LESSONS LEARNED FROM VISIONARY COMPANIES

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LESSONS LEARNED FROM VISIONARY COMPANIES

Riri SatriaCEO – Value Alignment Advisoryhttp://about.me/ririsatria


What are we going to discuss?

• What are the principles of visionary companies?• How to lead the company towards visionary one?• How to lead sustainable visionary company?• What is the leadership style of visionary companies?


Part 1 : Lessons from

visionary companies

This first part is adopted from the book “BUILT TO LAST” by Jim Collins and Jerry Porras.

This is a result of years of empirical research. They took a look at 18 well known, well established and healthy companies ('visionaries'), and analyzed all the information they could get their hands on, compiled it, and looked at it to try to find patterns of the visionary companies.

The result of all of this is a set of guidelines and principles that all companies, large or growing, can use to keep themselves growing, strong, and ahead of the competition.


Lessons from visionary companies(lesson #1)

Empirical research from visionary companies teach us that it doesn’t take a great idea to start a great company. Only

few of the visionary companies began life with a great idea. In fact, some began life without any specific idea

and a few even began with outright failures.

Great ideas are important, but EXECUTION is the key.


Lessons from visionary companies(lesson #2)Some of the most significant CEO in the history of visionary

companies did not fit the model of high profile and charismatic leader.

But empirical research from visionary companies teach us that great leaders sought to be clock builders, not time tellers.

Great leaders BUILT OTHER PEOPLE, not built themselves.



Empirical research from visionary companies teach us that they pursue profit as one of the cluster of objectives, not

the only one, and not the primary one. Yes, they seek profits, but they are equally guided by a core ideology.

Built CORPORATE IDEOLOGY / CORE VALUES first, and this will lead us to profit.



Empirical research from visionary companies teach us that here is no “right” set of core values for being a visionary company. Indeed, companies that have radically different ideologies can be visionary. The crucial variable is not the content of the company’s ideology, but how deeply it believes its ideology, and how consistent it is.

Whatever your corporate ideology / core values are, make sure that the people INTERNALIZE THE IDEOLOGY / VALUE.



Empirical research from visionary companies teach us that they manage yin-yang. They preserve the core, yet drive for progress. They almost religiously preserves its core ideology, and changing

it seldom, if ever.

Change is necessary for business sustainable, but DON’T CHANGE IDEOLOGY / CORE VALUES quite often. This is the

spirit of your company, or maybe your life.



Empirical research from visionary companies teach us that they set big, hairy, and, audacious goals (BHAGs). Like climbing a big mountain or going to the moon, a BHAG may be daunting or

perhaps risky, but the adventure, excitement, and challenge of it grabs people in the gut, create immense forward momentum.

Business needs PASSIONS and CALCULATED-RISK PLAYERS, not safety players.



Empirical research from visionary companies teach us that they are not great places to work for everyone. Only those who “fit” extremely well

with the core ideology and demanding standards of a visionary company will find a great place to work.

Visionary companies are so clear about what they stand for and what they are trying to achieve that they simply don’t have room for those unwilling

or unable to fit their exacting standards.

Business needs HIGHT TALENTED PEOPLE.



Empirical research from visionary companies teach us that they make some of their moves by trial and error,

opportunism, and quite literally - accidents.

Don’t be afraid to INNOVATE, failure is just a learning process. If your never fail, it means that your

never did something big.



Empirical research from visionary companies teach us that that home-grown management rules at the visionary companies to a far greater degree. In 1700 years of combined life spans across

the visionary companies, research found only 4 individual incidents of going outside for a CEO – and those in only 2

companies!

INTERNAL PEOPLE DEVELOPMENT and EMPOWERENT is the key.


Lessons from visionary companies

(lesson #10)Empirical research from visionary companies teach us that they focus primarily on beating themselves, not the

competition! No matter how much they achieve, no matter how far in front of their competitors they pull, they never think

they have done “good enough”.

