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Did CV really make a mistake? vendor logic vs. customer logicEx-post classification of structural barriers vs. ex-ante building.

The fallacy of technological determinism, first mover advantages

Sun case = Network economies.Audacious Goals beat IBMStrategy a few good betsAnd execution

Bluff, bluster, sellingTactical ingenuity/The dramatic gestureNever say dieThe lean and hungry look.

Similarities and contrasts with PSS

Sun Recap

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Profitability based on a few factors Niche Markets

Multiple Assets Embedded Coordination Mechanisms Mass Markets

FLEDGLING BUSINESSES MATURE CORPORATIONS

Huge gap between fledgling andmature business

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Decades of initiatives and effort

No foreknowledge of path or outcome

But purposive not random

Evolutionary, purposive transformation

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Distinctive entrepreneurial tasks

Necessary traits

Diagnostic questions

Todays talk

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Articulation of audacious goals and purpose

Formulation of a strategy

Effective implementation

1. Distinctive entrepreneurial tasks

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Impetus for search

Justification

Securing resources

Cooperation

Articulation of Goals

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TRANSITIONAL FIRMSProvide impetus for search, justify investments,help secure resources and promote cooperation

PROMISING STARTUPSConcerns about survival and cash flow dominate

LARGE CORPORATIONSLimited by history and sizeAudacious goals for individual units/initiatives possible

Firm Size and Maturity

Importance

IMPORTANCE OF ARTICULATING AUDACIOUS GOALS

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Articulation of audacious goals and purpose

Formulation of a strategy

Effective implementation

Rules to channel initiatives and investmentstowards the achievement of firm goals

1. Distinctive Entrepreneurial tasks

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Where and how firm will add value Breadth and attributes of product line

Distribution channels Technology and R&D

Organizational: Structure, staff, culture...

Elements of a strategy -- rules for:

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Goals

Prior experience

Adaptation

Limited analysis and research

Formulation of strategies:

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Articulation of audacious goals and purpose

Effective implementation

Formulation of strategy

Translation of broad rules into specific

investments and initiatives

1. Entrepreneurial tasks

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Strategy = map of Everest, not winning lottery ticket

Limits to delegation

Importance of implementation:

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Customers

Capital providers

Staff

Upgrading resources

Building the organizational infrastructure

Norms and culture

Reporting relationships, incentives, control systems

Critical implementation tasks:

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2.Necessary traits:

Pursuit of audacious goals

High ambition

the dream and will to found a private kingdom; thewill to conquer, to succeed for the sake not of thefruits of success, but of success itself; and finally the

joy of creating, of getting things done."

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Re-investment

Developing new assets

Personal guaranteesLoss of control

Head on competition with large companies

Delegation of responsibilities

Pursuit of audacious goals

High ambition and tolerance for risk

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RISKS FACED BY TOP-DECISION MAKERS

PersonalRisk

TRANSITIONAL FIRMSEntrepreneurs wealth tied to value of firm equity,May also have to guarantee debt

LARGE CORPORATIONSSeparation of risk-bearing and managementCEOs can diversify personal portfolios

PROMISING STARTUPSRequire little initial capital or valuable intellectual propertyLow opportunity costs of founders time

Firm Size and Maturity

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Constancy

Inspiration and Intimidation

Learning new skills

2. Necessary traits:

Implementation

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Opportunistic Adaptation Risk- transfer and syndication

...require different qualities ...

Articulating goals Formulating strategies

Implementation of strategies

Tasks

DistinctiveQualities

DIFFERENCES IN INITIATIVES, TASKS AND QUALITIES

STARTING A PROMISING BUSINESS BUILDING A LARGE CORPORATION

New initiatives and tasks...

Tolerance for ambiguity Decisiveness Open-mindedness Managing internal conflictTactical ingenuity Self-control Perceptiveness Sales skills

Grand ambition Willingness to take risk Imagination Creative Synthesis Abstraction Constancy Inspiration and intimidation Learning new skills

Initiatives One-Off, Low Investment, High Uncertainty Initiatives

Complementary, multi-period with more investment and lessuncertainty

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Hierarchy of questions:

Goals?

Founders Role?

Strategy?

Implementation?

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Wrap up

Significant opportunities and risks Overwhelming issues and options One-size-fit-all models dont work Broad periodic self-examination