{"id":146,"date":"2015-03-04T15:57:52","date_gmt":"2015-03-04T15:57:52","guid":{"rendered":"https:\/\/pressbooks.ccconline.org\/man4030-org-leadership\/chapter\/5-2-case-in-point-hanna-andersson-corporation-changes-for-good\/"},"modified":"2023-06-07T19:25:47","modified_gmt":"2023-06-07T19:25:47","slug":"5-2-case-in-point-hanna-andersson-corporation-changes-for-good","status":"publish","type":"chapter","link":"https:\/\/pressbooks.ccconline.org\/man4030-org-leadership\/chapter\/5-2-case-in-point-hanna-andersson-corporation-changes-for-good\/","title":{"raw":"Case in Point: Hanna Andersson Corporation Changes for Good","rendered":"Case in Point: Hanna Andersson Corporation Changes for Good"},"content":{"raw":"
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\r\n\r\n\"3.2\"<\/a>\r\n
\r\n\r\nJessica Lucia - pajama time<\/a> - CC BY-NC-ND 2.0.\r\n\r\n<\/div>\r\n<\/div>\r\n<\/div>\r\n

Born from a desire to bring quality European-style children\u2019s clothing to the United States, Hanna Andersson Corporation has sold colorful clothing and accessories since 1983. Husband and wife cofounders, Tom and Gun (pronounced \u201cg\u014d\u014dn\u201d) Denhart, started the Portland, Oregon\u2013based company by distributing imported Swedish clothing from their home. Named for Gun\u2019s Swedish grandmother, the company now boasts over $100 million in annual sales and employs over 500 people. Growing from an exclusive mail-order catalog business in the early 1980s, today Hanna Andersson also distributes products online, in 29 retail stores nationwide, and through select specialty retailers.<\/p>\r\n

Over the years, Hanna Andersson has shown that it deeply values its employees. The company provides supplemental child-care reimbursement to all employees\u2014even part-time sales associates. Additional employee benefits include part-time and flexible work hours, considerable paid time off, and 8 hours per year of paid time for employees to volunteer in the community. More important, though, employees feel like they are part of the Hanna Andersson family. In fact, in the beginning many of the employees were friends and family members of the Denharts.<\/p>\r\n

It was important to the Denharts that they were involved in the decisions of the company and that those decisions took quality of life issues into account. Gun states, \u201cIf you can create balance among your work, your community, your family, and your friends, then you\u2019re going to be more satisfied.\u201d Examples of this philosophy infusing Hanna Andersson include the establishment of HannaDowns, a clothing recycling program where customers can return used clothing and receive a 20% off coupon for their next purchase. The charitable nature of Hanna Andersson has continued through what is now the HannaHelps program. This program awards grants and donates products to schools and nonprofit groups, helping children in the community and around the world. In addition, under Gun\u2019s leadership Hanna Andersson established ongoing donations, 5% of pretax profits, to charities that benefit women and children.<\/p>\r\n

The considerable growth and development the business experienced did not come without its challenges and necessary organizational change. In the 1990s and early 2000s, increased competition from other retailers and the introduction of online commerce posed some challenges for Hanna Andersson. The Denharts found themselves without a solid growth plan for the future. They worried that they might have lost sight of market forces. Change was necessary if Hanna Andersson was to remain viable.<\/p>\r\n

Realizing the need for help and direction, the Denharts promoted from within the company to help initiate change and strategic growth, and in 1995, Phil Iosca took the strategic lead as CEO. Hanna Andersson was then sold to a private equity firm in 2001 and has since changed ownership several times, leading to a new business direction for the company. After selling the business, Gun remained on the Hanna board of directors until 2007. She also served as chair of the Hanna Andersson Children\u2019s Foundation from 2001 to 2006. She still partners with the company from time to time on charitable events in the community.<\/p>\r\n

Under Iosca\u2019s steady leadership, the company opened several retail stores throughout the country in 2002 and established online commerce. In 2009, Hanna Andersson began distributing merchandise wholesale through retail partners such as Nordstrom and Costco. The implementation of each of these new distribution avenues required a great deal of change within the company. HR Vice President Gretchen Peterson explains, \u201cThe growth of the retail business required the greatest shift in our internal processes from both technical systems, to inventory planning and buying to distribution processes to our organizational communication and HR processes (recruitment, compensation, etc.), as well as our marketing communication programs.\u201d Tenured employees throughout the company found themselves in unfamiliar territory, unsure of the company\u2019s future as the board and owners debated the risks and rewards of retail expansion. Fortunately, the changes were mostly offset by a consistent leadership team. Petersen, who has been with the company since 1994, explains, \u201cFrom 1995 to 2010, we retained the same CEO (Iosca) and therefore, the face of the company and the management style did not fluctuate greatly.\u201d<\/p>\r\n

