Beyond

Entrepreneurship 2.0
JIM COLLINS
BILL LAZIER

Presented by: Group 4

1
Agenda
Chapter 1 Chapter 6
Bill and Me What Makes Great Companies Tick–The Map

Chapter 2 Chapter 7
Great Vision Without Great People Is Irrelevant Strategy

Chapter 3 Chapter 8
Leadership Style Innovation

Chapter 4 Chapter 9
Vision Tacticall Excellence

Chapter 5
Luck Favors the Persistent

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CHAPTER
Bill and Me
Chapter 1
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Beyond Entrepreneurship 2.0

Life Lesson from a magnificent mentor

Despite of his successful, bill’s greatness lay not in the fact of his success.

But because Bill is a mentor to so many young people.

What can we learned from Bill?

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Never Stifle a Generous Impulse

Bill mastered the art of making people accept his generosity with making as if you were

actually doing him a favor.

William R. Hewlett co-founder Hewlett-Packard Company

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Know When to Make the Irreversible Leap

Bill take a risk to being a entrepreneurship from choosing a prestigious position where in

this era, people chasing this type of position and entrepreneurship viewed as a strange

career choice for crazy risk-takers.

But to make near-impossible dreams come true, there come moments when you have to

go all in, fully committed, with no easy path to retreat.

Bill believe that most people fail to achieve their audacious big dreams because they

don’t fully commit at the crucial moments.

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Make The Trust Wager

there is two choice in road of life, on one path, you assume that someone is trustworthy

and you hold that view until you have incontrovertible evidence to the contrary. On the

other path, you first assume that someone isn’t trustworthy until he proves to you that

trust is merited.
Bill principle is to keep trusting people that assume the best in people and accept that

sometimes they will disappoint.

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Make The Trust Wager
What if someone take advantage of that and abused that?

Bill put in terms of upside and downside

Trust someone Mistrust someone

Merit that trust Will demotivate and drive

Abused that trust away the very best people

More upside and less downside to opening trust

Bill trust make people to up the standard of performance and character because they

don’t want to let him down.

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Build a Meaningful Life by Building Relationships

How do we know if we have a great relationship?

“if you were to ask each person in the relationship who benefits more from

the relationship, both would answer, ‘I do.’”

It means that it will work if both people invest in the relationship.

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Start with Values, Always Values

Money was never the primary scorecard of life for bill.

“if you define success by money, you’ll always lose.”

The real scorecard of life is how you build meaningful relationships and how well you live

to your core values.

Values comes before goals, strategy, tactics, products, market choices, financing,

business plans, every decision. Values comes first and all else follows.

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Put the Butter on Your Waffles

Jim felt like he was on dark journey of despair. He expected bill to give me lecture about

the need for discipline to push through the pain. But he got lecture about fun. “if you don’t

love doing it, you won’t stay with it long enough to ever really get good at it.”

A lesson : the sheer values of having fun and enjoying yourself, of loving what you do, of

living with the paradoxical assumption that you have decades of life left and that it might

come to an end tomorrow.

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CHAPTER II Great Vision Without Great People Is Irrelevant

Great People Is Irrelevant
Great Vision Without
Chapter 2
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Apple

Jim ask Steve Jobs “what gave you hope?”

Steve jobs said people, he found hidden in the woodwork that some of the people that right

people with whom to build his turnaround - people who still had burning passion for the

change

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Build a great company to make a great product is to have a right people working in a right

culture

You need the right people far more than you need the right business idea, since any specific

business idea is likely to fail anyway.

Ed Catmull, co-founder of pixar animation studios, believed you can start with a bad idea and

end up with a great result if you have the right people.

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Track the number one metric

To build a truly great company, you’ll need to strive for having 90 percent

of your key seats filled with the right people.

What’s that metric?

The percentage of key seats on the bus filled with the right people for

those seats.

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 CHAPTER II Great Vision Without Great People Is Irrelevant

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Track the number one metric

To build a truly great company, you’ll need to strive for having 90 percent

of your key seats filled with the right people.

What’s that metric?

The percentage of key seats on the bus filled with the right people for

those seats.

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Track the number one metric
What makes for a key seat?
1.The person in that seat has the power to make significant people
decisions.
2.Failure in the seat could expose the enterprise to significant risk or
potential catastrophe.
3.Success in the seat would have a significantly outsized impact on the
company’s success.

The question of whom to put in key seats becomes crucial when you
cannot easily get people off your bus. But whatever the constraints you
still have the task to get your key seats filled with the right people. ‹17›
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Know when to shift from “develop” to “replace”

Which way do you prefer?

• have a person in a key seat who’s doing a good but not great job.
• You want this person to succeed. Invested time and energy in this
person. But you’re not yet seeing the a-level performance you need in
the seat.
Even though its 50/50, the one who tilt on develop will confront the fact
they need to replace someone in a key seat.

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Know when to shift from “develop” to “replace”
How do you know when you’ve crossed the demarcation line, when its time to
make the shift from “develop” to “replace” for a key seat?
7 questions :
1.Are you beginning to lose other people by keeping this person in the seat?
2.Do you have values problem, a will problem, or a skills problem?
3.What’s the person’s relationship to the window and the mirror?
4.Does the person see work as a job or a responsibility?
5.Has your confidence in the person gone up or down in the past year?
6.Do you have a bus problem or a seat problem?
7.How would you feel if the person quit?

When decided to replace someone in a key seat, keep in mind an essential

distinction : Be rigorous, not ruthless.

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If you want to grow your people, first grow yourself

CEO of Telecare, Anne Bakar

To make Telecare into great company, Bakar needed to grow into a great

leader, to scale her own capabilities right alongside the growth and scale

of the company.

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If you want to grow your people, first grow yourself

Most great leaders don’t begin as great leaders.

Example : Steve Jobs(in his 20s couldn’t have led apple’s resurgence in
the early. young Jobs was notorious for temperamental, demeaning
outbursts, immature genius.

but he changed to be mature and changed to have leadership

effectiveness in his fifties.

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If you want to grow your people, first grow yourself

Most great leaders don’t begin as great leaders.

Example : Steve Jobs(in his 20s couldn’t have led apple’s resurgence in
the early. young Jobs was notorious for temperamental, demeaning
outbursts, immature genius.

but he changed to be mature and changed to have leadership

effectiveness in his fifties.

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If you want to grow your people, first grow yourself

Never let anyone talk you into the false belief that founders cannot grow

into builders

To lead a company, you have to willing to do what it takes to grow into

the leader your unit, company, needs. Don’t just being a good leader, but
being leader that never stop growing into a great leader.

Leadership is a responsibility, not an entitlement, decision, accident.

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Make the most of “who luck”
We often think of “what luck” : something unexpected and consequential

things happen to us.

But there is more powerful type of luck : “who luck” : meeting across a

life-altering mentor, finding a great friend or ideal life partner or

incredible boss or teammate.

To get that “who luck”, we have to keep aware that we highly attuned to

stumbling upon great talent wherever you might be. You never know

when you’re going to get “who luck”, but you’ll get it , repeatedly.

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Focus on your unit and take care of your people—not

your career
The right unit leaders are those who focus first on their unit of responsibility rather

than obsessing over their next career move.

Jim said to people that asking for career advice. “the best thing you can do for your

career is stop focusing on your career.”

Anne Mulcahy, CEO of Xerox General Lloyd Austin

III. They exemplify a lesson to learn as early

as possible: Take care of your people,

not your career.

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Embrace the Jorge Paulo Dilemma

Their ultimate “strategy” was to find passionate young people; put them in an

intense meritocratic culture; challenge them with audacious goals; and give them a

stake in the outcome—what they summarized as Dream-People-Culture.

They didn’t hire to get people with particular skills or to fill an open position or to

achieve a specific goal or to pursue a market opportunity.

First, you get great people. Then you need to give them something to do. If you pick

big enough, you’ll need more great people. Then you have to come up with bigger

things to do, which requires getting more great people

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If you need financial Incentives to motivate, then you

have the wrong people

Financial incentives don’t cause companies to achieve greatness for the simple

reason : you cannot turn the wrong people into the right people with money.

if someone need financial incentives to perform at high level, he lacks intense inner

drive, the productive neurosis, required to do great things.

Cleveland clinic became one of the most admired health-care institutions in the

world by do what’s best for the patient. With have principle “get the right people”

They accomplished with simple salary structure for its physicians: no pay-for-

performance incentives base on the number of patients or procedures.

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If you need financial Incentives to motivate, then you

have the wrong people

The wrong incentives are not merely benign; they can be outright dangerous.

The wrong incentive system can encourage people to do the wrong things and

perhaps even throw a company into crisis.

In building a truly great organization, the primary purpose of compensation system

is to make sure that able to attract right people

Right people should be paid well in their field. And they need to feel that the

compensation system is fair.

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Build a Culture Where People Depend Upon People

William Manchester

The point is to highlight the power of creating a culture where people know their

comrades are depending on them and they cannot let them down.

Bill Lazier brought out Jim effort because if Jim failed he’d be letting him down

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CHAPTER III Leadership Style

Leadership Style
Chapter 3
 CHAPTER III Leadership Style

Beyond Entrepreneurship 2.0

The Multiplier Effect

if you are the top person, your style will set the tone for the entire organization. The

tone you set will affects the behavior of people.

If effective, your style will be a powerful factor for building great company.

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Beyond Entrepreneurship 2.0

Different Styles

Everyone is not obligated to have the same leadership style. There are many

effective style

Cultivate your own style, don’t try to be someone that doesn’t fit your style.

An effective style grows from within you. No one except you should have a style

exactly like yours.

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Effective leadership : function plus style
Effective corporate leadership consists of two parts : leadership function and

leadership style.

The function of leadership : the number one responsibility of a leader is to catalyze

a clear and shared vision for the company to secure commitment for pursuit that

vision.

