View
219
Download
0
Tags:
Embed Size (px)
Citation preview
Fixing Social SecurityFixing Social Security
President Franklin D. Roosevelt established social President Franklin D. Roosevelt established social security 70 years ago to help lift seniors out of poverty.security 70 years ago to help lift seniors out of poverty. There was no up-front funding. There was no up-front funding. The current average annual check is $14,000.The current average annual check is $14,000. 2/3 of 36 million seniors count this as half of their 2/3 of 36 million seniors count this as half of their income.income. A financial solvency problem looms as baby boomers A financial solvency problem looms as baby boomers reach retirement agereach retirement age Can the stock market help fix the problem?Can the stock market help fix the problem?
Private AccountsPrivate Accounts Workers would have 1/3 of their payroll taxes put into an Workers would have 1/3 of their payroll taxes put into an
individual account.individual account. Social Security returns about 2% a year.Social Security returns about 2% a year. Like PERS workers would select from various investment options.Like PERS workers would select from various investment options. The premise is that higher risk investments will produce higher The premise is that higher risk investments will produce higher
returns and result in more retirement income.returns and result in more retirement income. Could also encourage additional savings through added incentives. Could also encourage additional savings through added incentives.
i.e. workers under 55 could divert 4% of theirs earnings up to i.e. workers under 55 could divert 4% of theirs earnings up to $1,000 to a private account.$1,000 to a private account.
The private account approach would require the federal The private account approach would require the federal government to borrow about $160 billion for the first two or three government to borrow about $160 billion for the first two or three years.years.
Alternative to Private AccountsAlternative to Private Accounts
Raise the current 6.2% rate or increase the taxable amount Raise the current 6.2% rate or increase the taxable amount from first $90,000 to maybe $150,000.from first $90,000 to maybe $150,000.
Eliminate the current inheritance tax that expires in 2010.Eliminate the current inheritance tax that expires in 2010. Raise the retirement age from the current 67 for those born Raise the retirement age from the current 67 for those born
after 1960 to 70.after 1960 to 70. Reduce the payment rate.Reduce the payment rate.
So what is going to happen?So what is going to happen?
Continue to contend that the $3.7 trillion financial shortfall Continue to contend that the $3.7 trillion financial shortfall won’t happen if there is decent economic and population won’t happen if there is decent economic and population growth.growth.
Politics will play a major role in determining if anything Politics will play a major role in determining if anything will be done.will be done.
Who is paying federal taxes?Who is paying federal taxes?
To be in the top 25% of all tax payers you need to earn:
$52,965.
To be in the top 50% of all tax payers you need to earn:
$26,415
Who is paying federal taxes?Who is paying federal taxes?
Percentiles Share of AGI % of Fed. Taxes Paid
Top 1% 19.5% 36.2%
Top 5% 34.0% 55.5%
Top 10% 44.9% 66.5%
Top 25% 66.5% 83.5%
Top 50% 86.8% 96.0%
Bottom 50% 13.2% 4.0%
Course ScheduleCourse Schedule
Section I and II of ATP is due a week from today, Feb. 1.
Midterm exam is a week later on Feb. 8.
Midterm exam clinic on Wednesday, Feb. 2 at 4 to 5 PM.
Paper ObjectivePaper ObjectiveThe battle between digital and analog continues. Actually it
is not much of a battle since digital always wins because of
accuracy and the fact that it is more cost effective. This was
the case with telecommunications and is becoming the norm
for an increasing number of consumer products. Media is
becoming digital such as cameras, DVDs, music and
television. For this reason the traditional distinction between
computers and consumer products is gone. This results in a
competitive battlefield between computer companies like
Apple, HP and Dell and consumer product companies like
Sony, Phillips and Matsushita.
Their goal is to maximize their role in providing a wide range
of digital capabilities. It is the intent of this paper to evaluate
this competition with a specific focus on Apple Computer.
There is not an established industry term to identify this new
competition, digital hub industry will be used throughout the
paper.
To accomplish this analysis section I will describe the
industry and the major competitors. Section II will . . .
