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SFX Consulting
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Steve Fletcher BEng CEng MIMechEAugust 2016Extracts of Harvard Business Review Strategy PaperJames C Collins & Jerry I Porras September 1996
Building Company Vision
SFX Consulting
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Building Company Vision
Motivation1
Building Vision Explained2
3 Conclusions & Summary
Detail, Examples & How 2’sA
SFX Consulting
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Throughout my career as an engineer, I felt confused over the many various management descriptions – what do they mean, how are they connected and do they have an order of cascade?
Building Company Vision
Motivation: What’s it all about?
Vision Mission
Objectives
Tactics
Strategy
Values
PurposeIdeology
Operating Practices
Operational EfficiencyGoals
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Top businesses typically have the following mechanisms to try to drive the team forward:
Building Company Vision
Motivation: What do the books say…
Vision
Mission
Objectives
Tactics
Strategy
ValuesPurpose
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Top businesses typically have the following mechanisms to try to drive the team forward:
Top of the tree is Vision, this cascades all the way down to define our day to day tactics (or actions)
All of this is underpinned by Values & Purpose
Building Company Vision
Motivation: What do the books say…
Vision
Mission
Objectives
Tactics
Strategy
ValuesPurpose
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Companies that enjoy enduring success have core values and a core purpose that remain fixed while their business strategies and practices endlessly adapt to a changing world.
Well conceived vision consists of two major components:
- Core Ideology; this defines what we stand for and why we exist. - Values- Purpose
- Envisioned Future; what we aspire to become, to achieve or to create.- Big Hairy Audacious Goal (BHAG)- A vivid description
Building Company Vision
Overview: Building Vision
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Defines what we stand for and why we exist.
Building Company Vision
Overview: Core Ideology
Values
In our heart, what we stand for. Beliefs we hold dear and would hold on to unflinchingly irrespective of commercial gain.
Purpose
Why we exist and our motivation for doing the company’s work.In our head and our hands, what we’re here to do.
Purpose
Values
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Defines what we stand for and why we exist.
Building Company VisionOverview: Core IdeologySony Case Study
Values
Elevation of the Japanese culture and national statusBeing a pioneer – not following others; doing the impossibleEncouraging individual ability & creativity
Purpose
To experience the joy of advancing and applying technology for the benefit of the public
Purpose
Values
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What we aspire to become, to achieve or to create.
Building Company Vision
Overview: Envisioned Future
Vivid Description – Words & Music
A vibrant , engaging and tangible picture of what it will be like to achieve the BHAG.
Big Hairy Audacious Goal (BHAG) - Headline
An ambitious long term (10-30 years) plan which inspires the entire organization. Unifying focal point of effort and a catalyst for team spirit
$1billon
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What we aspire to become, to achieve or to create.
Building Company VisionOverview: Envisioned Future Sony Case Study
Vivid Description – Words & Music
‘Fifty years from now, our brand name will be as well known as any in the world…and will signify innovation and quality…’Made in Japan’ will mean something fine, not something shoddy’
Big Hairy Audacious Goal (BHAG) - Title
To become the company most known for changing the worldwide poor-quality image of Japanese products
$1billon
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Building Company Vision
Overview: Put them together
$1billonPurpose
Values
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Building Company VisionOverview: Put them togetherSony Case Study
$1billonPurpose
Values
ValuesElevation of the Japanese culture and national statusBeing a pioneer – not following others; doing the impossibleEncouraging individual ability & creativity
Purpose To experience the joy of advancing and applying technology for the benefit of the public
Vivid Description‘Fifty years from now, our brand name will be as well known as any in the world…and will signify innovation and quality…’Made in Japan’ will mean something fine, not something shoddy’
Big Hairy Audacious Goal (BHAG)To become the company most known for changing the worldwide poor-quality image of Japanese products
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Building Company Vision
Overview: Filling the Gaps
$1billon
£50m in 5 Years
Major presence in Europe
Major presence in USA
Manufacturing at 1 million unitsPurpose
Values
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Building Company Vision
Overview: Filling the Gaps
$1billon
£50m in 5 Years
Major presence in Europe
Major presence in USA
Manufacturing at 1 million unitsPurpose
Values
Measurement
Toolkit
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Building Company Vision
Conclusions & Summary
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Before approaching Mission statements and cascading to Objectives, Strategies and Tactics it is crucial to have clear sight of your company vision (BHAG) and underlying core values and core purpose.