CONTINUOUS IMPROVEMENT is a must, although you already become market / industry leader.



(lesson #11)Empirical research from visionary companies teach us that

they reject themselves trapped in choices. They reject having to make a choice between stability or progress,

making money or living with values, etc.

They GENIUSLY EMBRACE THE PARADOXIAL VIEW that allows them pursue both choices and gain

benefits at the same time.



(lesson #12)Empirical research from visionary companies teach us that they attained their stature not so much because they made visionary pronouncements

(although the often did make such pronouncements).

Nor did they rise to greatness because they wrote one of the vision, values, purpose, mission, or aspiration statements that have become popular in management today. It is only one of thousands steps in a never ending

process of expressing the fundamental characteristics.

Vision and mission are important, but EXECUTION is the key.


12 lessons from visionary companies (summary)

1. They think ideas are important, but belief that execution is the key.2. Their leaders built other people, not built themselves (the leaders’ image).3. They have a strong corporate ideology / core values.4. Their people internalize the ideology / core values.5. They don’t change ideology / core values quite often.6. They have calculated-risk players with passions.7. They have high talented people.8. They set a wide space for innovation and failure is a learning process.9. They promote, empower, and develop people internally.10. The always do continuous improvements although already become market leader.11. They do not trap in paradoxial thinking.12. They think vision and mission are important, but belief that execution is the key.


Part 2 : How to lead company to

become visionary one?This second part is adopted from the book “GOOD TO

GREAT” the second book by Jim Collins, following the first one “BUILT TO LAST”.

This book is an empirical research that describe how companies transition from being average companies to great or visionary companies. "Greatness" is defined as financial performance several multiples better than the market average over a sustained period of time.

Collins finds the main factor for achieving the transition to be a narrow focusing of the company’s resources on their field of competence.


What is inside this black box

?Good results

Great results

From GOOD results to GREAT results …

Some companies could make a quantum leap. The could transform themselves radically to achieve high performance in

their business. What are they doing anyway?


Build upBreakthrough

Discipline People Discipline Though Discipline Actions

Level 5 Leadeship

First Who … Then What

Confront the brutal facts,

never lost faith

Hedgehog Concept

Culture of discipline

Technology accelerators

The wheel of execution

From GOOD results to GREAT results …


Breakthrough action #1 : Level 5 Leadership

LEVEL 5 : Builds enduring greatness through a paradoxial blend of PERSONAL HUMILITY and PROFESSIONAL WILL.

LEVEL 4 : Effective leader : catalyzes commitment to and vigorous pursuit of a clear and compelling vision, stimulating higher performance standards.

LEVEL 3 : Competent manager : organizes people and resources toward the effective and efficient pursuit of predetermined objectives.

LEVEL 2 : Contributing team member : contributes individual capabilities to the achievement of group objectives and works effectively with others in a group setting.

LEVEL 1 : Highly capable individual : make productive contributions through talent, knowledge, skills, and good work habits.


Breakthrough action #2 : First Who … Then What

Empirical research shows that only talented people could create and execute strategy and gain excellent result.

They PUT-OFF YOUR LOW PERFORMERS AND PUT ON THE TALENTED PEOPLE (WHO). If you keep your

low performers, then it means you keep problems in the company. After that, you can think about the BUSINESS

(WHAT)


Breakthrough action #3 : Confront the brutal facts …

• Brutal facts are PROBEMS.• They should be FIXED and SOLVED.• Find reasons for problems do not solved anything.

So, confront the brutal facts by focusing on PROBLEM SOLVING rather than finding the

reasons for any legitimation.


What you are deeply passionate about ?

What drives your economic

engine ?

What you can be the best in the

world at ?

BHAG

Breakthrough action #4 : Hedgehog Concept

Great companies only run business where they can be the nest in that field, it is an economic engine, and they have passion for that.

It doesn’t mean you should focus on a single business, but please make sure that you have big, hairy, and audacious goals (BHAG) in every business that you are in.


