Could catch up reading quite a few books in the break between jobs ( April & May 08). Apart from ,Built to last, Good to great by Jim Collins did some reading on Forex and derivatives by AV Rajwade , caught up the following PG Wodehouse books
The old reliable
Much Obliged Jeeves
The world of Psmith- Omnibus which had
Psmith the Journalist
Psmith in the City
Leave it to Psmith
Uncle Fredan Omnibus which had
Uncle Fred in the springtime
Cocktail time ( read for the first time)
Left out Uncle Dynamite ( read earlier twice and that too not too far back)
It is always a pleasure reading Wodehouse . One is very clear that the novels are a complete departure from the real world and far from reality, so what ?, so are most of the novels. While other novelists make a pretense of narrating something close to real life , Wodehouse is quite clear that he delves in to realms of fancy , imagination . Sole purpose is to give some ( an understatement ) harmless pleasure to the readers. In fact it gives one enormous pleasure. The languageis great, the supercomical and contrived situations are, to put it mildly , hilarious . Exaggerated similies , giving exanple of a highly exaggerated parallel to describe some simple situation or expression by the characters is hilarious.
When one of the characters breathed heavily …”Panting like a buffalo in the mating season, describing one of the characters with a below avereage IQ, ……. so and so is not exactly the person who would be approached when one seeks explanation for Einstein’s theory etc and several more.
Saturday, May 31, 2008
Thursday, May 29, 2008
News on a dear friend of mine
Very saddened to hear about the news of death of J. Parthasarathy ( small pacha as we used to call him,must have been around 46 ). Though I have not been in touch with him for several years, more than 20 years, was pretty close when we did our CA togther way back in 1981-84. Was my batchmate. Was a very lively person . Quite intelligent. Undertsand that he was with American Express Bank after a some years with Corporation Bank. This was a news conveyed by Lakshmi ( Lakshminarasimhan) who got to know about this from Jayadevan, both CA batch mates.
Remember being with him for AV Thomas audit, then outstation in Vellor for CMC audit.Had great fun, what with ADA ( AD Anathnakrishnan, I , Pacha and Lakshmi around )
Incidentally Ananthakrushnan died a few years back.He was a bit older , was I think around 55 when he died but still young enough.
Pacha was an entreprising person in his own way. I just pray and hope that his family , his wife and kids get the mental strength to go through this.
Have very fond memories of interactions with him. Belonged to a, would think a reasonably orthodox madhwa family from Dharmapuri. His father was in TNEB.
He had good felicity in Tamil .
Very sad. How one wishes that one was in touch with people ?. After all he was in Chennai, not too far from Bangalore. With some effort , one could have easily been in touch with him.
We take things for granted when they are there and available.
May his soul rest in peace and God give his family strength to bear the loss.
Remember being with him for AV Thomas audit, then outstation in Vellor for CMC audit.Had great fun, what with ADA ( AD Anathnakrishnan, I , Pacha and Lakshmi around )
Incidentally Ananthakrushnan died a few years back.He was a bit older , was I think around 55 when he died but still young enough.
Pacha was an entreprising person in his own way. I just pray and hope that his family , his wife and kids get the mental strength to go through this.
Have very fond memories of interactions with him. Belonged to a, would think a reasonably orthodox madhwa family from Dharmapuri. His father was in TNEB.
He had good felicity in Tamil .
Very sad. How one wishes that one was in touch with people ?. After all he was in Chennai, not too far from Bangalore. With some effort , one could have easily been in touch with him.
We take things for granted when they are there and available.
May his soul rest in peace and God give his family strength to bear the loss.
Monday, May 5, 2008
Good to Great by Jim Collins- A simple synopsis
Good to Great by Jim Collins- A simple synopsis
This was written by the same author who had co authored Built to last. The attempt here is to identify Companies which were average performers for quite sometime , turning around and being consistently successful over the next 15 years. The author looks at the factors which have contributed to that . Very well researched book. In fact as per the author, research was done over a period of 5 years. The author and his team of researchers have confined themselves to publicly traded companies in USA. This was, in his own words due to reasons of comparability and ease of availabilit data for research They had put some serious filters in terms of the number of years the Company should have been an average performer and a certain point of turnaround and continuous great performanace over the next 15 years. To put in perspective they have benchmarked with the market , neutralised the Industry specific factots and made comparisons with Companies of the same vintage and size to bring out the qualitative variations which contributed to the quantitavie variations in the long run
The cut off for the book one understands was 1996 and the research went on till 2000 when the book was published.
