Achieving Business ExcellenceUnderstanding the Pattern of Business Success

This is a very special workshop• I have a ton to cover and I will go pretty fast.• 80% is in the book.• 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… take this seriously.

The slides and workbook are already posted at:

www.SlideShare.net/johnspence

For the past 21 years…

“Simplicity is the ultimate sophistication” Leonardo da Vinci

“Ownership Mentality”

Do you have a clearly focused and well-communicated strategy for success?

Effective Strategy =

Valued Differentiation x Execution

Five Foundations of Effective Strategic Thinking

Business Acumen

Personal Experience

Pattern Recognition

Strategic Insight

Disciplined Execution 2

The Four – I’s

• Ignorance

• Inflexibility

• Indifference

• Inconsistency

Page 2

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

• Ridiculously high level of customer focus.

• Keep the “Main Things” the main things.

• Bullish on knowledge sharing and learning.

• Teamwork is mandatory – not optional

• Passion and commitment at all levels.

• Foster a healthy paranoia.

• Revel in change.Page 3

To get the most from our session together…

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

3

So let's get started with

a little self-test…

Southwest

One type of planePoint-to-point

Fast turnsLow fares / no frills

Friendly staff

Dell

BTOJIT

Inventory turnsLogistics vs. Technology

VOC

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

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

(T + C + ECF) x DE = Success

Charlie Trotter’s 4

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

4

From: What the Best CEOs Know by Krames

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

1-10

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.5

25 Top Companies = Results Rule

WS: 5

$16,000,000,000

6

1. Collaborative Partnerships with Customers

2. Drive Unique Value and Growth through

Innovation

3. Invest in People

4. Leverage Talent and Knowledge through

Communication and Trust

• Lack of TRUST

• Lack of candor

• Lack of commitment

• Lack of accountability

• Lack of results

NIBT

Competence

RespectDistrust

Affection TRUST

HIGH

LOW

LOW HIGH

Concern

6

“I am good at what I do… and I do it because I

care about you.”

Is Your Company Up To Speed?

Fast Company June 2003

Pages 7 - 8

Good to Great

9

K N LPay The Price

Twice weekly surveys for five years of 2,000+ senior managers and executives at:

• IBM• GE• Morgan Stanley• Merck• 3M• Microsoft• CIGNA• Heineken• MasterCard

• Fidelity• Motorola• Ikon• American Express• Progressive• Bank of America• AT&T• SAP• Borders 9

Keys to effective management…

• Communicate clearly

• Force the hard decisions

• Focus on results

• Remain flexible to change

• Prove your value to the customer

• Force collaboration

• Rigorous but not ruthless…9

1 - 10

From: Think Big – Act Small by Jennings

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

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

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

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

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%)

In other words…

• In order to succeed you need a high-performance team that embraces a strong culture of disciplined execution and accountability while being nimble, agile and adaptable to changes in the marketplace.

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

Disciplined Execution Clear Vision

Detailed Strategy

Guiding Coalition

Alignment

Systems

Communication

Support

Adjust

Reward / Punish

13

1 - 10

Read Pages 14 & 15

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?• STUDY the New Nurseries info at the back of

the book!!!• 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.

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