Digital Hub IndustryDigital Hub Industry
1.1. The personal computer is transforming itself into the hub of The personal computer is transforming itself into the hub of people’s digital lives. people’s digital lives.
2.2. The PC industry is pursuing growth on a broader consumer The PC industry is pursuing growth on a broader consumer front while the consumer product industry is recognizing the front while the consumer product industry is recognizing the disappearance of the distinction between their products and disappearance of the distinction between their products and computers and its related potential.computers and its related potential.
3.3. So they are meeting somewhere in between. So they are meeting somewhere in between.
4.4. The key to market opportunity is to figure out how to make The key to market opportunity is to figure out how to make the technology easy to use by the average consumer and not the technology easy to use by the average consumer and not just computer gurus.just computer gurus.
Digital HubDigital Hub Personal Computer.Personal Computer. Internet Access.Internet Access. Video Recorder.Video Recorder. DVD video player. DVD video player. MP3 music server. MP3 music server. Advanced telephone and fax machine. Advanced telephone and fax machine. Digital photography and video hub. Digital photography and video hub. Video chat via the TV screen. Video chat via the TV screen.
Major CompetitorsMajor CompetitorsTraditional computer companies:Traditional computer companies:
– AppleApple– DellDell– Hewlett-PackardHewlett-Packard– GatewayGateway– MicrosoftMicrosoft
Traditional Consumer Product Companies:
• Sony
• Matsushita Electric
• Phillips
• Numerous smaller niche companies
Digital Hub IndustryDigital Hub Industry
Traditional Computer Service Companies:Traditional Computer Service Companies:
– AOLAOL
– YahooYahoo
– Service organizations of computer companies.Service organizations of computer companies.
Potential New Entrants:
Media companies
Substitutes:
Services versus equipment
Chapter 5 SummaryChapter 5 Summary
Information Systems Can Information Systems Can Redefine Competitive Redefine Competitive
BoundariesBoundaries
Major Chapter MessagesMajor Chapter Messages
Network-based systems (interorganizational sytems) are Network-based systems (interorganizational sytems) are providing the vehicle to create alliances between multiple providing the vehicle to create alliances between multiple companies to strengthen their competitive positions.companies to strengthen their competitive positions.
This approach frequently dictates the need for on-going This approach frequently dictates the need for on-going communication that is possible through the network links.communication that is possible through the network links.
Extranets through the use of Internet technology have Extranets through the use of Internet technology have become the preferred way for new efforts.become the preferred way for new efforts.
EDI systems remain unless company needs or priorities EDI systems remain unless company needs or priorities change.change.
Dell Computer is the role model for these types of systems Dell Computer is the role model for these types of systems because of their success with the direct business model. because of their success with the direct business model.
How does this chapter fit within the How does this chapter fit within the bigger scheme of things?bigger scheme of things?
Networks are the delivery vehicle for business communication Networks are the delivery vehicle for business communication
traffic.traffic.
Representative of the companies we are evaluating: Representative of the companies we are evaluating:
Dell – Direct business model.Dell – Direct business model.
Intel – Rosettanet link with customers.Intel – Rosettanet link with customers.
Knight-Ridder – Links for news article between 31 Knight-Ridder – Links for news article between 31
newspapers.newspapers.
Plantronics – Links with distributors.Plantronics – Links with distributors.
Better customer service:
• We are available.
• We are interested in you.
• We are responsive.
• You can count on us.
• We want to earn your trust and respect.
Interorganizational SystemsInterorganizational Systems
Why?• Tough for a company to face the challenges of a
global market by itself• Enables a company to build combined capabilities
to make it a stronger competitor• Creation of an extended enterprise: Us Versus Them
Strategic AlliancesStrategic Alliances
Figure 5-1
Interorganizational SystemsInterorganizational Systems
Industry Forces
Company
Customers
Vendors
Support Services
Business Partners
Competitors
• Providing access to a new product or geographic market
• Significantly improving a position in an existing market
• Accelerating the time to bring new products to market
• Dramatically changing product cost structure
Strategic Alliance ObjectivesStrategic Alliance Objectives
Alliances Provide Growth Alliances Provide Growth OpportunitiesOpportunities
Considerations when going global:
• Who are your customers?
