winning strategies of market driving organization l1

8/8/2019 Winning Strategies of Market Driving Organization L1

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Winning strategies of Marketdriven organizations

July 09, 18 2010 (A)

July 11, (B)


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Visionary FirmsDrivers of market

Leaders of Tomorrow


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Market Driving firmsMarket drivers see the world differently and

focus on latent or emerging customer needs.

Market drivers create new markets or

redefine the category in a fundamental way

that competitors are rendered obsolete.


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Market drivers attributes1. They trigger industry breakpoints or what Andy

Grove of Intels strategic inflexion points,

which change business innovation.2. Core Values inspire their radical business

concept.

3. Rather than learn from existing customers, they

often teach potential customers to consume their

drastically different value proposition.


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V

ALUES DRIV

EN CHANGE

OR

CIRCUMSTANCES DRIVEN VALUES


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Get bettervs

Getdifferent


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A JOURNEY

THROUGH WHAT ISFUNDAMENTAL

AND WHAT IS

CHANGEABLE


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NOTHING SPLENDID HAS

EVER BEEN ACHIEVEDEXCEPT THOSE WHO DARED

BELIEVED THAT SOMETHING

INSIDE THEM WAS SUPERIORTO CIRCUMSTANCE

BRUCE BARTON


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Today We Are In

A Brawl With NoRules!


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HORSERACEof TOMORROW

yAll rules subject to change without notice

yThe prize money may change at short notice

yThe route and the finish line will likely change after the race

starts

y

Bets may be made at any time during the raceyNew entrants may join the race at any time

yRacers are on line at all the times and may alter their plans based

on the most current information

yRacers may form alliances

yAll creative strategies that are not specifically against the law areallowed

yGovernment laws may change at any time (retrospectively)


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Confusion

And more confusion .


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Forbes100 from 1917 to 1987 [70 years]

* 39 members of the Class of 1917 were alive in

1987

* 20 of the firms were in list of 100 in 1987* 18 F100 survivors underperformedthe

market by 20%

* Just 2 (2%) GE & Kodak, outperformed the

market 1917 to 1987.

Source: Dick Foster & Sarah Kaplan, Creative Destruction:Why Companies That

Are Built to Last Underperform the Market


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*P&G:

Declining domestic sales in 20of 26 categories;

7 of them belonged to the top

10 categories:

The billion-dollar problem.Source: AdvertisingAge 01.21.2002ecurities


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They had the unpleasant job of

announcing the second straightquarter of losses in theirbusiness empire that had nevermade a loss before.

Mr. Steel's Moment of Truth, Forbes India, June 5, 2009

2009 .


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GM files for bankruptcy

Ford Motor seeks togain amid Rivals pain

Economic Times, June 1, 2009


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There will be more

confusion in thebusiness world in the next

decade than in any decade in history.

And the current pace of change willonly accelerate.

Steve Case[America online]


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Security in

an insecureworld(existence)?


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The greatest danger

for most of usis not that our aim is

too high

and we miss it,but that it is

too low

and we reach it.

MichelangeloItalian Renaissance painter


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Forget > Learn

The problem is never how to get new,

innovative thoughts into your mind,

but how to get the old ones out.

Tom Peters


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Our ideal acquisition is a small startup

that has a great technology product on thedrawing board that is going to come out in

six to twelve months.

We buy the engineers and

the next generation

product.

John Chambers, Cisco


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These days, you cant succeed as a

company if youre consumer led because in a world so full of so much

constant change, consumers cant

anticipate the next big thing.

Companies should be idea-led and

consumer-informed.

Doug Atkin, partner, Merkley Newman Harty


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IfId listened tocustomers,

Id have given them

a faster horse.Henry Ford

1896 Ford Quadricycle


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Our strategies must be tied to leadingedge customers on the attack. If we

focus on the defensive customers, we

will also become defensive.

