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Intuit Case Discussion Managing in Information-Intensive Companies August 27, 2009 Intuit created profitable growth 2002 onwards Intuit 1992-2004 2,500 8 6 2,000 4 2 1,500 in $ millions 0 1,000 -2 -4 500 -6 -8 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 -500 2001 2002 2003 2004 2005 -10 -12 Net Sales Net Income EPS (Diluted) Intuit stock price outperformed 2002-2004 Four design parameters Formal groupings Location of decision rights Which decisions at what level Processes By (mix of) functions, business units, geography, project teams Sequence of activities to organize work Management responsibilities Balance between unit and cross-unit focus Step 1. Formally group into sharply defined business units that have important decision rights Intuit: organically grew from one to 5+ product-markets CEO Bennett Small Business and Personal Finance Norrington Business Unit Primary Product Professional Accounting Solutions Manack Consumer Tax Allanson Personal Finance Supplies Employer Services Accounting Professional Tax Consumer Tax Quicken Checks, Forms Payroll QuickBooks ProTax TurboTax Push decisions “down,” give units freedom, hold them accountable, reward performance Vertical Businesses (Acquisitions) Various Businesses and Products Step 2. Develop a strong set of “service minded” functions Bennett put new senior people in charge of technology, process excellence, IT, procurement Doubled spending in HR Allocated decisions into three buckets: corporate function only, BU only, BU with corporate function guidance Step 3. Develop processes to get work done Intuit example of e-store: BUs BU - Product Marketing - Direct Marketing Hold Online Strategy Meeting with eStore (design, timing) Hold Online Kickoff Meeting with eStore Create FRD for eStore Launch Preliminary Fulfillment Matrix Review TRD Corporate Operations Begin BOM Setup - Manufacturing Review & OK Project Plan Corporate Marketing - COM/CIS Functions Review & OK Project Plan Corporate Marketing - Order Flow Corporate Marketing - eStore Review & OK Project Plan Develop eStore Resource and Project Plan FRD = Functional Requirements Document TRD = Technical Requirements Document BOM = Bill of Materials Review FRD and Approve Project Set up Schedule and HomePage Create TRD Response Incorporate TRD Feedback from Stakeholders Engineering Creates Project Plan QA Develops Test Plan Step 4. People: Develop joint responsibilities—”T-shaped” T-shaped managers excel in the dual task of delivering performance for their own unit (the vertical part of the T) and contributing to other units by helping, sharing knowledge, and coordinating work (the horizontal part of the T) Management levers to develop effective collaboration • E.g., processes Management levers to create unit performance • Clear responsibilities and targets • Accountability Cross unit collaboration Unit focus Levers emphasizing duality • E.g., evaluation and promotion criteria including both dimensions