The Companies which make the cut are as follows
Abbott
Circuit City
Fannie Mae
Gillette
Kimberly Clark
Kroger
Nucor
Philip Morris
Pitney Bowes
Walgreens
Wells Fargo
The author has a habit of summarising the concepts very well and reiterating and reemphsising the concepts or the conclusions they arrived at based on research, with live examples from the Companies that made the cut.
Briefly the author and his team have come out with the following differentiators which contributed to these Good Companies becoming great.
Level 5 leadership
This is a term coined by the author ,that is Level 5 leadership. The author defines 5 level hierarchy of leadership , namely,
i)Highly capable Individividual
ii)Contributing team member
iii)Competent manager
iv)Effective leader and
v)Level 5 executive, that is somebody who builds enduring greatness through a paradoxical blend of personal hunility and professional will.
He backs the above with live examples of how self effacing the leaders of these Companies were , at the same time they were extremely focussed. They made one thing sure , that the attention never got diverted to themsleves and it was rivetted at all times on the job on hand.This is quite fascinating. The author backs this with an example where a leader starts as a level 5 and degenerates later. He takes the example of Lee Iacocca , how he turned around Chrysler and did well for around 5 years, lost focus on the job on hand and started projecting himself , raised to the status of a rock star. Later part of his tenure in Chrysler , he did not produce the same kind of results, in fact the decline started and the Company was ultimately sold to Daimler. This was a case of a attention of self and ego over the Company and job on hand.
Examples of some of the leaders like Darwin Smith of Kimberly Clarke who was self effacing and humility personified , at the same time extraordinarily courageous in as much as he ran the Company in the midst of a personal crisis ( he was detected with cancer, was given a year, but lived for 25 years ) and had the great courage to sell the then focus area of the Company , Paper mills.
Then there is Cork Walgreen of Walgreens,Ken Iverson of Nucor who had the courage of conviction to drive the Company in to a completely different area of business,Alan Wurtzel of Circuit City , Colman Mockler of Gillette, David Maxwell of Fannie Mae and so on.
These leaders also had the courage to attribute success to factors other than themselves but own up failures as their own.
Since we are talking of turnarounds, one would be tempted to conclude that the turnaround artist must have been an outside leader. Contrary to popular perception, most of these leaders who initiated the turnaround and set the Company on its course to sustained turnaround and great results were insiders.
First who …. Then what
Again contrary to what could be the most expected sequence, one would think that in such turnaround cases one would have thought that the management would have thought of the specific business or area of operation and then select people around that.What has happened in most of the cases ( of course this selection of people we are talking about are all the top management who are more general managers and not so much technical) was that these Companies focussed on getting the right people and decided on the area or course of business later. The focus was also on a good management team and not so much on selecting extraordinary individuals. Extraoridnary individuals seldom build great teams. In author’s own words, these Companies decided first of all as to who to have on the bus ( the Company ) and decided later as to where the bus will proceed.
While one broadly agrees with the philosophy of getting a good team which can deliver, one has to obviously take in to consideration the fact that the Companies would need Industry experts and knowledge. My personal take on this is that the author has slightly overemphasised this bit about who first and then what later to put across the point forcefully.
The author amd his team had done extensive research on Executive compensation to look for link between compensation and motivation and did not find one.
The author goes to conclude that it is not people who are assets , only the right people can be assets.
Confront the brutal facts ( yet never lose faith)
Almost all these Companies confronted the path of greatness by first having a honest and brutal fact at the current reality of their businesses.The author comes out with telling example of how grocery chain store Kroger did a complete make over of their stores. Inelegant and purely functional grocery stores were the order of the day and in fact did make sense in the early 20 th Century with the US and European economies being ravaged by two wars and a depression in the early 30 s to boot. With an improving economy and desire on the part of the customers to have greater variety and greater desire for consumption, the need was for bigger , nicer stores with a greater choice.. Kroger was almost 80 years old and the Comparison Company A& P was around 110 years.Kroger faced the brutal reality and made a complete make over. They either eliminated, changed or replaced the entire chain of 400 stores and came out very successful. A& P stuck to their old format and soon dwindled in size and revenues.
