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Achieving Business

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This is a very special workshop• I have a ton to cover and I will go pretty fast.• Please take notes and ask questions.• I am happy to answer any of your questions, offer

advice and recommend books at any time.• Keep an open mind.• Work very hard…

The slides are already posted at:

www.SlideShare.net/johnspence

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For the past 21 years…

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What does this mean to me?

How can I use this idea?

What can I do right away?

I am NOT a guru…

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Most people are so busy working IN

their business that they do not take any time to work ON their business.

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What makes a winning strategy?

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Effective Strategy =

Valued Differentiation x Execution

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Key Point: Strategy is INTERNAL

as well as EXTERNAL

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Most people think of:

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Five Foundations of Effective Strategic Thinking

Business Acumen

Personal Experience

Pattern Recognition

Strategic Insight

Disciplined Execution 2

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The Four – I’s

• Ignorance

• Inflexibility

• Indifference

• Inconsistency2

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How to avoid the Four I’s • Aggressive external market focus.

• Aggressive customer focus.

• Keep the “Main Things” the main things.

• Bullish on knowledge sharing and learning.

• Passion and commitment at all levels.

• Foster a healthy paranoia.

• Revel in change.– be agile, adaptive, and anticipatory.

2

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Breakthrough Strategies

• GE: 1- 2 or F.S.C.• Intel: memory to processors• Microsoft: installed base• Apple: chaos to elegance• Saturn: no haggling

3

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Southwest

One type of planePoint-to-point

Fast turnsLow fares / no frills

Friendly staff3

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Dell

BTOJIT

Inventory turnsLogistics vs. Technology

VOC

3

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3

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Southwest – Dell – Walmart

What is the pattern?

• Extreme Efficiency

• Minimize Costs to as close to zero as possible – w/o negative impact

• All focused on delivering customer value

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From the CEO of a little 172 billion dollar company…

Look, what is strategy but resource allocation?

When you strip away all the noise, that’s what it

comes down to. Strategy means making clear-cut

choices about how to compete. You cannot be

everything to everybody, no matter what the size

your business or how deep its pockets. You have

to figure out what to say “NO” to.Jeffrey Immelt

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Educated GuessEducated GuessDifferentiated Strategy Differentiated Strategy

FocusFocusResource AllocationResource Allocation

Bold Not RiskyBold Not RiskyWhat What NOTNOT To Do To Do

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To get the most from our session together…

It is absolutely critical that you be brutally honest with yourself today.

4

So let's get started with

a little self-test…

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Charlie Trotter’s 5

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Lessons from seven top CEOs

• Have an outside-in perspective

• Be deeply passionate about your job

• Understand the importance of culture

• Create or adapt next generation products, processes and solutions

• Implement the best ideas regardless of origin

5

From: What the Best CEOs Know by Krames

Dell, Welch, Gerstner, Grove, Gates, Kelleher, Walton = 696 B

1-10

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The Toyota Way• Challenging Vision

– We form a long-term vision, meeting challenges with courage and creativity to realize our dreams.

• Kaizen– We improve our business operations continuously, always driving for

innovation and evolution.

• Genchi Genbutsu– We go to the source to find the facts to make correct decisions, build

consensus, and achieve our goals at our best speed.

• Respect, Challenge and Help your People and Suppliers– We respect others, make every effort to understand each other, take

responsibility and do our best to build mutual trust.

• Teamwork– We stimulate personal and professional growth, share the opportunities

of development, and maximize individual and team performance.

6

1-10

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In-depth study of 25 top companies renowned for building winning corporate cultures…

• GE• Dell• Wal-Mart• Toyota• Nordstrom• Starbucks

• Southwest Airlines• IBM• P&G• Whole Foods• Ritz Carlton• Intel

The pattern of six common traits for all of these firms…

From Results Rule by Randy Pennington

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They understand that: Results Rule!

