Lessons Learned From the Laurus/Konmar Disaster

The Amsterdam School of Management (ASOM) published a lessons learned report on the Laurus/Konmar repositioning disaster, costing at least 495 million euro.

This retailer was created in a merge with a number of retail organizations. The result was 6 different marketing formulas. A new Chief Executive Officer (CEO) decided to reduce the 6 formulas to one, and reduce the back-office cost drastically. An important driver for this new orientation was the unique selling point (USP) of capitalizing on local area knowledge.

There were many reasons that caused this disaster, but the researchers of ASOM considered the increasing gap between top management and the local market as most important factor. This is of course a rather ironical conclusion, as this was supposed to be the main driver for the reorganization.

This Laurus/Konmar example is quite common. The original reasons were sound, but in linking business strategy to performance it goes wrong. What actually happens is that the operational 'sh*t' distracts you from the important issues and then things start to divert.

Have you seen any examples of this happening? You are cordially invited to comment on this Results2Match blog!