• Can you tailor your products to specific markets?
• How do you deal with foreign competitors?
• Do you have the skills and resources necessary to compete outside of your home market?
EDI and/or ExtranetsEDI and/or Extranets
• More of a business than technical issue• Can improve relationships between a firm and its
partners• Implementation obstacles along the lines of:
- Data- Communications- Applications- Business Processes
Conclusions Conclusions
Three ways to extend the capabilities of an enterprise through the use of IT:
1) Interorganizational systems
2) Multiple forms of strategic alliances
3) Business process changes involving customers and suppliers
Possible Exam QuestionsPossible Exam Questions
1.1. Explain the term extended enterprise and the Explain the term extended enterprise and the possible benefits for a company in attempting to possible benefits for a company in attempting to establish a better competitive position.establish a better competitive position.
2.2. Explain and contrast the current extranet Explain and contrast the current extranet emphasis with the more traditional EDI emphasis with the more traditional EDI approach.approach.
Chapter GoalChapter Goal
The intent of this chapter is to position vision
as the starting point in directing, posturing,
and running a business.
Chapter SpecificsChapter Specifics
Define and understand visionDefine and understand vision
Two successful company examplesTwo successful company examples
USAAUSAA
WhirlpoolWhirlpool
Conclude with the importance of visionConclude with the importance of vision
What is a Vision?What is a Vision?
A vision is a photograph of what the company wants to
be look like in the future.
A vision is realistic, credible, and attractive.
Not a dream, but something achievable.
Must be concrete and easy to understand.
The Uncertainties of a VisionThe Uncertainties of a Vision
The dynamics of the market (customers)The dynamics of the market (customers)
Rapidly changing technologies that frequently offer Rapidly changing technologies that frequently offer new product life cyclesnew product life cycles
The logic and need to address changing employee The logic and need to address changing employee values and traditional ways that work is donevalues and traditional ways that work is done
The shift from the old to new regulatory practices The shift from the old to new regulatory practices in many industriesin many industries
The Vision-to-Action ProcessThe Vision-to-Action Process
Sensing Opportunity
Vision
Strategy
Tactic and Business Plan
Agreement and Commitment
Implementation (Action)Figure 6-1
USAA and WhirlpoolUSAA and Whirlpool
Two organizations that successfully Two organizations that successfully
implemented a vision processimplemented a vision process
A Leader With a VisionA Leader With a Vision
General Robert F. McDermott, CEO of USAA, and his vision:
“To become a company that provides the best possible customer service.
Our goal is to become a paperless insurance company. We may never get there, but that is where we are going.”
Customer Service and Employees
Customers keep the company running
Customer service is the vision driver
Service comes before either profits or growth
The Golden Rule: to serve others as you would want to be served
Employees make the vision happen
Quality service comes from employees’ satisfaction with the company and work place.
New CEO, David Whitwam in 1987, first initiated his vision in 1988 to become the global leader in the large appliance industry.
The World’s The World’s Manufacturer and Marketer of Major Manufacturer and Marketer of Major
Home AppliancesHome Appliances
LargestLargest
Whirlpool CorporationWhirlpool Corporation
The Whirlpool Global Vision:The Whirlpool Global Vision:
“Whirlpool, in its chosen lines of business, will grow with new opportunities and be the leader in an ever-changing global market. We will be driven by our commitment to continuous quality improvement and to exceeding all of our customers’ expectations. We will gain competitive advantage through this, and by building on our existing strengths and developing new competencies. We will be market driven, efficient and profitable. Our success will make Whirlpool a company that worldwide customers, employees and other stakeholders can depend on.” Whirlpool 1993 Annual report.
““Think Global But Act Local”Think Global But Act Local”
In ConclusionIn Conclusion
As General McDermott said, “How As General McDermott said, “How do you know what you should be do you know what you should be doing today, if you don’t know where doing today, if you don’t know where you are going?”you are going?”
