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Winning strategies of ‘Market’ driven organizations
March 15, 2010
Market Driven or
Market driving
The Marketing Continuum
Market DrivingMarket DrivingMarket DrivingMarket Driving
Market DrivenMarket DrivenMarket DrivenMarket Driven
SalesSalesSalesSales
ProductProductProductProduct
ProductionProductionProductionProduction
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 Driving Vs. Market Driven Companies
• Market driving companies go beyond accepting given market structures and behaviors
• Market driving firms shape or change markets/
sectors by eliminating, adding, or modifying the players in markets and their functions
• Market driving companies rewrite industry rules and compete in new market arenas
Market Driving Vs. Market Driven Companies – cont’d
• Market driving companies have unique business systems and ideas
• Market driving companies deliver large leap in customer value
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.
Adopting a proactive approach to reshape, educate and lead the customer
Conceptual Framework : Two forms of Market Orientation
Two forms of ‘Market Orientation’: Driven and Driving. Adapted from: Jaworski, B., Kohli, A.K. andSahay, A. (2000), ‘‘Market-driven versus market driving,’’ Journal of the Academy of Marketing Science, vol. 28 no. 1, pp. 45– 54.,
‘values’ driven organizations
VALUES DRIVEN CHANGE
OR
CIRCUMSTANCES DRIVEN CHANGE
“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 TOMORROWAll rules subject to change without noticeThe prize money may change at short noticeThe route and the finish line will likely change after the race startsBets may be made at any time during the raceNew entrants may join the race at any timeRacers are on line at all the times and may alter their plans based on the most current informationRacers may form alliancesAll creative strategies that are not specifically against the law are allowedGovernment 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
“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
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.
Ambiguity: We no longer know what “normal”
means. .
Security in an insecure world (existence)?
“The greatest dangerfor most of us
is not that our aim istoo high
and we miss it,but that it is
too lowand 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
“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 CustomersUpstart Competitors
Rogue EmployeesFringe Suppliers
Wayne Burkan, Wide Angle Vision
The Dream ManagerThe Dream Manager —Matthew Kelly—Matthew Kelly
“An organization can only become the-best-version-of-itself to the “An organization can only become the-best-version-of-itself to the extent that the people who drive that organization are striving to extent that the people who drive that organization are striving to
become better-versions-of-themselves.” “A company’s purpose is to become better-versions-of-themselves.” “A company’s purpose is to
become the-best-version-of-itself. The question is:become the-best-version-of-itself. The question is: What is an What is an emploemployyee’s ee’s ppururppose? Most would saose? Most would sayy, ‘to hel, ‘to helpp the comthe comppananyy achieve its achieve its ppururppose’—but theose’—but theyy would be wronwould be wrong. g. That is certainlThat is certainlyy part of the part of the emploemployyee’s role, but an emploee’s role, but an employyee’s ee’s pprimarrimaryy ppururppose is to become the-best-version-of-ose is to become the-best-version-of-
himself or –herselfhimself or –herself.. … When a company forgets that it exists … When a company forgets that it exists
to serve customers, it quickly goes out of business.to serve customers, it quickly goes out of business. Our employees Our employees are our first customers, and our most important are our first customers, and our most important
customers.”customers.”
Organizing GeniusOrganizing Genius / Warren Bennis / Warren Bennis and Patricia Ward Biederman and Patricia Ward Biederman
“Groups become great only when everyone in “Groups become great only when everyone in
them, leaders and members alike,them, leaders and members alike, is free to is free to do his or her absolute bestdo his or her absolute best.”.”
“The best thing a leader can do for a Great “The best thing a leader can do for a Great
Group is toGroup is to allow its members to allow its members to discover their discover their ggreatnessreatness.”.”
““free to do his or her free to do his or her absolute best” …absolute best” …
“allow its members to “allow its members to discover their discover their greatness.”greatness.”
Tom Peters, May 28, 2009
““You have to You have to treat your treat your
employees like employees like customers.”customers.” —Herb Kelleher, —Herb Kelleher,
complete answer, upon being asked his “secrets to success”complete answer, upon being asked his “secrets to success”
Source: Joe Nocera, NYT, “Parting Words of an Airline Pioneer,” on the occasion of Herb Kelleher’s 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 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 thethanking HK for all he had done; across the way in Dallas American Airlines’ pilots were picketing the Annual Meeting)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.GopalkrishnanExecutive 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
48
Comparison CompaniesVisionary Companies1. 3M2. American Express3. Boeing4. Citicorp5. Ford6. General Electric7. Hewlitt-Packard8. IBM9. Johnson & Johnson10. Marriott11. Merck12. Motorola13. Nordstrom14. Philip Morris15. Procter & Gamble16. Sony17. Wal-Mart18. Walt Disney
Comparison Companies1. Norton2. Wells Fargo3. McDonnell Douglas4. Chase Manhattan5. GM6. Westinghouse7. Texas Instruments8. Burroughs9. Bristol-Myers Squibb10. Howard Johnson11. Pfizer12. Zenith13. Melville14. RJR Nabisco15. Colgate16. Kenwood17. Ames18. Columbia
List of Visionary & comparison companies …
Visionary CompanyVisionary CompanyVisionary CompanyVisionary Company
Premier Institution
Widely Admired
Indelible imprint on the world
50+ year track record
Multiple generations of CEOs
Multiple product/service cycles
Vision
Vision
Coreideology
Envisionedfuture
Core Ideology
Core values Core Purpose
Essential, enduring Tenets (beliefs)
Reason for being
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
YOU DISCOVER CORE IDEOLOGY BY LOOKING
INSIDE.
IT HAS TO BE AUTHENTIC.
YOU CAN’T FAKE IT
Johnson &Johnson Core Values and Purpose
The company exists “to alleviate pain and disease” “We have a hierarchy of responsibilities: customers first,
employees second, society at large third, and shareholders fourth”
Individual opportunity and reward based on merit 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 interestThe 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
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 strategy3M : 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
Envisaged Future
BHAGS Vivid Description
Huge, daunting goals
Clear & compelling, tangible
Unifying, inspiring,engaging
Making goals ‘imaginable’
The ‘mind’s eye’
Hopeful, passionate,
inspiringimages & symbols
1. Difficult Target2. Common enemy3. Role-model4. Internal -transformation
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• Become the company most
known for changing the worldwide poor-quality image of Japanese products
• VIVID DESCRIPTION• We will create products
that become pervasive around the world.
• … be the 1st Japanese company to go into the U.S. market & distribute directly… succeed with innovations that U.S. companies have failed at- such as the transistor radio… 50 years from now, our brand name will be as well known as any in the world…”MIJ” will mean +
Thanx
+
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