HomeResearch & Knowledgeback to HomeSustainabilityback to Research & KnowledgeGrundfos (A): “Be, think, innovate”back to Sustainability

Case Study

Grundfos (A): “Be, think, innovate”

By Peter Vogel and Colleen Lief

6 pages

June 2023

Order this case study

Reference: IMD-7-2374

Poul Due Jensen (PDJ), the son of a Danish workhouse manager, had seen first-hand how harsh life can be. He understood early on that he needed to stand on his own two feet. After being orphaned aged 17, he worked as a machine operator, but soon founded his own water technology company, Grundfos Holding A/S, in 1944. He responded to a customer’s need for a high-quality water pump by designing and manufacturing something completely new. As the company grew and expanded, its competency as a technological innovator and a quality employer became apparent. These dual passions were mutually reinforcing. A broadly educated and incentivized workforce pushed the boundaries of what was possible in providing water solutions to customers worldwide. The growing realization of the impact Grundfos’ product line could have solidified the company’s foundational commitment to helping the world’s poor. Although the business was successful, PDJ – by now 63 – needed to think about the future. Of PDJ’s four children, his son Niels was technically inclined and had worked in different positions in the company. He was ready to assume more of a leadership role. After speaking with colleagues and advisors, PDJ considered whether to change the organizational form of Grundfos from a company to a commercial foundation. A company owned by a foundation has greater focus on its purpose rather than the interests of the founding family. PDJ had seen examples of firms in which the family retained a leadership role in the enterprise, albeit from a distance on the foundation board. And a minority shareholding, along with the accompanying dividends, was often held by the founder’s family. The foundation model seemed to hold real promise for Grundfos’ future, but with less family engagement, would the corporate culture remain durable and authentic? Would being free of potential business disagreements keep his family intact? And would Grundfos still be a “family business”?

Learning Objective

Explore the pros and cons of a foundation ownership model for long-term, sustainable, success of a business.
Examine the dichotomy between family culture and corporate culture that can arise in certain situations.
Does such a move help the family avoid major tensions and conflicts in the future?

Keywords

Family Business, Sustainability, Foundation, Ownership, Succession, Award, Clean Water, Sanitation, Climate Action

Settings

Europe, Denmark
Grundfos, Services, Water Supply and Sanitary Services
Foundation until today

Type

Field Research

Available Languages

English

IMD case studies are distributed through case clearing houses. In order to browse the collection and purchase copies please visit the links below.

The Case Centre

Cranfield University

Wharley End Beds MK43 0JR, UK
Tel +44 (0)1234 750903
Email [email protected]

Harvard Business School Publishing

60 Harvard Way, Boston MA 02163, USA
Tel (800) 545-7685 Tel (617)-783-7600
Fax (617) 783-7666
Email [email protected]

Asia Pacific Case Center

NUCB Business School

1-3-1 Nishiki Naka
Nagoya Aichi, Japan 460-0003
Tel +81 52 20 38 111
Email [email protected]

IMD retains all proprietary interests in its case studies and notes. Without prior written permission, IMD cases and notes may not be reproduced, used, translated, included in books or other publications, distributed in any form or by any means, stored in a database or in other retrieval systems. For additional copyright information related to case studies, please contact Case Services.

Contact

Research Information & Knowledge Hub for additional information on IMD publications

This case study is part of a series

Grundfos (A): “Be, think, innovate”
Grundfos (B): “Solved in a better way”

Selected for the 2024 Schlesinger Global Family Enterprise Case Competition

This case study is part of a series

Grundfos (A): “Be, think, innovate”
Grundfos (B): “Solved in a better way”

Keep reading

Case Study

Rede Mulher Empreendedora: Navigating mission integrity and financial sustainability

Entrepreneurship Sustainability Diversity and Equity and Inclusion

By Vanina Farber, María Helena Jaén, Jose Mello, Lilian de Miranda, Patricia Araripe, Peter Munk Laursen and Rabia Chishti

Article

Se il manager sceglie di centralizzare la catena decisionale

September 2024 marks a turning point in corporate management and a drama in the management world, which began with an essay by Paul Graham, patron of Silicon Valley's leading startup incubator, Y Combinator.Graham coins a new paradigm, the founder...

Family Business Team Dynamics Organizational Behavior Leadership

By Alfredo De Massis and Paolo Lacchè

in Il Sole 24 ore

21 November 2024

Case Study

Not so black and white: Grupo Inca’s black alpaca dilemma (A)

Social Innovation Business Ethics Sustainability

By Vanina Farber, Carolina Duran Silva, Baris Silahcioglu, Hugo ten Zijthoff and Shih-Han Huang

Video

‘Defiant Optimism’ is what is needed to bring about a more sustainable, inclusive world

We need to rethink traditional models of finance if we are to achieve a sustainable and inclusive future, argues Durreen Shahnaz, founder & CEO of Impact Investment Exchange (IIX).

