New 7 vision engineering

On Vision Engineering

Ziya G. Boyacigiller

This presentation was created and given by Ziya Boyacigiller who was leading Angel Investor and a loved mentor to many young entrepreneurs in Turkey. We have shared it on the web for everyone’s benefit. It is free to use but please cite Ziya Boyacigiller as the source when you use any part of this presentation. For more about Ziya Boyacigiller’s contributions to the start-up Ecosystem of Turkey, please go to www.ziyaboyacigiller.com

Vision - Mission In Practice

Ziya G. BoyacıgillerSabanci UniversitesiYonetim Bilimleri Fakultesi

The Seven Domains of Attractive Opportunities

Ziya G. Boyacigiller (c) 2005 EMBA 3

MODIFIED by ZGB, from “The New Business Road Test”, by J. Mullins

MA

CR

OM

ICR

O

MARKET DOMAIN INDUSTRY DOMAIN

VISION

Note: Market is customers, industry is sellers…

Is the Market Attractive?Assessment Metrics

Number of customers in the market,

Aggregate money spent by these customers on the relevant goods and services,

Number of units of relevant product or usage occasions,

How fast is the market growing (in the past and future)

Ziya G. Boyacigiller (c) 2005 EMBA 4

HOW DO WE PICK OUR“MARKET”?

Creating a Vision…

Ziya G. Boyacigiller (c) 2005 EMBA 5

Ziya G. Boyacigiller (c) 2005 EMBA 6

Vision…… paints a mental picture of the future.

Ziya G. Boyacigiller (c) 2005 EMBA 8

To Create a “Compelling* Vision” you need a

Picture of the Future

Vision is about going somewhere • “Man on the moon”• How Soviets ruled over the 1976 Olympics…

Where we are now

Vision Where we will be in the future

(* “compelling” means “you have to take action NOW” …)

Ziya G. Boyacigiller (c) 2005 EMBA 10

ML King speech…paints a picture of the end-result

I have a dream that one day on the red hills of

Georgia the sons of former slaves and the sons of

former slave owners will be able to sit down together

at the table of brotherhood. ...I have a dream that my

four little children will one day live in a nation where

they will not be judged by the color of their skin but

by the -content of their character. ...I have a dream

that one day the state of Alabama. ..will be

transformed into a situation where little black boys

and girls will be able to join hands with little white

boys and girls and walk together as sisters and

brothers. ...

Ziya G. Boyacigiller (c) 2005 EMBA 11

How to Activate the Power of Visualization Paint in words a detailed description of the end

result, a picture of the future.

The power of picture works when you focus on what you want to create not what you want to get rid of.

The power of picture works when you focus on the end result, not the process to achieve it.

Enhance the visual picture with five-senses, to make it seem as real as you can

Ziya G. Boyacigiller © 2005

Vision versus Goals Vision provides continued guidance

(“leader in space exploration”)

Goals are focused on specific achievements (“man on the moon”)

Goals, once achieved, prompt the question: “What is next?”

Ziya G. Boyacigiller © 2005

Vision Defined:

Vision is knowing who you are, where you’re going, and what will guide your journey.

Ziya G. Boyacigiller (c) 2005 EMBA 14

Vision …

…defines what will happen in the future, and

how you will fit into that picture.

Examples: Microsoft – Why Bill dropped out of school… Intel – Memories to microprocessors…

Smell Changesto find Opportunities

Change drivesOpportunities

Ziya G. Boyacigiller (c) 2005 EMBA 17

Vision Engineering:1. Identify “drivers of change” for the industry.

Economic, social/cultural, political, regulatory, demographic, technological, natural trends that will change how the industry functions. Which of these “incoming waves” is strongest?

2. Analyze how these drivers of change will affect every stage of the value chain for the industry. Note the threats / opportunities.

3. Decide where you want to be.4. What capabilities and competencies does your

company need to develop, what assets do you have or should get - to exploit the opportunities, dodge the threats, and ride the waves of change.

Ziya G. Boyacigiller (c) 2005 EMBA 18

Trends Affecting PC Industry – Early 1990s Economic

Shift toward service and information economy Increased domestic and global competition Increased power of low labor-cost Asian countries …

Political Globalization of world economies Further deregulation of telephone companies Legislation of trade barriers (e.g. Japanese tariffs) …

Social Increased computer literacy and sophistication Need for reschooling and continuing education Development of computer stores …

Technological Increasingly powerful chips Faster and cheaper peripherals Increased networking capabilities …

Ziya G. Boyacigiller (c) 2005 EMBA 19

Vision Engineering:1. Identify “drivers of change” for the industry.

