mymm-feb-25-01

Making Your MissionMaking Your Mission
MeaningfulMeaningful
Sam Swaminathan

Sam Swaminathan
ChangeChange
• There was no change in global GDP for
1000 years, except during the last 100
years.
• Innovation came from the village
blacksmith, baker, butcher, barber, and
banker.
• Suddenly, the density of connections has
grown and so the range of ideas has
grown too.

Sam Swaminathan
Rhetoric Vs RealityRhetoric Vs Reality
• Layoffs during 1999 was the highest in
the US [66,682 in Jan, 2001 among F-500
companies].
• Yet, corporations claim that employees
are their greatest assets!
• Business leaders are trusted the least
[Gallup Poll].

Sam Swaminathan
• Are corporations run like communist
governments:
– Over centralization
– Controlled information dissemination
– Bosses who are not accountable
– Rigid hierarchies
– Cronyism and sycophancy
– Distortion of truth and reality
– A few rich, vast numbers of poor
– Disagreements are punishable
– Your position determines your power
Corporations & CommunismCorporations & Communism

Sam Swaminathan
By:
– Benchmarking with the world’s best
– Learning from them
– Developing revolutionary new
approaches to management
– Never letting success get to its head
How does your company become great?How does your company become great?

Fortune’sMostAdmired-Fortune’sMostAdmired-
20002000

GE: The fastest elephant at the dance!

GE Leaders . . . Always withGE Leaders . . . Always with
unyielding integrityunyielding integrity . . .. . .
AreAre passionately focusedpassionately focused on drivingon driving
customer successcustomer success
Live Six Sigma Quality . . . ensure that theLive Six Sigma Quality . . . ensure that the
customer is always its first beneficiarycustomer is always its first beneficiary . . .. . .
and use it to accelerate growthand use it to accelerate growth
Insist on excellence and are intolerant ofInsist on excellence and are intolerant of
bureaucracybureaucracy
Act in a boundaryless fashion . . . alwaysAct in a boundaryless fashion . . . always
search for and apply thesearch for and apply the best ideasbest ideas
regardless of their sourceregardless of their source

Prize global intellectual capital and thePrize global intellectual capital and the peoplepeople thatthat
provide it . . . build diverse teams to maximize itprovide it . . . build diverse teams to maximize it
See change for the growth opportunities it brings . . .See change for the growth opportunities it brings . . .
i.e.,i.e., "e-Business""e-Business"
Create a clear, simple,Create a clear, simple, customer-centered visioncustomer-centered vision . . .. . .
and continually renew and refresh its executionand continually renew and refresh its execution
Create an environment of "stretch," excitement,Create an environment of "stretch," excitement,
informality andinformality and trusttrust . . . reward improvements . . .. . . reward improvements . . .
and celebrate resultsand celebrate results
Demonstrate . . . always with infectious enthusiasmDemonstrate . . . always with infectious enthusiasm
for the customer . . . the "4-E's" offor the customer . . . the "4-E's" of GE leadershipGE leadership::
the personalthe personal EnergyEnergy to welcome and deal with theto welcome and deal with the
speed of change . . . the ability to create anspeed of change . . . the ability to create an
atmosphere thatatmosphere that EnergizesEnergizes others . . . theothers . . . the EdgeEdge toto
make difficult decisions . . . and the ability tomake difficult decisions . . . and the ability to
consistentlyconsistently ExecuteExecute

Sam Swaminathan
• Our heritage is no longer our
destiny.
• The old economy has to synthesize
with new economy capabilities to
create the Post-Industrial
Enterprise.
- Gary Hamel

Sam Swaminathan
ChangeChange
• Change is about abandoning your
comfort zone far enough to reach
the fringes of the changes
surrounding you, challenging
yourself again and again, and trying
out things you never dreamt of
trying before.

Sam Swaminathan
Mission and VisionMission and Vision
What’s wrong with them…
• They tell you what the score should
look like when the game is over.
• They tell you nothing about what
people should do to make that score.

Sam Swaminathan
What’s wrong with them…
• They sound the same
• It is hard to disagree with them
• Very few people in the company
know how to achieve them

Sam Swaminathan
What’s wrong with them?
You’ll never know if you have truetrue buy-
in
or phonyphony buy-in.
Because…
… there’s no way to be against them.

