Concentrated Knowledge for the Busy Executive www.summar y .com Vol. 26 !o. " #" $arts% &art " 'arch 2(() *rder + 26,(- .he )/2 0ormula for 1ustained Business 1uccess WHAT REALLY WORKS .2E 13''456 7! B57E0 Business is fullof mysteries 8ut none greater than this9:hat reallywor;s< .oday=s managers reali>e all too $ainfully that manymany thingsmatter in achieving 8usiness success 8ut few of them can tellyou muchBy William Joyce, Nitin Nohria and Bruce RoberonC*!.E!.1&rimary and1econdary'anagement&ractices&age 2)/2 in the 5eal :orld&ages 2 "'a;e 6our1trategyClear and0ocused&ages " )Execute 0lawlessly&age )Build a &erformance,Based Culture&age ?'a;e 6our*rgani>ation0astand 0lat&ages ? 6'a;e .alent 1tic;4round 4nd @evelo$'ore&age 6'a;e 6our AeadersCommitted to 6our Business&ages 6 B'a;e 7ndustry,.ransforming 7nnovations&ages B -'a;e Crowth 2a$$en :ith'ergers and &artnershi$s&age -morethanwhat wor;edfor them. .hey s$endyears guessing at whatreallymatters in8usiness and guessingwrong D they $ursuefads and follieswithout getting to theheart of thefundamental $racticesthat create 8usi,ness success..he authors of What Really Wor! conducted a E(,year study that turned ?( academics and 8usiness consultants loose on do>ens of com$a,nies loo;ing for theanswer to that elusivemystery D :hat reallywor;sation fast and Gat. Cut through the layers and silos andcreate an open, communicative and effective organiation.F 2ow to ma;e talent stic; around and develo$ more. !oingoutsidethecompanyfortalent mightoccasionallybe necessary,but you likelyhave astar or t"o in your organiation right no", "aiting for their chance to shine.F 2ow to ma;e industry,transforming innovations. #eep yourorgania-tion off life support by supporting research and development."ublihed by Sound#ie$ E%ecuti#e Boo! Summarie, "&O& Bo% '()*, +oncord#ille, "ennyl#ania ',**' -SA./((0 Sound#ie$ E%ecuti#e Boo! Summarie 1 All ri2ht reer#ed& Re3roduction in $hole or 3art i 3rohibited& WHAT REALLY WORKS 8y :illiam Hoyce !itin !ohria and Bruce 5o8erson D .2E C*'&AE.E 13''456&rimary and1econdary'anagement&racticesThere are ei2ht mana2ement 3ractice 4 5our 3rimaryand5ourecondary4that directlycorrelate$ithu3e6rior cor3orate 3er5ormance, a meaured by total return tohareholder 7TRS8& Winnin2 com3anie achie#ee%cellence in all 5our o5 the 3rimary 3ractice, 3lu t$oo5 the econdary 3ractice 4 hence, the 09/ 5ormula& Allei2ht 3ractice ha#e 5eature that are both intuiti#eandcounterintuiti#e&.he 0our &rimary 'anagement &racticesThe 5our 3rimary mana2ement3ractice are trate2y,e%ecution, culture and tructure&1trategy. :ana2er mut de#ie and maintain a clear6ly tated, 5ocued trate2y& Whate#er your trate2y 4 $hether it i lo$ 3rice, inno#ati#e 3roduct, or ome other initiati#e 4 it $ill $or! only i5 it i har3lyde5ined, clearlycommunicated, ande55ecti#elyunder6tood by em3loyee, cutomer, 3artner and in#etor&Execution. +om3anie mut de#elo3 and maintain 5la$le o3erational e%ecution& You mi2ht not al$aydeli2ht your cutomer, but you mut ma!e ure you ne#er dia33oint them& Winner conitently meet the e%3ectation o5 their cutomer by deli#erin2 on their #alue 3ro3oition, lahin2 o3erational cot, andincreain2 3roducti#ity conitently, year in and year out&Culture.Or2ani;ation mut de#elo3 and maintain a3er5ormance6oriented culture& uality2oodat thelo$et 3oible3rice& Theor2ani;ationJcutomerare3uruedbymanycom3anie, butalmota an a5terthou2htK mot 2o 5or more a55luent client and 5atter 3ro5it mar2in& Collar @eneral, on the other hand,deliberately 5ocue on it Lalt o5 the earthM cutomer&Execution. The