Economic, social, political, technological trends that will change how the industry functions. Which of these “incoming waves” is strongest?

2. Analyze how these drivers of change will affect every stage of the value chain for the industry. Note the threats / opportunities.

3. Decide where you want to be.4. What capabilities and competencies does your

company need to develop, what assets do you have or should get - to exploit the opportunities, dodge the threats, and ride the waves of change.

Ziya G. Boyacigiller (c) 2005 EMBA 20

See Both Sides of a Crisis

THREAT

OPPORTUNITY

YING YANG

Ziya G. Boyacigiller (c) 2005 EMBA 21

U.S. Auto Industry Profit Pool(Modified from HBR, May 1998, Orit Gadiesh and James L. Gilbert)

auto manufacturing

new car sales

used car sales

loans

leasing

insurance

gas

service/repair

aftermarket parts

auto rental

gasoil

100%

SHARE OF INDUSTRY REVENUE

OP

ER

ATIN

G M

AR

GIN

%

Profit = share$ x OM%

Ziya G. Boyacigiller (c) 2005 EMBA 22

How will the all-electric car affect the value chain?

auto manufacturing

new car sales

used car sales

loans

leasing

insurance

gas

service/repair

aftermarket parts

auto rental

gasoil

100%

SHARE OF INDUSTRY REVENUE

OP

ER

ATIN

G M

AR

GIN

%

Ziya G. Boyacigiller (c) 2005 EMBA 23

Maxim’s Vision (1983)

1. World will be more and more digital in the future.

2. Digital will need analog to exist.

3. Thus analog growth will be parallel to microprocessor growth.

4. Maxim will capitalize on the analog.

Ziya G. Boyacigiller (c) 2005 EMBA 24

Vision Engineering:1. Identify “drivers of change” for the industry.

Economic, social, political, technological trends that will change how the industry functions. Which of these “incoming waves” is strongest?

2. Analyze how these drivers of change will affect every stage of the value chain for the industry. Note the threats / opportunities.

3. Decide where you want to be.4. What capabilities and competencies does your

company need to develop, what assets do you have or should get - to exploit the opportunities, dodge the threats, and ride the waves of change.

Ziya G. Boyacigiller (c) 2005 EMBA 25

Maxim’s Vision (1983)

1. World will be more and more digital in the future.

2. Digital will need analog to exist.

3. Thus analog growth will be parallel to microprocessor growth.

4. Maxim will capitalize on the analog.

Ziya G. Boyacigiller (c) 2005 EMBA 26

1983

Maxim starts up

2000

Maxim sales $1B

Ziya G. Boyacigiller (c) 2005 EMBA 27

Maxim’s Value Growth

Ziya G. Boyacigiller (c) 2005 EMBA 28

Vision Engineering:1. Identify “drivers of change” for the industry.

Economic, social, political, technological trends that will change how the industry functions. Which of these “incoming waves” is strongest?

2. Analyze how these drivers of change will affect every stage of the value chain for the industry. Note the threats / opportunities.

3. Decide where you want to be.4. What capabilities and competencies does your

company need to develop, what assets do you have or should get - to exploit the opportunities, dodge the threats, and ride the waves of change.

Ziya G. Boyacigiller (c) 2005 EMBA 29

When the tide rises, all the boats rise with it…

R I D I N G T H E W A V E

Ziya G. Boyacigiller (c) 2005 EMBA 30

Maxim’s VisionResources & Capacities Needed(Why You? Why can you get there…)

Analog expertise ( knowledge) is a scarce resource, which will allow us to compete effectively ( monopolize).

We already have some of the best analog experts in the world, and we can find and train more as we grow.

We can create a world class analog company.

We can use excess fabrication capacity available in the industry for manufacturing, thus we can startup with low capital investment.

We can get the initial investment from VCs.

Ziya G. Boyacigiller (c) 2005 EMBA 31

First, Vision Next, Mission If you show the stakeholders what

your vision is, you will make sure that they are seeing the exciting “big picture” as you do.

Then, they will be excited about the specific opportunity/threat you want to pursue.

Ziya G. Boyacigiller (c) 2005 EMBA 34

Vision vs Mission Vision is about where you are going

Mission is about how you will get there

Where we are now

Where we will be in the future

Mission What we do to get from here to there

Vision is not enough; it must

be combined with venture. It

is not enough to stare up the

steps, we must step up the

stairs.

Ziya G. Boyacigiller (c) 2005 EMBA 35

Vaclav Havel

Ziya G. Boyacigiller (c) 2005 EMBA 36

Tests of a good Vision/Mission Statement Imaginable: Describes the future

Desirable: Benefits for followers

Feasible: Realistic, attainable goals

Focused: Shows what to do & not to do

Flexible: General enough to allow for “individual initiative” and “alternative response” when conditions change (situation or information) – allows moving from Plan A to Plan B etc.