Sam Swaminathan
• It is during periods of gut-wrenching
change that we need faith. Mission
statements can and do provide that faith.
• When developed and implemented
properly, they transform organizations
into communities of practice, that
generate incredible and sustained profits
while keeping their stakeholders happy.
Can Mission and Vision help?

Sam Swaminathan
Seek Consensus…
… and then distrustdistrust it.

Sam Swaminathan
If it comes real easy, get nervous.
It means no one intends toIt means no one intends to
change their behavior.change their behavior.

Sam Swaminathan
Will your gardener, security guardgardener, security guard
and receptionistreceptionist know what you are
talking about…
…and what they are supposed to do?

Sam Swaminathan
The job of the leader is to convince people
that they are not doing lots of things – they
are just 1 or 3. They help people understand
how this ‘new thing’ integrates with
everything else you are doing. If you can do
that, you can make your org. receptive to
lots of radical changes. Its capacity to
absorb frequent wild changes goes up
dramatically. If you can’t do that you are part
of the problem. You are going to overload
everybody.

Sam Swaminathan
Be nervous setting goals which only
8 or 10 people understand how they
can be achieved.

Sam Swaminathan
If your objectives deal with things like
working capital or inventory turns, you
have a pretty good idea who is going
to work on it.
The more vague the goals,
the more difficult it gets.

Sam Swaminathan
ObjectivesObjectives
Make sure your goals are articulate and clear.
The higher you go, the more
ambiguous will be your goals.
This is called
COGNITIVE COMPLEXITY.COGNITIVE COMPLEXITY.

Sam Swaminathan
There are bosses like Gandhi who
describe what they want in such
metaphysical terms, you don’t know
what the hell they are talking about.
If you can’t handle that, you don’t
deserve to get promoted.

Sam Swaminathan
You can tell everyone about actions and
behaviors, not CONCEPTS.
Be empowering.empowering.
Be boundaryless.boundaryless.
Be integrated.integrated.

Sam Swaminathan
Your objectives should include the
creation of processes and structures
to take vague concepts and make the
gardener, security guard and
receptionist understand what actions
and behaviors are expected of them.

Sam Swaminathan
This is called creating
LINE OF SIGHTLINE OF SIGHT

Sam Swaminathan
• Convert sweet words into actions and
behaviors. These become the goals and
objectives of people.
Line of SightLine of Sight
• Measure the actions and behaviors you
desire.
Performance ManagementPerformance Management
• Align rewards with desired actions and
behaviors.
Compensation ManagementCompensation Management

Sam Swaminathan
A good system gives you what you
want.
Don’t set up systems that give you what
you don’tdon’t want.

Sam Swaminathan
If sharing best practices is important to
your company, rewardreward people who
share them and punishpunish those who
don’t.
Otherwise it won’t happen.

Sam Swaminathan
There are two critical components of
setting objectives.
OneOne is the idea of creating integrative
mechanisms to help your people
understand why what’s important is
important, and connecting them with
the rest of what you do.

Sam Swaminathan
TwoTwo is creating Line of Sight.
You don’t just feed people information.
Instead, you describe it in terms that
help them understand what they can
do to achieve corporate objectives.

Sam Swaminathan
Line of SightLine of Sight helps people understand
that the new thing we are bringing in is
not another attack on everything else.
It’s congruent.It’s congruent.
Then, help them understand how they
can contribute and why they should.

Sam Swaminathan
SS - Stretch
MM - Measurable
AA - Agreed
RR - Realistic
TT - Time-Bound

Sam Swaminathan
• Is it challenging?
• How does it compare with previous
ones?
• Are there any best practices?
• Are they specific at lower levels?

Sam Swaminathan
• How does it stack up qualitatively?
• Are there corporate standards?
• How does it stack up quantitatively?
• How much will it cost / earn?
• How long should it take?
• How much effort is required?

Sam Swaminathan
• Did we agree on the resources – what,
how much?
• Are there any imponderables?
• Did we agree on standards of
excellence?

Sam Swaminathan
• In all fairness, can this be done?
• Do you and the organization have the
resources that this will require?
• Are we flying a kite?
• Can we draw experience from past
objectives?

Sam Swaminathan
• What are the agreed timelines?
• Does each constituent know about
these timelines and has he/she agreed
to commit?

Sam Swaminathan
Great companies set objectives based
upon two factors:
• What should performance
look like?
• How should it be achieved?

