Case Study: Gary Loveman and Harrah’s Entertainment

Reference: Stanford Graduate School of Business, CASE OB-45

This case describes the evolution of Harrah’s just before to some time after Gary Loveman was hired as COO and then CEO.  Phil Satre picked Loveman to be COO and ultimately succeed himself as CEO.  It was an unpopular decision but became a very successful one.

Loveman has a couple of interesting strategies.  First, he says that the shareholders own the company jobs, not the people filling them.  It is management’s job to make sure the most effective people are in each position.  This principle led to Loveman terminating several people who were perceived to be successful but were not the most effective people available for the respective positions.

Loveman also focused much attention on understanding the customers and acting to provide customers the value they most appreciated.  To accomplish this, Loveman researched customer behavior and other attributes and made changes based on insights from the research.  The insights were good ones and the changes were effective in dramatically increasing customer loyalty and the over all top line of the business.

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