Transcript www.bomaneantwi.com

6/13/2012
WHAT GREAT COMPANIES DO
DIFFERENT
THE PLAIN TRUTH
(FROM EMPIRICAL RESEARCH EVIDENCE
ACROSS THE ATLANTIC)
CHAIRMAN:
BOARD OF GOVERNORS OF GRADUATE
SCHOOL OF GOVERNANCE AND LEADERSHIP.
K. B. OMANE
VICE RECTOR/DEAN :
PENTECOST UNIVERSITY COLLEGE.
6/13/2012
RESOURCE PERSON:
PROF. KWAME BOSIAKO OMANE-ANTWI
VICE PRESIDENT:
INSTITUTE OF CHARTERED ACCOUNTANTS,
GHANA.
2
JUNE 27, 2012.
RLG
ZOOMLION GHANA LTD
TOBINCO
K. B. OMANE
UT BANK
Watch the
leadership
style
and the
operational
energy
6/13/2012
21ST CENTURY SMART
COMPANIES IN GHANA
3
K. B. OMANE
• Great businesses have attributes that
are easy to identify but hard to
assemble
• They have an experienced, energetic
management team from the top to the
bottom.
• The team’s members have skills and
experience directly relevant to the
opportunity they are pursuing
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PART I : INTRODUCTION
4
K. B. OMANE
• Ideally, they would have worked
successfully together in the past.
• The opportunity they are pursuing has
an attractive, sustainable business
model; it is possible to create a
competitive edge and defend it.
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INTRODUCTION- Cont’d
5
Determination
Passion
Flexibility
Innovation
Self-confidence
Dedication
Vision
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Creativity
6/13/2012
• The team members have some unique personal
attributes
6
MEET THE PRACTITIONERS
 Peter
Druker
(1909-2005)
describes
entrepreneurs as “ someone who actually searches
for change, responds to it, and exploits change as an
opportunity”
Ted Turner, founder of CNN describes these
personality attributes better in what I can
conveniently refer to as the gospel according to Ted
Turner: “We won’t be signing-off until the world
ends. We’ll be on, and we will cover the end of the
world, live, and that will be our last event. We’ll play
‘Nearer My God, to Thee’ before we sign off”
K. B. OMANE
ideas and lots of enthusiasm.”
Bill Gates, founder of Microsoft Corporation
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“we were young but we had good advice and good
7
THE INNOVATION, CREATIVITY AND
CHANGE FACTORS
K. B. OMANE
and creativity are simply the
learning perspectives, which conitnues
to improve and create future value .
Again, change, creativity and innovation
are about learning
new things to
improve and create future value for your
business as an entrepreneur” (Prof.
Kwame Bosiako Omane-Antwi, 2012)
6/13/2012
“Innovation
8
ENTREPRENEURIAL SUCCESS PANACEA MODEL
Team Work
(Servant
Leader)
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Mission
(Action/
Strategy)
Entrepreneurial
Success panacea
Finance
(Cash is
King)
K. B. OMANE
Monitoring
(Reporting/Feed
back)
Vision
(Dream)
Leadership
(Character)
Motivation
(Determination)
Inspiration
(Passion)
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THE OPPORTUNITY PROFILE OF THE BUSINESS-
K. B. OMANE
THE PEOPLE- without the Right Team, none of the other
parts of a business really matters
SMART PEOPLE- SMARTS
Common sense joined with basic knowledge/ experience
in a related business and endeavor.
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FOUR KEY VARIABLES TO WATCH
AND MANAGE
 what it will sell and to whom
Whether the business can grow and how fast
What its economies are and
Who and what stands in the way of success.
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THE CONTEXT- THE BIG PICTURE
Regulatory environment
Interest rates
Demographic trends
Inflation
Plus all other factors that inevitably
change but cannot be controlled by
the company
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VARIABLES TO WATCH AND
MANAGE
11
K. B. OMANE
RISK AND REWARD
Assessment of everything that can go
wrong and right and how the company can
respond.
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VARIABLES TO WATCH AND
MANAGE- Cont’d
12
WORDS ASSOCIATED WITH GOOD
ENTERPRISE GOVERNANCE
Effectiveness
Accountability
Value for Money
K. B. OMANE
6/13/2012
Efficiency
Transparency
Success
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ENTERPRISE GOVERNANCE FRAMEWORK
Accountability
Assurance
Business
Governance
i.e. Performance
Value Creation
Resource
utilization
Source: CIMA, UK (2004)
K. B. OMANE
Corporate
Governance
i.e. Conformance
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ENTERPRISE GOVERNANCE
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SUCCESSFUL ENTERPRISE
ATTRIBUTES
Efficient, Effective Labour Force
K. B. OMANE
Good Citizenship
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Growth
Reliability
Customer Satisfaction
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Returns
Quality & Price
Reward & Job Satisfaction
Safety, Obey Rules & Regulations
Good Payers
Liquidity & Profitability
Pay the Right Taxes
CSR
Will produce your “TRIAL BALANCE”
K. B. OMANE
Shareholders (Equity)
Customers
Employees
Regulators
Suppliers
Bankers / Financiers
Revenue Authorities
Community
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ENTERPRISE STAKEHOLDERS- BUILDING
YOUR TRIAL BALANCE
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K. B. OMANE
6/13/2012
THE CORPORATE GOVERNANCE CHARTER
MODEL
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Source: Kiel and Nicholson (2003)
KEY PERFORMANCE INDICATORS
Attention to customers
Motivating employees
Managing product quality
Strengthening team orientation
Learning from failure
Optimizing inventory
Shortening pro-dev cycle
Indicators
Customer satisfaction
Employee productivity
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Value
Drivers
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Value
Creation
Defect rate
Return on Invested Capital
Employee turnover
Working capital/revenues
Time from patent to product
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-Results beyond past year
-Results beyond your previous
best
-Results beyond the competition
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GOVERNANCE IS ABOUT RESULTS
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DRIVERS OF SUSTAINABILITY
Corporate and
business unit
strategy
• Work force diversity
• Environmental impacts
• Bribery/corruption
• Community involvement
• Ethical sourcing
• Human rights
• Product safety
• Product usefulness
Stakeholders
reaction
• Employees
• Community
• Customer
• Government
• Investors
• Financial
analysts
Long term
corporate
financial
performanc
e
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Sustainability performance
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Sustainability actions
(Strategy, plans & programmes, structure and
systems)
Corporate Cost – Benefit of action
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Source: Epstein and Roy (2001)
Feedback
Increase in Assets
Growth
Profitability
Success
Liabilities of Defined Liabilities
Non satisfying stakeholders
Interest i.e. Communities,
stakeholders, employees,
etc.
K. B. OMANE
6/13/2012
Acceptable Balance Sheet
21
Challenges when striving for acceptable Balance Sheet
What is needed
•Clashes with politicians and
associates
•Strong values/Principles
•Not being with the “crowd”
•Strength to withstand temptations
•Upholding utmost
professionalism
•Possible loss of position
•Integrity
•Non acceptance of mediocrity
K. B. OMANE
6/13/2012
Challenges
•Have God on your side
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TAXANOMY OF BUSINESS RISKS
(ENTERPRISE-WIDE RISKS)
PEOPLE RISK
PROCESS RISK
SYSTEM RISK
FINANCIAL
RISK
NON FINANCIAL
RISK
• Fraud
• Financial
• Credit risk
• Political risk
• Human error
process &
control
• Data
Security
• Market risk
• Competitor
risk
• Health & Safety
• Employment
Law
• Training &
empowerment
• Customer
Relationship
Management
• Project
Management
• Supply Chain
Management
• Data
integrity
• System
performance
• Liquidity risk
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External Risk
K. B. OMANE
Internal Risk
• Socioeconomic risks
• External fraud
• Capacity
planning
• Change
Management
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K. B. OMANE
• Due care should be given to Board selection
and succession
• Board members’ skills, expertise and
experience should complement one another
• The performance of individual directors
needs regular monitoring an ongoing
development
• Once the structure is right, the board must
work through a series of further
developmental stages.
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BUILDING A BETTER BOARD
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K. B. OMANE
6/13/2012
BOARDROOM LEADERSHIP SKILLS
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Seven competencies for strengthening resilience at the board level
(Source: People Management, October 2011)
A FRAMEWORK FOR CLASSIFYING
MANAGEMENT APPROACHES
Local Actions
Optimizing the
box
Analysis Techniques
Measuring the box
Learning
organization
Times
JIT
Quality
TQM
Worker-based actions
• Employee involvement
• Continuous improvement
• Performance measures
Strategic cost
management
Cost
ABM
Task-based actions
• Concurrent engineering
• Plant layout
• Statistical process control
Analysis techniques
• Value-chain analysis
• Benchmarking
• Activity-based costing
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Strategic Initiatives
Redefining the box
Business
process
reengineering
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Global Perspective
Thinking outside the
box
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VALUE CHAIN: A STRATEGIC DECISION
Marketing
Sales
Profit
Target
markets
K. B. OMANE
Firm infrastructure:
Systems, accounting and finance, logistics
procurement, and human resources
6/13/2012
External environment:
Political, social, economic
Production Distribution After-sales
services
Vendors
Competition
27
THE DIAGNOSTIC FRAMEWORK
Structure
Results
People
Processes
K. B. OMANE
6/13/2012
Business
Strategy
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DIFFERENT TOOLS FOR DIFFERENT PURPOSES
Structure
Processes
Total quality
management