Sam Swaminathan
GE’s LeadershipGE’s Leadership
Development ModelDevelopment Model
T3T3 T4T4
T1T1 T2T2
Low VALUESVALUES High
High
Low
PERFORMANCEPERFORMANCE

Sam Swaminathan
GE’s LeadershipGE’s Leadership
Development ModelDevelopment Model
T1T1 – Say goodbye
now
T2T2 – Coach, give a
chance
T3T3 – Tyrant.
Warn – if no
change, get rid
T4T4 – Make them role
models
T3T3 T4T4
T1T1 T2T2
Low VALUESVALUES High
High
Low
PERFORMANCEPERFORMANCE

Sam Swaminathan
Tyranny is not leadership.
Cruelty is not edge.
- Jack Welch on Leadership

Sam Swaminathan
Backward ImagingBackward Imaging
You are at a party, end of year.
You are celebrating the achievement
of your company’s objectives.
You are a substantially
more integrated
organization than before.

Sam Swaminathan
You are looking back, and asking
yourselves:
What are our people doing now that
they were not doing six months ago?
More ofMore of // Less ofLess of
Stopped doingStopped doing // Started doingStarted doing
Bull’s Eye Drill

Sam Swaminathan
What would we do that we are not doing
now?
Any revolution must
change the majority’s behavior.
If you are not going to act
differently, you are not going to
get different results. Bull’s Eye Drill

Sam Swaminathan
Bull’s Eye DrillBull’s Eye Drill
The outputThe output from thefrom the
is the inputis the input
to everything else.to everything else.

Sam Swaminathan
What we should do What we do now
Share ideas
Cross-fn. sales teams
Build diversity

Sam Swaminathan
• Take every plank of your objectives and
values, and run it as a separate exercise.
Run it separately for senior people.
• Everything that is done must be connected.
• It doesn’t matter who is singing, it is the
same song.

Sam Swaminathan
• Take the list of ‘more of’ and ‘less of’,
mix them up, so you know which ones
are where, but a more naive reader
wouldn’t know. Put a box in the
employee cafeteria, make it anonymous,
give them the list of things and ask the
question: “If you were to do each of the
actions and behaviors described below,
what would be the organization’s
reaction?”

Sam Swaminathan
• Responses:
– 1. I would expect to be rewarded or
approved
– 2. I would expect to be punished or
disapproved
– 3. There would be no reaction of any
kind till hell froze over
• Do a frequency count and locate the
crossover items:

Sam Swaminathan
• 1. We have to do more of those
seven things, but your people are
saying that if they do those things,
they would get killed around here
• 2. You are saying this has to stop,
and I get paid handsomely to do it.
You are injecting dye into the
bloodstream.

Sam Swaminathan
• It is often the case that senior
managers have a good reward
system, but middle and lower levels
get punished for the very things that
are required.
• So you change the rewards for middle
managers and below. You next look at
first-line supervisors.

Sam Swaminathan
• All your HR processes become your
friends if you hit the Bull’s Eye.

Sam Swaminathan
Clean Sheet ExerciseClean Sheet Exercise
• This is how you change glop into
tasks, roles, and responsibilities. Then
you use the Clean Sheet Exercise to
see if the measurements are lined up
or screwy. Then you use the rewards
system to see if they are lined up or
screwy.

Sam Swaminathan
Imagine …
• no measurements,
• no controls,
• no auditors,
• no Mickey Mouse accountants who
haunt your lives, and make you
miserable…
We would then be twice as productive.We would then be twice as productive.

Sam Swaminathan
Phone rings, secretary says…
“You better take this.”
You know this is an important call – who
might it be that would cause your
secretary to say “You’d better take
this” ?

Sam Swaminathan
• Boss?
• Senior management?
• Important Customer?
• Family situation?
• Government regulator?
• Important supplier to whom you are
vulnerable?
In 3 minutes, you have got in touch withIn 3 minutes, you have got in touch with
your stakeholders or constituencies.your stakeholders or constituencies.

Sam Swaminathan
Take them one at a
time, and discover
the dimensions in
which you are
vulnerable.
CUSTOMERCUSTOMER
Dimensions:
• Supplies
• Price
• Quality
• Schedule
• Responsiveness
• Creativity

Sam Swaminathan
• If we had no measurements at all, what
would we have to keep track of inside to
keep that phone from ringing outside?
OROR
• What would we have to keep track of inside
so that when the telephone did ring, it at
least wouldn’t be the first time you heard
about it?