When Iosca retired in early 2010, chief operating officer Adam Stone took over as CEO. He helped his company weather yet another transition with a calm push for changes within the company. To help understand different points of view at Hanna Andersson, Stone often sat in on inventory and operational planning meetings. Step by step, Stone was able to break down work initiatives so the continuing changes were not so overwhelming to the company and its valued employees. Over time, his and other company leaders\u2019 presence has helped employees make better, more strategic decisions. Rather than resisting change, they now feel heard and understood.<\/p>\r\n

The decision to sell wholesale turned out to be a good one, as it has enabled the company to weather the recession\u2019s negative effect on retail and online purchases. Accounting for approximately 10% of total sales, the company\u2019s wholesale business is expected to boost yearly revenue by 5%. With more conscientious inventory purchases and strategic distribution initiatives, Hanna Andersson has realized a higher sales volume, lower inventory at year-end, and less liquidation. Through it all, company management has done an effective job at interpreting the desired growth goals of its owners while inspiring change within the company. With continued clear communication, direction, and willingness to try new techniques, Hanna Andersson is poised for growth and success in the future while not forgetting to take care of its employees.<\/p>\r\n\r\n

\r\n

Case study based on information from Bollier, D. (1996). Aiming higher: 25 stories of how companies prosper by combining sound management and social vision (pp. 23\u201335). New York: The Business Enterprise Trust; Boul\u00e9, M. (2009, July 16). Hanna Andersson employee can\u2019t say enough of a thank-you to co-workers who helped her through cancer. Oregonian. Retrieved March 4, 2010, from http:\/\/www.oregonlive.com\/news\/oregonian\/margie_boule\/index.ssf\/2009\/07\/hanna_andersson_employee_cant.html<\/a>; Information retrieved February 28, 2010, from the Hanna Andersson Web site: http:\/\/www.hannaandersson.com<\/a>; Muoio, A. (1998, November 30). Giving back. Fast Company. Retrieved March 1, 2010, from http:\/\/www.fastcompany.com\/magazine\/20\/one.html?page=0%2C1<\/a>; Goldfield, R. (2002, June 14). Hanna sees bricks-and-mortar future. Portland Business Journal; Peterson, G. (2010, March 5 and April 5). Personal communication; Information retrieved March 1, 2010, from http:\/\/www.answers.com\/topic\/hanna-andersson<\/a>; Raphel, M., & Raphel, N. (1995). Up the loyalty ladder (pp. 83\u201390). New York: HarperCollins.<\/p>\r\n\r\n<\/div>\r\n<\/div>\r\n

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Discussion Questions<\/h3>\r\n
    \r\n \t
  1. How has Hanna Andersson applied values-based leadership in terms of the organization\u2019s choices related to P-O-L-C?<\/li>\r\n \t
  2. How did company leaders like Iosca, Petersen, and Stone help facilitate change within the company? Did they remain consistent with the values of the founders?<\/li>\r\n \t
  3. What were the reasons for organizational change within Hanna Andersson, both internally and externally?<\/li>\r\n \t
  4. What unique challenges do family-owned and -operated businesses face?<\/li>\r\n \t
  5. How did the mission of Hanna Andersson evolve over time?<\/li>\r\n<\/ol>\r\n<\/div>\r\n \r\n\r\n<\/div>","rendered":"
    \n
    \n
    \n

    \"3.2\"<\/a><\/p>\n

    \n

    Jessica Lucia – pajama time<\/a> – CC BY-NC-ND 2.0.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

    Born from a desire to bring quality European-style children\u2019s clothing to the United States, Hanna Andersson Corporation has sold colorful clothing and accessories since 1983. Husband and wife cofounders, Tom and Gun (pronounced \u201cg\u014d\u014dn\u201d) Denhart, started the Portland, Oregon\u2013based company by distributing imported Swedish clothing from their home. Named for Gun\u2019s Swedish grandmother, the company now boasts over $100 million in annual sales and employs over 500 people. Growing from an exclusive mail-order catalog business in the early 1980s, today Hanna Andersson also distributes products online, in 29 retail stores nationwide, and through select specialty retailers.<\/p>\n

    Over the years, Hanna Andersson has shown that it deeply values its employees. The company provides supplemental child-care reimbursement to all employees\u2014even part-time sales associates. Additional employee benefits include part-time and flexible work hours, considerable paid time off, and 8 hours per year of paid time for employees to volunteer in the community. More important, though, employees feel like they are part of the Hanna Andersson family. In fact, in the beginning many of the employees were friends and family members of the Denharts.<\/p>\n

    It was important to the Denharts that they were involved in the decisions of the company and that those decisions took quality of life issues into account. Gun states, \u201cIf you can create balance among your work, your community, your family, and your friends, then you\u2019re going to be more satisfied.\u201d Examples of this philosophy infusing Hanna Andersson include the establishment of HannaDowns, a clothing recycling program where customers can return used clothing and receive a 20% off coupon for their next purchase. The charitable nature of Hanna Andersson has continued through what is now the HannaHelps program. This program awards grants and donates products to schools and nonprofit groups, helping children in the community and around the world. In addition, under Gun\u2019s leadership Hanna Andersson established ongoing donations, 5% of pretax profits, to charities that benefit women and children.<\/p>\n