com3any conitently deli#er on it3romie to 3ro#ide >uality 2ood at e#eryday lo$3riceK the tore are re3lete $ith bar2ain dei2ned to atonih cutomer& Since it toc! i baic conumer 2ood, Collar @eneral hold no 3ecial ale, nor doe it rely on ad#ertiin2 to brin2 in ne$ cutomer& The com63any 3ae on the a#in2 o5 a L$ord o5 mouthM mar6!etin2 trate2y to cutomer&The com3anyJ u33lier are alo ea2er to do buine$ith Collar @eneral, becaue it 2uarantee their 3roducthi2h #olume and limited com3etition& Each tore carrie,ona#era2e, *,)((item, ortoc!6!ee3in2unit7SK-8&Each year, the tore re#ie$ their SK- to enure they aretill deli#erin2 #alueK a a reult, the tore dro3 ')( to /((item, re3lacin2 them $ith ne$ one&Culture.Winner dei2n their cor3orate culture to u33ort the hi2het 3oible le#el o5 3er5ormance, 5ul65illin2 their trate2ie and ati5yin2 the 3eci5ic needo5theirmar!et& uality 2ood& ui#alency di3loma&1tructure. Collar @eneral 3oee a lean, >uic! or2ani;ation that re3ond ra3idly to mar!et chan2e$ithout $atin2 time or incurrin2 unneceary cot& uarter are li!e$ie treated #ery $ell, and can ta!e ad#anta2e o5 an on6ite day6care center, trainin2 center, 5itne center, dry clean6er, AT:, tra#el a2ent, and other 5irt6cla amenitie&While the cor3orate cam3u $a intended to be ama2net 5or talent, in the end, it i Collar @eneralJtron2 cor3orate culture and #alue that attract and !ee3 themot a33ro3riate em3loyee to achie#e it 2oal&Aeadershi$.The dedication, intelli2ence, and 3eron6ality o5 Collar @eneralJ +EO +al Turner, Jr&, ha#e3layedamaForroleinma!in2thecom3anya$inner&Turner reco2ni;e the talent and olid idea o5 hiem3loyee, and i #ery >uic! to 2i#e and hare credit& He alo reco2ni;e $hen thin2 arenJt $or!in2, uch a in ',IH, $hen he et a ne$ leaderhi3 tone by re3lacin2 /(( o5 hi to3 e%ecuti#e $ith more eaoned 3ro5e6ional& He did o in order to be able to 2ain truth5ulad#ice 5rom hi 3eo3le, not im3ly to ha#e a corral o5Lye menM a2reein2 $ith e#erythin2 he aid or did& J'a;e 6our 1trategyClear and 0ocusedOnethin2mot mana2ercana2reeu3on, at leatin3rinci3le, i that 2ro$th o5 oneJ core buine hould beoneJ maFor trate2ic 5ocu& ation 0ast and 0lat#continued from $age ?%o3enin2 communication bet$een de3artment& ?inally, $innin2 com3anie $ut their 8est $eo$le closest to the action and ;ee$ their front,line stars in $lace. The 5uture o5 $innin2 com3anie ret not on the brilliance o5 their e%ecuti#e, but on the dedication and in#enti#ene o5 their mana2er and em3loyee& Winner ta3 into thi $ell o5 creati#ity by cuttin2 a$ay layer o5 command, becomin2 more 5ront6line dri#en& They alo tri#e mi2htily to !ee3 their bet 5ront6line 3eo3le at the 5ore, $or!in2 ide6by6ide $ith their tar 3er5ormer to !ee3 o3eration mo#in2 e#er 5or$ard& J'a;e .alent 1tic;4round4nd @evelo$'oreWinner dedicate maFor human and 5inancial reource to buildin2 an e55ecti#e, inno#ati#e $or! 5orce and mana2ement team& They alo ho$ a ditinct 3re5er6ence 5or de#elo3in2 their o$n tar 5rom inide the or2ani;ation, and an ability to retain their to3 talent, in 3art becaue they reco2ni;e the #alue o5 thi talent in creatin2 a hi2h63er5ormance or2ani;ation& The e%itence o5 a talent6rich en#ironment alo attract 3eo3le 5rom outide a com3any& No or2ani;ation can ha#e too much talent, and $inner 3urue it outide and inide theirVals$ar 'a;es 5oom 0or Em$loyees to 'ove 3$%necorporationthat hasa strong commitment tofilling 9ob openings from "ithin is Aalspar, a paint andcoatings provider based in Minneapolis. (hecompany has B,;88 employees in more than @8 locations around the "orld, and a C8 percent annual