The author puts forward a strong case for an enabling environment where truth is heard and brutal facts faced
He talks of four basic practices
i.)Lead with questions not answers. I think this means a very open and evolved leader who listens and has an open mind
ii)Engage in dialogue and debate and not coercion
iii)Conduct autopsies without blame
iv)Build red flag mechanisms that turn information in to information that can not be ignored
The Hedgehog Concept ( Simplicity within the three Circles)
The author brings in this concept of a Fox or a hedgehog.Hedghog is something close to a porcupine . Fox keeps looking for a myriad ways of attacking and making a meal of the hedgehog whereas hedgehog masters a certain type of defense which involves making itself in to a ball and making sure that its sharp spikes all point out in such a way that the fog is not in a position to get close to it.
While Fox is extraordinarily cunning and smart , the hedgehog is smart but makes its defense a simple task. It does not cloud its mind with various forms of defense, it has developed a certain defense which is very simple and effective against the fox
The author elaborates further and talks about three circles of the hedgehog concept.
i) What you can be the best in the world
ii) What you are deeply passionate about ?
iii) What drives your economic engine
He talks of settling for something which is an intersection of these three concepts
Just because somethig is your core buisness and just because you have been doing something for years does not necessarily mean that you can be the best at it.
To get insight in to the drivers of one’s economic engine , one has to search for the one denominator , could be profit per employee, cash flow per etc , that is something which has the maximum impact.
A culture of discipline
The author talksof the discipline in thought , action , sticking to a certain course of action with fanatical adherence to the hedgehog concept and the willingness to shun opportunities that fall outisde the three circles.Not falling for the fad of the month/year etc.
Technology accelerators
Good to great Companies always use technology as an accelerator and not as a creator of it.They may not have begun with pioneering technology but become pioneers in application of technology
The flywheel and the doomloop
The author tries to bring in the concept that none of the Companies had some kind of an “Aha” moment. The great results were a culmination of years of effort. He takes the example of a flywheel. You have identified the direction and start pushing hard, still it is one hell of an effort to start the thing going. Once the activoity gets started, it picks up momentum and the incremental effort put in gives rise to better results
Sustainable transformations follow a predictable pattern of build up and breakthrough.The flywheel builds momentum eventually hitting a point of breakthrough
Comparison companies look for a break through skipping the build up and on most occassions this leads to disappointing results
The author talks of this book and the concepts as a prequel to “Built to last” rather than as a sequel. Apply the findings in this Company to create sustained great results, as a start up or an established organisation and then apply the findings in Built to last to go from great results to an enduring great company.
This was written by the same author who had co authored Built to last. The attempt here is to identify Companies which were average performers for quite sometime , turning around and being consistently successful over the next 15 years. The author looks at the factors which have contributed to that . Very well researched book. In fact as per the author, research was done over a period of 5 years. The author and his team of researchers have confined themselves to publicly traded companies in USA. This was, in his own words due to reasons of comparability and ease of availabilit data for research They had put some serious filters in terms of the number of years the Company should have been an average performer and a certain point of turnaround and continuous great performanace over the next 15 years. To put in perspective they have benchmarked with the market , neutralised the Industry specific factots and made comparisons with Companies of the same vintage and size to bring out the qualitative variations which contributed to the quantitavie variations in the long run
The cut off for the book one understands was 1996 and the research went on till 2000 when the book was published.
The Companies which make the cut are as follows
Abbott
Circuit City
Fannie Mae
Gillette
Kimberly Clark
Kroger
Nucor
Philip Morris
Pitney Bowes
Walgreens
Wells Fargo
The author has a habit of summarising the concepts very well and reiterating and reemphsising the concepts or the conclusions they arrived at based on research, with live examples from the Companies that made the cut.
Briefly the author and his team have come out with the following differentiators which contributed to these Good Companies becoming great.
Level 5 leadership
This is a term coined by the author ,that is Level 5 leadership. The author defines 5 level hierarchy of leadership , namely,
i)Highly capable Individividual
ii)Contributing team member
iii)Competent manager
iv)Effective leader and
v)Level 5 executive, that is somebody who builds enduring greatness through a paradoxical blend of personal hunility and professional will.