Building Company Vision
Conclusions & Summary
This enables clear articulation to the business of why Objectives etc. are important and valid. This works both up and down the management hierarchy, allowing better decision making for the senior management whilst giving clarity and purpose to all staff.
It is prudent to have a confident view of these ideas, however the key is to not get too hung up on all of the detail. There is subjectivity to these definitions, what is most important is that they resonate across the company. Aim to minimise management-speak and work in plain English, the idea is to build camaraderie across the team – not for the senior team to look smart and alienate everyone!
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Core Purpose- Why we exist and our motivation for doing the company’s work.- In our head and our hands, what we’re here to do.
Core Values- In our heart, what we stand for. Beliefs we hold dear and would hold on to
unflinchingly irrespective of commercial gain.
BHAG (Big Hairy Audacious Goal)- An ambitious long term (10-30 years) plan which inspires the entire
organization. Unifying focal point of effort and a catalyst for team spirit
Vivid Description- A vibrant , engaging and tangible picture of what it will be like to achieve
the BHAG.
Building Company Vision
Conclusions & Summary
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One of the most intriguing results of the Collins and Porras BHAG study was the finding that in order to be effective, companies have to put BHAGs in place while they are infant enterprises. Only one of the 18 firms the authors studied set up a BHAG after reaching a mature size. "It turns out," Collins says, "that the real key is to give your company good parenting."
An example from Starbucks is to overtake Coke as the world’s leading brand. It is a good example of fit with company strategy, purpose and values. The Starbucks BHAG is about world-class brand-building – at the heart of their strategy and values, not number of stores or revenue targets. And it will take the company performing at their best for 20 years to reach
Building Company Vision
‘…we’re not Sony for godsake, isn’t this just for the Big Guys?’
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Building Company Vision
Detail, Examples & How 2’s
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Building Company Vision
Core Values
Values
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Handful of guiding principles by which a company navigates. Requires no external justification Intrinsic and not merely made to capitalize on business opportunities Great companies will change their markets/customers and maintain their core values Largely independent of current environment, competitive requirements or management
fads. Visionary companies rarely have more than five core values.
Building Company Vision
Core Values - Explained
‘…core values embodied in our credo might be a competitive advantage, but this is not why we have them. We have them because they define for us what we stand for, and we would hold them even if they became a competitive disadvantage in certain situations’ Ralph S Loren CEO Johnson & Johnson Values
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No CynicismNurturing of ‘wholesome American values’
Creativity, dreams and imaginationFanatical attention to consistency & detail
Preservation and control of the Disney magic
Building Company Vision
Core Values - Examples
Elevation of the Japanese culture and national statusBeing a pioneer – not following others; doing the
impossibleEncouraging individual ability & creativity
Product Excellence Respect for the individual Values
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This is a discovery process Be relentlessly honest These are not operating practices, business strategies or cultural norms They should be able to stand the test of time
Building Company Vision
Defining your Company Core Values
Question If circumstances changed and a proposed core value penalized
us, would you still stand by it? What would you tell your children are your core values at work in
hope that they carry them into their working lives? If money was no object to you, would you still hold the same core
values? Will they still be valid in 100 years time? Would you still hold them even if they were a competitive
disadvantage? If you started a new business in a different industry would you
build these same core values into it?