Sam Swaminathan
Output ofOutput of
The CSE tells you the dimensions inThe CSE tells you the dimensions in
which you are vulnerable.which you are vulnerable.
Next Question:
What do we measure now?
What do we keep track of now?

Sam Swaminathan
Output of the CSE What we measure now
ROAROA EVAEVA
AbsenceAbsence LatenessLateness
TurnoverTurnover MarginsMargins

Sam Swaminathan
Output of the CSE What we measure now
ROAROA EVAEVA
AbsenceAbsence LatenessLateness
TurnoverTurnover MarginsMargins
Connect the stuff on the left with that on the rightConnect the stuff on the left with that on the right

Sam Swaminathan
Do we measure any of the dimensions
in which we are vulnerable?

Sam Swaminathan
• If you find stuff on the left that doesn’t
connect with stuff on the right, spend
time answering the question –
‘How could we measure these things, so
that at least when the phone rings, it
wouldn’t be the first time I heard about
it?’

Sam Swaminathan
• This becomes a realignment, a recalibration.
It’s a test of goodness of fit between what
you are measuring and controlling and what
you ought to be, to meet the needs,
demands, requirements and expectations of
your major constituents. This is a lens.This is a lens.
Create a hundred lenses.
The questions are the lenses.

Sam Swaminathan
• This is a test of alignment between
what you say you want, and what
you say you are measuring.
• If you say one thing and measure
something quite different, you set
yourself up for failure.

Sam Swaminathan
• If you are not measuring what you
want, how are you going to coach,
mentor, and give feedback? How are
you going to reward people who do it,
and punish those who don’t?
• How are you going to act?

Sam Swaminathan
Guard against
Middle Circles
while setting
objectives and
doing
performance
appraisals.
Top CircleTop Circle
Middle CircleMiddle Circle

Sam Swaminathan
Middle CirclesMiddle Circles
It’s the end of the year, you are having a
party, you have done it, what are you
seeing more of ?
Answer:
More respect for ourMore respect for our
products and servicesproducts and services

Sam Swaminathan
Great answer, but respectrespect is not an
action.
It’s a thought word - it’s middle circle.
You can’t measuremeasure or rewardreward respect.
It’s not useful.

Sam Swaminathan
Ask:
“Great, if your customers had more
respect, what would they be doing
that they are not doing now?”

Sam Swaminathan
Next,
Ask what you should be doing to gain
the respect of customers.

Sam Swaminathan
• Our quality standards meet the
requirements of customers.
• Our customers are promptly and
openly informed of any known actual
or potential problems with our
products or services.

Sam Swaminathan
It’s the end of the year…
You are an empowered organization,
you are celebrating, what are you
seeing lessless of?
Answer:
Less employee fearLess employee fear

Sam Swaminathan
Great example, but that’s middle circle.
FearFear is an emotionemotion, not a behavior.
Ask:
“So if the work force was less afraid,
what would they do that they are not
doing now because they are afraid?”

Sam Swaminathan
They speak up, they disagree,
they take more risk, etc.
Now you are talking
actionsactions andand behaviors.behaviors.

Sam Swaminathan
It’s the end of the year…
You are an empowered organization,
you are celebrating, what are you
seeing moremore of?
Answer:
Greater employeeGreater employee
commitmentcommitment

Sam Swaminathan
That’s middle circle.
CommitmentCommitment is an emotionemotion, not a
behavior.
Ask:
“So if the work force is more committed,
what would they do that they are not
doing now because they are not
committed?”

Sam Swaminathan
• They are reliable
• They deliver what they promise
• They put their company’s
interests before their own
• They speak out when an individual
or the company acts contrary to its
values.

Sam Swaminathan
• I can never depend on you.
• You don’t have integrity.
• You are not responsible.
These are all examples of the middle
circle. It is always resisted.
Convert the middle circle intoConvert the middle circle into
actions.actions.

Sam Swaminathan
Don’t say, “I can’t depend on you.”
Instead, you say, “Let me describe 3
actions that I noticed you take, and
you tell me how I can account for this.”

Sam Swaminathan
AlignmentAlignment
Check the objectives in your
Performance Appraisal – look at the
dimensions.
Identify items that are a hodge-podge of
middle circles and behaviors. Rework
them to hook to the left side of your
CSE and your BED.

Sam Swaminathan
Fostering T4 TypesFostering T4 Types
• You set objectives in order to meet the
performance requirements of your
organization.
• But you also have to ensure that
they are met while upholding
the values of the organization.
• That’s what helps you develop and retain
T4T4 staff, managersstaff, managers and leaders.leaders.

