Winning strategies of ‘Market’

driven organizations

July 15, 2013

Market Driven
or
Market driving
 Market Driving firms
Market drivers see the world differently and
focus on latent or emerging customer needs.

Market drivers create new markets or

redefine the category in a fundamental way
that competitors are rendered obsolete.
 Market driver’s attributes
1. They trigger industry breakpoints or what Andy
Grove of Intel’s “strategic inflexion points”,
which change business innovation.
2. Core Values inspire their radical business
concept.
3. Rather than learn from existing customers, they
often teach potential customers to consume their
drastically different value proposition.
‘values’ driven organizations
 VALUES DRIVEN CHANGE

OR

CIRCUMSTANCES DRIVEN VALUES

“Get better”
vs

“Get
different”
 A JOURNEY
THROUGH WHAT IS
FUNDAMENTAL
AND WHAT IS
CHANGEABLE
 “NOTHING SPLENDID HAS
EVER BEEN ACHIEVED
EXCEPT THOSE WHO DARED
BELIEVED THAT SOMETHING
INSIDE THEM WAS SUPERIOR
TO CIRCUMSTANCE”
BRUCE BARTON
Today We Are In
A Brawl With No
Rules!
 HORSE RACE of TOMORROW
All rules subject to change without notice
The prize money may change at short notice
The route and the finish line will likely change after the race
starts
Bets may be made at any time during the race
New entrants may join the race at any time
Racers are on line at all the times and may alter their plans based
on the most current information
Racers may form alliances
All creative strategies that are not specifically against the law are
allowed
Government laws may change at any time (retrospectively)
Confusion
And more confusion ….
Forbes100 from 1917 to 1987 [70 years]

* 39 members of the Class of 1917 were alive in

1987
* 20 of the firms were in list of 100 in 1987
* 18 F100 “survivors” underperformed the
market by 20%
* Just 2 (2%) GE & Kodak, outperformed the
market 1917 to 1987.

Source: Dick Foster & Sarah Kaplan, Creative Destruction: Why Companies That
Are Built to Last Underperform the Market
 20 of 26
7 of top 10*
*P&G:
Declining domestic sales in 20
of 26 categories;

7 of them belonged to the top

10 categories:

The “billion-dollar problem.”

Source: Advertising Age 01.21.2002ecurities
2009 ….

“They had the unpleasant job of

announcing the second straight
quarter of losses in their
business empire that had never
made a loss before.”

Mr. Steel's Moment of Truth, Forbes India, June 5, 2009

GM files for bankruptcy
…… Ford Motor seeks to
gain amid Rival’s pain

Economic Times, June 1, 2009

 “There will be more
confusion in the
business world in the next
decade than in any decade in history.
And the current pace of change will
only accelerate.”
Steve Case
[America online]
 Uncertainty: We
don’t know
when things will get back to
normal.
We no longer
Ambiguity:
know what “normal”
means. .
Security in
an insecure
world
(existence)?
“The greatest danger
for most of us
is not that our aim is
too high
and we miss it,
but that it is
too low
and we reach it.”

Michelangelo
Italian Renaissance painter
 “Beware of the
tyranny of making
Small Changes to Small
Things. Rather,
make Big
Changes to Big
Things.” —Roger Enrico, former Chairman, PepsiCo
 Forget > “Learn”
“The problem is never how to get new,
innovative thoughts into your mind,
but how to get the old ones out.”

Tom Peters
Being
Different
 “Our ideal acquisition is a small startup
that has a great technology product on the
drawing board that is going to come out in
six to twelve months.

We buy the engineers and

the next generation
product.…”

John Chambers, Cisco

 “These days, you can’t succeed as a
company if you’re consumer led –
because in a world so full of so much
constant change, consumers can’t
anticipate the next big thing.
Companies should be idea-led and
consumer-informed.”
Doug Atkin, partner, Merkley Newman Harty
 “If I’d listened to
customers,
I’d have given them
a faster horse.”
Henry Ford
1896 Ford Quadricycle
“Our strategies must be tied to leading
edge customers on the attack. If we
focus on the defensive customers, we
will also become defensive.”

