This is just an excerpt. This case is about LEADERSHIP & MANAGING PEOPLE

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