He backs the above with live examples of how self effacing the leaders of these Companies were , at the same time they were extremely focussed. They made one thing sure , that the attention never got diverted to themsleves and it was rivetted at all times on the job on hand.This is quite fascinating. The author backs this with an example where a leader starts as a level 5 and degenerates later. He takes the example of Lee Iacocca , how he turned around Chrysler and did well for around 5 years, lost focus on the job on hand and started projecting himself , raised to the status of a rock star. Later part of his tenure in Chrysler , he did not produce the same kind of results, in fact the decline started and the Company was ultimately sold to Daimler. This was a case of a attention of self and ego over the Company and job on hand.
Examples of some of the leaders like Darwin Smith of Kimberly Clarke who was self effacing and humility personified , at the same time extraordinarily courageous in as much as he ran the Company in the midst of a personal crisis ( he was detected with cancer, was given a year, but lived for 25 years ) and had the great courage to sell the then focus area of the Company , Paper mills.
Then there is Cork Walgreen of Walgreens,Ken Iverson of Nucor who had the courage of conviction to drive the Company in to a completely different area of business,Alan Wurtzel of Circuit City , Colman Mockler of Gillette, David Maxwell of Fannie Mae and so on.
These leaders also had the courage to attribute success to factors other than themselves but own up failures as their own.
Since we are talking of turnarounds, one would be tempted to conclude that the turnaround artist must have been an outside leader. Contrary to popular perception, most of these leaders who initiated the turnaround and set the Company on its course to sustained turnaround and great results were insiders.
First who …. Then what
Again contrary to what could be the most expected sequence, one would think that in such turnaround cases one would have thought that the management would have thought of the specific business or area of operation and then select people around that.What has happened in most of the cases ( of course this selection of people we are talking about are all the top management who are more general managers and not so much technical) was that these Companies focussed on getting the right people and decided on the area or course of business later. The focus was also on a good management team and not so much on selecting extraordinary individuals. Extraoridnary individuals seldom build great teams. In author’s own words, these Companies decided first of all as to who to have on the bus ( the Company ) and decided later as to where the bus will proceed.
While one broadly agrees with the philosophy of getting a good team which can deliver, one has to obviously take in to consideration the fact that the Companies would need Industry experts and knowledge. My personal take on this is that the author has slightly overemphasised this bit about who first and then what later to put across the point forcefully.
The author amd his team had done extensive research on Executive compensation to look for link between compensation and motivation and did not find one.
The author goes to conclude that it is not people who are assets , only the right people can be assets.
Confront the brutal facts ( yet never lose faith)
Almost all these Companies confronted the path of greatness by first having a honest and brutal fact at the current reality of their businesses.The author comes out with telling example of how grocery chain store Kroger did a complete make over of their stores. Inelegant and purely functional grocery stores were the order of the day and in fact did make sense in the early 20 th Century with the US and European economies being ravaged by two wars and a depression in the early 30 s to boot. With an improving economy and desire on the part of the customers to have greater variety and greater desire for consumption, the need was for bigger , nicer stores with a greater choice.. Kroger was almost 80 years old and the Comparison Company A& P was around 110 years.Kroger faced the brutal reality and made a complete make over. They either eliminated, changed or replaced the entire chain of 400 stores and came out very successful. A& P stuck to their old format and soon dwindled in size and revenues.
The author puts forward a strong case for an enabling environment where truth is heard and brutal facts faced
He talks of four basic practices
i.)Lead with questions not answers. I think this means a very open and evolved leader who listens and has an open mind
ii)Engage in dialogue and debate and not coercion
iii)Conduct autopsies without blame
iv)Build red flag mechanisms that turn information in to information that can not be ignored
The Hedgehog Concept ( Simplicity within the three Circles)
The author brings in this concept of a Fox or a hedgehog.Hedghog is something close to a porcupine . Fox keeps looking for a myriad ways of attacking and making a meal of the hedgehog whereas hedgehog masters a certain type of defense which involves making itself in to a ball and making sure that its sharp spikes all point out in such a way that the fog is not in a position to get close to it.