John Roth, CEO, Nortel


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Saviors-in-Waiting

DisgruntledCustomers

UpstartCompetitorsRogue Employees

Fringe SuppliersWayne Burkan, Wide Angle Vision


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The Dream ManagerThe Dream Manager Matthew KellyMatthew Kelly

An organization can only become theAn organization can only become the--bestbest--versionversion--ofof--itself to theitself to theextent that the people who drive that organization are striving toextent that the people who drive that organization are striving to

become betterbecome better--versionsversions--ofof--themselves. A companys purpose is tothemselves. A companys purpose is to

become thebecome the--bestbest--versionversion--ofof--itself. The question is:itself. The question is: What is anWhat is an

emploemployyeeseesppururppose? Most would saose? Most would sayy, to hel, to helppthe comthe comppananyy achieve itsachieve its ppururpposeosebut thebut theyywould be wronwould be wrong.g. That is certainlThat is certainlyy part of thepart of theemploemployyees role, but an emploees role, but an employyeeseespprimarrimaryy

ppururppose is to become theose is to become the--bestbest--versionversion--ofof--himself orhimself or herselfherself.. When a company forgets that it exists When a company forgets that it exists

to serve customers, it quickly goes out of business.to serve customers, it quickly goes out of business. OurOuremployees are our first customers, and our mostemployees are our first customers, and our most

important customers.important customers.


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We are aWe are a

Life SuccessLife Success

Company.Company.Dave Liniger, founder, RE/MAX [Real Estate]


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The role of theDirectoris to createaTheroleof theDirectoris to createaspace wheretheactorsandspace wheretheactorsand

actresses canactresses can becomemorebecomemore

than theyveeverbeenthan theyveeverbeenbefore,more thanbefore,more than

theyvedreamedoftheyvedreamedofbeingbeing.. Robert Altman, Oscar acceptance speechRobert Altman, Oscar acceptance speech


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Organizing GeniusOrganizing Genius / Warren/ Warren BennisBennisand Patricia Wardand Patricia Ward BiedermanBiederman

Groups become great only when everyone inGroups become great only when everyone in

them, leaders and members alike,them, leaders and members alike, is free tois free todo his or her absolute bestdo his or her absolute best..

The best thing a leader can do for a GreatThe best thing a leader can do for a Great

Group is toGroup is to allow its members toallow its members todiscover theirdiscover theirggreatnessreatness..


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free to do his or herfree to do his or herabsolute bestabsolute best

allow its memberstoallow its memberstodiscovertheirdiscovertheir

greatness.greatness.

Tom Peters, May 28, 2009


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Youhave toYouhave totreat yourtreat your

employees likeemployees likecustomers.customers.Herb Kelleher, completeHerb Kelleher, complete

answer, upon being asked his secrets to successanswer, upon being asked his secrets to success

Source: Joe Nocera, NYT, Parting Words of an Airline Pioneer, on the occasion of Herb KellehersSource: Joe Nocera, NYT, Parting Words of an Airline Pioneer, on the occasion of Herb Kellehers

retirement after 37 years at Southwest Airlines (SWAs pilots union took out a fullretirement after 37 years at Southwest Airlines (SWAs pilots union took out a full--page ad in USA Todaypage ad in USA Today

thanking HK for all he had done; across thethanking HK for all he had done; across the

way in Dallas American Airlines pilots were picketing the Annual Meeting)way in Dallas American Airlines pilots were picketing the Annual Meeting)


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Get bettervs

Getdifferent


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SUCCESSFUL HABITS OFVISIONARY FIRMS

COMPANIES HAVE THEIRCOREVALUES AND CORE PURPOSES FIXED

WHILE THEIR BUSINESS STRATEGIES

AND PRACTICES ENDLESSLY ADAPT

TOCHANGING WORLD


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VISIONARY FIRMS

UNDERSTAND THE DIFFERENCEBETWEEN WHAT SHOULD NEVER

CHANGE AND WHAT SHOULD BE OPEN

FOR CHANGE

WHAT ISVISION?

Mission?


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VIS

ION

AN

D MISS

ION

VISION: WHAT YOU WOULD LIKE TO BEKNOWN FOR?

MISSION: WHAT BUSINESS YOU WOULD LIKETO BE IN?


