Because there is no way in the world that I can know as much about your business as you do, many of my suggestions and ideas I present will be somewhat generic, which means it is up to YOU to take the ideas I present and figure out how to make them work in your company, in your specific market, with your customers, with your employees. If you will continually ask the three questions above every time I put up a slide, there is a good chance that you will uncover something that will help your business significantly.
EO Auckland 4.4.13
Understanding the Pattern of Business Success
This is a very special workshop• I have a ton to cover and I will go pretty fast.• 80% is in the book.• Please take notes and ask questions.• I am happy to answer any of your questions, offer advice and recommend books at any time.• Work very hard… take this seriously. The slides are already posted at: www.SlideShare.net/johnspence
Success comes from executing the RIGHT ideas,not just from the planning process itself.
Five Foundations of Effective Strategy Business AcumenPersonal ExperiencePattern Recognition Strategic InsightDisciplined Execution 2
The Four – I’s• Ignorance• Inflexibility• Indifference• Inconsistency Page 2
How to avoid the Four I’s• Aggressive external market focus.• Aggressive customer focus.• Keep the “Main Things” the main things.• Bullish on knowledge sharing and learning.• Teamwork is mandatory – not optional.• Passion and commitment at all levels.• Foster a healthy paranoia.• Revel in change. 2
• The willingness… even enthusiasm… to change EVERYTHING combined with the wisdom to understand what must NEVER be changed.
The Key To Success in the New Normal…•Nimbleosity•Nimbo-licious
To get the most from our session together… It is absolutely critical that you bebrutally honest with yourself today. So lets get started with a little self-test… 3
“Simplicity isthe ultimatesophistication” Leonardo da Vinci
From the CEO of a little 172 billion dollar company… Look, what is strategy but resource allocation? When you strip away all the noise, that’s what it comes down to. Strategy means making clear-cut choices about how to compete. You cannot be everything to everybody, no matter what the size your business or how deep its pockets. You have to figure out what to say “NO” to. Jeffrey Immelt
Microsoft • Total World Domination • The Top 5 % • Bet the Company • Require Failure • Managers are Qualified • Perform, Perform, Perform • Shrimps vs. Weenies • Stop the Insanity • Espirit De Corps 4From: The Twelve Simple Secrets of Microsoft Management by Thielen
Lessons from seven top CEOs Dell, Welch, Gerstner, Grove, Gates, Kelleher, Walton = 696 B • Have an outside-in perspective • Be deeply passionate about your job • Understand the importance of culture • Create or adapt next generation products, processes and solutions • Implement the best ideas regardless of origin 1-10 4From: What the Best CEOs Know by Krames
The Toyota Way• Challenging Vision – We form a long-term vision, meeting challenges with courage and creativity to realize our dreams.• Kaizen – We improve our business operations continuously, always driving for innovation and evolution.• Genchi Genbutsu – We go to the source to find the facts to make correct decisions, build consensus, and achieve our goals at our best speed.• Respect, Challenge and Help your People and Suppliers – We respect others, make every effort to understand each other, take responsibility and do our best to build mutual trust.• Teamwork – We stimulate personal and professional growth, share the opportunities of development, and maximize individual and team performance. 5
What does it take to be a valued member of a team? Develop and display competence. Follow through on commitments. Deliver required results. Ensure your actions are consistent with your word. Stand behind the team and its people. Be enjoyable to work with. Be passionate about your work and those you serve. Communicate and keep everyone informed. Help the other members of the team. Help members of other teams. Share ideas, information and credit. Hold yourself 100% accountable.
• Direction – vivid, clear, inspiring --- shared• Measurements – specific, observable, focused• Competence – very good at what they do• Communication – open, honest, courageous• M utual Accountability – all team members• Discipline – do this every day 6
10 Key Team Competencies:1. Setting clear, specific and measurable goals.2. Making assignments extremely clear and ensuring required competence.3. Establishing accountability for high performance across the entire team.4. Running effective team meetings.5. Building strong levels of trust.6. Establishing open, honest and frank communications.7. Managing conflict effectively.8. Creating mutual respect and collaboration.9. Encouraging risk-taking and innovation. 1 - 1010. Engaging in ongoing team building activities. 6 6
The number one factor in increasing the level of highly satisfied and engaged CUSTOMERS in your business is… The level of highly satisfied and engaged EMPLOYEES in your business.