CEO Job DescriptionCEO Job Description
The primary job of a CEO is deal with the long-term viability of the business.
Leaders combine vision with communication that leads to a shared purpose.
A leader sets the vision which is different from being a visionary.
The essence of competitiveness isvision, leadership and a hunger to succeed.
P. R. VagelosChairman and CEOMerck
A Business Vision
• A vision is a photograph of the future.
• It is a self-image that deals with what the business wants to look like over the long range future.
• Business visions are realistic, credible and attractive to people within the organization.
Jack Welch Vision for GEJack Welch Vision for GEHis vision was for GE to become the most competitive enterprise on earth.
He wanted to create a small company spirit in a big company, to build an organization out of an old line industrial company that would be high spirited, more adaptable, and more agile than companies one-fiftieth the size.
He wanted GE to be a company where people dared to try new things—where people felt assured in knowing that only the limits of creativity and drive, their own standards of personal excellence, would be the ceiling on how far and how fast they move.
Larry Ellison Vision for OracleLarry Ellison Vision for Oracle
To be the world leader in providing software applications over a network and hardware designed and priced to serve those needs.
Ellison suggests that the software industry as we know it today will vanish and be replaced by a service industry.
ValuesBeliefs
Principles
VisionMission
Goals
Culture
Objectives and
Measurements
Strategies
Tactics
Authorityand
ResponsibilityBusinessPlan
George Bush: The Vision ThingGeorge Bush: The Vision Thing
His inability to grasp "the vision thing" was an important part of
George Bush's undoing in the '92 election; but he's not the only
one to have a hard time articulating wishes and dreams for the
future.
Organizations are frequently brought to crisis by conflicts over
basic issues of mission, values, and vision.
Without these basic agreements in place, no organization is truly
viable.
Mission, values, and vision are the glue that holds an organization
together.
Gerstner’s Lack of Vision for Gerstner’s Lack of Vision for IBMIBM
Lou Gerstner caused a stir at his first major press
conference when he declared that the last thing IBM
needed was to proclaim a grand vision.
Executive VisionExecutive Vision
If a company has restructured, where do they turn for business performance and financial improvement?
A broad grounding in a particular industry is a often a necessary prerequisite to successful direction setting.
Visionaries can draw a conceptual roadmap to some imagined future.
The most important thing that I have learned is that the time for a business to go from chump to champ to chump used to be two to three decades and now it is five to seven years.
Bill McGowanFormer CEO of MCI
VisionStrategyTactics
Business Plan
• Competitive Options• Roles, Roles and Relationships• Redefine and/or Define• Telecommunications
as the Delivery Vehicle• Success Factor Profile
A Systematic Approach
A Shared Vision Positions IT
1. Achieves Strategic Synergy.
2. Puts the Onus on the Owners.
3. Leverages Learning.
4. Extends Externally.
5. Chucks the Organization Chart.
6. Indulges in Information.
7. Makes a Bee-line for Benefits.
““The Vision Trap”The Vision Trap”
Grand, abstract visions can be too inspirational.
The company may wind up making more poetry than products.
Gerard H. Langeler
President, Mentor Graphics
Sensing Opportunity
Vision
Strategy
Tactics and Business Plan
Agreement &Commitment
Implementation(Action)
Feedback
The Vision to ActionProcess
Figure 6-1
Vision ExamplesVision Examples
• Robert McDermott at USAA
• David Whitwam at Whirlpool
• Peter Lewis at Progressive Corp.
If Starting TodayIf Starting Today
Charles Schwab, Charles Schwab & Co.
Jeff Bezos, Amazon.com
Meg Whitman, eBay
Michael Dell, Dell Computer
Fred Smith, Federal Express
Louis Gerstner, IBM
Sam Walton, Wal-Mart Stores
Lee Kuan Yew, Singapore, Inc.
Morita, Sony
Peter Lewis, Progressive Corp.
USAAUSAA• Financial Services Company.
• Headquartered in San Antonio, Texas.
• A member owned association.