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VIS

IONARY

F

IR

MS

Collins &Porras, 1996


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44


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Built to Last

Criteria for a Visionary Company Premier institution in its industry

Widely admired by knowledgeable business

Made an indelible imprint on the world Had multiple generations of chief executives

Been through multiple product life cycles

Founded before 1950

It is more than successful, more than enduring

Displays resiliency and ability to bounce back fromsetbacks and mistakes


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Selection Process Surveyed 700 CEOs at leading

corporations from a cross section of

industry, size, location and type/ownership

Identified distinguishing essential

differences (rather than commonalities)

with a similar Comparison Company

Examined how they started and evolved

(responded to historical circumstances)


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Research Results and Comparison Companies

Visionary Companies

1. 3M

2. American Express

3. Boeing

4. Citicorp

5. Ford

6. General Electric

7. Hewlitt-Packard8. IBM

9. Johnson & Johnson

10. Marriott

11. Merck

12. Motorola

13. Nordstrom14. Philip Morris

15. Procter & Gamble

16. Sony

17. Wal-Mart

18. Walt Disney

Comparison Companies

1. Norton

2. Wells Fargo

3. McDonnell Douglas

4. Chase Manhattan

5. GM

6. Westinghouse

7. Texas Instruments8. Burroughs

9. Bristol-Myers Squibb

10. Howard Johnson

11. Pfizer

12. Zenith

13. Melville14. RJR Nabisco

15. Colgate

16. Kenwood

17. Ames

18. Columbia


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List ofVisionary & comparison companies


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Visionary CompanyVisionary CompanyVisionary CompanyVisionary Company

Premier Institution

Widely Admired

Indelible imprint on the world

50+ year track record

Multiple generations of CEOs

Multiple product/service cycles


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Core Ideology

Core values Core Purpose

Essential, enduringTenets (beliefs)

What isimportant?

Reason for being

What theorganisation

offers to society

Dominant aspiration


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YOU DISCOVER COREIDEOLOGY BY LOOKING

INSIDE.

IT HAS TO BE AUTHENTIC.

YOU CANT FAKE IT


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What are Core Values?

A set of beliefs that influence the way

people and groups behave

They are the soul of the organization

Effective values are deep rooted


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Johnson &Johnson Core

Values and Purposel The companyexists to alleviate painanddisease

l Wehaveahierarchy ofresponsibilities: customers first,employees second, societyatlarge third, and shareholdersfourth

l Individualopportunityandrewardbasedon merit

l Decentralization = Creativity = Productivity


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Where do Core Values Come

From? Most core values come from the founders of

an organization

Some organizations have used a group

consensus process to develop core values


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Why are Core Values Important?

Influence behavior

Communicate what we really believe

Core values are sacred, they do not change They provide a moral compass

Provide continuity through change

Help people make tough decisions

They help to decentralize decision making

Help people to be more proactive


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National interestThe Tata group is

committed to benefit the

economic development of

the countries in which it

operates. No Tata

company shall undertake

any project or activity to

the detriment of the wider

interests of thecommunities in which it

operates.


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Tata Code of Conduct

Gifts and donations

A Tata company and its employees shall neither receive nor offer ormake, directly or indirectly, any illegal payments, remuneration, gifts,

donations or comparable benefits that are intended, or perceived, toobtain uncompetitive favours for the conduct of its business. Thecompany shall cooperate with governmental authorities in efforts toeliminate all forms of bribery, fraud and corruption.

However, a Tata company and its employees may, with full disclosure,

accept and offer nominal gifts, provided such gifts are customarilygiven and / or are of a commemorative nature. Each company shallhave a policy to clarify its rules and regulations on gifts andentertainment, to be used for the guidance of its employees.


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Integration of Core Values

Effective core values are integrated into all

levels and functions of the organization

Practicing the core values in all areas, all the

time creates integrity


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Norstan Inc. Integration of Core

Values

Employees Customers Stakeholders Owners

1. Be Ethical

2. Be Responsive

3. Be Profitable


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Characteristics of Effective Core

Values Clear and succinct

Usually no more than 6

Thought about and iterated a lot

They stay the same through time, they are sacred

Widely and frequently communicated Provide substantial guidance

Profitability is not the primary ingredient


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Leading with Core Values

Communicate to assure that people understandthe values and believe in the values.

