Stanford Graduate School of Business Case: Gary Loveman and Harrah’s Entertainment

When Gary Loveman was offered a position as a chief operating officer at Harrah’s he was fresh out of business school and new in the industry where individuals usually get promoted from bottom positions on a casino floor to up.  Loveman was essentially thrown into this position and had to work hard to gain respect and trust of his peers.

Harrah’s then CEO, Phil Satre, was planning to retire in 2002 and needed to find a strong follower. He believed that Harrah’s had strong technological capabilities and efficient operations but suffered from ineffective marketing.

Harrah’s introduced a reward system that also gathered data on their customer base. The problem was that Harrah’s gathered all this information but they did not know what to do with it and how to best utilize it. This is when Satre took a huge risk by bringing someone as inexperienced as Loveman for COO of the company.  In order for this to work out, without other employees to feel threatened there had to be a strong company culture with open communication and trust.  This is what Satre had already established for Harrah’s.

Loveman gained success at Harrah’s by emphasizing on teamwork and more importantly using science, experimenting, running numbers and gathering data and using them properly to determine the needs and the wants of the customer and customers loyalty.  He turned the system that was a friendly place to work, as long as you didn’t break the law and managed to achieve some modest level of performance into a more meritocratic system. His experience as a management professor at Harvard’s Business School gave him the skills to change the cultural environment inside the Harrah’s.

He also emphasized on the importance of his shareholders satisfaction, but I think for Gary Loveman, his shareholders were not only the people who invested in the company but also every customer that stepped foot in any Harrah’s properties.

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~ by aliahmadian on March 31, 2010.

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