In 1999, the new CEO Vyaderm Pharmaceuticals introduces the economic value added (EVA) program to focus the company on a long-term shareholder value. The program EVA consists of three elements: EVA centers (business units), EVA drivers (operational practices that improve results EVA) and EVA-based incentive program for the bonus-eligible managers.
Over the next two years, the program takes place in several stumbling blocks, including the resistance of regional managers who insist on the "line of sight" drivers EVA; complexity of managing a large number of EVA centers and unexpected adjustments bonuses for poor performance due to EVA. Decision point focuses on the competitive situation in the unit, where a sudden exit from the competition produces unexpected time windfall profits. Top managers Vyaderm to combat the issue of how to adjust the results of EVA to prevent demoralizing managers in the following years, when EVA results are likely to decline. "Hide
by Robert L. Simons, Indra A. Reinbergs Source: HBS Premier Case Collection 15 pages. Publication Date: 04 Oct 2000. Prod. #: 101019-PDF-ENG
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