"Turning Goals into Results". Presentation based on article by Jim Collins. Explaining how big and audacious goals can be turned into reality? How to think out of box? How you can convert dreams into reality?

1. Turning Goals into Results
The Power of Catalytic Mechanisms
by Jim Collinsby Jim Collins
Courtesy: Harvard Business ReviewCourtesy: Harvard Business Review
Compiled by:
Syed Muhammad Ijaz, FCA, LLB
Group CFO, City Schools.
Special thanks and assistance by:
• Imran Akram-ACA Senior Manager Finance
•Zarka Farooq-Assistant Manager.

2. What does that mean
“turning goals into results?”
• Executives have big hairy audacious goals also known as
BHAGsBHAGs. Too that end they put forward ambitious vision
statements, enthusiastic speeches, and aggressive goal oriented
schemes, building layers of bureaucratic tantrum. How much of
these are materialized is very well known to all of us, isn’t it?
• Time and over again, many of the powerful managerial tools
have been invented to codify the apparently impossible dreams
into reality – one of the tools is named as Catalytic Mechanism.
• Catalytic mechanism are the link between the objectives and
performance;
1. They galvanize non- bureaucratic means into one another,
2. They are easy to create and implement,
3. They are the most underutilized and most promising
devices,
Executives can use to achieve their BHAGs – Big, Hairy, Audacious,BHAGs – Big, Hairy, Audacious,
Goals.Goals.

3. Anatomy of BHAGs
There are three characteristics if a good BHAGs:

4. Examples of BHAGs
The following example better explains the BHAG its characteristics and catalytic
mechanism;
•Granite Rock, that sells crushed gravels, concrete, sand and asphalt gave their company a
new BHAG, total customer satisfaction.
•This was not at all an easy goal to achieve for a family owned company whose employees
are mostly though sweaty people operating rocks and whose customers are not easily
dazzled.
•Now think how we can achieve this ambitious goal?
•Instead of going for the traditional galvanized leadership methodology, Granite Rock,
opted for the concept of “short pay”.
•The bottom of very invoice reads “if you are not satisfied for any reason, don’t pay us for
it, imply scratch out the line item, write a brief note about the problem and return copy of
this invoice along with your check for the balance”.
•No doubt “short pay” was a critical device for turning BHAG into reality and improving
razor thin margins to profits ratios.
•Granite Rocks was dead serious about the customer satisfaction in a what that goes far
beyond slogans and finally it keep Granite Rock from basking into glory of its remarkable
success.
•Another device “red flag” concept was introduced by Jim Collins in his class which gave
the students the right to use it once for a quarter, since its non transferable and saleable. But
it give opportunity equally to each student to share their views and take part in upfront
discussions.

5. Characteristics of a Catalytic Mechanisms

6. Catalytic Mechanisms produces desired
results in unpredictable ways:
• Executives while identifying bold organizational goals, first design plethora of
systems, controls, procedures and practices, this process is named “alignment”.
• Controls that undergird alignment also creates bureaucracy and it should be
news to no one that bureaucracy does not breed extraordinary results, since
bureaucracy leads to predictability and conformity.
• Organizations achieve greatness when they are allowed to do unexpected things
and take initiative for the creativity and think out of the box. That is when
amazing results occur.
Example:
1. Take example of 3M where 15% rule was introduces when the scientists were allowed to
utilize the lab out for 15% of their total time and they come up with big great ideas and see
3M sales increases by 40 folds since then.
• Ultimately, introducing catalytic mechanism leads to better results , variation,
improvement and enhances results.
• Thus, giving up controls and decreasing predictability, you increase the
probability of attaining extraordinary results.

7. Catalytic Mechanism distributes power for the
benefit of overall system, often to the great
discomfort of those who traditionally hold power;
• With enough powers executives can always get people jump through hoops.
Example:
If increasing market share is the dream, then they will only promote those managers who make
it happen.
• “Short pay” distributes powers to the great discomfort of Granite Rock’s
executives, similarly, “Red Flag” distributes powers to the great discomfort of
teachers but to the ultimate improvement of learning in general.
• Catalytic mechanisms force the right things to happen even though those in
power often have a vested interest in the right things not happening.
• Catalytic mechanism exemplifies the beauty and power of redistributing powers.
• Catalytic mechanism tilts the balance of power away from inertia and towards
change.
• When executives vest people with power and responsibility and step out of the
way, vast reservoirs of energy and competence flow forth.
• Again we have a paradox, the more executives disperse power and responsibility
the more likely the organization is to reach its big hairy audacious goal.