• Started by Army officers who had difficulty getting insurance.
• Historically managed by former military officers.
• Top-rated for customer service and financial
performance.
• Increased assets from $207 million to $8.5 billion. • Grew customer base from 650,000 to 2.4 million.
• Significantly increased the level of customer service.
• Broadened the product base.
• Decreased the high annual employee turnover rate.
• Redefined the business from a property and casualty insurance company to a financial services organization.
McDermott LeadershipMcDermott Leadership
USAA Vision 2000An Events Oriented Organization
Needs WantsMember (Customer)
Key Points Security Quality Asset of Life Management
Supporting Insurance Consumer FinancialSystems Products Services Services Products Products
Figure 6-2
USAA’s ultimate goal is to manage its customer relationships and not its individual products.
How does this relate to information systems?
USAA Products and ServicesUSAA Products and Services
So integrated that members lose
something if they go elsewhere.
1. Customer Convenient
2. Operator Efficient
3. Cost Effective
USAA Business and IS GoalsUSAA Business and IS Goals
Information Systems StrategiesInformation Systems Strategies
• Executive Partnership
• Strategic Architectures
• Technology Experimentation
• External Resource Leverage
• Technology Assimilation
• Horizontal Integration
IT at USAAIT at USAA
• 28,000 workstations for 22,709 employees.• 7 mainframe computers.• 750 client server systems.• Own and operate a communications company.• 4,300 AT&T Trunk Lines: 94 million annual
telephone calls representing 90% of business transactions.
• 1,300 Information Systems people. (ITCo)
12/31/99
USAA Image Processing
Direct AccessStorage Drive
Document DatabaseDirect AccessStorage Drive
Token Ring LAN
StorageManager
FolderManagementApplication
A
P
I
A
P
I
InnerServer
API
On-line Optical Disks
Service RepresentativesM
ailr
oom
ScannerImage Workstation
Application Workstation
Image Workstation
ApplicationWorkstation
Optical StorageLibrary
(Not On-line)
][
Mainframe Computer
Figure 6-3
1. Provides quality service.2. Attracts, trains, retains and motivates employees.3. Aggressively and successfully uses information technology.4. Provides products and services to address the changing needs of its customers.5. Maintains one of the lowest operating expense ratios in the industry.6. Achieves financial results that warrant excellent to superior ratings.7. Makes business, organizational and management changes on a timely basis.8. Had an outstanding CEO in General McDermott.
USAA Success ConclusionsUSAA Success Conclusions
• Traditionally, a successful, well-managed company.
• A new CEO in 1987 who initiated a global vision in 1988.
• A global strategy that emphasized:- Product Technology-Procurement
• Promoted a theme of “Thinking global but acting local.”
Whirlpool CorporationWhirlpool Corporation
Whirlpool Corp.Whirlpool Corp.
Manufactures in 13 countries, has nearly 50 product technology centers and markets products under 13 brands in 170 countries.
Has the patience to allow the global strategy to evolve.
Is the only company with a presence in four of the five global markets.
Has realized impressive growth in revenue but not profits.
Has become a new Whirlpool.
Financial PerformanceFinancial Performance
1991 - $6.5 billion in global sales
2002 - $11 billion in global sales.
2003 - $11.8 billion in global sales.
1991 - $353 million in operating profit
2002 - $262 million in operating profit
2003 - $709 million in operating profit
Whitwam StatementWhitwam Statement
We entered 2003 with continuing economic uncertainty in most of the global markets we serve. We took the appropriate cost and productivity actions to deal with that uncertainty.
We believe that Whirlpool’s global leadership position, the company’s unique global platform and innovation activities focused on building customer loyalty will drive continued performance improvements in 2004 and beyond.