While Fox is extraordinarily cunning and smart , the hedgehog is smart but makes its defense a simple task. It does not cloud its mind with various forms of defense, it has developed a certain defense which is very simple and effective against the fox
The author elaborates further and talks about three circles of the hedgehog concept.
i) What you can be the best in the world
ii) What you are deeply passionate about ?
iii) What drives your economic engine
He talks of settling for something which is an intersection of these three concepts
Just because somethig is your core buisness and just because you have been doing something for years does not necessarily mean that you can be the best at it.
To get insight in to the drivers of one’s economic engine , one has to search for the one denominator , could be profit per employee, cash flow per etc , that is something which has the maximum impact.
A culture of discipline
The author talksof the discipline in thought , action , sticking to a certain course of action with fanatical adherence to the hedgehog concept and the willingness to shun opportunities that fall outisde the three circles.Not falling for the fad of the month/year etc.
Technology accelerators
Good to great Companies always use technology as an accelerator and not as a creator of it.They may not have begun with pioneering technology but become pioneers in application of technology
The flywheel and the doomloop
The author tries to bring in the concept that none of the Companies had some kind of an “Aha” moment. The great results were a culmination of years of effort. He takes the example of a flywheel. You have identified the direction and start pushing hard, still it is one hell of an effort to start the thing going. Once the activoity gets started, it picks up momentum and the incremental effort put in gives rise to better results
Sustainable transformations follow a predictable pattern of build up and breakthrough.The flywheel builds momentum eventually hitting a point of breakthrough
Comparison companies look for a break through skipping the build up and on most occassions this leads to disappointing results
The author talks of this book and the concepts as a prequel to “Built to last” rather than as a sequel. Apply the findings in this Company to create sustained great results, as a start up or an established organisation and then apply the findings in Built to last to go from great results to an enduring great company.
For those of you who are interested in a more elbaorate and more structured synopsis ( it looks so on the face of it ), here is a link
http://www.jnorth.net/mindmaps/business/business%20management/good%20to%20great/index.html
Friday, May 2, 2008
Built to last by Jim Collins and Jerry Porras- Just a simple synopsis
Just finished reading one of the very old bestselling management books, Built to last ,successful habits of visionary companies by Jim Collins and Jerry Porras. This was written sometime in 1994 and there have been a few reprints and editions. Essentiel part of the contents are the same from 1994. Quite interesting that the Companies that they had identified continue to be either top performers or atleast there somewhere close to the top. Their purpose was to identify and bring out the factors/ingredients which run across these companies. One thing is the promoters of these Companies either at the very begiining or somehwere quite close to the founding year , have had clear intentions of building enduring and great companies.The authors talk of the founders of these Companies as Clock builders as against clock readers. In simple terms they built a structure and enabling factors where there was continuity in the functioning of the Company the way it was envisaged and it continued to do perform great well after the time of the founders as against may be some technocrats who built a company around himself/herself and his/her capabilites and could never get the same replicated in others.
Companies which have made the cut are as follows
1.3M
2.American express
3.Boeing
4.Citicorp
5.Ford
6.GE
7.HP
8.IBM
9.Johnson& Johnson
10.Marriott
11.Merck
12.Motorola
13.Nordstrom
14.Philip Morris
15.Procter & Gamble
16.Sony
17.Wal mart
18.Walt disney
The authors have Compared these Companies to some very successful Companies of the same vintage and ried to bring out the reasons for success of the above Companies Vis a Vis the Comparison Companies. Most the Comparison Compaines were also very successful Companies but did not quite make the cut either because thet they did not succeed in the long run or had disappared , being sold out etc or have been left way behind by the Visionary Companies over the long haul.
Some of the key attributes they found are
Almost all these Companies had a core ideology which keep getting talked of day in day out internally and the actions of the Company are aligned to such Core ideology.The Core ideologies vary from Company to Company ,ranging from Customer focus, in the case of Norstrom, alleviating human diseases in the case of Merck, Technolgy driver products to make life easy for mankind and also remove the notion of bad quality associated with Jaanese products in the case of Sony,high technology based products and value for employees in the case of HP and so on.