Standardize the values: define what they meanand give examples of the value, tell valuestories.

Practice using the values:daily, weekly, monthly.

Encourage people to use the values to makedecisions.


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Leading with Core Values

Align to practices and systems with the values:

rewards, information sharing, measures,

meetings, teams, etc. Recognize people and groups that practice the

values. Inform others about how the values were

used to make a decision. Correct those who do not use the values or

violate them.


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CORE VALUES: EXAMPLES

MERCK

Corporate social responsibility

Unequivocal excellence in all aspects of the company

Science-based innovation

Honesty and integrity

Profit, but profit from work that benefits humanity


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PHILIP MORRIS

The right to freedom of choice

Winning beating others in a good fight

Encouraging individual initiative

Opportunity based on merit; no one is entitled to anything

Hard work and continuous self improvement


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SONY

Elevation of the Japanese culture and national status

Being pioneer not following others; doing the impossible

Encouraging individual ability and creativity

.


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Nordstrom

Service to the customer above all else

Never being satisfied

Hard work and individual productivity


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Identifying core values:

What core values you personally bring to work?

What would you tell your children?

If you have enough money to retire, would you

continue to live those values?

Can you envision them being as valid for next100 years?

Would you hold them even if they become

disadvantageous?

If you start a new organization, what core

values you would build into it, regardless of

industry?


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Core Purpose

Fundamental reason for being

Not to be confused with goals or strategies of thefirm

Purpose itself does not change, but it inspireschange

Its a guiding star on the horizon - forever pursued

but never reached

Core Purpose is a companys raison detre, not


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Core Purpose is a company s raison d etre, not

a goal or business strategy

3M : To Solve unsolved problems innovatively

Hewlett-Packard : To make technical contributions for the advancement and

welfare of humanity

Mary Kay Cosmetics: to give unlimited opportunity to women

Nike: to experience the emotion of competition, winning, and crushing thecompetition

McKinsey: To help corporations and Govts. be more successful in 100 years

Merck: To preserve and improve human life

Wal-Mart : To give ordinary folk the chance to buy the same things as richpeople

Walt Disney : To make people happy


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ROLE OF CORE IDEOLOGY IS TO

GUIDE AND INSPIRE, NOT TODIFFERENTIATE

Core ideology needs to be meaningful

and inspirational to people inside the

organization; it need not be exciting tooutsiders.


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A CLEAR AND WELL ARTICULATED

IDEOLOGY ATTRACTS TO THECOMPANY PEOPLE WHOSE PERSONAL

VALUES ARE COMPATIBLE WITH THE

COMPANYS COREV

ALUES

COREVALUESAND PURPOSESCANNOT

BEIMPOSED ONTHEPEOPLE


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Envisaged Future

BHAGS Vivid Description

Huge, daunting

goalsClear & compelling,

tangibleUnifying, inspiring,

engaging

Making goalsimaginable

The minds eye

Hopeful,passionate,

inspiringimages & symbols

1. Difficult Target2. Common enemy3. Role-model4. Internal -


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ENVISIONED FUTURE

VividDescription

Vibrant, engaging and specific description.

In 10-20 yrs. What would we love to see?

What will a writer say?

Passion, emotion and conviction are essential parts

of the vivid description


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Sony in the 50s

CORE IDEOLOGY

COREVALUES

Elevation of Japaneseculture & national status

Being a pioneer-notfollowing others, doing theimpossible

Encouraging individualability & creativity

PURPOSE

To experience the sheer joy

of innovation & the

application of technology

for the benefit & pleasure

of the general public


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SONY [Contd.]

ENVISIONED FUTURE

Become the company mostknown for changing the

worldwide poor-qualityimage of Japanese products

VIVID DESCRIPTION

We will create products

that become pervasivearound the world.

be the 1st Japanesecompany to go into the U.S.market & distribute directly

succeed with innovations thatU.S. companies have failedat- such as the transistorradio 50 years from now,our brand name will be aswell known as any in theworldMIJ will mean +


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