Easy to communicate: Can be explained in less than 2 minutes (elevator-test)

From “Realizing Change CD, P.Kottler)

Copyright (c) Ziya G. Boyacigiller 2003, 2004

To Create Compelling Vision need:

Purpose Without purpose, visions are not compelling

enough…

Purpose defines what business we are really in, what we are here for, why we exist

Explain “Why we?”

A good purpose should “serve a greater good” (Merck)

Copyright (c) Ziya G. Boyacigiller 2003, 2004

From www.Merck.com :Merck & Co., Inc. is a leading research-driven

pharmaceutical products and services company. Merck discovers, develops, manufactures and markets a broad range of innovative products to improve human and animal health, directly and through its joint ventures.

OUR MISSIONThe mission of Merck is to provide society with superior

products and services by developing innovations and solutions that improve the quality of life and satisfy customer needs, and to provide employees with meaningful work and advancement opportunities, and investors with a superior rate of return.

Copyright (c) Ziya G. Boyacigiller 2003, 2004

Summary of Purpose:

Purpose is your organization’s reason for existence – meaning to exist

It answers the question “Why do you do it?” rather than just explaining what you do.

Great organizations have a deep and noble sense of purpose – a significant purpose – that inspires excitement and commitment. (stone cutters story)

Ziya G. Boyacigiller (c) 2005 EMBA 40

Example:Maxim’s Vision & Mission Vision:

World will be more and more digital in the future. Digital will need analog to exist. Thus analog growth will be parallel to microprocessor growth. Analog expertise (knowledge) is a scarce resource, which will allow us to compete effectively (monopolize*). We have some of the best analog experts in the world, and we can find and train more as we grow.

We will create a world-class analog company and use innovation to make the world a better place for us all...

Mission:We add value to our customers’ products through our analog

definition, design, and manufacturing expertise. (expertise = knowledge)

(*: At the time Maxim’s gross margin was > 70%…)

FUTURE(WHERE)

PURPOSE (WHY)

HOW

Ziya G. Boyacigiller (c) 2005 EMBA 41

Mission has two components

Mission:①We add value to our customers’ products

Benefit for customers (and other stakeholders)

②through our analog definition, design, and manufacturing expertise.

How you create/deliver that benefit what you will do / will not do

IMPORTANT!

Write your mission

statement after

you have developed

your strategy…Ziya G. Boyacigiller (c) 2005 EMBA 42

Ziya G. Boyacigiller (c) 2005 EMBA 43

Why do organizations need to make their mission clear to everyone?

Ziya G. Boyacigiller (c) 2005 EMBA 44

Vision, Purpose, & Mission

Result in: Everyone rows in the same direction.

People have the power to make important decisions on their own

They take charge (proactive) rather than wait (passive or reactive).

They find-a-way (creativity) when faced with a problem

Everyone assumes responsibility and accountability for their own actions (company gets results)

Everyone finds a place for themselves to fit in the larger whole

Company becomes effective and efficient

Copyright (c) Ziya G. Boyacigiller 2003, 2004

For Vision to become Reality:

It is important: How it is created (process of creating it) How it is communicated (keep talking, stories) How it is lived (courage of commitment, take a

step, always focus on your vision)

As the leader of your company, your job is to help articulate the vision, to champion the vision, but not to “own” the vision. Everyone in the company must own the vision. (Say “Our vision is …” and NOT “My vision is…”

Ziya G. Boyacigiller (c) 2005 EMBA 46

Final Words…Effort to define vision and mission is necessary to show

stakeholders if your business has a reason to exist now and in the future; to be a

- compelling, - viable, - growing, and - sustainable business.

If stakeholders won’t buy into this reason, they will not agree to work with you!

They will say “I’m out!”

Copyright (c) Ziya G. Boyacigiller 2003, 2004

Whatever you can do, or dream you can, begin it.

Boldness has genius, power, and magic in it.

- GOETHE

Copyright (c) Ziya G. Boyacigiller 2003, 2004

A journey of ten thousand miles,

starts with a

single step.

-CHINEESE PROVERB

Copyright (c) Ziya G. Boyacigiller 2003, 2004

A journey of ten thousand miles,

starts with a

vision.

-Ziya’s version of this CHINEESE PROVERB

He who risks and fails can be forgiven. He who never risks and never fails is a failure in his whole being.

Paul TillichZiya G. Boyacigiller (c) 2005 EMBA 50