ETHICS OF ENTREPRENEURSHIP

CU

LT

UR

E

OF

DIS

CIP

LIN

E

Low High

Low

HighHierarchical organization

Bureaucratic organization

Great organization

Start-up organization

Breakthrough action #5 : Culture of Discipline

Culture of discipline means that organization should discipline with their own business strategy, and they become a strategy-focused

organization, each movement should be in the strategy corridor.


Breakthrough action #6 : Technology accelerators

BUSINESS STRATEGYBUSINESS STRATEGY

TECHNOLOGY INVESTMENT

TECHNOLOGY INVESTMENT

Technology investment guided by business needs and aligned to business strategy of the firm.

Use technology to accelerate your business development and operation.


Breakthrough action #7 : Wheel of execution

- Focus on execution.- Always do continuous improvements.- Evaluate the performance periodically.- Fixed the problems as soon as possible.


Part 3 : How to lead a sustainable

visionary company?This third part is adopted from the book “HOW THE MIGHTY FALL” the third book by Jim Collins, following the first one “BUILT TO LAST” and the second one “GOOD TO GREAT”.

In contrast to Jim Collins' previous books, Good to Great and Built to Last, which examined corporate ascent, the newly published How The Mighty Fall focuses on corporate decline.

Data about the 11 "fallen" companies came from the Good to Great and Built to Last archives as well as from updated research.


Five steps to the death of mighty companies


Death step # 1 : hubris born of success

The company’s people become ARROGANT, regarding success as virtually an entitlement.

Are they really success?What are the indicators of success?

Real success vs virtual success?


Death step # 2 : undiscipline pursuit of more …

… more scale, more growth, more acclaim. Companies stray from the disciplined creativity that

led them to greatness in the first place, making undisciplined leaps into areas where they cannot be great or growing faster than they can achieve with

excellence, or both.

GREEDY STRATEGY


Death step # 3 : denial of risk and peril

Leaders of the company discount negative data, amplify positive data and put a positive spin on ambiguous data DATA MANIPULATION

Those in power start to blame external factors for setbacks rather than accept responsibility.

BLAMING OTHERS


Death step # 4 : grasping for salvation

Common “saviors” include a charismatic visionary leader, a bold but untested strategy, a radical

transformation, a “game changing” acquisition or any number of other silver-bullet solutions.

PANIC MOVEMENTS


Death step # 5 : capitulation to irrelevant of death

Accumulative setbacks and expensive false starts erode financial strength and individual spirits to such an extent that leaders abandon all hope of building a

great future. In some cases their leaders just sell out. In other cases

the institution atrophies to utter insignificance.

LOST STRENGTH AND SPIRIT


Summary : things to remember to lead sustainable visionary company

• Never be an arrogant company.• Never develop a greedy strategy / expansion.• Never do any data manipulations for pragmatic issues.• Never blaming on external factors.• Never do panic movements• Never lost strength and spirits.


Part 4 : What is the leadership style of a visionary company?This fourth part is adopted from the book “GREAT BY CHOICE” the fourth book by Jim Collins, following the first one “BUILT TO LAST”, the second one “GOOD TO GREAT”, and the third one “HOW THE MIGHTY FALL”.

In contrast to Jim Collins' previous books, Good to Great and Built to Last, which examined corporate ascent, the newly published How The Mighty Fall focuses on corporate decline.

Data about the 11 "fallen" companies came from the Good to Great and Built to Last archives as well as from updated research.


The Leadership Style


Level 5 ambition : “incredibly ambitious, but their ambition is first and foremost for the

institution and its greatness, not for themselves“

Level 5 Ambition


Closing Remarks


Closing Remarks

• Jim Collins teach us that :– There are 12 principles of visionary company.– There are 7 breakthrough actions towards visionary company.– There are 6 things to avoid to lead sustainable visionary company.– There are 4 leadership style of visionary company.


THANK YOU