Even though each leader have their own style, some style can be more effective

than others?

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Effective leadership : function plus style
Although each leader has a unique style, there are certain elements that tend to be

common across a range of effective styles

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Just exactly what is “leadership”?
True leadership only exist if people follow when they would otherwise have the

freedom to not follow.

Leadership is the art of getting people want to do what must be done.

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Seven elements of leadership style

1.Authenticity

2.Decisiveness

3.Focus

4.Personal Touch

5.Hard/Soft People Skills

6.Communication

7.Ever Forward

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Seven elements of leadership style

1. Authenticity
Show your conviction

Be the best role model

Case example: Yvon Chouinard and Lost Arrow Corporation

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Seven elements of leadership style

2. Decisiveness
Don’t let analysis prevent a decision
Follow your gut
A bad decision is often better than no decision

Be decisive but not bullheaded

Group decision making

Accept responsibility and share credit

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Seven elements of leadership style

3. Focus
take one shot at a time

manage your time, not your work

Hard choice—decisiveness revisited

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Seven elements of leadership style

4. Personal touch
Build relationships
Be accessible and approachable
A bad decision is often better than no decision

Know whats going on

Reinforce values with symbolic details

Personal touch versus micro-management

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Seven elements of leadership style

5. Hard/soft people skills

The importance of feedback

Case example : russel s. Reynolds

Leader as teacher

The role of high standards

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Seven elements of leadership style

6. Communication
Communicate vision and strategy

Use analogies and images

Add personal touch to formal communication

Call a duck a duck—and don’t hide

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Seven elements of leadership style

7. Ever forward
Hard work

Improve with each day

Keep the energy up

Optimism and tenacity

Keep the company going “ever forward”

Touch the spirit

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CHAPTER 4 VISION
Chapter 4
Vision
 CHAPTER 4 VISION
Beyond Entrepreneurship 2.0
CHAPTER 4 – Vision
"The only thing worse than being blind is having
sight but no vision." by Helen Keller

A Deep Dive into Chapter 4 “Vision“ of 'Beyond

Entrepreneurship' by Jim Collins
What is Vision?
Vision refers to a forward-looking, is like having a map
that shows you exactly where you want to go.

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Beyond Entrepreneurship 2.0
The Importance of Vision
Vision is important because it provides a framework for
decision-making and motivate and inspire you.

Without a vision can a company succeed?

If there is no vision, resilience will be reduced and

more difficulties will arise on the horizon. It is like a
ship sailing without a sailor.

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 CHAPTER 4 VISION
Beyond Entrepreneurship 2.0
Benefits of Vision
1- Basis for Extraordinary Human For instance, In the 1960s, the United States had
Effort: it is like having a super special the ambitious goal of landing humans on the moon.
reason that makes you and everyone The extraordinary human effort put into the Apollo
around you want to work really, really 11 mission led to the successful moon landing on
hard. July 20, 1969. Astronauts Neil Armstrong and Buzz
Aldrin became the first humans to set foot on the
lunar surface.

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 CHAPTER 4 VISION
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Apollo 11: Landing on the Moon
Apollo 11 astronauts Neil Armstrong and Buzz
Aldrin explored the area around their lunar
landing site for more than two hours.

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Beyond Entrepreneurship 2.0
Benefits of Vision
2- A Context for Strategic and
Tactical Decisions: It is like having a
compass and destination and figuring
out a way to get there.

Establishing a clear vision provides a crucial

context for strategic and tactical decisions within
an organization. This is because a well-defined
vision offers essential information, setting the
framework for decision-making processes. The
reason behind its significance lies in the fact that it
aligns organizational actions with a common goal,
fostering cohesion and efficiency.
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 CHAPTER 4 VISION
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Benefits of Vision
For instance, American Colonel: "You never
defeated us on the battlefield."
North Vietnamese Colonel: "That may be so. But it
is also irrelevant." He is saying that while it's true
the U.S. won battles, that's not the point, as they
eventually succussed to liberate themselves using
Guerrilla warfare.

Guerrilla warfare is the tactic that was used by the

vietnamese and led them to win against the U.S
that has a larger military force.

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 CHAPTER 4 VISION
Beyond Entrepreneurship 2.0
Benefits of Vision
3- Cohesion, Teamwork, and Example: Our mission, said Swanson, CIO of
Community: The vision provides Johnson and Johnson, one of the largest healthcare
essential information, offering a companies globally, “was to get out of bankruptcy”.
shared understanding of the It was such a challenging task that unified the team.
organization's purpose. This shared This is like a reason for the team to unite and fight,
understanding becomes the reason he equipped them with a mission.
for teams to unite, fostering a
collaborative environment.

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Benefits of Vision
4- lays the groundwork for the Example: Tom Watson, Jr. took over as the leader
company to evolve past dependence of a big tech company called IBM from his dad in
on a few key individuals: provides a 1956. He wanted to make sure that the company
shared understanding of the didn't rely too much on just one person (himself or
company's long-term goals and his dad), so he came up with a special plan. He took
direction. the top bosses on a trip. This was like a big meeting
As a result, the company is better to figure out the future of IBM. Watson, Jr. wanted
equipped to capitalize on the to create a clear plan for IBM that would last even
strengths of diverse talents. if the leaders changed. By doing this, he aimed to
give IBM a strong sense of purpose and direction,
like the principles that guide a whole nation. This
way, the company could keep going strong, no
matter who was in charge.

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Benefits of Vision
Thomas John Watson Jr. was an
American businessman, political
figure, and philanthropist.

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 CHAPTER 4 VISION
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Vision components
1- Core Values and Beliefs : Now, this It provides a moral compass and guiding principles.
is where you can start thinking bigger. The result is a more cohesive and purpose-driven
You didn’t just make a product or organization, better equipped to navigate
service at random. Instead, you’re challenges and contribute meaningfully to their
most likely motivated by a set of core respective fields.
values.

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Vision components
Without core values and beliefs, Example: L.L.Bean was built on the core values and
organizations and individuals may lack beliefs espoused by Leon Leonwood Bean. Bean,
a guiding framework for decision- who founded the company in 1911, had a deeply
making and behavior. This absence held personal philosophy summed up simply as,
can lead to a lack of coherence, “Sell good merchandise at a reasonable price, treat
resulting in inconsistent actions, your customers like you would your friends, and
unclear goals, and a diminished sense the business will take care of itself.
of purpose.

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Vision components
An example of an organization that The absence of strong core values allowed for
faced challenges due to the absence financial misconduct, accounting fraud, and
or neglect of core values is Enron. In unethical business practices to flourish. As a result,
the late 1990s and early 2000s, Enron, Enron's bankruptcy not only led to massive
once a highly regarded energy financial losses for investors but also eroded trust
company, collapsed in one of the in corporate governance and financial markets.
most notorious corporate scandals in
history. Enron's leadership prioritized
profit at almost any cost, neglecting
ethical considerations and
transparency.

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Vision components
Herman Miller, Inc. | Core Values and We are a research-driven product company; we are
Beliefs* not a market-driven company. We intend to make a
contribution to society, through our products,
services, and the way we deliver them.

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Vision components
2- Purpose Purpose-driven organizations often seek innovative
That is the reason why your company solutions to meet their objectives. An emphasis on
does exist. What does your product or continuous improvement aligns with the need for
innovation in TQM. often referred to as Kaizen
service do, or aim to offer and for
Philosophy meaning "change for better".
whom. A crucial aspect of Purpose is
that it’s always worked toward and
never fully achieved.

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Vision components
1- Core Values and Beliefs : Now, this Example: Mckinsey&Company Statement of
is where you can start thinking bigger. Purpose is: To help leading corporations and
You didn’t just make a product or governments be more successful.
service at random. Instead, you’re They want to coin the term The War for Talent, the
most likely motivated by a set of core same name as a 1997 book authored by some
values. consultants at McKinsey. The name war of talent
implies there is high competition among companies
for excellence.
The book reflects the collective expertise and
insights of these McKinsey consultants, drawing on
their experiences in advising organizations on
talent-related challenges and opportunities.

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Vision components
Theranos an american company in The reason:
healthcare industry, in 2018 they
They had issues with TQM like Leadership Issues:
were active only 15 years. They laid
off all their employees and announced Elizabeth Holmes, the founder and CEO, lack of
their bankruptcy. transparency, misleading claims were a significant
factor in the company's downfall. The company did
not fully disclose the details of its blood-testing
technology making it challenging for stakeholders
to assess the validity and reliability of the claims.

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Vision components
Taiichi Ohno a Japanese engineer and Toyota
production manager, he adopted the 5 whys
technique to help not only solving problems but
also to make statement of purpose. He says keep
asking why multiple times until you get into the
fundamental purpose of your business.

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Mission and Its Types

Mission is like an overall goal. It is a clear and

concise description of the organization's primary
objectives and activities, and unlike purpose,
mission should be achievable. Purpose is timeless
while mission has a time frame.

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Mission Type 1: Targeting

Setting a clear, well-defined target and Tokyo Tsushin Kogyo: aimed to diversify its product
aiming for it. range beyond its initial focus on tape recorders
after struggling for 7 years. Then they created the
first radio small enough to fit in a pocket!!
Today they are known as SONY.!!!
This targeted approach has contributed to
Sony's strength in the electronics and
entertainment industries.

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Mission Type 2: Common enemy

Nike’s mission is to crush adidas, a German brand,

and it did. The brand value of Nike has increased
year-on-year since 2010 and reached around 50
billion U.S. dollars in 2022. In comparison, the
adidas brand was valued at approximately 16
billion U.S. dollars in 2022. Nike has achieved
significant success. And this success is attributed to
effective leadership, and responsiveness to market
conditions (continuous improvement).

