The important thing is this: to be able at any moment to
sacrifice what we are for what we could become. -- Charles
DuBois
Slide 3
The difficult task of leadership is to make sure the
organization raises its ability to handle growth as rapidly as it
does its revenue line. (The Breakthrough Company, pg 14)
Slide 4
small entrepreneurial firm to Entrepreneurial Enterprise
Slide 5
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The Ladder
Slide 7
The Ladder Survey
Slide 8
Advantages of Sovereign Company Better able to recruit and
retain: People want to be part of something bigger than one person.
More highly committed to sovereign company vision than go back to
work and leave the driving to us senior management. Can adapt and
make decisions more quickly since people throughout the
organization have an understanding of the vision and how it plans
to get there. Like George Washington who didnt accept a crown,
breakthrough leaders are motivated by a sense of confidence in the
potential of people to accomplish great things.
Slide 9
Upping the Ante Progress always involves risk; you cant steal
second base and keep your foot on first base. --Frederick
Wilcox
Slide 10
Upping the Ante Understanding when to up the. Bet big in order
to grow big. 88% reported their success was mainly due to
exceptional execution of an ordinary idea. Willingness to place
bigger and bigger bets actually decreased its risk, making the
firms long-term prospects even safer. Only companies that continue
to adapt through progressively bigger bets will reach
breakthrough.
Slide 11
Peeling the Onion Thinking deeply about where the market is
going. Does this bet help us change the field of play in our
market? Refuse to see other companies as bit players. 1+1+1=6 is
the power of the exponential bet relation to other bets.
Slide 12
Slide 13
Placing Big Bets
Slide 14
Company Character People seem not to see that their opinion of
the world is also a confession of their character. --Ralph Waldo
Emerson
Slide 15
Company Character Bedrock foundation: Lining up what people say
with what people do. Success... Focus first on the way their
company treated its people and its customers. The leaders of
breakthrough companies put enormous faithand powerin the hands of
their employees.
Slide 16
Company Character We were struck by how carefully and precisely
the companies had defined their business models so that they could
build jobs in which people know exactly what was expected of them
and also had the tools to achieve high levels of performance. He
found that people tended to be most creative, effective, and
connected to their work when they were challenged without being
defeated. People flourish, he found, when they are given, clear
goals, unambiguous feedback, and a sense of control.
Slide 17
Company Character Leadership What one characteristic did all of
the breakthrough leaders we studied share? Charisma... But it turns
out that the word charisma doesnt mean what many people think it
does... Charismatic leaders inspire with their character. For these
companies character is sacred.
Slide 18
Company Character Strategic Miser: They scrimp on the
frivolities so they can spend real money where it counts.
Slide 19
Navigating the Business Bermuda Triangle We cannot direct the
wind, but we can adjust the sails. --Bertha Calloway
Slide 20
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Bermuda Triangle Often have to spend some money. Avoid
premature diversification companies often move on to the next
product before fully mastering the ones theyve already got. When it
is time to diversify, let the customers be your guide. Nothing
kills speed, hurts customer satisfaction, and erodes a cost
advantage faster than unnecessary layers of management.
Slide 22
Erecting Scaffolding Human beings, who are almost unique in
having the ability to learn from the experience of others, are also
remarkable for their apparent disinclination do so. --Douglas
Adams
Slide 23
Erecting Scaffolding Our biggest risk is that we stop listening
to our customers and start reacting to our competitors instead. SAS
CIO Everyone... should have people to turn to for support when they
are faced with a challenge. Too many growing companies continually
try to reinvent the wheel instead of seeking out the very best
wheel-makers.
Slide 24
Erecting Scaffolding Net Promoter Score: Ask customers, on a
scale of one to ten, how willing they would be to recommend a
companys product to their friends: 9 & 10 Promoters, 7 & 8
Passives, 1-6 Detractors. Zero in on the detractors and find out
how to turn them into promoters. There are only two requirements
for growth, Cook has said. Happy customers and profitable
customers. NPS was exactly what we needed to get back in touch with
our customers and make the kinds of changes they wanted us to
make.
Slide 25
Erecting Scaffolding Peer Networks: The research shows that one
of the main reasons people participate in peer groups is to hold
themselves accountable for improving the performance of their
firms. Boards and Advisory Boards that challenge management
thinking Serving on Boards access and learn from fellow Board
members Professional Associations & outside mentors Investors
Customers and Vendors: new technologies and ideas they provide us
for our products are critical to our success. Colleges and
Universities
Slide 26
Insultants It is difficult to lay aside a confirmed passion.
--Caius Valerius Catullus
Slide 27
Insultants Not only are they open to people questioning the
fundamental assumptions of the business, breakthrough companies
encourage people to buck the system. Consultants from the inside.
