W h y s o m e c o m p a n I e s m a k e t h e
F INA NC IA LS PR EA D SHEET ANALYSIS
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- E XE CUT IV E INTERVIEWS
- C OM PAN YA ND NUMBER OF INTERVIEWS CONDUCTED
- I n t er view Questions
| F INA NC IA LS PR EA D SHEET ANALYSIS We conducted extensive financial analysis for each company, examining all financial variables for 980 combined years of data (35 years on average per company for 28 companies. This comprised gathering raw income and balance sheet data and examining the following variables in both the pre- and posttransition decades Total sales in nominal and real (inflation-adjusted) dollars Sales growth Profit growth Profit margin Return on sales Sales per employee in nominal and real dollars Profit per in nominal and real dollars property, plant, and equipment) Dividend payout ratio Selling, general, and administrative expenses as a percent of sales Research and development as a percent of sales Collection period in days Inventory turnover ratio Return on equity Ratio of debt to equity Ratio of long-term debt to equity Interest expense as a percent of sales High stock price to earnings per share Low stock price to earnings per share Average stock price to earnings per share Appendix l.D E XE CUT IV E INTERVIEWS W e conducted interviews of senior management and members of the board, focusing on people who were in office during the transition era. We tran- scribed all interviews and synthesized the data into content analysis findings. C OM PAN YA ND NUMBER OF INTERVIEWS CONDUCTED Abbott Circuit City Fannie Mae Gillette Kimberly-Clark Kroger Nucor Philip Morris Pitney Bowes Walgreens Wells Total 2 I n t er view Questions Could you briefly give an overview of your relationship to the company-years involved and primary responsibilities held W hat do you see as the top five factors that contributed to or caused the upward shift in during the years ten years before transition to ten years after transition Now let's to each of those factors, and I'd like you to allocate a total o f 100 points to those factors, according to their overall importance to the tran- sition (total across all five factors equals 100 points). Could you please elaborate on the top two or three factors Can you give me specific examples that illustrate the factor Appendix l.D Did the company make a conscious decision to initiate a major change or tran- sition during this time [If a conscious decision To the best of your recollection, when did the company begin to make the key decisions that led to the transition (what year, approxi- mately)? [If a conscious decision What sparked the decision to undertake a major tran- sition? What was the process by which the company made key decisions and developed key strategies during the transition era-not what decisions the company made, but how did it go about making them What was the role, if any, of outside consultants and advisors in making the key decisions? O n a scale of 1 to 10, what confidence did you have in the decisions at the time they were made, before you knew their outcome (Ten means you had great con- fidence that they were very good decisions with high probability of success. One means you had little confidence in the decisions they seemed risky-a roll of the dice) [ If had confidence of 6 or greater What gave you such confidence in the deci- sions? How did the company get commitment and alignment with its decisions Can you cite a specific example of how this took place What did you try during the transition that didn't work How did the company manage the short-term pressures of Wall Street while ,making long-term changes and investments for the future Many companies undertake change programs and initiatives, yet their efforts do not produce lasting results. One of the remarkable aspects of [good-to-great company's] transition is that it has endured-it was not just a short-term upswing. We find this extraordinary. What makes [good-to-great company dif- ferent? What were the primary factors in the endurance of the transition far beyond the first few years We will be comparing [good-to-great company to comparison company, which was in your industry at the time of your transition but-unlike [good-to-great company]-did not show a significant and lasting shift in What Appendix l.D 241 was different about [good-to-great company that enabled it to make this transition Other companies could have done what you did, but didn't; what did you have that they didn't? Can you think of one particularly powerful example or vignette from your experience or observation that, to you, exemplifies the essence of the shift good to great at [good-to-great company Who else would you strongly recommend that we interview Inside management during and after the transition. External board members or other key outside people. Are there any questions we didn't ask, but should have Download 3.69 Mb. Share with your friends:
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