gro"th in return to shareholders.2henit makes an ac5uisition,Aalsparmergesmore than9ust facilities andtechnology from the purchased company into the parent fold it alsointegrates key people from thene" company4s man-agement into Aalspar4s management. (his policyraised a potential problem ho" to handle talentedparent company employees "hose promotionsmight be held back by incoming managers from thene"ly ac5uired business.Aalsparrespondedto the situationby combiningits ac5uisition efforts "ith a ma9or program toachieve internal gro"th. -s company president &ob Pa9ors once noted, =People "ill not be satisfied "ith-out internal gro"th. 'mployees have to kno" that there4s a place for them to move up, too.?ran!, e#en thou2h ne$ hire tend to be more e%3eni#e&Winner demontrate 3ecial !ill in ati5yin2 5ourmandateAE. 0illmid, and high,levelOo8s with internaltalentwhenever $ossi8le. Winnin2 com3anie de#ote maFor reourceto3reer#in2in6houetalent andde#elo3in2their o$n tar& uantity&2. Create and maintain to$,of,the,line trainingand educational $rograms. Em3loyee $ho ha#e bonded $ith an or2ani;ation are more li!ely to 2i#e their bet e55ort to their Fob& The com3any that hel3 em3loyee rie throu2h the ran!, u33lyin2 trainin2 and education6al aitance, i $ell63oitioned to create thee bond&". @esign Oo8s that will intrigue and challengeyour8est $erformers.The late, 2reat Wahin2ton Red!in 5ootball coach @eor2e Allen once aid, LTheachie#er ithe only 3eron $ho i truly ali#e&M There i an untated aum3tionthat bri2ht, talented3eo3le$ant tobechal6len2ed, $ant toachie#e2reaterand2reaterthin2& One$ay to !ee3 them achie#in2 i to 2i#e them ai2nment$ith incrementally 2reater re3onibility attached&). Become$ersonallyinvolvedinwinningthe war for talent.Winner 5ocu on 2roomin2talented in6houe em3loyee 5or hi2her6le#el Fob& Senior e%ecu6ti#ein$innin2com3anieare#erymucha$areo5therecruitment im3erati#e, andin#ol#ethemel#e inhel36in2 their com3anie $in the $ar 5or talent& JFor Additional Informationon acompanythatswinning thetalentwar, go to: http://my.summary.com'a;e 6our AeadersCommitted to 6our BusinessThere are 5e$ e#ent o5 2reater i2ni5icance to an or2ani;ation than the election o5 a chie5 e%ecuti#e& The bet +EO are able to communicate their #iion o con6#incin2ly that other $ill ado3t that #iion a 3art o5 their o$n 3eronal a2enda& They alo ha#e un>uetioned inte2rity, in $ord and deed& When the com3any i con65ronted by a moral dilemma 4 a 3roduct de5ect, 5or intance 4 there i no heitationA The com3any $ill do the ri2ht thin2, >uic!ly& The +EO $al! the tal!&Whenleaderdemontratetheir trueand5irmcommit6ment to their belie5, they rein5orce their leaderhi3role& Em3loyee ee that the chie5 e%ecuti#e li#e by their $ord and can be truted, and that trut i 3reciou, 3articularly $hen time are hard& No one $ant to hear bad ne$, but it 2oe do$n better $hen it come 5rom a trut$orthy leadercontinued on $age B% G1oundview Executive Boo; 1ummariesK:hat 5eally :or;s D 13''456 'a;e 6our Aeaders Committed to 6ourBusiness#continued from $age 6%Winner that e%cel at leaderhi3 mana2ement 3ractice ahared dedication to e#eral !ey 3rece3t&?irt, they ins$ire management to strengthen its relationshi$s with $eo$le at all levels of the com$any.Winnin2 com3anie belie#e in 5oterin2 tron2 relation6hi3 bet$een mana2ement and em3loyee& They under6tand that uch relationhi3 are the !ey to buildin2 a 3oiti#e attitude in the ran! to$ard a com3any and it 2oal& When +EO 3reent themel#e a 5leh6and6blood3eo3le4a5ello$em3loyee, rather thanamater 4 they can 5oter 3oiti#e attitude