Whirlpool Corporation
Principal ProductsAutomatic Dryers
Automatic Washers
Dehumidifiers
Dishwashers
Freezers
Microwave Ovens
Ranges
Refrigerators
Trash Compactors
Room Air Conditioners
Who Buys Large AppliancesWho Buys Large Appliances
1. Contractors for new homes.
2. Home owners for replacements.
3. Appliance service businesses.
4. Businesses and public sector entities.
5. First time appliance buyers.
Appliance BrandsWhirlpool
Kitchen AidRoperWhirlpool
Kenmore*
* Manufactured for Sears
Maytag
AdmiralHardwickHooverJenn-AirMagic ChefMaytagNorge
GE
GERCAHot Point
Electrolux
FrigidaireGibsonElnaEurekaKelvinatorO’Keefe and MerrittTappanWhite- Westinghouse
Differentiation Strategy!?Differentiation Strategy!?
• Clothes Management System
• Food Management System
Whirlpool Strategic Design
• Mission Statement
• Vision
• Value Creating Objectives
• Shared Values
• Worldwide Excellence System
Whirlpool CorporationWhirlpool CorporationHow We Must Work, Think, Plan and Manage to Reach Our ObjectivesHow We Must Work, Think, Plan and Manage to Reach Our Objectives
Whirlpool People
Leadership
Quality of Processes and Products
Fact-Based Management
Strategic Planning
Measurement and Results
Customer Satisfaction Figure 6-4
1. Stick to its large appliance knitting within the North American market and fight for increased market share with the hope that economic factors would improve its market conditions.2. Diversify within the North American market.3. Pursue a global strategy as a conservative player in multiple global markets.4. Pursue an aggressive global strategy with the objective of leading the redefining of the world- wide large appliance industry.
Four Whirlpool OptionsFour Whirlpool Options
Whirlpool Mission StatementWhirlpool Mission Statement
To shape and lead the major home appliance industry globally, becoming one of the world’s great companies while creating value for shareholders, employees, customers, suppliers, government leaders and communities.
WhirlpoolWhirlpool Vision Vision
Whirlpool, in its chosen lines of business, will grow with new opportunities and be the leader in an ever-changing global market. We will be driven by our commitment to continuous quality improvement and to exceeding all of our customers’ expectations. We will gain competitive advantage through this, and by building on our existing strengths and developing new competencies. We will be market driven, efficient and profitable. Our success will make Whirlpool a company that worldwide customers, employees and other stakeholders can depend on.
Pyramid of ExcellenceStakeholder Value
Measurement
& Results
Customer
Satisfaction
Strategic
PlanningFact-Based
Management
Customer Satisfaction
People
Commitment
Values
Vision
WorldwideExcellence
System
Value CreatingObjectives
WhirlpoolPeople Quality Process
& Products
Leadership
Growth & Innovation
TotalQuality
Where
Way
What
How
Whirlpool CorporationWhirlpool Corporation
The market of tomorrow will be huge, filled with tough savvy customers with a wide range of preferences and choices. We must fulfill their needs and meet their expectations in quality and service. We must surprise them.
David R. WhitwamWhirlpool CEO
1. Product Technology.
2. Procurement.
3. Information Systems
Platform for Global SuccessPlatform for Global Success
Worldwide Major Appliance Industry
United States Whirlpool General Electric Maytag
Sweden Electrolux
Figure 6-5
Japan Matshushita Electric Hitachi
Korea Samsung
Morita and SonyMorita and Sony
Sony was started in 1946 when Morita, the oldest son of a rice wine brewer, joined former Japanese navy colleague Masaru Ibuka, a fellow engineer, to start a business repairing radios on borrowed $500.
A significant number of firsts:
- Japan’s first transistors in 1954.
- Japan’s first transistor radio in 1955.
- First Japanese company to be listed on the NYSE.
- First Japanese company to build a U.S. factory.
SonySony
Morita told engineers to make Walkmans despite the lack of market research. “We don’t believe in market research for a new product unknown to the public. So we never do any.”
Preferred Approach: innovation in design, manufacturing and marketing.
Lee Kuan Yew and Singapore Inc.Lee Kuan Yew and Singapore Inc.
Although no nation's history can ever be reduced to the story of one man, Lee Kuan Yew had such a paramount role in making modem Singapore that an understanding of that country, its society and its business environment cannot be complete without an attempt at understanding Lee himself.