8. Catalytic Mechanism has teeth;
• Plenty of the organizations state the lofty intentions to empower people few
translates that into results with a mechanism that has teeth like “Red Flag”.
• Catalytic mechanism puts a process in place that all but guarantees that the
vision will be fulfilled. A catalytic mechanism has a sharp set of teeth.
Example:
Take an example of a Nucor’s Steel Corporation, to be an organization whose workers and
management share the common goal of being the most efficient, high quality steel operation
in the world, thereby creating job security and corporate prosperity in and industry
ravaged by foreign competition.
• Nucor’s vision may sound warm and fuzzy. Dig deeper, and you will see that it
actually leaves no room for unproductive employees.
Examples:
Powerful mechanism with teeth;
• Five people do the work that ten do at other steel companies and get paid like eight.

9. Catalytic mechanism ejects
viruses;
• Traditionally controls are designed to get employees to act the “right” way and
do the “right” things even if they are not inclined.
• But catalytic mechanism help organizations to get the right people in the first
place keep them and eject those who do not share the company’s core values.
• “People are your most important asset” is wrong, “right people are your most
important asset”.
• The real challenge is to find people who already share your core values and
create a catalytic mechanism and those who don’t share the core values will self
eject themselves.
• You are a leader if and only if people chose you to be and thus W.L Gore &
associates come up with an idea that most creative and productive work came
when people freely made commitments to one another not when the bosses told
them to do so. This mechanism attracted the right people like magnet and pulled
the wrong ones away.

10. Catalytic Mechanism produces an ongoing
effect;
• Leaders who feign a crisis, and creates a burning platform without
simultaneously building catalytic mechanism do more harm than good by
creating a syndrome of crisis addiction.
• To produce lasting effects they have to shift from orchestrating a series of
events to building catalytic mechanism.
• Part of failure is based upon the approach to reform , too often buzzwords
rather than catalytic mechanism that produces sustained effects.
• The ongoing effect of a catalytic mechanism in a corporate setting goes like;
CEO of kimberly-clark created his BHAG to transform the company from a mediocre forest
and paper product company onto a world class consumer goods company, for that he
create a catalytic event and a catalytic mechanism, “he sold a big chunk of company’s
paper production mills thus leaving no easy escape route from the dream and committed
company head to head competition with the best consumer products company in world
Proctor and Gamble.”
With entry into disposable diapers kimberly clark entered as a direct rival of P&G
“The beauty of catalytic mechanism unlike the “change or die” is its ongoing
effect as powerful today as it was in past”.

11. Traditional managerial
device, control or
mechanism.
Catalytic Mechanism Examples of Catalytic
Mechanism
Reduces variation as it
enlarges the organization’s
bureaucracy
Produces desired results in
unpredictable ways
Ref Flag made ferociously opinionated
CEO listen to the challenge of an MBA
student improving the knowledge of
whole class despite of the unexpected
nature of exchange.
Concentrates power in the
hands of authorities who can
force people to obey their
commands
Distributes powers for the
benefit of overall system to the
discomfort of those who have
traditionally holding powers
New government rule allowed a low
level manager to expunge an
immensely wasteful regulation that
required nearly new uniforms to be
burned.
Is understood by employees
and executives alike as merely
an intention
Has sharp set of teeth Short pay at granite rock allows
customers to pay only for the products
that satisfy them.
Attempts to stimulate the right
behaviors from the wrong
people
Attracts the right people and
ejects viruses
W.L.Gore & associates employees can
in effect fir their bosses ensuring non
hierarchical leadership.
Has the short lived impact of a
single event or a fad
Produces an ongoing effect Kimberly clark put itself into head to
head competition with proctor and
gamble to impel better performance in
the comsuner goods arket place such a
strategy is still working 30 years later.
Catalytic Mechanism-Breaking from Tradition;

12. Principles to follow while forming a catalytic
mechanism;
1. Don’t just add, remove
2. Create, don’t copy
3. Use money but not only money
4. Allow your mechanism to evolve
5. Build an integrated set
• Developing a set of catalytic mechanism should be an organic process, an
ongoing discipline, a habit of mind and action.
• Catalytic mechanism should be catalysts not inhibitors.
• After all, a catalytic mechanism alone will not create greatness they need a
dream to guide them but if you blend huge intangible aspirations with
simple tangible catalytic mechanism then you will have the magic
combination from which sustained excellence grows.
Conclusion:
“If you build castles in the air, your work need not to be lost, that is where they
should be. Now put foundations under them”.
BHAGs are the company’s wildest dreams. Catalytic Mechanisms are their
foundations. Build them both.

13. That’s it!That’s it!