Developing PeopleDeveloping People
Punishing mistakes severely
don’t prevent them; they simply
get driven underground. Now
people won’t admit them. So you
learn about them late, and don’t
have time to set them right.

Case Study - ICase Study - I
A Multinational
Company

Sam Swaminathan
A CULTURAL JOURNEYA CULTURAL JOURNEY
• Care more than others think
wise.
• Risk more than others think
safe.
• Dream more than others think
practical.
• Expect more than others
think possible.
STARBUCKS

Sam Swaminathan
MISSION STATEMENTSMISSION STATEMENTS
"Establish Starbucks as the premier
purveyor of the finest coffee in the
world while maintaining our
uncompromising principles as we
grow. The following five guiding
principles will help us measure the
appropriateness of our decisions:

Sam Swaminathan
1) Provide a great work environment and treat each
other with respect and dignity.
2) Apply the highest standards of excellence to the
purchasing, roasting, and fresh delivery of our
coffee.
3) Develop enthusiastically satisfied customers all
of the time.
4) Contribute positively to our communities and our
environment.
5) Recognize that profitability is essential to our
future success."
STARBUCKSSTARBUCKS

Sam Swaminathan
STARBUCKSSTARBUCKS
• Employer of choice
– Higher pay than the market
– benefits not available elsewhere
– A group of investors and managers should
not win at the expense of employees
• Health-care to include 20 hour a week
employees
• Treat people like family and they will
give their all

Sam Swaminathan
STARBUCKSSTARBUCKS
• Investors asked, “how can you be so
extravagant with our money?”
– Reduced recruitment and training costs
– Low turnover increases customer loyalty
– Part-timers make up 2/3 of the work force
– Their contribution should be valued
– 75 percent is covered, including AIDS
• Does this work?

Sam Swaminathan
STARBUCKSSTARBUCKS
• Nationwide front-line turnover rate
is 150 to 400%; here it is 60 to 65%
• Store managers - 50% Vs 25%
• More importantly, the real benefit
has been in the attitude of
employees
• Bill Clinton recognized Starbucks in
April ‘94 for its health-care program

Sam Swaminathan
STARBUCKSSTARBUCKS
• The mission statement is not a trophy
to decorate the office walls, but an
organic body of beliefs, a foundation
of guiding principles held in common.
• A Mission Review team receives a
comment card from employees who
see decisions/actions that do not
support the Mission Statement.
• Response within 2 weeks

Sam Swaminathan
STARBUCKSSTARBUCKS
• Bean Stock - stock options to all, in
proportion to the level of base pay
[started at 12% - now 14%].
• Investors might hold a slightly
smaller percentage of the company,
but the value of their holdings
would grow faster and more surely.
• A special exemption from the SEC
was required.

Sam Swaminathan
STARBUCKSSTARBUCKS
• Since that day, no one is called an
employee. Everyone is called a partner.
• A partner earning $20,000 would be given
$2,400 of stock options. He could cash in
one-fifth of the amount each year after
that, simultaneously buying at the first
year’s low price and selling at the current
price, keeping the difference.

Case Study - IICase Study - II
A Local Company

One Company’sOne Company’s
ExperienceExperience
Presented by:
Captain Ole H. Wang
Managing Director,
International Tanker
Management, Holding Ltd.
Dubai

Sam Swaminathan
Mission statementMission statement
“To be a leading tanker manager and
preferred partner to the global
shipping industry, by ensuring
customer satisfaction through
quality service provided by a team
of dynamic professionals”

Sam Swaminathan
Company values.Company values.
• Integrity
• Working as a team
• People are the source of our strength,
show respect and concern.
• Continues improvement and innovation
• Every employee is equally important
• Encourage individual initiative and
personal growth

Sam Swaminathan
The proof of the puddingThe proof of the pudding
Financial result 1999
Financial result 2000
Financial result (2001)
Corrective action
request 1999/2000
Undesired events 1999
Undesired events 2000
» A
» 2.1 X A
» 3 X A
» Ship/year
» 6.2 / 3.4
» 11/ship/year
» 4/ship/year

Brought to you by
Sam SwaminathanSam Swaminathan
Center for Creative Thinking
http://www.ccthinking.com
HELPING YOU THINK
DIFFERENTLY

mymm-feb-25-01

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