John Roth, CEO, Nortel

 Saviors-in-Waiting

Disgruntled Customers
Upstart Competitors
Rogue Employees
Fringe Suppliers
Wayne Burkan, Wide Angle Vision
 The Dream Manager —Matthew Kelly

“An organization can only become the-best-version-of-itself to the

extent that the people who drive that organization are striving to
become better-versions-of-themselves.” “A company’s purpose is to
What is an
become the-best-version-of-itself. The question is:
employee’s purpose? Most would say, ‘to help
the company achieve its purpose’—but they
would be wrong. That is certainly part of the
employee’s role, but an employee’s primary
purpose is to become the-best-version-of-
himself or –herself. … When a company forgets that it exists
Our
to serve customers, it quickly goes out of business.
employees are our first customers, and our most
important customers.”
“Business has to give
people enriching,
rewarding lives,
or it's simply not
worth doing.” —Richard Branson
 “We are a
‘Life Success’
Company.”
Dave Liniger, founder, RE/MAX [Real Estate]
“The role of the Director is to create a
space where the actors and
become more
actresses can
than they’ve ever been
before, more than
they’ve dreamed of
being.” —Robert Altman, Oscar acceptance speech
 Organizing Genius / Warren Bennis
and Patricia Ward Biederman

“Groups become great only when everyone in

them, leaders and members alike, is free to
do his or her absolute best.”
“The best thing a leader can do for a Great
Group is to allow its members to
discover their greatness.”
“free to do his or her
absolute best” …
“allow its members to
discover their
greatness.”
Tom Peters, May 28, 2009
 “You have to
treat your
employees like
customers.” answer, upon being asked his “secrets to success”
—Herb Kelleher, complete

Source: Joe Nocera, NYT, “Parting Words of an Airline Pioneer,” on the occasion of Herb Kelleher’s
retirement after 37 years at Southwest Airlines (SWA’s pilots union took out a full-page ad in USA Today
thanking HK for all he had done; across the
way in Dallas American Airlines’ pilots were picketing the Annual Meeting)
“Get better”
vs

“Get
different”
Nano

Swach
 Blue Ocean Strategy
“What we are looking for is – what we can do to satisfy the needs
of the swelling middle class and their aspirations for consumption.
That is what is called the bottom-of-the-pyramid approach.

We are not into the

marketing approach of low
pricing. We are trying to
create fields where none
exists.”
R.Gopalkrishnan
Executive Director Tata Sons
 SUCCESSFUL HABITS OF
VISIONARY FIRMS

COMPANIES HAVE THEIR CORE

VALUES AND CORE PURPOSES FIXED
WHILE THEIR BUSINESS STRATEGIES
AND PRACTICES ENDLESSLY ADAPT
TO CHANGING WORLD
 VISIONARY FIRMS
UNDERSTAND THE DIFFERENCE
BETWEEN WHAT SHOULD NEVER
CHANGE AND WHAT SHOULD BE OPEN
FOR CHANGE

WHAT IS VISION?
Mission?
 VISION AND MISSION

VISION : WHAT YOU WOULD LIKE TO BE

KNOWN FOR?

MISSION: WHAT BUSINESS YOU WOULD LIKE

TO BE IN?
Mission Statement components:
Customer/Marketing

Product or Service

Geographic Domain

Technology

Concern For Survival

Company Philosophy

Self (Business) Concept

Public Image
VISIONARY FIRMS

Collins &
Porras, 1996
47
 Built to Last
Criteria for a Visionary Company
• Premier institution in its industry
• Widely admired by knowledgeable business
• Made an indelible imprint on the world
• Had multiple generations of chief executives
• Been through multiple product life cycles
• Founded before 1950
It is more than “successful”, more than “enduring”
Displays resiliency and ability to bounce back from
setbacks and mistakes
 Selection Process
• Surveyed 700 CEOs at leading
corporations from a cross section of
industry, size, location and type/ownership

• Identified distinguishing essential

differences (rather than commonalities)
with a similar Comparison Company

• Examined how they started and evolved

(responded to historical circumstances)
Research Results and Comparison Companies
Visionary Companies Comparison Companies
1. 3M 1. Norton
2. American Express 2. Wells Fargo
3. Boeing 3. McDonnell Douglas
4. Citicorp 4. Chase Manhattan
5. Ford 5. GM
6. General Electric 6. Westinghouse
7. Hewlitt-Packard 7. Texas Instruments
8. IBM 8. Burroughs
9. Johnson & Johnson 9. Bristol-Myers Squibb
10. Marriott 10. Howard Johnson
11. Merck 11. Pfizer
12. Motorola 12. Zenith
13. Nordstrom 13. Melville
14. Philip Morris 14. RJR Nabisco
15. Procter & Gamble 15. Colgate
16. Sony 16. Kenwood
17. Wal-Mart 17. Ames
18. Walt Disney 18. Columbia
List of Visionary & comparison companies …
Visionary Company