1. Tell themselves the truth and value candor and honesty.

2. Pursue the best over the easiest in every situation.

3. Leverage the power of partnerships both internally and externally.

4. Focus the energy to make the main things the main thing.

5. Show the courage of accountability.

6. Learn, grow and improve every single day.

From Results Rule by Randy Pennington

61-10

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Fast Company June 2003

Pages 7 - 8

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Anyone who tells you they enjoy change… should seek immediate

professional help.

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Emotional Response to Perceived Negative Change

Stability

Immobilization

Denial

Anger

Bargaining

Depression

Testing

Acceptance

Time

Passive

Active

Em

oti

on

al R

esp

on

se

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Managing Positive Responses to Change

Uninformed Optimism

Informed Pessimism

HopefulRealism

Informed Optimism

Completion

CheckingOut

TIME

PE

SS

IMIS

M

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The eight major steps of the

change process

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1. Build an irresistible case for change

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2. Create a strong sense of urgency

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3. Form a powerful guiding coalition

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4. Create a clear vision for successful change 5. Communicate it relentlessly

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5. Empower others to act

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6. Plan for and celebrate small wins

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7. Institutionalize the change

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The Evergreen Project

10 year study of 160 top companies

40 distinct industries

200 management practices

Winners, climbers, tumblers, losers

Winners had an average Total Return to Shareholders of 945%... The

Losers only averaged a TRS of 62%

From: What (really) Works by Joyce, Nohria, Roberson 10

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The Four Primary Practices:1. A sharply focused, clearly communicated and

well-understood strategy for growth.

2. Flawless operational execution that consistently delivers the value proposition.

3. A performance-oriented culture that does not tolerate mediocrity.

4. A fast, flexible, flat organization that reduces bureaucracy and simplifies work.

From: What (really) Works by Joyce, Nohria, Roberson

10

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The Secondary Management Practices:

• Talent = find and keep the best people.

• Key leaders show commitment and enthusiasm for the business.

• Embrace strategic innovation.

• Master the power of partnerships.

From: What (really) Works by Joyce, Nohria, Roberson

Score yourself on the 1–10 scale for all eight practices on page 10

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Key Drivers of Business Success

Financial Performance

Quality P&S&

Customer Relationship

EmployeeSatisfaction

Empowerment High Standards

Long-termOrientation

Enthusiasm, Commitment,

Respect

Training &Development

Fair Compensatio

n

CR=104.12

CR= .404

CR=.334

CR=.277

CR=.275CR=.249

CR=.280 Coaching

CR=.285

CR=.371

CR=.365

CR=.191

CR=.247

11

WorkshopPage 12

TolerateNothingLess

From: Practice What You Preach by Maister

Global study:16 countries29 companies139 offices5,589 respondents

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What Inhibits Execution?National Survey of 4,000 Senior Executives

4. Inability to work together (21%)

3. Company culture (23%)

2. Economic climate (29%)

1. Holding onto the past / unwillingness to CHANGE (35%)

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Where are we going + how will we behave on the way?

FocusDifferentiation“No”

Stakeholders + guiding collation

Vision + ValuesStrategyPlansGoals / ObjectivesTactics / Actions

Procedures / ProtocolsRepeatable ProcessClear / consistent /

relentless

Training +time / money /

supplies / people

Measure / TrackCommunicate

Transparency Renewal

Praise + Celebration and

Eliminate Mediocrity

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Disciplined Execution Clear Vision

Detailed Strategy

Guiding Coalition

Alignment

Systems

Communication

Support

Adjust

Reward / Punish

13

1 - 10

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14 & 15

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Individual Workshop• Go back and look at all of your audits.• Where were your low scores, where were your high

scores – what is the pattern?• Look over your notes – what were the key themes?

What are the most important ideas?• Answers all the questions on pages 16 – 18.• Put in as much detail as possible.• Be very honest with yourself.• Think in terms of Actions and Outcomes.

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If you have any questions at all please do not hesitate to send a note or call.

My email address is: john@johnspence.com My twitter address is: @awesomelysimple

Also, you might find value in the ideas I share in my blog. You can sign up for it at:

www.blog.johnspence.com

Lastly, these slides have already been uploaded to:

www.slideshare.net/johnspence

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