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Mission Type 2: Common enemy

Another example is: (Yamaha wo tsubusu)= we will

crush Yamaha says Honda.
Honda significantly outsells Yamaha in numbers of
motorcycles - in 2022, Honda sold the most
motorcycles globally (around 22% of all bikes sold),
compared to Yamaha who were in second place
with a little over 10% of all bikes sold.

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Mission Type 3: Role Model

It means looking up to and learning from

organizations that you admire. These organizations
serve as models or examples for what you want
your own company to become. A Role Model
mission is excellent for smaller and medium-sized
companies because it helps guide them in setting
high standards and values.

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Mission Type 4: Internal Transformation

It is a strategic approach that focuses on The LEGO Group. In Denmark. In the early 2000s,
bringing about significant changes within the iconic toy company faced financial challenges
the organization itself. and a changing market landscape. The company
underwent a significant internal transformation to
renew its brand and operations.
The LEGO Group experienced a remarkable
financial turnaround, with increased revenue and
profitability.
A revenue increased to 254 billion NTD, growth by
27%!!!!!!

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Closing Slide: BHAG
BHAG: Big Hairy Audacious Goal: BHAG is
a strategic business goal that is
ambitious, challenging, and often
audacious in nature. It is designed to
inspire and motivate an organization,
providing a clear and compelling vision
for the future.

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Closing Slide: BHAG
Coming up with a BHAG is like trying to
choose a New Year's resolution. You
start with something grand and
audacious, but by February, it's more
like a 'Big Hairy Abandoned Goal.
In summary, a clear vision, well-defined
core values, a meaningful purpose, and
a mission provide a strong foundation
for an organization.

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CHAPTER 4 VISION
Closing Slide: BHAG
 CHAPTER 4 VISION
Beyond Entrepreneurship 2.0
Challenging Perspectives
Interestingly some authors and prominent
celebrities opposes this statement. For instance,
Jeffrey Pfeffer: American business theorist at
Stanford university. in his book Leadership BS:
Fixing Workplaces and Careers One Truth at a
Time"

He criticizes what he sees as misguided or

deceptive aspects of leadership advice. He says
leadership approaches or techniques are seen as
outdated or trendy and does not providing
meaningful impact on organizations.

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CHAPTER 5 Luck Favors the Persistent

Luck Favors the
Persistent
Chapter 5
 CHAPTER 5 Luck Favors the Persistent
Beyond Entrepreneurship 2.0
CHAPTER 5
Luck Favors the Persistent
“You start at the bottom. And even though you see stuff up ahead
you know you can’t climb, you go and you go until you can you can
touch the obstacle–and more often than not, when you get that
close, there’s a way past. If you turn back before you can put your
nose against it, then you’re giving up.”
Tom Frost

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How much of success is explained by luck?

Tommy
Caldwell

Steve Winston
Jobs Churchill

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Beyond Entrepreneurship 2.0
The DAWN WALL Story
The Dawn Wall refers to a particular route on El Capitan, a prominent granite rock
formation in Yosemite National Park, California. This route gained widespread
attention in the climbing world due to its exceptional difficulty and technical
challenges.

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The DAWN WALL Story
The most notable ascent of the Dawn Wall occurred in
January 2015 when climbers Tommy Caldwell
successfully completed the first free climb of this route.

Caldwell's ascent was a historic achievement in the

climbing world. The route consists of extremely
challenging pitches, demanding precise and strenuous
movements, small holds, and sections with virtually no
natural features for assistance.

His successful climb was widely celebrated as a

testament to human determination, perseverance, and
skill in the realm of rock climbing.
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The DAWN WALL Story：

CHAPTER 5 Luck Favors the Persistent

Beyond Entrepreneurship 2.0
Bad Luck Happened
1. Injury and Physical Setbacks：In 2000, he encountered a traumatic
event where a loose blade detached from a haul bag he was carrying,
severing a portion of his index finger. Losing part of his finger could have
been a considerable setback for any climber, affecting grip strength and
dexterity, crucial aspects in climbing.
2. Route Finding and Challenges：The route presented Caldwell with
various technical challenges, including pitches with minuscule holds,
sections with minimal natural features for assistance, and demanding
movements that required exceptional skill and precision.
3. Weather and Environmental Factors：Weather conditions in Yosemite
National Park, where El Capitan is located, can be unpredictable and
challenging for climbers. Caldwell and his climbing partner, Kevin
Jorgeson, faced weather-related obstacles during their initial attempts, 77
including cold temperatures affecting grip on the rock.
The DAWN WALL Story：

CHAPTER 5 Luck Favors the Persistent

Beyond Entrepreneurship 2.0
How did he success?
“I got back because the climb is making me better, it’s making me stronger”
“I’m not failing, I’m growing.”
–Tommy Caldwell

Despite facing setbacks, including injuries and challenges during climbs,

Caldwell's resilience and adaptability allowed him to overcome
obstacles. His ability to learn from failures, adapt strategies, and
persistently pursue his goals contributed to his success.

Tommy Caldwell's success in climbing isn't just defined by his historic

climbs but also by his resilience, innovation, and commitment to the
climbing community and environmental conservation.

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 CHAPTER 5 Luck Favors the Persistent
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Steve Jobs’s Story：Bad Luck
Departure from Apple：In 1985, after Create NeXT Computer：Following his
internal power struggles within Apple, departure from Apple, Jobs founded
Jobs was removed from his own NeXT Computer, aiming to create high-
company by the board of directors. This end workstations. However, the
was a deeply challenging time for Jobs computer didn't gain significant market
as he was ousted from the company he share despite being praised for its
co-founded. innovation and technology.

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 CHAPTER 5 Luck Favors the Persistent
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Steve Jobs’s Story：Good Luck
Because of Apple acquired NeXT primarily for its
advanced operating system technology, and to
bring Steve Jobs, a visionary leader, back into
the company. NeXT's innovative OS and talented
team were key factors in revitalizing Apple's
technology and driving future innovation.

Steve Jobs' return to Apple through the NeXT

acquisition was a stroke of luck for the company.
You can say that with his experience of
designing computers in NeXT, so that he can use
his visionary leadership, marked by innovative
products like the iMac, iPod, iPhone, and iPad,
revitalized Apple and reshaped the tech 80
 CHAPTER 5 Luck Favors the Persistent
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Winston Churchill’s Story

Winston Churchill's life reflects a

blend of persistent determination
and moments where luck seemingly
favored his endeavors.

In Churchill's story, persistence and

luck intertwined, with his determined
leadership and strategic decisions
often aligning with favorable
circumstances that, at crucial
junctures, seemed to swing in his
favor. 81
 CHAPTER 5 Luck Favors the Persistent
Beyond Entrepreneurship 2.0
Winston Churchill’s Story
1. Persistent Leadership：Churchill's persistent and unwavering leadership
during World War II is renowned. Despite facing immense challenges
and setbacks, he persistently rallied the British people, inspiring courage
and determination in the face of adversity.
2. Luck Amid Challenges：During the Battle of Britain in 1940, the Royal Air
Force's successful defense against the German Luftwaffe was crucial.
Factors like favorable weather conditions and the interception of German
plans contributed to the RAF's victory, which can be seen as a stroke of
luck amidst intense strategic planning and relentless effort.
3. Resilience in Defeat and Success：Despite numerous setbacks,
including political defeats and disagreements, he remained persistent in
his beliefs and goals, eventually becoming Prime Minister during one of
the most challenging periods in British history.

His ability to persist in the face of adversity and capitalize on moments of 82

 CHAPTER 5 Luck Favors the Persistent
Beyond Entrepreneurship 2.0
Which can have more chance for success at last?

Company with good luck at first Company with bad luck at first

This kind of company might This kind of company often

encounter challenges that hinder undergo a transformational
sustained success for several journey that can lead to potential
reasons： V.S. success for several reasons:
1. Complacency 1. Resilience and Adaptability
2. Lack of Resilience 2. Learning from Mistakes
3. Dependency on Luck 3. Innovative Solutions
4. Limited Opportunities 4. Stronger Company Culture
5. Failure to Innovate 5. Outperforming Competition

Company with bad luck at first has the ability to adapt, learn, innovate, and build a resilient
culture from initial challenges can serve as catalysts for future achievements.
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 CHAPTER 5 Luck Favors the Persistent
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“Be prepared to kill, revise, or evolve an idea...but never give up on the company.”
–John W. Gardner

Kill, Revise, or Evolve an Idea：In the business world, ideas or

strategies may not always work as initially envisioned. Being willing to
reevaluate, modify, or even discard an idea that isn't yielding results is
crucial.

Persistent Evolution：Businesses that thrive are often those that can

evolve with the times, responding to changing customer needs,
technological advancements, or shifts in the market landscape.

Commitment to the Company：While ideas or strategies might need

adjustment, the commitment to the company's success remains
unwavering.

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“Be prepared to kill, revise, or evolve an idea...but never give up on the company.”
–John W. Gardner

This sentence encapsulates an

important principle in business
management and entrepreneurship:
the importance of adaptability and
resilience.

It emphasizes the significance of

being adaptable and continuously
evolving in the business world, while
maintaining a commitment to the
success of the company.

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 CHAPTER 5 Luck Favors the Persistent
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Persistent ideas
1. Resilience in the Face of Setbacks:：Persistence involves the ability to
endure setbacks, failures, or unfavorable circumstances without losing
enthusiasm or determination.
2. Continuous Effort and Improvement：Persistence involves consistent
effort and ongoing improvement. By continuously working towards their
goals, individuals increase their chances of being in the right place at the
right time, which can lead to fortunate outcomes.
3. Creating Luck through Perseverance：Persistent individuals believe that
by persisting, they increase the probability of success, whether by being
better prepared for opportunities or by creating them through their
continuous effort.