Values
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Building Company Vision
Core PurposePurpose
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Fundamental reason or being which captures the soul of the organization Idealistic motivation for doing work, inspires change and drives objectives and strategies Can be true for 100 years or more Forever pursued, but never reached Not: current products or customers Not specific goals or business strategies
Building Company Vision
Core Purpose - Explained
‘Core Purpose is a Company's Reason for Being. People assume wrongly, that a company exists just to make money…this is important… but we have to go deeper to find the real reason. Together…they are able to accomplish something collectively that they could not accomplish separately – they make a contribution to society…underlying drive comes from a desire to do something else, make a product, provide a service – to do something which is of value’ David Packard - Hewlett Packard
Purpose
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Building Company Vision
Core Purpose - Examples
To solve unsolved problems innovatively To make people happy
To experience the joy of advancing and applying technology for the
benefit of the public
To give ordinary people the chance to buy the same things as rich people
To experience the emotion of competition, winning and
crushing competitors
To make technical contributions for the advancement and welfare of
humanity
Purpose
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This is a discovery process. Try using the ‘Five Whys?’ Why is this important…
- Why do we make a certain product?- Because it’s hard to do
- Why do we work on stuff that is hard to do?- Because we enjoy being challenged and our customers struggle with these problems
- Why do we enjoy being challenged?- We are driven and… etc etc!
Fundamentally what links all of this? What inspires us and will inspire our team?
Building Company Vision
Defining your Company Core Purpose
Consider this scenario:- An offer to buy the Company was made at a very good price. - All employees futures are guaranteed, but in a different industry- the Company as we know it would be closed down
Would you accept the offer? Why or Why Not? What would be lost if the company ceased to exist? Why is it important for the company to continue to exist?
Purpose
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Building Company Vision
Big Hairy Audacious Goal
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An ambitious plan which inspires the entire organization. Typically 10-30 years work to complete Not a small scale goal, or mid term strategy A unifying focal point of effort, acts as a catalyst for team spirit Not a 100% certainty it will be achieved
‘…in order to be effective, companies have to put BHAGs in place while they are infant enterprises. Only one of the 18 firms studied set up a BHAG after reaching a mature size…’"It turns out, that the real key is to give yourcompany good parenting."Collins & Porras
Building Company Vision
Big Hairy Audacious Goal (BHAG) - Explained
$1billon
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Wal Mart (1990’s): Become a $125 billion company by 2000 Sony (1960’s): To become the company most known for changing the worldwide poor-
quality image of Japanese products Amazon: Every book, ever printed, in any language, all available in less than 60
seconds. Microsoft: A computer on every desk and in every home.
Nike (1960’s): Crush Adidas Churchill (1938): Beat Hitler
Stanford Uni (1940’s): Become the Harvard of the west Giro Sport Design (1980’s): Become the Nike of the cycling industry
GE(1980’s): Be number 1 or 2 in every market we serve in. Have the strengths of a big company with the leanness and agility of a small company.
Rockwell (1990’s): Transform from a defense contractor to the best diversified high tech company in the world
Building Company Vision
Big Hairy Audacious Goal (BHAG) - Examples
Qua
ntita
tive
/ Q
ualit
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Com
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En
emy
Role
M
odel
Inte
rnal
Tr
ansf
orm
-ati
on
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Don’t confuse this with core purpose This is a goal and can be achieved. When completed (or perhaps if) then a new BHAG is defined. This is a creative process! In 20 years time what would you love to see? What should it feel like to the employees? What would a major publication (Newsweek, Time etc…) say about the Company in 20
years time? Be confident – this is supposed to be ambitious that’s why its called a BIG HAIRY
AUDACIOUS GOAL!
Building Company Vision
Developing the Company’s Big Hairy Audacious Goal
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Building Company Vision
Vivid Description
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Take the BHAG and develop it!
Building Company Vision
Developing the Company’s Vivid Description
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Sony (1960’s): To become the company most known for changing the worldwide
‘Fifty years from now, our brand name will be as well known as any in the world…and will signify innovation and quality…’Made in Japan’ will mean something fine, not something shoddy’.
Churchill (1938): Beat Hitler
‘Hitler knows he will have to break us on this island or lose the war. If we can stand up to him, all Europe may be free, and the life of the world may move forward into broad, sunlit uplands. But if we fail, the whole world, including the United States, including all we have known or cared for, will sink into the abyss of a new Dark Age….Let us therefore brace ourselves…for a thousand years, men will still say, ‘This was or finest hour.’
Building Company Vision
BHAG & Vivid Description - Examples