There is evidence of what the authors call as BHAG s( Big Hairy audacious goals) which in simple terms traslates to betting your last rupee or dollar on some huge innovation and earth shaking project.They look for such path breaking products/p[rocesses on these lines repeatedly. This of course by their own admission has a huge downside. Some of the Companies that try this out could go down in the process. Risk factor is high. For every successful Company that has survived and come out successfully out of a gamble on such huge project , they themselves admit that there would be atleast 3 times the number of Companies that would have failed.They consider this as a test for greatness.It is a choice between a grand gamble in line with your core ideology and consequent huge beenfits as against an average growth on less risky projects. This is one point, I am not sure that I agree with the authors. On the one hand they talk of Built to last and in the current day context when we talk of Risk management etc, betting your last rupee/dollar does not quite cut ice. Of course repetitive risks on new technology etc of a certain quantum which does not bring in to question the very survival of the Company is definitey needed to retain the cutting edge.The broad concept of need for risk taking and path breaking attempts is definitely laudable but betting your last rupee/dollar does not quite sound right.
The authors talk of certain cultism.They are looking at creation of an intense sense of loyalty and dedication to influence the behaviour of those inside the Company to be consistent with the Company’s ideology.This takes various forms, including training , orientation programs,on the job ideological socialisation within the Company, making pledges ,corporate songs etc.The authors are also looking at a certain sense of elitism , that is some kind of a pride in belonging to the Company which is something special and superior, calling themselves Motorolans,Nordies etc.
Next major point the authors talk of is evidence of purposeful evolution to stimulate progress.They have in fact borrowed freely from Charles Darwin’s concept of evolution and survival of the fittest. They are looking at Companies which try out various things and settling down to the ones which have the highest success and dropping the ones which turn out to be failures . The authors look at Operational autonomy as one of the constituents of variations being tried out and follow up with selection of the best product/process/people. Of course they are also looking at various methods which foster creativity,new ideas, etc.
Another factor the authors have looked at is the Management continuity. They looked at Internal versus External CEO s. They look at this more as a test to see whether the Company has well developed formal management development programs, careful succession planning etc.This could be quite vital when one looks at the other factors like Core ideology, cultism etc. This can come about only when you have an internal candidate slipping in to leadership roles.
Another critical factor the authors have looked at is the evidence of self improvement. What the authors are trying to bring out is whether the management invests sufficienlty for the future in R & D, people, new technoligies etc to have a built in improvement mechanism. One interesting point that the authors make is the fact that there has to be at all times elements of discomfort that impel change and improvement before the external environment forces the same.
The authors have laid a great emphasis on the fact that none of the Visionary companies had Profit as the core ideology. It was one of the requirements but never the goal of the organisation. These Organisations all realised that Profit was necessary to achieve their main objective of say alleviating pain from diseases to the human race ( Merck ) etc.That is very interesting .They establish with figures that in almost all the visionary Companies , the financial results/ prifts have been consistently higher in the longer run notwithstanding the fact that profit was not their primary motive or a core ideology.
One thing which may add a new dimension is to look at evidence of these factors in some of the failed Companies. It is quite possible a few of the failed Companies also did possess quite a lot of the above ingredients but failed may be due to absence of one of the key ones.That may be worth the research .
On the whole a very interesting and useful book. The book also by and large has stood the test of time considering the fact that Management theories have been more fads for the month /year and have been written , rewritten etc.Somewhere down the line the authors also bring out the fact that what works for one Company does not necessarily work for another. They have laid great emphasis on the activities of the Company being aligned to the core ideology at all times. They mention this as a kind of universal concept.
They have done a huge amount of research and have deployed a fairly large team.
The authors have summarised the books very nicely to refresh the concepts and drill in again and again unlike some authors who skim over points never to revisit again.
Companies which have made the cut are as follows
1.3M
2.American express
3.Boeing
4.Citicorp
5.Ford
6.GE
7.HP
8.IBM
9.Johnson& Johnson
10.Marriott
11.Merck
12.Motorola
13.Nordstrom
14.Philip Morris
15.Procter & Gamble
16.Sony
17.Wal mart
18.Walt disney
The authors have Compared these Companies to some very successful Companies of the same vintage and ried to bring out the reasons for success of the above Companies Vis a Vis the Comparison Companies. Most the Comparison Compaines were also very successful Companies but did not quite make the cut either because thet they did not succeed in the long run or had disappared , being sold out etc or have been left way behind by the Visionary Companies over the long haul.