“Lee took the opportunity to assure Malays that they need not fear Hong Kong immigrants taking their jobs because the immigrants will all be high income earners.”
Increasingly, companies are usingvision statements to explain who theyare, where they are going and whycustomers and employees should follow them there.
Business VisionBusiness Vision
A Good Vision StatementA Good Vision Statement
• Provides a clear picture of what the company wants to be in the future.
• Excites and motivates people and gains consensus and commitment.
• Focuses on operations.• Is measurable at least in general terms.• Establishes a standard of excellence.• Changes the basis for competition.
Good Vision Statement?Good Vision Statement?
We want to sell a variety of
products on a daily basis to
every living person on the earth.
PepsiCo.
Good Vision Statement?Good Vision Statement?
To be the world leader in
transportation products
and services.
General Motors Corp.
A Good Vision Statement?A Good Vision Statement?
To continue to be the world’s best way to pay and be paid for consumers and businesses.
Visa International
Good Vision Statement?Good Vision Statement?
To provide the best service and lowest fares to the short haul, frequent-flying, point-to-point, non-interlining traveler.
Southwest Airlines
When you have a vision and someone comes to you with some convoluted idea, you should be able to hold it up to the vision and ask: Does it fit? Does it fly? If not, don’t bother with it.
The ingredient that catapulted Southwest to the top of the industry is simple, elegant and well publicized.
Discipline, focus and execution.
Throughout its existence, Southwest has consistently adhered to a clearly defined purpose and a well thought out strategy for accomplishing it.
Wal-Mart VisionWal-Mart Vision
“I concentrated all along on building the finest retailing company that we possibly could. Period.”
“Creating a huge personal fortune was never a goal of mine.”
Sam Walton
Wal-Mart Wal-Mart
If you are not serving the customer or supporting the folks that do, then we don’t need you.
AMR Corporate Vision
We will be the global leader in air transportation and
related information services.
That leadership will be attained by:
• Setting the industry standard for safety and security.
• Providing world class service.
• Creating an open and participative work environment which seeks positive change, rewards innovation, and provides growth, security and opportunity to all employees.
• Producing consistently superior financial returns for shareholders.
Built to Last CompaniesBuilt to Last Companies
1812 Citicorp
1837 Procter and Gamble
1847 Phillip Morris
1850 American Express
1886 Johnson & Johnson
1891 Merck
1892 General Electric
1901 Nordstrom
1903 3Com
1911 IBM
1915 Boeing
1923 Walt Disney
1927 Marriott
1928 Motorola
1938 Hewlett-Packard
1945 Sony
1945 Wal-Mart
Built to Last ConclusionsBuilt to Last Conclusions
1. A visionary company does not by definition start with a
great idea.
2. A charismatic leader is not required for a visionary company.
3. There are no standard core values to be a visionary company.
4. A visionary company is not built on frequent change but a
focus over time on its core ideology.
Built to Last ConclusionsBuilt to Last Conclusions
5. Visionary companies may appear conservative to outsiders but they are not afraid to make bold commitments and/or establish ambitious goals.
6. Only those people who fit well with the core ideology and the demanding standards of a visionary company will find it a great place to work.
7. Visionary companies make some of their best moves by experimentation, trail and error, opportunism and accidentally.
8. Great visionary companies seldom go outside to hire a new CEO.
Built to Last ConclusionsBuilt to Last Conclusions
9. Visionary companies focus primarily on beating themselves.
10. Visionary companies believe they can accomplish major objectives simultaneously without making major negative trade-offs.
11. Visionary companies attained their successful status not so much because they made visionary pronouncements (although they frequently did) but by pursuing a never-ending process of emphasizing the above factors.
A Logical Vision ProcessA Logical Vision Process
• Define the Business Environment.
• Build a Company Vision.
• Turn the Vision into a Plan.
• Drive Action with the Plan.
By instilling:
Leadership
Vision
Strategy
Tactical Excellence
Innovation
A Great Company
You create:
Improved Performance
Market Impact
Sustained Success
Excellent Reputation
Which results in: