“BuilDing Company’s Vision”on Paper of James C Collins & Jerry I Porrar Presented by : Abhishek Rai ( 11Ex-002) PGDM (Executive) 2011-12
Vision ::Why& what Vision Why & whatVision provides guidance about what core topreserve and what future to stimulateprogress toward. Core Ideology Vision Envisioned future
Vision :Yin-Yang Core Ideology • What we stand for • Why we exist Envisioned Future • What we aspire to become, to achieve, to create • Something that will require significant change and progress to attain.
Core Ideology Core Ideology Core ideology provides the glue that holds an organization together as it Consistent Identity grows, decentralizes, diversifies, expands globally and develops workplace diversity”.Leaders Core Core Core Technological Ideology Purpose Values Breakthrough Manageme nt fads
Core Values Intrinsic values Belief of organization Timeless guiding principles • Mostly visionary company have three to five core values.How to find core Values ?• Ask relentlessly and honestly what values are truly central.• Ask about each one , if the circumstances changed and penalized us for holding this core value, would we still keep it.• “ A company should not change its core values in respect to market changes ; rather it should change markets, if necessary, to remain true to its core values”. Who should be involved in articulating the core values ? • Mars Group : A representative slice of company’s genetic code. Individual Organization If you awoke tomorrow with enough money to retire , would you continue to work with core values ? Can you envision them being as valid for you 100 years from now ? Will you hold them even if they become competitive disadvantage ?
Core Purpose Guiding star of horizon- Reason for Soul of Inspiration forever pursued , never being organization reached“ Core purpose is reason for someones existence not a goal or business strategy”. For Mckinsey & Company, purpose is not to do management consultancy but help corporate and governments to be more successful.Method of getting a purpose “Five Whys” i.e. Why it is important ? Five time. After a few why, you will come down to fundamental purpose of organization. Can “Maximizing shareholders wealth” be purpose ? Not possible as it cannot inspire people at all level of organization.Mars Group How could we frame the purpose of firm, so that if you work up tomorrow morning with enough to retire, you would nevertheless keep working here.
Discovering Core Ideology ( You do not create or set it, you discover it)• How ? By looking Inside.• Core Ideology is to guide and inspire not to differentiate.• The authenticity, the discipline and the consistency with which the ideology is lived not- not the content of ideology- differentiate visionary companies from the rest of the pack.• Core ideology needs to be meaningful and inspirational only to the people inside the organization, it need not be exciting to outsider.• A clear ideology attracts people with compatible core values and repels others.• A company can have a strong core ideology without a formal statement.• Don’t confuse core ideology with core competency.• Core competency defines capabilities whereas Core ideology captures what you stand for and why you exist.• Core competency change over decades but core ideology does not.
Envisioned Future 10 to 30 years What it will be like to Envisioned Future audacious goal achieve the goal• How ? By looking Inside.• Core Ideology is to guide and inspire not to differentiate.• The authenticity, the discipline and the consistency with which the ideology is lived not- not the content of ideology- differentiate visionary companies from the rest of the pack.
Vision Level BHAG ( Big, Hairy, Audacious Goals)• Visionary companies often use goals as “Climbing Mount Everest”, to stimulate progress & commitment to a huge-daunting challenge.• A true BHAG is : – Clear and compelling – Serves as unifying focal point of effort – Acts as catalyst of team spirit – Has clear finish line “Become a $ 125 billion company by the year 2000” - [ Wal-Mart, 1990]• A BHAG should not be a sure bet- it will have perhaps only a 50% to 70% probability of success – but the organization must believe that it can reach the goal anyways• BHAG : Four Categories-1. Target BHAGs2. Common enemy BHAGs –”We will destroyy Yamaha”- [Honda 1970s]3. Role-model BHAGs – “Become Harvard of the west”- [Stanford University, 1940s]4. Internal Transformation BHAGs- “Transform this company from defense contractor to best diversified company in world” – [Rockwell, 1995]
Vivid DescriptionWhat is Vivid description ?Vibrant , engaging, and specific description of what it is like to achieve BHAG• In 1930s Merck has the BHAG to transform itself from a chemical manufacturer into one of the preeminent drug-making companies of the world• Passion, emotion and conviction are essential parts of the vivid description.
Envisioned future: Key points• Don’t confuse core purpose with envisioned future as core purpose can never be completed whereas the BHAG is reachable in 10 to 30 years. “Did Shakespeare created the right Hamlet ? ”• It makes no sense to analyze whether the envisioned future is the right one. It is not prediction but creation and with a creation there can be no right answer. “What about failure to realize the envisioned future ? ”• Visionary companies set audacious goal but they still achieve them even without larger than life leaders at helm.• Success lies in process of lets try a lot of stuff and keep what works than by well defined strategy.• It is about building strength of organization as primary way of creating future. We have arrived syndrome• It is a complacent lethargy that arises once an organization achieves a BHAG and fails to replace it with another.
Building a visionary company requires 1% visionand 99 % alignment and for creating alignment first step will always be recasting VISION. “Thank you”