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SETTING STRATEGIC DIRECTION. Visionary Companies. Premier institutions Widely admired Significant impact on the world Visionary companies made mistakes, faced difficulties, but they bound back Visionary made extraordinary long-term performance. The Companies in the Research . Norton
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Visionary Companies • Premier institutions • Widely admired • Significant impact on the world • Visionary companies made mistakes, faced difficulties, but they bound back • Visionary made extraordinary long-term performance
The Companies in the Research • Norton • Wells Fargo • McDonnell Douglas • Chase Manhattan • GM • Westinghouse • Texas Instrument • Burroughs • Bristol-Myers Squibb • Howard Johnson • Pfizer • Zenith • Melville • RJR Nabisco • Colgate • Kenwood • Ames • Columbia • 3M • American Express • Boeing • Citicorp • Ford • General Electric • Hewlett-Packard • IBM • Johnson & Johnson • Marriot • Merck • Motorola • Nordstrom • Philip Morris • Proter & Gamble • Sony • Wal-Mart • Walt Disney
Visionary companies, $6356 $6000 $5000 $4000 $3000 $2000 Comparison companies, $955 $1000 General market, $415 1960 1984 1990 1926 Cumulative Stock Returns of $1 Invested Jan. 1, 1926 - Dec. 31, 1990
The first step in setting strategic direction is to define WHO YOU ARE
Envisioned • future • BHAG • Vivid description • It’s who are you • It’s the benefits you • provide to the society • It’s your dream • Core ideology • Core values • Core purpose • It’s the picture • of you in • 10 years Collins and Porras’ (1996) Ideas
Core Values • Some examples of core values? • Where do they come from? • Should the company change them when they do not seem to fit with the market? • How many values should a company have?
An Example: Our Values Communication: We have an obligation to communicate. Here, we take the time to talk with one another… and to listen. We believe that information is meant to move and that information moves people. Respect: We treat others as we would like to be treated ourselves. We do not tolerate abusive or disrespectful treatment. Integrity: We work with customers and prospects openly, honestly and sincerely. When we say we will do something, we will do it; when we say we cannot or will not do something, then we won’t do it. Excellence: We are satisfied with nothing less than the very best in everything we do. We will continue to raise the bar for everyone. The great fun here will be for all of us to discover just how good we can really be.
Core Purpose • Give some examples? • How long should the core purpose last? • Can a company fully achieve its core purpose? • Where does the core purpose come from (or where do you look for your core purpose?)
Video: Starbucks • Identify core values of Starbucks? • Why do you think these are core values? • How important these core values are to the success of Starbucks?
Whose missions are they? • ...to create software for the personal computer that empowers and enriches people in the workplace, at school and at home. • ...is to be the world's best quick service restaurant experience • To maximize profits to shareholders through products and services that enrich people's lives.
Robin Hood • What problems were facing Robin and his band? • Create a mission for Robin and his band. Based on the mission, decide what the band should do on the following issues: • What are the core values of the band? • Who are the real "competitors"? (Sheriff or the rich?) • Who are key "customers"? • Should the band impose a fixed tax? • How to recruit people? What to motivate people? • Should the band joint-venture with King Richard's supporters? • Should it expands nationally? • What do we learn as for modern managers?
GROUP EXERCISE: “ROBIN HOOD” What are strategic implications for Robin Hood and his band if they follow one of the following missions: • Mission 1: “Fight for the fairness and equality. Rob from the rich and give to the poor” • Mission 2: “Create our own world. Fight for a better lives for the team members”