that tran6late into im3ro#ed com3any6$ide 3er5ormance&They aloins$iremanagement tohoneitsca$acityto s$ot o$$ortunities and $ro8lems early. +hie5e%ec6uti#e and their to3 aide, in 2eneral, !no$ ho$ to deal$ith the immediate 3roblem o5 their or2ani;ation&Winnin2 com3anie that e%cel in leaderhi3 3lace a maFor em3hai on im3ro#in2 mana2ementJ ability toantici3ate chan2e and it 3otential im3act on the or2ani6;ation& They $ant to ma!e certain that the or2ani;ation inJtblindidedbyne$re2ulationortrend, andthatthey are alerted to 5orthcomin2 buine o33ortunitie&The third !ey leaderhi3 mana2ement 3ractice i toa$$oint a 8oard of directors whose mem8ershave asu8stantialNnancialsta;e in the com$any=ssuccess.Board o5 director 3lay a i2ni5icant role in the 5ate o5 their com3anie& The bet $ay to in3ire director to ta!e a truly in5ormed and acti#e role i to ma!e ure they ha#e a maFor 5inancial interet in the com3anyA Their 3eronal money hould be at ri!& When it i,director elect and u33ort u3erior chie5 e%ecuti#e&?inally, $innin2 com3anieloosely lin; the $ayof the leadershi$ team to their $erformance.:ember o5 to3 mana2ementneed to be re$arded 5ortheirachie#ement in dollar, a $ell a in hare o5 com3anytoc!& Ho$e#er, the e%ecuti#eJ remuneration houldre5lect their 3er5ormance a2aint a et o5 cor3orate 2oal& uiition, !ee3 the 5ollo$in2 in mindAE. 4cQuire new 8usinesses that leverage existing customer relationshi$s. uire com3anie $hoe cutomer $ill 3urchae your&olaroid Aoses 7ts 7nnovative EdgePolaroid "as a company built on a disruptive tech-nology, the instant camera. *n its first decades, the company dedicated itself to finding more such break-throughs, funding its research and developmentF$G,H entity at an enormous level. 'ventually, as the instant camera became less and less of a player in the consumer photography market, Polaroid sunk deeper and deeper into debt, as fe" of its ne" inven-tions attracted customer interest.*n677;, !ary,icamillocameaboardasC'%, andimmediately calledfor arefocusingonthe=neglect-ed? instant photo business. +e presided over theintroductionof the*-/oneinstant camera, aminor hit"ith teenagers, but could not lead Polaroid into aleadingpositionintheburgeoningdigital cameramarket. &yspringof :886, thecompany4s shareprice "as IC, do"n from IJ; in 677;, "hen,icamillo took over. 2ith over I6 billion in debt and none"innovations on the horion, Polaroid filed forChapter 66 bankruptcy protection in %ctober :886. (heonce great company had lost its ability to createbreakthrough, innovative products, and had suffered theultimate conse5uence.2oodand$hoe2ood$illbeattracti#etoyour cu6tomer& Thiiane%3eni#eroute, 3articularlyinthehort term&2.Enter new8usinesses thatcom$lementyourcom$any=s existing strengths.Ci#eri5ication5ortheim3lea!eo5di#eri5icationi2enerally a loin23ro3oition& ?orac>uiitionto$or!, ma!euretheymatch u3 $ell $ith your com3anyJ o$n 3ro5ile&". :ith a $artner move into new 8usinessesthat can use the $artnershi$=s talents. "artnerhi3 are to mer2er $hat datin2 i to marria2e 4 com3anie and indi#idual that mer2e mut adFut to 7or u55er $ith8 each otherJ tren2th and $ea!nee in a 3ermanent arran2ement $ith no 2uarantee o5 a ati5actory con6cluion& "artnerhi3 or alliance do not demand that 3artner chan2e to accommodate all o5 each otherJ idioyncraie& While they both bene5it i5 the buine #enture i ucce5ul, they remain e3arate entitie&). @evelo$ a systematic ca$a8ility to identifyscreenandclosedeals.uiite in#eti2ati#e, 5inancial and bui6ne !ill to ma!e the relationhi3 $or!& J I1oundview Executive Boo; 1ummariesK