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 CHAPTER 5 Luck Favors the Persistent
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Persistence：Opportunities to Success
In essence, "luck favors the persistent" emphasizes the correlation between
persistence and opportunities. While luck itself may seem random or unexpected,
persistent individuals are more likely to find themselves in situations where luck
can play a favorable role. By consistently pursuing their goals and remaining
resilient, they increase the likelihood of encountering opportunities that lead to
success.

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Beyond Entrepreneurship 2.0
88

CHAPTER 6 What Makes Great Companies Tick– The Map

What Makes Great Companies
Tick–The Map
Chapter 6
 CHAPTER 6

CHAPTER 6 What Makes Great Companies Tick– The Map

Beyond Entrepreneurship 2.0
What Makes Great Companies Tick–
The Map
“In the ever renewing society what matures is a system or
framework within which continuous innovation, renewal and rebirth
can occur”
–John W. Gardner

The purpose of this chapter is the author figuring out how do

great company begin and grow.up with successfully route.
Exploring how successful companies were founded on a
visionary idea or purpose that guided their initial steps.
Understanding how this vision was crystallized and
communicated across the organization to inspire and align the
team.
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 CHAPTER 6 What Makes Great Companies Tick– The Map
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THE MAPS
"The MAP" in the context of what makes great companies tick might refer to an acronym or
framework used to outline the essential elements or strategies that contribute to their success.

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 CHAPTER 6 What Makes Great Companies Tick– The Map
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Four Stages of Inputs
Disciplined People：Everything starts Disciplined Thought：In business,
with people. In a business setting, having disciplined thought is essential for making
a team composed of disciplined well-informed decisions, solving complex
individuals forms the backbone of a problems, and navigating uncertainties
productive and efficient organization. effectively.

Disciplined Action：Within a business Building to Last：Is a concept that

context , actions refers to the consistent embodies the idea of creating businesses
execution of plans, strategies, and tasks in or organizations with enduring qualities,
a structured and focused manner. structures, and strategies.

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Stage 1: Disciplined People

CHAPTER 6 What Makes Great Companies Tick– The Map

Beyond Entrepreneurship 2.0
Level 5 Leadership Hierarchy
Level 5 Leadership, introduced by
Jim Collins in his book "Good to
Great," represents a specific tier
within the hierarchy of leadership Level 5 Level 5 Excutive
qualities.

Level 5 Leadership represents the Level 4 Effective Leader

highest tier in the hierarchy,
characterized by a unique blend
of humility. Level 3 Competent Manager

Every good-to-great transition in

our research began with a Level 5 Contributing Team Member
Level 2
leader who motivated people
more with inspired standards
than inspiring personality. Highly Capable Individual
Level 1
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Level 5 Leadership Hierarchy
Level1 – Highly Capable Individual：Makes productive contributions through talents,
knowledge, skills, and good work habits.

Level2 – Contributing Team Member：Contributing Team Members play a crucial role

within organizations by not only excelling in their own roles but also by enhancing the team's
overall effectiveness through collaboration, support, and commitment to shared goals.

Level3 – Competent Manager：.Competent Managers play a pivotal role in organizational

success by effectively leading teams, achieving objectives, and creating an environment
conducive to productivity and growth.

Level4 – Effective Leader：Effective Leaders play a pivotal role in driving organizational

success by providing direction, inspiring teams, and creating a culture of excellence and
continuous improvement.

Level5 – Level 5 Excutive：Build enduring greatness through a paradoxical blend of

personal humility and professional will.Level 5 Executives represent the pinnacle of
leadership, driving organizations from being good to achieving sustained greatness. 93
Stage 1: Disciplined People

CHAPTER 6 What Makes Great Companies Tick– The Map

Beyond Entrepreneurship 2.0
First Who, Then What
Emphasizing the importance of getting the
right people on board before determining the
direction or strategy for an organization. It
aligns with the metaphor Collins uses of
"getting the right people on the bus" and then
deciding where to drive the bus.

Ultimately, the success of an organization

hinges on the collective efforts and
capabilities of its people. By getting the right
individuals in the right roles, organizations are
better equipped to tackle challenges, drive
innovation, and achieve sustainable success. 94
Stage 2: Disciplined Thought

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Beyond Entrepreneurship 2.0
Embrace the Genius of the AND
"Embrace the Genius of the AND" is a concept
from Jim Collins that highlights the importance
of embracing seemingly contradictory ideas
and finding ways to integrate them for optimal
results.

By embracing seemingly contradictory ideas

and integrating them creatively, organizations
can unlock new possibilities, overcome
limitations of binary thinking, and create
strategies that are more comprehensive and
robust.
95
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Embrace the Genius of the AND
Creativity Discipline
Innovation Execution
Humility Audacity
Freedom Responsibility
Cost Quality
Short-term Long-term
Prudence AND Courage
Analysis Action
Idealistic Pragmatic
Continuity Change
Realistic Visionary
Values Results
Purpose Profits 96
Stage 2: Disciplined Thought

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Confront the Brutal Facts
"Confront the brutal facts" is a concept often
associated with the "Stockdale Paradox.This idea
emphasizes the importance of facing harsh realities
while maintaining unwavering hope and
determination.

In a business context, confronting the brutal facts

involves acknowledging harsh realities, challenges,
or setbacks faced by a company. It's about
accepting the current situation, no matter how
difficult.

Confronting the brutal facts, or living the Stockdale

Paradox, means facing tough realities head-on
while maintaining unwavering hope for eventual 97
success.
Stage 2: Disciplined Thought

CHAPTER 6 What Makes Great Companies Tick– The Map

Beyond Entrepreneurship 2.0
Clarify a Hedgehog Concept
It’s based on the understanding that
great companies excel by focusing on
what they can be the best in the world.

What You Can Be Best At：It's about

understanding what the company does
exceptionally well and can potentially
dominate in the market.

What Drives Your Economic Engine：It

involves understanding the economic
indicators crucial for sustainable growth.

What You Are Deeply Passionate About

：It's about aligning the company's
98
goals with its core values and passions.
Stage 3: Disciplined Action

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Beyond Entrepreneurship 2.0
Build Momentum by turning the Flywheel
It refers to the cumulative effect of consistent, small actions that eventually lead to
significant momentum and success for an organization.

The flywheel metaphor represents a heavy, rotating disk. Initially, efforts to push the
flywheel are met with resistance and seem to yield minimal results.

However, as consistent force is applied, the flywheel gains momentum and

becomes easier to turn. Eventually, it develops into a powerful force driving the
organization forward.

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Stage 3: Disciplined Action

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Beyond Entrepreneurship 2.0
Build Momentum by turning the Flywheel
Turning the flywheel involves:
Disciplined Action Consistency
Consistently taking small steps aligned with the Continuously reinforcing the core values, strategies,
company's goals and values. and actions that contribute to the company's
success.

Persistence Sustainable Momentum

Despite challenges or setbacks, maintaining the Over time, the consistent application of effort creates
momentum.
effort and commitment to the chosen course of
action.

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Archeive Breakthrough with 20 Mile March Discipline
The "20 Mile March" is about achieving consistent progress and avoiding extreme
highs and lows by adhering to self-imposed constraints, regardless of external
circumstances. It’s how it works：

Discipline and Control

Consistent Performance
The idea is control by
Companies or individuals set
consistently hitting
ambitious but achievable
predetermined performance
performance markers.
targets.

Risk Management
It's about managing risk and
ensuring steady progress
without exposing oneself.
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Stage 3: Disciplined Action

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Beyond Entrepreneurship 2.0
Renew and Extend Via Fire Bullets, Then Cannonballs
“Fire Bullets, Then Cannonballs”
–Jim Collins's book "Great by Choice,"

This sentence illustrates a strategy for testing

ideas and making big bets more effectively.

By firing bullets first, companies can gather data,

mitigate risks, and validate their strategies before
making substantial investments.

Once they've identified what works, they can

then focus their resources more effectively, like
firing cannonballs, to achieve significant impact
or breakthroughs. 102
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Renew and Extend Via Fire Bullets, Then Cannonballs
Fire Bullets Cannonballs

This involves experimenting with small, Once a viable strategy or idea is identified
low-risk initiatives (bullets) to test the through the successful "bullets," it's time to
waters. concentrate resources and decisive action
(cannonball).
These are like small-scale experiments
or trials that help in gathering This involves committing significant
information, understanding the market, resources based on validated insights
and assessing the viability of an idea. gained from the initial small experiments.

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Stage 3: Disciplined Action

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Renew and Extend Via Fire Bullets, Then Cannonballs
The key principles are:
Risk Management
By starting with small-scale
experiments (bullets),
companies minimize risk and
potential losses associated
with unproven strategies.

Validation
Flexibility and Adaptability
Successful bullets validate the
This approach allows
direction or strategy, giving
companies to adjust and refine
confidence to invest more
their strategies based on the
significantly (cannonballs) in
outcomes of the smaller
what has been proven
experiments
effective.
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Stage 4: Build to Last

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Practice Productive Paranoia

Productive paranoia aims to prevent organizations from entering the "Five Stages of
Decline" by maintaining vigilance, adaptability, and forward-thinking strategies.

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Avoid the 5 Stages of decline

ByStage
staying alert
1 Hubris andofhumble,
Born Success Stage 2:Being vigilantPursuit
Undisciplined helps of More Stage 3: Denial of Risk and Peril
It promotes a mindset where
organizations can avoid organizations steer clear of
potential risks are
overconfidence and continue overextending that don't align
acknowledged .
to seek improvement. with their core strengths.

Stage 5: Capitulation to Irrelevance or Death By maintaining

Stage vigilance,
4: Grasping for Salvation
Practicing productive paranoia
organizations can avoid
helps organizations remain
desperate attempts to find
adaptive and agile,
quick-fix solutions.