Some of the key attributes they found are
Almost all these Companies had a core ideology which keep getting talked of day in day out internally and the actions of the Company are aligned to such Core ideology.The Core ideologies vary from Company to Company ,ranging from Customer focus, in the case of Norstrom, alleviating human diseases in the case of Merck, Technolgy driver products to make life easy for mankind and also remove the notion of bad quality associated with Jaanese products in the case of Sony,high technology based products and value for employees in the case of HP and so on.
There is evidence of what the authors call as BHAG s( Big Hairy audacious goals) which in simple terms traslates to betting your last rupee or dollar on some huge innovation and earth shaking project.They look for such path breaking products/p[rocesses on these lines repeatedly. This of course by their own admission has a huge downside. Some of the Companies that try this out could go down in the process. Risk factor is high. For every successful Company that has survived and come out successfully out of a gamble on such huge project , they themselves admit that there would be atleast 3 times the number of Companies that would have failed.They consider this as a test for greatness.It is a choice between a grand gamble in line with your core ideology and consequent huge beenfits as against an average growth on less risky projects. This is one point, I am not sure that I agree with the authors. On the one hand they talk of Built to last and in the current day context when we talk of Risk management etc, betting your last rupee/dollar does not quite cut ice. Of course repetitive risks on new technology etc of a certain quantum which does not bring in to question the very survival of the Company is definitey needed to retain the cutting edge.The broad concept of need for risk taking and path breaking attempts is definitely laudable but betting your last rupee/dollar does not quite sound right.
The authors talk of certain cultism.They are looking at creation of an intense sense of loyalty and dedication to influence the behaviour of those inside the Company to be consistent with the Company’s ideology.This takes various forms, including training , orientation programs,on the job ideological socialisation within the Company, making pledges ,corporate songs etc.The authors are also looking at a certain sense of elitism , that is some kind of a pride in belonging to the Company which is something special and superior, calling themselves Motorolans,Nordies etc.
Next major point the authors talk of is evidence of purposeful evolution to stimulate progress.They have in fact borrowed freely from Charles Darwin’s concept of evolution and survival of the fittest. They are looking at Companies which try out various things and settling down to the ones which have the highest success and dropping the ones which turn out to be failures . The authors look at Operational autonomy as one of the constituents of variations being tried out and follow up with selection of the best product/process/people. Of course they are also looking at various methods which foster creativity,new ideas, etc.
Another factor the authors have looked at is the Management continuity. They looked at Internal versus External CEO s. They look at this more as a test to see whether the Company has well developed formal management development programs, careful succession planning etc.This could be quite vital when one looks at the other factors like Core ideology, cultism etc. This can come about only when you have an internal candidate slipping in to leadership roles.
Another critical factor the authors have looked at is the evidence of self improvement. What the authors are trying to bring out is whether the management invests sufficienlty for the future in R & D, people, new technoligies etc to have a built in improvement mechanism. One interesting point that the authors make is the fact that there has to be at all times elements of discomfort that impel change and improvement before the external environment forces the same.
The authors have laid a great emphasis on the fact that none of the Visionary companies had Profit as the core ideology. It was one of the requirements but never the goal of the organisation. These Organisations all realised that Profit was necessary to achieve their main objective of say alleviating pain from diseases to the human race ( Merck ) etc.That is very interesting .They establish with figures that in almost all the visionary Companies , the financial results/ prifts have been consistently higher in the longer run notwithstanding the fact that profit was not their primary motive or a core ideology.
One thing which may add a new dimension is to look at evidence of these factors in some of the failed Companies. It is quite possible a few of the failed Companies also did possess quite a lot of the above ingredients but failed may be due to absence of one of the key ones.That may be worth the research .
On the whole a very interesting and useful book. The book also by and large has stood the test of time considering the fact that Management theories have been more fads for the month /year and have been written , rewritten etc.Somewhere down the line the authors also bring out the fact that what works for one Company does not necessarily work for another. They have laid great emphasis on the activities of the Company being aligned to the core ideology at all times. They mention this as a kind of universal concept.
They have done a huge amount of research and have deployed a fairly large team.
The authors have summarised the books very nicely to refresh the concepts and drill in again and again unlike some authors who skim over points never to revisit again.
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