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Visionary Companies
Visionary companies are premier institutions in their industries, widely admired by their peers and having a long track record of making a significant impact on the world around them. The key point is that a visionary company is an organization, not an individual or product. Despite facing setbacks and mistakes, visionary companies display a remarkable resiliency, an ability to bounce back from adversity. As a result, visionary companies attain extraordinary longterm performance.
Myth 10: The most successful companies focus primarily on beating the competition. Visionary companies focus primarily on beating themselves. Myth 11: You cant have your cake and eat it too. Visionary companies do not [believe in the] purely rational view that says you can have either A OR B, but not both. They embrace the paradoxical view that allows them to pursue both A AND B at the same time. Myth 12: Companies become visionary primarily through vision statements. Creating a statement can be a helpful step but it is only one of thousands of steps in a never-ending process.
If youre a high-profile charismatic leader, fine. But if youre not, then thats fine, too, for youre in good company right along with those that built companies like 3M, P&G, Sony, Boeing, HP, and Merck. Not a bad crowd.
No Tyranny of the OR
The Tyranny of the OR pushes people to believe that things must be either A OR B, but not both. Highly visionary companies liberate themselves with the Genius of the ANDthe ability to embrace both at the same time.
In short, we did not find any specific ideological content essential to being a visionary company. Our research indicates that the authenticity of the ideology and the extent to which a company attains consistent alignment with the ideology counts more than the content of the ideology. In a visionary company, the core values need no rational or external justification. Nor do they sway with the trends and fads of the day. Nor even do they shift in response to changing market conditions.
This framework has two layers. You can think of the top layer as a set of guiding intangibles that are necessary requirements. To become a visionary company requires translating these intangibles down into the second layer.
Intentions are all fine and good, but it is the translation of those intentions into concrete items mechanisms with teeththat can make the difference between becoming a visionary company or forever remaining a wannabe. If you are involved in building and managing an organization, the single most important point to take away from this book is the critical importance of creating tangible mechanisms aligned to preserve the core and stimulate progress. This is the essence of clock building.
The BHAGs looked more audacious to outsiders than to insiders. The visionary companies didnt see their audacity as taunting the gods. It simply never occurred to them that they couldnt do what they set out to do.
Cult-Like Cultures
Visionary companies are great places to work for only those who buy in to the core ideology; those who dont fit with the ideology are ejected like a virus. This also helps to preserve the core. Ejected Like a Virus! Visionary companies tend to be more demanding of their people than other companies, both in terms of performance and congruence with the ideology. Joining these companies [is like] joining an extremely tight-knit group or society. And if you dont fit, youd better not join.
Week the core while operational autonomy stimulates progress. Visionary, we learned, does not mean soft and undisciplined. Quite the contrary. Because the visionary companies have such clarity about who they are, what theyre all about, and what theyre trying to achieve, they tend to not have much room for people unwilling or unsuited to their demanding standards. IBM attained its greatest successand displayed its greatest ability to adapt to a changing worldduring the same era that it displayed its strongest cult-like culture. The point of this chapter is not that you should set out to create a cult of personality. Thats the last thing you should do.
Visionary companies practice high levels of action and experimentationoften unplanned and undirectedthat produce new and unexpected paths of progress and enable visionary companies to mimic the biological evolution of species. This also helps to stimulate progress. Corporations as Evolving Species Visionary companies are stimulated by evolutionary progress, which is an unplanned progress. Darwins Theory of Evolution Applied to Visionary Companies The central concept of evolutionary theory is that species evolve by a process of undirected variation (random genetic mutation) and natural selection. Of course, all companies evolve to some degree. [However,] visionary companies more aggressively harness the power of evolution.
If we mapped 3Ms portfolio of business units on a strategic planning matrix, we could easily see why the company is so successful (Look at all those cash cows and strategic stars!), but the matrix would utterly fail to capture how this portfolio came to be in the first place.
Home-Grown Management
Visionary companies practice promotion from within, bringing to senior levels only those whove spent significant time steeped in the core ideology of the company. This also helps to preserve the core. Promote From Within to Preserve the Core Visionary companies develop, promote, and carefully select managerial talent grown from inside the company [They also] had better management development and succession planning.
What mechanisms of discontent can you create that would obliterate complacency and bring about change and improvement from within, yet are consistent with your core ideology? What are you doing to invest for the future while doing well today? Does your company continue to build for the long-term even during difficult times? Do people in your company understand that comfort is not the objectivethat life in a visionary company is not supposed to be easy? Comfort is not the objective in a visionary company. Indeed, visionary companies install powerful mechanisms to create discomfortto obliterate complacencyand thereby stimulate change and improvement before the external world demands it. Managers at visionary companies simply do not accept the proposition that they must choose between short-term performance or long-term success. They build first and foremost for the long term while simultaneously holding themselves to highly demanding short-term standards.
Visionary companies do not rely on any one program, strategy, tactic, mechanism, cultural norm, symbolic gesture, or CEO speech to preserve the core and stimulate progress. Its the whole ball of wax that counts. The real question to ask is not Is this practice good? but Is this practice appropriate for us does it fit with our ideology and ambitions?
A well-conceived vision consists of two major componentscore ideology and an envisioned future. It defines what we stand for and why we exist that does not change (the core ideology) and sets forth what we aspire to become, to achieve, to create that will require significant change and progress to attain (the envisioned future).
Core Ideology
Core ideology provides the bonding glue that holds an organization together as it grows, decentralizes, diversifies, expands globally, and attains diversity within. Core Values The organizations essential and enduring tenets. Core Purpose The organizations fundamental reason for being. A Few Key Points on Core Ideology You cannot install new core values or purpose into people. [They] are not something people buy in to. People must already have a predisposition to holding them.
Envisioned Future
Envisioned future consists of two parts: a ten- to thirty-year Big Hairy Audacious Goal and vivid descriptions of what it will be like when the organization achieves the BHAG.
Vision-level BHAG Setting the BHAG ten to thirty years into the future requires thinking beyond the current capabilities of the organization and current environmental trends, forces, and conditions. In creating such a vision-level BHAG we suggest thinking about the following four categories: Target BHAGs can be quantitative or qualitative. Common-enemy BHAGs involve focusing on beating a common enemya David versus Goliath BHAG. Role-model BHAGs are particularly effective for up-and-coming organizations with bright prospects. Internal Transformation BHAGs tend to be effective in old or large organizations in need of internal transformation. Vivid Descriptions Vivid description is a vibrant, engaging, and specific description of what it will be like to achieve the BHAG. Passion, emotion, and conviction are essential parts of this. A Few Key Points on Envisioned Future Dont confuse core ideology and envisioned future Weve found, therefore, that some executives make more progress by starting first with the vivid description and backing from there into the BHAG. Also, beware the weve arrived syndromecomplacent lethargy that arises once an organization has achieved a BHAG and fails to replace it with another.