    The considerable growth and development the business experienced did not come without its challenges and necessary organizational change. In the 1990s and early 2000s, increased competition from other retailers and the introduction of online commerce posed some challenges for Hanna Andersson. The Denharts found themselves without a solid growth plan for the future. They worried that they might have lost sight of market forces. Change was necessary if Hanna Andersson was to remain viable.<\/p>\n

    Realizing the need for help and direction, the Denharts promoted from within the company to help initiate change and strategic growth, and in 1995, Phil Iosca took the strategic lead as CEO. Hanna Andersson was then sold to a private equity firm in 2001 and has since changed ownership several times, leading to a new business direction for the company. After selling the business, Gun remained on the Hanna board of directors until 2007. She also served as chair of the Hanna Andersson Children\u2019s Foundation from 2001 to 2006. She still partners with the company from time to time on charitable events in the community.<\/p>\n

    Under Iosca\u2019s steady leadership, the company opened several retail stores throughout the country in 2002 and established online commerce. In 2009, Hanna Andersson began distributing merchandise wholesale through retail partners such as Nordstrom and Costco. The implementation of each of these new distribution avenues required a great deal of change within the company. HR Vice President Gretchen Peterson explains, \u201cThe growth of the retail business required the greatest shift in our internal processes from both technical systems, to inventory planning and buying to distribution processes to our organizational communication and HR processes (recruitment, compensation, etc.), as well as our marketing communication programs.\u201d Tenured employees throughout the company found themselves in unfamiliar territory, unsure of the company\u2019s future as the board and owners debated the risks and rewards of retail expansion. Fortunately, the changes were mostly offset by a consistent leadership team. Petersen, who has been with the company since 1994, explains, \u201cFrom 1995 to 2010, we retained the same CEO (Iosca) and therefore, the face of the company and the management style did not fluctuate greatly.\u201d<\/p>\n

    When Iosca retired in early 2010, chief operating officer Adam Stone took over as CEO. He helped his company weather yet another transition with a calm push for changes within the company. To help understand different points of view at Hanna Andersson, Stone often sat in on inventory and operational planning meetings. Step by step, Stone was able to break down work initiatives so the continuing changes were not so overwhelming to the company and its valued employees. Over time, his and other company leaders\u2019 presence has helped employees make better, more strategic decisions. Rather than resisting change, they now feel heard and understood.<\/p>\n

    The decision to sell wholesale turned out to be a good one, as it has enabled the company to weather the recession\u2019s negative effect on retail and online purchases. Accounting for approximately 10% of total sales, the company\u2019s wholesale business is expected to boost yearly revenue by 5%. With more conscientious inventory purchases and strategic distribution initiatives, Hanna Andersson has realized a higher sales volume, lower inventory at year-end, and less liquidation. Through it all, company management has done an effective job at interpreting the desired growth goals of its owners while inspiring change within the company. With continued clear communication, direction, and willingness to try new techniques, Hanna Andersson is poised for growth and success in the future while not forgetting to take care of its employees.<\/p>\n

    \n

    Case study based on information from Bollier, D. (1996). Aiming higher: 25 stories of how companies prosper by combining sound management and social vision (pp. 23\u201335). New York: The Business Enterprise Trust; Boul\u00e9, M. (2009, July 16). Hanna Andersson employee can\u2019t say enough of a thank-you to co-workers who helped her through cancer. Oregonian. Retrieved March 4, 2010, from http:\/\/www.oregonlive.com\/news\/oregonian\/margie_boule\/index.ssf\/2009\/07\/hanna_andersson_employee_cant.html<\/a>; Information retrieved February 28, 2010, from the Hanna Andersson Web site: http:\/\/www.hannaandersson.com<\/a>; Muoio, A. (1998, November 30). Giving back. Fast Company. Retrieved March 1, 2010, from http:\/\/www.fastcompany.com\/magazine\/20\/one.html?page=0%2C1<\/a>; Goldfield, R. (2002, June 14). Hanna sees bricks-and-mortar future. Portland Business Journal; Peterson, G. (2010, March 5 and April 5). Personal communication; Information retrieved March 1, 2010, from http:\/\/www.answers.com\/topic\/hanna-andersson<\/a>; Raphel, M., & Raphel, N. (1995). Up the loyalty ladder (pp. 83\u201390). New York: HarperCollins.<\/p>\n<\/div>\n<\/div>\n

    \n
    \n

    Discussion Questions<\/h3>\n
      \n
    1. How has Hanna Andersson applied values-based leadership in terms of the organization\u2019s choices related to P-O-L-C?<\/li>\n
    2. How did company leaders like Iosca, Petersen, and Stone help facilitate change within the company? Did they remain consistent with the values of the founders?<\/li>\n
    3. What were the reasons for organizational change within Hanna Andersson, both internally and externally?<\/li>\n
    4. What unique challenges do family-owned and -operated businesses face?<\/li>\n
    5. How did the mission of Hanna Andersson evolve over time?<\/li>\n<\/ol>\n<\/div>\n

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