Lincoln Electric
Executive Summary
Michael Gillespie, The Lincoln Electric Company’s new president for the Asia Region, was “encouraged to develop plans to open welding consumables factories in several Asian countries” by the new CEO, Anthony Massaro, and Gillespie had specifically “turned his attention to plans for Indonesia [O’Connell,[1] main reference, p 1].” We worked with Gillespie to prepare for the September 1996 meeting with Massaro and the presidents of the other worldwide regions. We analyzed Lincoln’s current capabilities and its past experiences and prepared a transformative plan based on business concept innovation [Hamel[2], ch 3], documented by this report, with a three pronged approach for the Asia Region. The first
4. Cleveland did not know all and Lincoln could learn from all. It was self-defeating for Willis to retain existing managers for “their local knowledge” and then “To help them, he sent out U.S. managers who knew the system in Cleveland, and also linked overseas supervisors and foremen with mentors among their U.S.counterparts. Beyond this, however, corporate headquarters largely left the new subsidiaries to manage on their own [p 6].” How would the “local knowledge” be transferred to Lincoln so that the retained managers could have been properly recognized? Lincoln could benefit by revising the Incentive Plan to incorporate elements of collaborative learning in order to “Know yourself, know your adversary; win every battle [SunZi[5]].” Lincoln’s adversaries were not limited to business competitors and must include all forms of challenges which would be outside of Lincoln’s control.
Aligning Strategy
The decision to manufacture in Indonesia was predicated on a risk and benefits assessment and the Four Lessons Learned. Gillespie’s concerns were threefold [p 1]: the political and economic conditions, the nature of the market, and the