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Do More Clock Building, Less Time Telling
“Clock Building, Not Time Telling”
–Jim Collins

This sentence is a concept that emphasizes the

importance of focusing on creating enduring systems
and structures .

By focusing on building enduring systems and

structures, leaders invest in the organization's long-
term success, fostering a legacy that lasts beyond their
tenure.

It involves empowering others, fostering a culture of

continuous improvement, and ensuring the 107
Stage 4: Build to Last

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Do More Clock Building, Less Time Telling
Clock Building Time Telling

It involves building strong teams, It involves providing immediate solutions or

fostering a culture of innovation and instructions without necessarily contributing
excellence, and establishing enduring to the long-term development or
processes that outlast individual leaders. sustainability of the organization.

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Do More Clock Building, Less Time Telling
The key principles are:

Leadership Legacy
Clock building involves leaving
a lasting legacy by building
systems and structures.

Systemic Development Empowerment and Culture

It's about creating enduring Clock building emphasizes
processes and mechanisms empowering others, fostering
that outlast any single leader, a culture of collaboration, and
ensuring the organization's building capabilities within the
sustained success. organization.

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Preserve the Core/Stimulate Progress(Achieve the Next
BHAG)
It's about maintaining fundamental values while encouraging progress and pursuing
ambitious goals. Here's what it entails：

Preserve the Core Stimulate Progress

This involves safeguarding the This involves seeking new
organization's core values, opportunities, embracing
enduring principles, and change, and pursuing
fundamental strengths. ambitious goals.

Achieving the Next BHAG

BHAGs are ambitious, long-
term goals that galvanize the
organization and drive
progress.
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Outputs：
The Three tests Superior Results Distinctive Impact
Refers to achieving Signifies a remarkable and
exceptional or outstanding recognizable difference or
performance, surpassing contribution made by an
(1)Superior Results benchmarks, and individual, organization,
consistently delivering product, or initiative.
(2)Distinctive Impact outcomes that exceed
standard expectations.
(3)Lasting Endurance

Lasting Endurance
Describes the ability to
persist or sustain over a
long period despite
challenges, obstacles, or
changing circumstances.
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After The Map?
What’s Next?
Execution and Action Continuous Monitoring and Adaptation
Once the map or strategy is in place, the This ensures that the map remains relevant
focus shifts to execution. and effective in dynamic environments.

Scaling and Growth Learning and Development

Expanding operations, reaching new Learning from successes and failures, and
markets, or growing the organization while applying those lessons to refine strategies
maintaining the core values. and capabilities.

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Beyond Entrepreneurship 2.0
113

CHAPTER 7 Strategy
Chapter 7
Strategy
 CHAPTER 7 Strategy
Beyond Entrepreneurship 2.0
CHAPTER 7 – Strategy
Strategy’is’easy,
’but’tactics’– the’day- to- day’and’month- to- month’
decisions’required’to’manage’a’business’– are’hard. ̴ Arthur Rock

The purpose of this chapter is to demystify the topic of

strategy and provide a straightforward road map for
setting a strategy. We will also address four key
strategic issues commonly faced by small to mid-sized
companies:
● How fast to grow
● Focus versus diversification
● Whether to go public
● Whether to lead a market or follow

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Overview of Strategy
Strategy is simply the basic of
methodology you intend to apply to
attain your company’s current mission.
A good strategy is not a thick, turgid
plan that lays out every action of the
company to the nth degree and
requires six months of effort by a
strategic planning staff. Business, like
life, cannot be entirely planned. There
are too many uncertainties and
unexpected opportunities. Instead, it’s
better to simply have a clear,
thoughtful, and uncomplicated
methodology for attaining your mission.
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Four Basic Principles of Setting Effective Strategy

1. The strategy must descend directly from your vision. It’s impossible to
set strategy unless you have a crystal-clear idea of what you’re trying to
do in the first place.
2. The strategy must leverage off the strengths and unique capabilities of
your company.
3. The strategy must be realistic. It must therefore take into account
internal constraints and external factors.
4. Strategy should be set with the participation of those who are going to
be on the line to make it happen.

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The Process

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Beyond Entrepreneurship 2.0
Setting strategy involves the following
basic steps:

1. Review the vision, do so. In

particular, ensure that the current
mission is clear.
2. Do an internal assessment of the
company’s capabilities.
3. Do an external assessment of the
environment, markets, competitors,
and trends.
4. Taking the internal and external
assessments into account, make key
decisions about how you intend to
go about achieving your current
mission. 117
Internal Assessment

CHAPTER 7 Strategy
Beyond Entrepreneurship 2.0
❏ Strengths and Weakness
● Asking a selection of employees and managers to list the top three strengths and the top three
weaknesses of the company to get the objective reading.
● Ask trusted advisors, investors, and board members what they see as your strengths and weaknesses.
● Ask a few key customer accounts (which has the additional benefit of developing a closer relationship with
your customers).
❏ Resources
Next you want to get a clear picture of your resource. Specific categories of resources to consider might
include: cash flow, access to outside capital, scarce materials, production capacity, and people.
❏ Innovations and New Ideas
● Make sure that your company is responsive to its own internal creative output.
● Examine what new innovations and new ideas are bubbling up in product development, research, design,
and marketing.
● List all possible innovations that might come to fruition.
● Obtain estimates on how quickly the innovation could be made marketable, the level of resources required
to complete its development, and the level of marketing required. 118
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External Assessment

There are seven components of a good external assessment:

❏ Industry/market trends
❏ Technology trends
❏ Competitor assessment
❏ Social and regulatory environment
❏ Macroeconomy and demographics
❏ International threats and opportunities
❏ Overall threats and opportunities

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Industry/Market Trends

Take a quick snapshot of your industry.

❏ How are your markets segmented, and in which segments do you compete?
❏ How large are the market segments for your current product line and planned future products?
❏ Are the market segments for your products (services) growing, stable, or shrinking? How fast?
Why?
❏ What are the dominant trends in your industry? What are the underlying forces behind those
trends?
❏ What are your customers telling you about their evolving needs? What are they telling you about
how well your company is meeting their needs? How are customer demands changing?
❏ At what stage of evolution is your industry? What does this imply in terms of how the industry
might change in the next five years?

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Technology Trends
All industries, even “low tech” industries, have a
technology component to their evolution, either in
products or in process. Every industry is somehow
affected by changes in technology. For example,
the banking industry, which has not historically
been known as “high tech,” was nonetheless
dramatically changed by computer technology. In
back-room processing, effective use of computers
became a key strategic advantage for those who
mastered their use quickly. In services to
customers, adoption of ATMs became an essential
part of banking services.
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Competitor Assessment
Never underestimate your competition. One of the biggest mistakes in mapping
out a strategy is doing so in ignorance of the competition or, worse, with disdain
for the competition.

● Who are your current competitors?

● Who are potential competitors?
● What are their strengths and weaknesses?
● What do you anticipate as being their future moves in the market? What are
their visions and strategies?
● How do your strengths, weaknesses, and product line stack up against the
competition? Where are they vulnerable? Where are you vulnerable?
● Do you have a clear, differentiated position with respect to your
competitors? What is it?
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Social and Regulatory Environment
All companies exist as integral parts of society-at-large, and are affected by powerful social,
regulatory, and political forces. Keep abreast of these forces and assess how they might
affect your company. Astute anticipation of governmental moves or regulatory-body
decisions can create tremendous opportunities. Conversely, ignorance of the same can be
disastrous.

Macroeconomy and Demographics

Examine the general macroeconomic climate and assess what impact the overall economy
might have on your company. Pay particular attention to demographic trends. Entire
industries can be dramatically affected by demographic changes. For example, the United
States’s “baby boom” (a gigantic bulge in the birth rate from 1945 to 1960) will continue to
have a profound impact on a wide range of industries until at least the year 2020. This is only
one of many demographic forces. For companies doing business in the United States, a
subscription to American Demographics magazine can be very useful.
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International Threats and Opportunities

International strategy is relevant for all companies; no matter what your

size, there will probably be forces pulling you into the international arena.
Small companies with good products are often approached by foreign
distributors, retailers, resellers, and potential customers. When setting
strategy, assume that participation in the international arena is a viable
possibility and, furthermore, that international opportunities will present
themselves unexpectedly. It may not make sense within the context of your
vision to take advantage of these opportunities, but you should nonetheless
make international an explicit part of your strategy, even if you decide to
stay domestic.

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Overall Threats and Opportunities
Ignoring facts, explaining away problems, and refusing to see the world as it really is
doesn’t change reality. It only invites catastrophe. There are a number of things you
can do to ensure that you are not protected from reality:

1. Surround yourself with people who tell it like it is. Strange as it seems, this is
not an easy task. For one thing, most people know that telling the truth can be
politically dangerous and many, like the manager mentioned earlier, are
terrified of political fallout.
2. Personally stay in touch with what’s happening. Don’t rely solely on status
reports or quarterly reviews, and other formal reporting methods for
information. Use you company’s products. Listen directly to employees at all
levels. Talk to customers. Read consumer reports about your products.
Personally answer customer complaints. In short, do whatever you can to keep
in touch with reality.
3. Never punish people for telling the truth. 125
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Jim’s View From 2020 – The Essence of Strategy

In the years since the original edition of Beyond Entrepreneurship, Jim

continues to reflect on the topic of strategy. By leveraging their research
into what makes great companies tick, working with organizations in their
management lab in Boulder, and learning from great military leaders and
thinkers, Jim realized that good strategic thinking (once you have clarity
vision) boils down to getting in-depth and empirically validated answers
to three important questions:

1. Where to place our bis bets?

2. How to protect our flanks?
3. How to extend our victories?

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The Essence of Strategy – Where to place our bis bets?
● Every great company we studied made a few exceptionally good, highly
concentrated big bets at pivotal points in their histories.
● Microsoft bet big on Windows, powering its rise from a small computer-languages
start-up into one of the most successful software companies in the world. Walt
Disney bet big on animated films, the bet big again on Disneyland as the primary
inflection from small animated-film company into a major entertainment enterprise.
● Of course, we need good big bets. The wrong big bets can damage or even cripple
a very successful company. So, then, what makes a good big bet distinct from a
bad big bet?
● Any truly successful strategy involves making carefully calibrated big bets. We
need empirical validation that the big bet fits with what we are passionate about,
what we can be the best at, and what drives our economic engine (our Hedgehog
Concept). The best way to know for sure something will work on a large scale is to
have proven it first on a small scale. Fire bullets, then cannonballs.
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The Essence of Strategy – How to protect our flanks?