Don’t ignore the S in ESG: a strong social strategy is essential

Here’s how your company can meet regulatory requirements and the expectations of sustainability indexes.

Corporate Governance Sustainability

By Luca Condosta

in I by IMD

Case Study

Pasona: Well-being through regional revitalization

Social Innovation Diversity and Equity and Inclusion Sustainability

By Alyson Meister and Naoko Jinjo

Case Study

Decathlon’s circular revolution: Scaling sustainable business models

Sustainability Innovation Value Creation

By Julia Katharina Binder and Manuel Braun

Article

Essential strategies for thriving in a family business

Entrepreneurial families play a vital role in shaping the global economy and society. These families, engaged in creating and managing businesses across generations, share a commitment to long-term growth, wealth preservation, and legacy building.

Family Business Entrepreneurship

By Alfredo De Massis

in Entrepreneur

18 November 2024

Article

Sustainability needs more than technology. This leadership framework might be the answer

As global attention has turned to Azerbaijan’s capital, Baku, for the U.N.’s ongoing COP29 climate summit, many business leaders are at a crossroads about how they can pitch in on the green transition. Adding to the uncertainty, Donald Trump’s ele...

Sustainability Leadership Technology Management

By David Bach, Heather Cairns-Lee and Natalia Olynec

in Time

14 November 2024

Article

Family Enterprise Ecosystem - Mental Health

An exploration of mental health in family business and its triggers, symptoms, and implications on the family enterprise ecosystem with tangible next steps to help leaders achieve long-term success.

Future Readiness Human Resources Leadership Family Business

By Peter Vogel, Elizabeth Tetzlaff and Peter Jaskiewicz

in I by IMD

14 November 2024

Rede Mulher Empreendedora: Navigating mission integrity and financial sustainability

By Vanina Farber María Helena Jaén Jose Mello Lilian de Miranda Patricia Araripe Peter Munk Laursen and Rabia Chishti
Case reference: IMD-7-2613 ©2024

Summary

The case focuses on Rede Mulher Empreendedora (RME), Brazil’s largest support platform for female entrepreneurship, and its founder, Ana Fontes. Founded in 2010, RME had grown into a significant network by 2023, impacting the livelihoods of over 12 million women in Brazil, a country with substantial gender disparities. The platform offers initiatives to empower women economically and provides knowledge and tailored content to help them manage their businesses and navigate Brazil’s entrepreneurial landscape. By 2023, RME was at a critical juncture. Although RME had clear objectives to empower women, there was uncertainty about how each initiative contributed to its mission. Financially, RME experienced a dramatic shift: In 2022, it raised US$6 million, but in 2023, fundraising efforts dropped to US$2.6 million – a 57% decrease. This decline exposed RME’s heavy reliance on corporate philanthropy, from organizations like Google.org, Visa and the Mapfre Foundation, which constituted 80% of its income. The remaining 20% of revenue came from projects funded by RME’s partners, which proved inadequate to sustain the organization’s ambitious goals. Besides, in 2023, the fundraising campaign fell far short of expectations. Reduced funds meant that new projects were postponed, and existing initiatives faced the threat of being scaled back. Fontes must ensure financial sustainability, identify new revenue streams and reduce dependence on philanthropy while staying true to RME´s mission. Her goal is to achieve self-sustainability while continuing to fulfill the mission. This involves analyzing whether RME should pivot to a for-profit enterprise, remain a non-profit or adopt a hybrid approach to balance its social impact with financial viability. Students must put themselves in Ana’s shoes and evaluate the potential benefits and trade-offs of these models to determine the best path forward.

Reference IMD-7-2613

Organization Rede Mulher Empreendedora

Industry Services

Available Languages English

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Entrepreneurship

Sustainability

Diversity and Equity and Inclusion

Browse all topics

Se il manager sceglie di centralizzare la catena decisionale

By Alfredo De Massis and Paolo Lacchè
in Il Sole 24 ore 21 November 2024

Summary

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Family Business

Team Dynamics

Organizational Behavior

Leadership

Browse all topics

Not so black and white: Grupo Inca’s black alpaca dilemma (A)

By Vanina Farber Carolina Duran Silva Baris Silahcioglu Hugo ten Zijthoff and Shih-Han Huang
Case reference: IMD-7-2609 ©2024