Premier Institution
Widely Admired

Indelible imprint on the world

50+ year track record

Multiple generations of CEOs

Multiple product/service cycles

 Vision

Core
ideology

Vision

Envisioned
future
 Core Ideology

Core values Core Purpose

Essential, enduring Reason for being

Tenets (beliefs)
What the
What is organisation
important? offers to society

Dominant aspiration
 YOU DISCOVER CORE
IDEOLOGY BY LOOKING
INSIDE.
IT HAS TO BE AUTHENTIC.
YOU CAN’T FAKE IT
 What are Core Values?
• A set of beliefs that influence the way
people and groups behave
• They are the “soul” of the organization
• Effective values are deep rooted
 Johnson &Johnson Core
Values and Purpose
l The company exists “to alleviate pain and disease”
l “We have a hierarchy of responsibilities: customers first,
employees second, society at large third, and shareholders
fourth”
l Individual opportunity and reward based on merit
l Decentralization = Creativity = Productivity
 Where do Core Values Come
From?
• Most core values come from the founders of
an organization
• Some organizations have used a group
consensus process to develop core values
 Why are Core Values Important?
• Influence behavior
• Communicate what we really believe
• Core values are sacred, they do not change
• They provide a moral compass
• Provide continuity through change
• Help people make tough decisions
• They help to decentralize decision making
• Help people to be more proactive
National interest
The Tata group is
committed to benefit the
economic development of
the countries in which it
operates. No Tata
company shall undertake
any project or activity to
the detriment of the wider
interests of the
communities in which it
operates.
 Tata Code of Conduct
Gifts and donations
• A Tata company and its employees shall neither receive nor offer or
make, directly or indirectly, any illegal payments, remuneration, gifts,
donations or comparable benefits that are intended, or perceived, to
obtain uncompetitive favours for the conduct of its business. The
company shall cooperate with governmental authorities in efforts to
eliminate all forms of bribery, fraud and corruption.

• However, a Tata company and its employees may, with full disclosure,
accept and offer nominal gifts, provided such gifts are customarily
given and / or are of a commemorative nature. Each company shall
have a policy to clarify its rules and regulations on gifts and
entertainment, to be used for the guidance of its employees.
 Integration of Core Values
• Effective core values are integrated into all
levels and functions of the organization

Practicing the core values in all areas, all the

time creates integrity
 Norstan Inc. Integration of Core
Values
Employees Customers Stakeholders Owners

1. Be Ethical

2. Be Responsive

3. Be Profitable
 Characteristics of Effective Core
Values
• Clear and succinct
• Usually no more than 6
• Thought about and iterated a lot
• They stay the same through time, they are sacred
• Widely and frequently communicated
• Provide substantial guidance
• Profitability is not the primary ingredient
 Leading with Core Values
• Communicate to assure that people understand
the values and believe in the values.
• Standardize the values: define what they mean
and give examples of the value, tell value
stories.
• Practice using the values:
daily, weekly, monthly.
• Encourage people to use the values to make
decisions.
 Leading with Core Values
• Align to practices and systems with the values:
rewards, information sharing, measures,
meetings, teams, etc.
• Recognize people and groups that practice the
values. Inform others about how the values were
used to make a decision.
• Correct those who do not use the values or
violate them.
 CORE VALUES: EXAMPLES

MERCK
Corporate social responsibility
Unequivocal excellence in all aspects of the company
Science-based innovation
Honesty and integrity
Profit, but profit from work that benefits humanity
 CORE VALUES: EXAMPLES

PHILIP MORRIS
The right to freedom of choice
Winning – beating others in a good fight
Encouraging individual initiative
Opportunity based on merit; no one is entitled to anything
Hard work and continuous self improvement
 CORE VALUES: EXAMPLES
.
SONY
Elevation of the Japanese culture and national status
Being pioneer – not following others; doing the impossible
Encouraging individual ability and creativity
 CORE VALUES: EXAMPLES

Nordstrom
•Service to the customer above all else
•Never being satisfied
•Hard work and individual productivity
Identifying core values:
•What core values you personally bring to work?
•What would you tell your children?
•If you have enough money to retire, would you
continue to live those values?
•Can you envision them being as valid for next
100 years?
•Would you hold them even if they become
disadvantageous?
•If you start a new organization, what core
values you would build into it, regardless of
industry?
 Core Purpose
Fundamental reason for being