● Jim has puzzled for years over the question of why some companies fail to adapt
quickly enough to what Clayton Christensen calls “disruptive innovation,” while
others do not. Reflecting on the cases in their research study, Jim concluded that
the main answer was actually quite simple – failure to implement productive
paranoia, not only in the short term, but also over a fifteen-plus year period. When
executive teams visit Jim's management lab in Boulder, Jim often asks them these
three questions:
1. What significant changes in your world (both within your company and in the
external environment) do you believe will occur fifteen years from now?
2. Which changes pose a significant or real threat to your company?
3. What do you need to start doing now – immediately – to get ahead of these
changes?
● Morten Hansen and Jim learned an essential lesson from our research: It’s what you
do before the storm comes that most determines how well you do when the storm
comes. 128
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The Essence of Strategy – How to extend our victories?

● Making the most of victories is what the flywheel principle is all about.
● Jim and his research colleagues discovered that one of the most costly
strategic mistakes is failure to take full advantage of winnings, failure to fully
realize the flywheel effect.
● Turning the flywheel doesn’t mean doing the same thing, mindlessly
repeating what you’ve done before. It means exploiting, expanding,
extending. It means evolving and creating.
● Be sure to keep building momentum with your winning strategies. Never
forget, the Next Big Thing is very likely the Big Thing you already have. Make
the most of your victories. Keep turning the flywheel.

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Never Forget: Vision First (1)

The three elements of strategy described

before (big bets, protect flanks, and extend
victories) can guide your strategic thinking. But
never forget, sound strategy is impossible
without clear vision. Muddled strategies flow
from muddled vision; clear strategies flow from
clear vision. If you want to have a good
strategy, you need to first understand with
piercing clarity what you are trying to achieve.
A good strategy determines how you will
achieve your BHAG, guided by your purpose
and consistent with your values. Vision then
strategy then tactics.
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Never Forget: Vision First (2)

Think again of your BHAG like a big mountain to

climb. Once you’ve clarified your core values and
purpose, you set a BHAG, get the right people on
the team, and set a strategy. Then you break the
climb down into base camps, which are three-to-
five-year targets that move you up the mountain.
Then you set your top priorities for the coming
year, the strategic imperatives you must
accomplish along the way to your next base
camp. Once you hit the base camp, you adjust
and clarify your second base camp, then repeat
again for your third base camp, and so forth, until
you reach the BHAG. Then you set a new BHAG.
Repeat, again and again, forever.
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Making Strategic Decisions
● Keep in mind the image of a balanced three-legged stool; each leg should be
strong in order for the stool to be stable. To make solid strategic decisions, you
need each of the three legs: vision, internal assessment, and external assessment.
Once you have done each of these, strategic decision will, in most cases, be fairly
obvious.
● Be sure to pay as much attention to common sense, seasoned judgment, and
intuition as to hardheaded analysis. Don’t overcomplicate the strategy. Keep it
simple and straightforward.
● Specific tactical or implementation plans might be more than three pages, but the
basic strategy should be short, clear, and elegant. (In fact, you should be able to
capture the essence of the strategy in a few well-worded sentences.)
● A useful approach is to take the five primary categories of a business – products
(or services), customers (market segments), cash flow, people and organization,
and infrastructure – and map out the key elements of your strategy in each of
them.
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The Multi-Year Rolling Strategy and Annual Strategic Priorities

It’s seldom useful to lay out more than a five-

year strategy. Some companies go no further
than three years. We suggest having a three-
to five-year strategy, revised annually. Think
of strategy as dynamic, rather than static – as
something that changes and evolves as your
internal situation and the external
environment changes. It’s also essential to set
the top five strategic priorities for the coming
year, with a specific person being responsible
for each priority. Try not to have any more
than five strategic priorities for the year. If
everything is a priority, then you have no
priorities. Even the best companies can only
concentrate on a few key issues at a time.

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The Annual Strategy Meeting

One of the most effective methods for setting and revisiting strategy is to schedule an off-site
strategy meeting once per year. Attendees should include key people from each area of the company.
Few things capture people’s attention better than knowing that they need to make a public
presentation. Certain individuals might take on specific preparation tasks, such as industry/market
trends, technology trends, new innovations, and competitor analysis. They suggest using the following
rough agenda:

● Review vision (core values and beliefs, purpose, and mission). Ensure that the vision is agreed
upon and crystal clear.
● As a group, do an internal assessment.
● As a group, do an external assessment.
● As a group, decide upon/revise the basic strategy for reaching the current mission.
● As a group, decide on the top five strategic priorities for the coming year.

Someone should have responsibility for summarizing in writing the results of the meeting. This
summary can be used as the strategic “guide” and should be distributed to all key people, referred to
constantly, and used in setting individual goals and milestones.
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Four Common Key Strategic Issues That
Face Small to Mid-Sized Companies

The following four key strategic issues commonly

faced by small to mid-sized companies:

● How fast to grow

● Focus versus diversification
● Whether to go public
● Whether to lead a market or follow.

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How Fast to Grow

Growth is not de facto good (or bad for that matter), and rapid growth should not automatically be viewed
as a desirable aim. The decision to grow rapidly should not be a foregone conclusion and, indeed, there
may be reasons not to grow rapidly. For one thing, rapid growth can create a perilous cash flow situation. A
common pattern is that a company shells out cash to purchase materials and labor in anticipation of rapid
sales increases. It then turns those materials into products and sales, but cash doesn’t come in until months
after the initial purchases. If the company doesn’t hit its forecasts, cash is tied up in inventory. This is why
roughly half of all bankruptcies occur after a year of record sales. There are many other downsides to rapid
growth:

● Rapid growth can hide gross inefficiencies that don’t show up until the growth slows.
● Rapid growth stretches a company’s infrastructure, often past the breaking point.
● A rapid-growth strategy can pressure your salesforce to commit to prices that severely cut your
margins.
● There is tremendous human cost. The stress and strain on people during a rapid growth phase can
be extreme.
● Rapid growth leads to increased organizational complexity and reduced communications.
● Large companies tend to be less fun, and rapid growth just brings that about sooner.
● Rapid growth can quickly dilute the culture of your company, making it very difficult to develop
management and reinforce your values. 136
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Warm bodies don’t necessarily hold your values. And they might not
live up to your standards of excellence. Rapid growth puts pressure
on you to be much less discerning in whom you hire; and hiring is one
place you want to be extremely careful. Rapid growth can – and
often does – evolve into a growth-for-growth’s-sake mentality, which
can then undercut the solidity of the company.

Case Example: Lightcraft

● Lightcraft performed very well while it pursued a moderate-

growth strategy (10% to 15% annual growth rate).
● Then the company was sold to Nu-Tone. The new owners
decided to pursue a rapid-growth strategy – 50% the first year.
● This put a strain on the company. Revenues in the prior year
had been $6 million. Nu-Tone pushed for $9 million in the next
year.
● Lightcraft grew to $7.2 million that year – which would have
been high by past standards, but far short of the projected $9
million.
● The result was a severe deterioration of profitability. Lightcraft
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slowly lost its reputation and position in the market.
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Can Slow Growth Work?

There are significant downsides to rapid growth, but doesn’t a company need to grow at a rapid
clip to remain healthy, exciting, and vibrant? Rapid growth makes room for advancement.
Nonetheless, there are companies with great people, low turnover (happy people), satisfied
customers, superior financial performances, and slow-growth strategy.

Case Example: University National Bank and Trust

● Founded in 1980, Carl Schmitt believed that a slow-growth company can provide superior
customer service and quality.
● Schmitt guided his bank along a methodical slow-growth path, gradually building a
reputation for superior service.
● By the end of the 1980s, his bank boasted a return on assets 45% higher that the average
return of other United States Banks, a 1.3% reserve ratio (very healthy), and virtually no non-
performing loans.
● The bank’s slow growth allowed it to get the details right, and generate superior financial
performance.
● The key to UNB’s slow-growth strategy lies in its ability to attract and retain good people. 138
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Focus versus Diversification
One of the most effective strategies for a small to mid-sized company is to focus on one particular
market or product line and, within that area of focus, be significantly better that the competition. A
focused strategy ensures that your limited resources are concentrated to create the maximum
advantage. This not only applies to financial resources, but also applies to resource that is far more
valuable: management time and energy.

Case Example: GFP, INC.