Summary

Grupo Inca, a conglomerate that owned Peru’s leading textile business with a long history of working with alpaca fleece, was at a crossroads regarding the conservation and commercialization of black alpaca fiber. Historically, black alpacas were as common as their lighter-colored counterparts, but market preferences drove them to near extinction. The Inoue brothers, fashion designers committed to social impact, expressed an interest in creating a luxury collection using rare black alpaca fiber. This presents Grupo Inca with both an opportunity and a dilemma: Should it invest in developing this niche market despite uncertainties of both supply and demand, or collaborate with local government and NGOs to ensure sustainable practices, or maintain its current direction and do nothing? This compact case explores the intricacies of actions vs. impact, ethical responsibility and long-term strategic thinking. It provides a rich context for discussing the impact of business decisions on biodiversity and sustainability, the role of corporate values in guiding strategy and the potential for innovation in sustainability. Students will explore Grupo Inca’s role in the decline of black alpacas, assess the ethical implications of the company’s actions and develop strategic recommendations through scenario planning. The accompanying teaching note also covers methods to leverage AI tools to generate ideas and explore solutions that enhance students’ learning.

Reference IMD-7-2609

Organization Grupo Inca

Industry Manufacturing, Textile

Available Languages English

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Social Innovation

Business Ethics

Sustainability

Browse all topics

Pasona: Well-being through regional revitalization

By Alyson Meister and Naoko Jinjo
Case reference: IMD-7-2573 ©2024

Summary

Pasona Group, a Japan-based human resources company, is committed to driving social change through business and supporting individuals to find "ikigai” (fulfillment) through work. The company has promoted flexible work and equitable workplaces and created employment opportunities for minorities. Pasona now wanted to tackle the overconcentration of population and businesses in Tokyo and the related decline of rural areas; both issues raised questions of well-being and sustainability. In response, Pasona moved its headquarters from Tokyo to Awaji Island, setting up sales and back-office operations for its core business and launching the "Regional Revitalization" initiative. Employees who moved from Tokyo to Awaji said that their lives became more sustainable, and their well-being improved. On the other hand, some Tokyo-based employees chose not to relocate, worried that boundaries between work and personal life would be blurred. Pasona was also criticized for its tourism-oriented and corporate-driven approach to local development, while the local government of Awaji appreciated the increase in the population and tax revenue that Pasona had brought. As Pasona sought to expand its "regional revitalization" model throughout Japan and attract more local governments to partner with the company, it needed to rethink its strategy to develop its original model in Awaji into a more powerful showcase that would lead to a more decentralized and sustainable society while ensuring the well-being of its own employees.

Reference IMD-7-2573

Organization Pasona Group

Industry Business Management Services, Human Resources

Available Languages English

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Social Innovation

Diversity and Equity and Inclusion

Sustainability

Browse all topics

Decathlon’s circular revolution: Scaling sustainable business models

By Julia Katharina Binder and Manuel Braun
Case reference: IMD-7-2599 ©2024

Summary

The case focuses on Decathlon’s journey from 2023 onwards as it seeks to scale its circular business models and transform from a successful pilot phase to large-scale industrialization. Anna Turrell, Decathlon’s chief sustainability officer, is tasked with achieving ambitious growth targets – to increase circular sales by 6 to 10 times. The case details how Decathlon approached its circularity strategy by expanding second-hand, repair, rental and recycling initiatives across its global operations. It highlights the strategic challenges Anna and her team faced in deciding where to focus their scaling efforts across regions, sports segments and business models. Key enablers of the scaling strategy, including digital transformation, reverse logistics, consumer engagement and strategic partnerships, are explored as critical factors for success. As Decathlon moved toward becoming a global leader in circularity, Anna had to overcome operational complexities and encourage consumer behavioral change while balancing financial goals with sustainability objectives. Despite the clear business potential, the challenge remained of how to scale circularity efficiently across diverse markets and sports while creating a seamless customer experience.

Reference IMD-7-2599

Organization Decathlon

Industry Consumer Goods, Sports Equipment

Available Languages English

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Sustainability

Innovation

Value Creation

Browse all topics

Essential strategies for thriving in a family business

By Alfredo De Massis
in Entrepreneur 18 November 2024

Summary

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Family Business

Entrepreneurship

Browse all topics

Sustainability needs more than technology. This leadership framework might be the answer

By David Bach Heather Cairns-Lee and Natalia Olynec
in Time 14 November 2024

Summary

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Sustainability

Leadership

Technology Management

Browse all topics

Family Enterprise Ecosystem - Mental Health

By Peter Vogel Elizabeth Tetzlaff and Peter Jaskiewicz
in I by IMD 14 November 2024

Summary

An exploration of mental health in family business and its triggers, symptoms, and implications on the family enterprise ecosystem with tangible next steps to help leaders achieve long-term success.

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Future Readiness

Human Resources

Leadership

Family Business

Browse all topics