Turnaround at Norsk Gjenvinning (A)
Erik Osmundsen, CEO of Norsk Gjenvinning (NG), had initiated a program to strengthen corporate governance, eliminate corruption and improve compliance, and as a result the company had experienced a turnover of almost half of its top 70 line managers and strained relations with several competitors and the waste management industry association. Osmundsen had relentlessly pushed an agenda that involved transforming and professionalizing the waste management industry to mitigate instances of corruption and other crimes. Osmundsen was convinced that his turnaround strategy and change management process would be effective. Having brought employees on board, he was planning to relentlessly engage customers, regulators, and security agencies to drive transformational change within the industry. It was still unclear though how fast customer demand for robust compliance programs would affect the competitive dynamics. How should NG go about convincing its customers? What could NG learn from companies in other industries that have relied on customer support to shift to responsible business practices? Did competitors that maintain non-compliant practices have an Achilles heel that NG could exploit? To what degree should NG drive change on its own in order to achieve customer differentiation vs. collaborate with competitors to bring the whole industry on board? What other mechanisms existed to level the playing field if NG did not succeed in convincing the customers?