Not to be confused with goals or strategies of the

firm

Purpose itself does not change, but it inspires

change

It’s a guiding star on the horizon - forever pursued

but never reached
Core Purpose is a company’s raison d’etre, not
a goal or business strategy
3M : To Solve unsolved problems innovatively
Hewlett-Packard : To make technical contributions for the advancement and
welfare of humanity

Mary Kay Cosmetics: to give unlimited opportunity to women

Nike: to experience the emotion of competition, winning, and crushing the

competition
McKinsey: To help corporations and Govts. be more successful in 100 years
Merck : To preserve and improve human life
Wal-Mart : To give ordinary folk the chance to buy the same things as rich
people
Walt Disney : To make people happy
ROLE OF CORE IDEOLOGY IS TO
GUIDE AND INSPIRE, NOT TO
DIFFERENTIATE

Core ideology needs to be meaningful

and inspirational to people inside the
organization; it need not be exciting to
outsiders.
A CLEAR AND WELL ARTICULATED
IDEOLOGY ATTRACTS TO THE
COMPANY PEOPLE WHOSE PERSONAL
VALUES ARE COMPATIBLE WITH THE
COMPANY’S CORE VALUES

CORE VALUES AND PURPOSES CANNOT

BE IMPOSED ON THE PEOPLE
 Envisaged Future

BHAGS Vivid Description

Huge, daunting Making goals

goals ‘imaginable’
Clear & compelling,
tangible The ‘mind’s eye’
Unifying, inspiring,
engaging
1. Difficult Target Hopeful,
2. Common enemy passionate,
3. Role-model inspiring
4. Internal - images & symbols
 ENVISIONED FUTURE
Big, Hairy, Audacious Goals : Aid Long Term
Vision
BHAGs can be quantitative or Qualitative
Target, common enemy, role-model or internal transformation
Become a $125 billion company by 2000 (Wal-Mart)
Democratize the automobile (Ford Motors, 1900)
Common-enemy
Crush Adidas (Nike, 1960)
Yamaha wo tsubusu! We will destroy Yamaha! (Honda, 1970)
ENVISIONED FUTURE
Vivid Description

Vibrant, engaging and specific description.

In 10-20 yrs. What would we love to see?

What will a writer say?

Passion, emotion and conviction are essential parts

of the vivid description
 Sony in the 50s
• CORE IDEOLOGY
• CORE VALUES
• Elevation of Japanese
culture & national status
• Being a pioneer-not
following others, doing the
impossible
• Encouraging individual
ability & creativity
• PURPOSE
• To experience the sheer joy
of innovation & the
application of technology
for the benefit & pleasure
of the general public
 SONY [Contd.]
• ENVISIONED FUTURE • … be the 1st Japanese
• Become the company most company to go into the U.S.
known for changing the market & distribute directly…
worldwide poor-quality succeed with innovations that
image of Japanese products U.S. companies have failed
• VIVID DESCRIPTION at- such as the transistor
radio… 50 years from now,
• We will create products our brand name will be as
that become pervasive well known as any in the
around the world. world…”MIJ” will mean +
 FOUNDING ROOTS OF VISIONARY COMPANIES AND
COMPARISON COMPANIES
Founding Roots Summary Founding with a
“Great Idea”

Visionary Comparison
3M vs. Norton No Yes Comparison Company
Amex vs. Wells Fargo No No Visionary Company
Boeing vs. McDonnell Douglas No Yes Comparison Company
Citicorp vs. Chase No No Indistinguishable
Ford vs. GM Yes No Visionary Company
GE vs. Westinghouse Yes Yes Indistinguishable
HP vs. TI No Yes Comparison Company
IBM vs. Burroughs No Yes Comparison Company
J & J vs. Bristol - Myers Yes No Visionary Company
Marriott vs. Howard Johnson No No Indistinguishable
Merck vs. Pfizer No Yes Indistinguishable
Motorola vs. Zenith No Yes Comparison Company
Nordstrom vs. Melville No No Comparison Company
Procter & Gamble vs. Colgate No Yes Indistinguishable
Philip Morris vs. R.J. Reynolds No Yes Comparison Company
Sony vs. Kenwood No Yes Comparison Company
Wal-Mart vs. Ames` No Yes Comparison Company
Walt Disney vs. Columbia No No Comparison Company
Thanx