● GFP was founded by Clem Atkins in the mid-1970s to bring to market his unique clock
designs, his clocks were well received by a specific segment of customers: those who
wanted highly functional clocks that were also viewed as works of art.
● GFP grew to about $3 million, at which time Atkins decided to diversify into bicycle
accessories.
● Atkins the got interested in the newly emerging personal computer market, and decided to
produce accessories for personal computer users.
● This process of diversification continued – a ski resort, gardening products, recycled paper
manufacturing – until the company began to lose money at alarming rates. Sales grew to $5
million and then declined precipitously. 139
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Whether to Go Public (1)
Most outstanding companies eventually reach a stage where going
public (raising cash by selling shares to the general public) is a
possibility. For many, the glamour and liquidity (a chance to “cash out”)
of going public is alluring. However, it’s a common misconception that,
once a company reaches a certain size or age, a public offering is
always the next natural step. Going public can be a helpful strategic
step in working towards your vision, as it provides capital for
expansion and investment in new products. It also provides liquidity
for shareholders and can help solve some difficult estate-tax
problems that occur with the death of major shareholder. But there
are significant disadvantages to going public:

● It’s a drain on management time, both before and after the

offering.
● It’s expensive. Legal fees, accounting fees, printing costs, and
filing fees will cost about half a million dollars right off the top.
● You’ll be managing in a fishbowl
● You’ll feel pressure to manage for the short term.
● You may lose control of the company.
● There may be a conflict of corporate purpose. 140
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Whether to Go Public (2)

Case Example: Tensor Corporation

● Tensor Corporation was founded in 1960 by Jay Monroe, a highly creative and intense man
whose main purpose was to have a vehicle for bringing his ideas to market and to have fun.
● He had a vision for the company where it would make product decisions on aesthetic
considerations as much as on short-term return on investment criteria.
● He felt the company should be able to produce products that might not produce the best
short-term financial results, but that would ultimately be better and more interesting
contributions to the market.
● He made a fateful decision: he took the company public and left himself with less than 50%
of the stock.
● The motivations of the public stockholders (short-term return on investment) came in direct
conflict with Monroe’s vision. Monroe was eventually faced with losing the company to a
corporate raider or changing his vision

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To Lead a Market or Follow

In general, tremendous benefits accrue to market innovators – first movers or pioneers. Yet, a first-
mover advantage is by no means a guarantee of greatness and, indeed, there can be costs to
being the market innovator. There are many examples of first movers losing their advantage,
usually due to competitor introducing a better product, performing better marketing, or both.
Indeed, early followers often ride the coattails of a pioneer, taking advantage of the fact that the
market has already been primed and educated.

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Caveats to Industry Evolution Analysis

The stages of industry evolution (emergence, rapid growth, maturity, decline) is

probably the most common pattern of evolution, but it does not necessarily hold in all
industries. Michael Porter offers four things to keep in mind when using the concept:

1. The duration of the stages varies widely from industry to industry, and it is often
not easy to determine which stage the industry is in.
2. Industry growth does not always go through the S-shaped pattern. Industries
can skip maturity, passing straight through to decline. Some industries seem to
skip the emergence phase altogether.
3. Companies can affect the shape of the growth curve through product innovation
and repositioning. If a company takes the stages of evolution as given, it
becomes an undesirable self-fulfilling prophesy.
4. The nature of competition associated with each stage of evolution is different for
different industries. Some industries remain concentrated. Some start
fragmented and consolidate. Some remain fragmented.
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144

CHAPTER 8 Innovation
Innovation
Chapter 8
 CHAPTER 8 Innovation
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CHAPTER 8 – Innovation
‘THERE’S NO SHORTAGE OF GOOD IDEAS’

Being open to new concepts and approaches, and

the ability to effective implement these ideas to drive
business growth and sustainability.

Innovation is not limited to product or technology

innovation but also includes innovative approaches to
business models, leadership, and company culture.

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Six basic elements that are essential for an innovative
company:

1. Receptivity to ideas from everywhere

2. "Being" the customer
3. Experimentation and mistakes
4. People being creative
5. Autonomy and decentralization
6. Rewards
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Corporate Innovation Element 1

Receptivity to Ideas from Everywhere

The importance of being receptive to ideas in fostering
corporate innovation. It makes the point that highly
innovative companies are distinguished not by generating
more ideas but by being more open to ideas from all
sources, both internal and external.

To foster innovation, companies should create a

climate of receptivity to new ideas and remind everyone of
the importance of being open to them.

To support this culture shift, they recommend

circulating a list of historical "wet blankets" — experts who
dismissed now-successful ideas — and encouraging
everyone to be more welcoming to new concepts. 147
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Corporate Innovation Element 1

Receptivity to Ideas from Everywhere

Ideas from Outside

‘Don’t think that the only idea worth doing come from
within your company. Some of the most creative companies
rely extensively on ideas generated outside their walls’

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Corporate Innovation Element 1

Receptivity to Ideas from Everywhere

Wet The Blankets Through History
● Western Union dismissed Bell's telephone in 1876, failing to see its potential for communication.
● A Yale professor doubted the feasibility of Fred Smith's idea for reliable overnight delivery, which
became the foundation for FedEx.
● Bill Bowerman, co-founder of NIKE, faced rejection from a large sporting shoe manufacturer.
● Atari and HP rejected Steve Jobs and Steve Wozniak's proposal to fund or work with them on
personal computers, leading to the creation of Apple.
● H. M. Warner of Warner Brothers could not see the potential in talking movies.
● Decca Recording Company mistakenly predicted the Beatles' lack of future success in 1962.
● John Henry Patterson was ridiculed for buying the rights to the cash register, which became a
commercial success.
● Concerns were expressed over the practicality of computers in medicine, dismissing the significance
of the CT scanner.
● Edwin L. Drake faced doubt about the feasibility of drilling for oil.
● Ferdinand Foch dismissed the military potential of airplanes in World War I.
● A Harvard professor in 1940 claimed television would not become popular due to its demands on
viewer attention.
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Corporate Innovation Element 1 'If It’s Not Invented Here, It Can’t Be Any Good’

Receptivity to Ideas from Everywhere

Wet The Blankets Through History

● The basic ideas behind the Macintosh ● T/Maker Company didn't invent the
computer were developed over years at 'Personal Publisher' software; it was
defense research projects and later at Xerox initiated by an external programmer.
PARC, not by Apple itself.

● The original McDonald's restaurant was ● Tylenol, a breakthrough non-aspirin

created by the McDonald brothers, not Ray pain reliever by Johnson & Johnson,
Kroc, who franchised the concept into a was originally created by McNeil
global chain. Laboratories.

● Procter & Gamble and 3M did not invent Oxycalor Lava Soap
and Wetordry sandpaper, respectively. These were acquired
or brought to market after being created by others. 150
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Corporate Innovation Element 1 'If It’s Not Invented Here, It Can’t Be Any Good’

Receptivity to Ideas from Everywhere

Suggestions for fostering innovation and receptivity to new ideas within
an organization

1. Responsibility for Receptivity

2. Employee Swap
3. Hiring External Designers
4. Joining Groups
5. Allowing Time Off for Exploration
6. Subscriptions and Libraries
7. Inviting Speakers
8. Attending Educational Events
9. Encouraging Diverse Reading
10. Customer Feedback
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Corporate Innovation Element 1

Receptivity to Ideas from Everywhere

Ideas from Inside

Good ideas for innovations often originate from within

the organization, from employees' own thoughts and
interactions, rather than just from external sources.

The concept of a customer

suggestion box as a tool for internal
innovation, citing Walmart's "Low
Threshold for Change" (LTC) policy.

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Corporate Innovation Element 1

Receptivity to Ideas from Everywhere

The importance of founders and CEOs in fostering a
culture of innovation within their companies

At Giro Sport Design, founder Jim

Gentes and his team have
generated numerous new product
ideas.

L.L.Bean's founder was directly

responsible for numerous
Sony Walkman was a brainchild innovations
of Honorary Chairman Masaru
Ibuka.

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Receptivity to Ideas from Everywhere

Idea-Push 0r Market-Pull?
Any market-successful innovations did not originate
from market-pull or research but were often driven by idea-
push.

Market research can provide valuable insights, relying

solely on it could lead to missed opportunities

A balance between idea-push and market-pull is

essential. Companies should not discard market input but
should also be open to unconventional ideas that may not
immediately seem to meet a market need.
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Corporate Innovation Element 2

Being the Customer

‘Be your own customer and satisfy yourself’

● Solve Your Own Problems and Meet Your Own Needs

The overarching theme is that personal needs or problems can
be the seed for broader innovations that benefit many others.

IBM: The Roizen created the ‘Personal

Publisher’ project at T/Maker for IBM PCs
because she needs a graphics software
that worked on her preferred IBM PC.

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Corporate Innovation Element 2

Being the Customer

Giro Helmet: Jim Gentes at Giro developed better bicycle
helmets through observations during his cycling.

Apple: Steve Jobs and Steve Wozniak

invented the personal computer to
educate themselves.

Band-Aid at Johnson & Johnson: Earle Dickson

invented band-aid to help his wife.
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Corporate Innovation Element 2

Being the Customer

● The Woodwork Factor

The idea that by solving your own problems, you can discover
others with the same needs who are not visible through
traditional market research.

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Being the Customer

● The Woodwork Factor

Ways to stimulate the innovation in a company

★ Distributing “Personal Idea

Journal” to employees to
record problems and ideas.

★ Sharing stories of the

woodwork factor through
company communication to
Allow employees to integrate it into the company
Hiring customers culture.
test products
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Corporate Innovation Element 2

Being the Customer

● Simulate Being the Customer

A concept for businesses that produce products they

themselves don’t use.

2 Strategies
1. Solve a problem for single, individual customer, which
could reveal a wider, unaddressed market need.

1. Get close to the customers to directly experience what they

go through, termed the “touch and feel” approach.

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Corporate Innovation Element 2

Being the Customer

● Case Example of Touch and Feel: Ballard Medical Products
: Approach to product development

1. Involving customers in the product innovation process.

2. Requiring salespeople to interact directly with customers
on site to understand their problem.
3. Encouraging R&D to respond to ideas from salespeople

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Corporate Innovation Element 3

Experimentation and Mistake

Vinod Khosla, co-founder of Sun Microsystems,
emphasizes that innovation is largely about
experimentation, with a success expectation of
only 10 to 20 percent, and often propelled by
sheer determination and hard work.