Someone willing to ask the tough questions that cause a company to
think critically about its fundamental assumptions.
Slide 28
Why Companies Need Insultants 1. Ideas the CEO initially doesnt
like are regularly implemented at our company: True or False (90-
60) 2. Our CEO encourages thinking that challenges our current
beliefs: True or False (77-47)
Slide 29
Insultants Insultants are masters at getting their ideas heard,
and they never resort to insulting someone. They work quietly
within existing systems to get the organization to question its
assumptions and change its thinking. The power of insultants is
directly proportional to the free flow of information in a
company.
Slide 30
Insultants: Strategy Development Expand beyond the CEO and
senior management team. Created strategy faster and with much
higher levels of commitment and follow through.
Slide 31
Three Leverage Points Leadership There are three places a
leader can have the greatest impact on an organization: strategy,
people, and execution.
Slide 32
Reinventing Strategy The purpose of strategy is to help the
members of an organization learn to triage issues, to sort out what
is truly essential to the firms success. Executives kid themselves
that they are better at strategy than their troops, but fail to
recognize that they have one key advantagethey are drinking from a
very large data pipe. Give people on the frontlines access to key
strategic information and train them how to use it, and theyll
surprise you every time.
Slide 33
Compressing Strategy Cycle Time The faster a company can
accumulate and prioritize insights, convert the most important
insights into decisions, and translate those into actions, the more
readily it will outpace competitors.
Slide 34
Slide 35
Strategy Learning Cycle 1. What have been our most important
strategic accomplishments during the past ninety days? 2. What are
the most important ways we fell short of our strategic potential
during the past ninety days? 3. What are the most important things
we have learned about our strategy during the past ninety
days?
Slide 36
Getting the Most Out of People When people are enrolled at all
levels of the organization in crafting a strategy, those people
invested more of themselves in making sure the company reached the
goals it outlined. Hire people that you think can scale.
Breakthrough leaders understand it is their responsibility to
develop new hires into the right people.
Slide 37
Getting the Most Out of People The breakthrough companies we
visited were filled with great coachespeople skilled at helping
people do their very best.
Slide 38
Execution Relentless focus on improving the companys ability to
execute. Effective execution is vital to breakthrough. Dont wrap up
the strategy meeting until the group has distilled the top
priorities into specific, measurable initiatives and action plans,
ones that have both a deadline and a person responsible.
Slide 39
Slide 40
Strategy Cycle at Work Those companies that follow the 90-day
dynamic approach to strategy, focus on getting the most out of its
people, and drive effective execution are at a significant
advantage.
Slide 41
The art of progress is to preserve order amid change and to
preserve change amid order. --Alfred North Whitehead
Slide 42
Strategy Ethos Management views its job as Organizations that
crowned the leaders Organizations that crowned the company
CEO/Founder makes major strategic decisions, often with the input
of a handful of close advisors Strategic issues openly and actively
debated throughout the organization; all the major functional areas
(product development, finance, operations, sales) contribute
meaningfully to strategy formulation Personal loyalty to the leader
and his vision Commitment to doing the very best job possible for
the organization, even if that means bucking the system or
questioning the firms fundamental assumptions Running the business
Creating an environment where people get better at spotting what is
important, and at making and implementing decisions
Slide 43
Culture New Ideas Interdepartmental conflict is resolved by
Organizations that crowned the leaders Organizations that crowned
the company Often purely a reflection of the personal
characteristics of the leader or founder Though strongly influenced
by the leader, tends to more broadly reflect the people who make
the organization, as expressed in their stories of shared
experiences Come primarily from senior management Regularly and
systematically come from throughout the firm Kicking the issue
upstairs Affected departments sitting down and discussing the
issue
Slide 44
People are celebrated for Biggest no-no Organizations that
crowned the leaders Organizations that crowned the company Heroics
(saving the customer, solving the big problem, etc.) Bricklaying
(helping to build robust and sound processes that make
organizational heroics less necessary Act in a way that might be
misinterpreted as disloyalty Fail to have the best interest of the
company at heart
Slide 45
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Slide 47
Successful Change Management 1. Duration (D) 2. Integrity of
Performance (I) 3. Management Commitment Commitment of Senior
Management (C 1 ) Local Level Commitment (C 2 ) 4. Effort (E) DICE
Score = D + 2I + 2C 1 + C 2 + E
Slide 48
Successful Change Management
Slide 49
Sources: The Breakthrough Company: How Everyday Companies
become Extraordinary Performers --by Keith McFarland
http://www.breakthroughcompany.com/ The Hard Side of Change
Management, Harvard Business Review, October 2005.