1,300,000 interviews: Basic 4 + 1 NITBFrom: The Orange Revolution by Gostick and Elton
What do engaged employees look like?1. They give more discretionary effort.2. They consistently exceed expectations. 1 - 103. They take more responsibility and initiative.4. They receive better customer service ratings.5. They offer more ideas for improvement.6. They promote and model teamwork.7. They volunteer more for extra assignments.8. They anticipate and adapt better to change.9. They persist at difficult work over time.10. They speak well of the organization. 7 11
Twice weekly surveys for five years of2,000+ senior managers and executives at:• IBM • Fidelity• GE • Motorola• Morgan Stanley • Ikon• Merck • American Express• 3M • Progressive• Microsoft • Bank of America• CIGNA • AT&T• Heineken • SAP• MasterCard • Borders
Keys to effective management… • Communicate clearly • Force the hard decisions • Focus on results 1 - 10 • Remain flexible to change • Prove your value to the customer • Force collaboration • Rigorous but not ruthless…From: Think Big – Act Small by Jennings
The Evergreen Project10 year study of 160 top companies40 distinct industries200 management practicesWinners, climbers, tumblers, losersWinners had an average Total Return to Shareholders of 945%... The Losers only averaged a TRS of 62%From: What (really) Works by Joyce, Nohria, Roberson
The Four Primary Practices: 1. A sharply focused, clearly communicated and well-understood strategy for growth. 2. Flawless operational execution that consistently delivers the value proposition. 3. A performance-oriented culture that does not tolerate mediocrity. 4. A fast, flexible, flat organization that reduces bureaucracy and simplifies work. 11From: What (really) Works by Joyce, Nohria, Roberson
The Secondary Management Practices: • Talent = find and keep the best people. • Key leaders show commitment and enthusiasm for the business. • Embrace strategic innovation. • Master the power of partnerships. Score yourself on the 1–10 scale for all eight practices on page 11From: What (really) Works by Joyce, Nohria, Roberson
Key Drivers of Financial Performance Business Success T olerate CR=104.12 N othing Global study: Quality P&S L ess 16 countries & Customer Relationship 29 companies 139 offices CR= .404 5,589 respondents Employee CR=.277 Satisfaction CR=.275 Workshop CR=.249 CR=.334 Page 13 Empowerment CR=.280 Coaching High Standards CR=.28 CR=.37 CR=.36 CR=.19 CR=.24 5 1 5 1 7 Long-term Enthusiasm, Training & Fair Orientation Commitment, Development Compensation Respect 12From: Practice What You Preach by Maister
What Inhibits Execution? National Survey of 4,000 Senior Executives 4. Inability to work together (21%) 3. Company culture (23%) 2. Economic climate (29%) 1. Holding onto the past / unwillingness to CHANGE (35%)
In other words… • In order to succeed you need a high-performance team that embraces a strong culture of disciplined execution and accountability while being nimble, agile and adaptable to changes in the marketplace.
Where are we going + how will we behave on the way? Praise + Celebration Focus and Differentiation Eliminate Mediocrity “No”Measure / Track Communicate Stakeholders + Transparency guiding collation Renewal Vision + Values Training + Strategy time / money / Plans supplies / Goals / people Objectives Tactics / Actions Procedures / Protocols Clear / consistent / Repeatable Process relentless
Disciplined Execution Clear Vision Detailed Strategy Guiding Coalition Alignment Systems 1 - 10 Communication Support Adjust Reward / Punish 14
Individual Workshop• Go back and look at all of your audits.• Where were your low scores, where were your high scores – what is the pattern?• Look over your notes – what were the key themes? What are the most important ideas?• Answers all the questions on pages 17 – 19.• Put in as much detail as possible.• Be very honest with yourself.• Think in terms of Actions and Outcomes.
In teams…• What do you feel were the FOUR biggest takeaways of the day? The four most important things you learned for creating a successful business?
Please read page 22 If you have any questions at all please do not hesitate to send a note or call. My email address is: firstname.lastname@example.org My twitter address is: @awesomelysimple*** Please connect with me on LinkedIn ***Also, you might find value in the ideas I share in my blog. You can sign up for it at: www.blog.johnspence.com Lastly, these slides have already been uploaded to: www.slideshare.net/johnspence
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