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Corporate Innovation Element 3

Experimentation and Mistake

Just Do It

Don’t Make It Big Before You Have To

The Role of Product Failures

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Corporate Innovation Element 3

Experimentation and Mistake

Good Mistakes and Bad Mistakes

The Popcorn Image

Let Persistence Win

A Company of Experimenters and Tinkerers

● Employ creative people

● Get out of their way
● Reward them for being
innovative

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Corporate Innovation Element 4

People Being Creative

Creativity is not a divine endowment or a trait exclusive to

certain individuals, but rather, it is a capability that resides in
everyone.

The first step towards fostering innovation at all levels of a

company is to believe in and nurture the inherent creative potential
of every individual

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People Being Creative

● Help People Develop Their Creative Capabilities

1. Educational Training
2. Educational Materials
3. Innovation Manifesto

The aim of these steps is to instill a belief in the

creative abilities of employees and provide them with
tools and a supportive environment to develop their
innovative potential.

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Corporate Innovation Element 4

People Being Creative

● Hire and Nurture Unusual People

The importance of hiring and nurturing individuals

who are not only creative but also bring diverse
experiences and perspectives to a company.

It is important to have some individuals who may

be considered "misfits" due to their unconventional
behavior or backgrounds, they often bring substantial
creative contributions.

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Corporate Innovation Element 4

People Being Creative

● Hire Diverse Talents, But Not Divergent Values

It is beneficial to have employees with a

wide range of backgrounds and
experiences, it is crucial to ensure that all
employees share a core set of company
values.

The diversity of backgrounds brings a

breadth of perspectives and problem-
solving approaches, which can lead to more
creative and effective solutions.
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People Being Creative

● Hire People Who Don’t Know Much

Innovation can benefit from the fresh perspectives

of people who are not deeply entrenched in traditional
knowledge or ways of thinking.

● Hire Designers

Designers, who are trained in various relevant

fields of design, can apply their creativity to practical
problems, which can lead to better product design and
innovation.
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Corporate Innovation Element 5

Autonomy and Decentralization

‘Freedom, inefficiency, and prosperity are not infrequently found
together.’
For creativity and innovation to flourish, individuals
within a company need the freedom to explore and
execute their ideas.

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Corporate Innovation Element 5

Autonomy and Decentralization

● Trust, Respect, and Courage

The companies must provide their employees with the

autonomy to innovate and resist the tendency to impose
excessive control, which can lead to a decline in innovative
capacity as the company grows. The key is to hire good people,
create the right environment for them, and then step out of their
way, allowing the space for autonomy and decentralized
innovation to drive the company's growth and success.

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Corporate Innovation Element 5

Autonomy and Decentralization

● Decentralization: Slicing up the Diamond

“Slicing up the diamond" to describe how companies can

maintain the innovative spark and agility of a small enterprise as
they grow larger by creating semi-autonomous units, or
"chunks," within the organization.

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Autonomy and Decentralization

● Making Decentralization Work
The decentralization can be effectively
implemented within a company to foster
innovation.
1. Link to Vision
2. Overcome Lack of Centralized Control
3. Have an Open System
4. Avoid Duplication of Effort
5. Accept the Messiness
6. Better than the Alternative
7. Inefficiencies Spark Innovation
8. Embrace Inefficiencies
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Corporate Innovation Element 6

Reward
Reward structures within a company should explicitly
recognize and encourage innovation.

1. Make heroes of creative contributors through awards, honors, and

recognition
2. Set measurable innovation goals and evaluate based on those
3. Have a separate career track for creative contributors who don’t want
to go into management
4. Compensate people for specific valuable creative contributions
5. Let people play ‘pinball’

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Not Just Products but Processes
The importance of creativity not just in product or service innovation, but
across all aspects of a business, including marketing, production, and
organization.

Innovative Products + Creative Marketing = Magic

1. Creative Marketing
2. Creativity in Day-to-Day Operations
3. Encouraging Organizational Creativity

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Eight Management Techniques for
Stimulating Creativity
1. Encourage
2. Be Not Judgemental
3. Help Shy People
4. Stimulate Curiosity
5. Create Necessity
6. Allow Time Away from the Fray
7. Catalyze Group Problem Solving
8. Require Fun

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Faith in the Creative Process
Maintaining an innovative company requires a leap of faith in people's
creative abilities, the existence of many good ideas, and the
expression of emotions.

The need to trust in the natural human tendency to invent, discover,

and explore. This faith is not only in the potential for innovation but
also in the joy and fulfillment that come from creative achievements,
similar to the sensations felt by great discoverers like Columbus or
Newton upon their significant findings.

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Jim’s View From 2020
Creativity In the Easy Part

The nature of creativity and innovation in business, emphasizing

that while creativity is a natural and inherent quality, the real
challenge lies in cultivating self-discipline to harness this creativity
effectively.
The idea that innovation alone doesn't guarantee a competitive
edge; rather, the ability to scale innovation is what leads to sustained
success.

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CHAPTER 9 Tactical Excellence

Tactical Excellence
Chapter 9
 CHAPTER 9 Tactical Excellence
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CHAPTER 9 Tactical Excellence

“Great concept + poor execution = death”

JIM’S VIEW FROM 2020

❏ Deadlines: Freedom in a Framework
❏ SMaC Mindset
❏ Expectations
❏ Tactical BHAGS
❏ Make People OPURS

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Deadlines: Freedom in a Framework

“Deadlines stimulate progress." To hit a deadline means

achieving the objective with absolutely A-level work,
absolutely complete, absolutely on time, absolutely without
complaint. If you establish deadlines that everyone knows
will slip, then you have no deadlines.

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Milestone Management
“…each strategic priority should be broken down into “bite-sized,” discrete
chunks—milestones. Each milestone should have a person responsible for its attainment
plus—and THIS IS EXTREMELY IMPORTANT—a specific completion date.”

The transfer from broad vision

and strategy to specific milestones
owned by committed individuals is
fundamental to achieving our goals.

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SMAC Mindset
“SMaC” is the essence of consistent tactical excellence.

The 4 Fundamental Elements for Achieving SMaC

1. Specific, replicable processes and mechanisms that create tremendous consistency.
2. Checking and cross-checking systems to prevent catastrophic mistakes.
3. Rigorous thinking to consider a wide range of contingencies and backups.
4. Continuous evolution of SMaC based on understanding the why behind SMaC
processes.
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Creating an Environment Where People Attain Consistent
Tactical Excellence

“If your people aren’t executing well, it’s not their fault. It’s yours.”

The 5 basic conditions under which people tend to execute well

1. People execute well if they’re clear on what they need to do
2. People execute well if they have the right skills for the job
3. People execute well if they’re given freedom and support
4. People execute well if they’re appreciated for their efforts
5. People execute well if they see the importance of their work

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Expectations
A Clear and compelling vision is essential to people seeing the importance of
their work. The importance of having a clear organizational vision and strong core values.
These values not only guide actions but also establish norms and rules within an
organization.

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Tactical BHAGs: T minus 3
Jim Collins emphasizes the use of tactical Big Hairy Audacious Goals (BHAGs)
at a unit level for exceptional performance. He illustrates this with the "T minus 3"
mechanism, ensuring event logistics are mostly set three weeks before events. This
drove a sense of responsibility among team members, resulting in successful execution.

Preparations and briefings

are complete

3-Week Before 2-Week Before 1-Week Before Event Date

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Tactical BHAGs: A Six-Part Process
1. Hiring: It all starts with hiring decisions. Good people attract
good people.
2. Inculturating: Educating them early on, instilling and
reinforcing our company's vision and core values. Give them
a “Starter Kit” that:
1. The founder or CEO should write it.
2. Write for employees, not the outside world.
3. Don’t wait too long.
3. Training: People not only need inculturation through training
A Six-Part Process
programs but also require specialized skill training.

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Tactical BHAGs: A Six-Part Process (Con’t)
4. Goal setting: It's not merely about having goals; it's about
involving each employee in the process of setting these goals.

5. Measuring: Measuring our performance helps us understand

how well we're doing and where we can improve.
6. Appreciating: Focusing on the significance of appreciating
A Six-Part Process
employees within the company.

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Tactical BHAGs: Technology and Information Systems
A Timely Flow of Data
1. Cash Flow: Tracking current and projected cash flow helps us anticipate shortages
before they become critical.
2. Financial Accounting Information: Comparative statements and ratios (balance
sheet, income statement) offer insights for informed decisions.
3. Cost Information: Understanding costs per product or service prevents
unknowingly sustaining unprofitable ventures.
4. Sales Information: Tracking sales trends by product or service category along
relevant dimensions like geography or distribution channels aids strategic analysis.
5. Customer information: Customers provide invaluable insights into products,
competition, preferences, suggestions, and trends.

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Tactical BHAGs: Trust
People need freedom to act. Motivated, trained, and well-inculturated people
don’t need to be “controlled.”

“I trust you to do your best to do the right thing.”

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Tactical BHAGs: Rigorous Standards
There are two parts:
● Values standards are the most rigid. Disregarding core company values warrants
asking an individual to leave.
● Performance standards should be high. Good performers lose respect for
companies tolerating poor performance.

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Make People OPURs
OPUR stands for One Person Ultimately Responsible. For every critical task or
objective, there should be a clear OPUR. The key to maintaining an OPUR culture is that
every individual needs to have an OPUR mentality and clear OPUR tasks.

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The Final “Secret”—Respect
Great companies stand tall on a foundation built on respect. They respect their
customers, they respect themselves, they respect their relationships. Most important, they
respect their people at all levels, and from all backgrounds.

“They respect their people, and therefore. . .

. . . they trust them.
. . . they’re open and honest with them.
. . . they give them freedom to act and make decisions.
. . . believe in their inherent creativity, intelligence, and ability to solve
problems.”

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Thank you

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