Business process
reengineering

Benchmarking

Value-chain
analysis

Visioning






Self-directed
Work teams
People
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Strategy

Mission
statement

Empowerment

Scenario models

K. B. OMANE
Tool
29
PERFORMANCE MANAGEMENT
FRAMEWORK (PMF)
Organization/strategic
• Objectives and goals
• Resources
Performer/performer team
• Objectives and goals
• Resources
Performance
Process maps
“is”/”should”
Cost
Function
• Objectives and goals
• Resources
Quality
Process
• Objectives and goals
• Resources
Activity-based
costing/budgeting
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Consumer
Employee
Regulators
Owners
Investors
Organization plan
Time
•
•
•
•
•
Strategic plan
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Stakeholder needs
Operating plan
Benchmarks
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GROWTH
MANAGER
Disposable profit
Tax
TAX MANAGER
Profit
Pricing
Expenses
VALUE ADD
MANAGER
Capacity
Customer
Requirements
ASSET
MANAGER
6/13/2012
Dividends &
equity repayment
FINANCIAL
EXPRESSION
OF KEY BUSINESS
DECISION
STEPS
K. B. OMANE
Reinvestment
Resources
Borrowings
FUNDING
MANAGER
Owner’s investment
Potential
demand
Business Plan
IDEA
31
NON-FINANCE CONSIDERATION IN BUSINESS MANAGEMENT
TAX
MANAGEMENT
Customer’s
perspective
VALUE ADD
MANAGEMENT
Employee’s
perspective
ASSET
MANAGEMENT
Community
perspective
Supplier’s
perspective
6/13/2012
GROWTH
MANAGEMENT
K. B. OMANE
Innovation
and learning
perspective
Investor’s
perspective
FUNDING
MANAGEMENT
32
PERFORMANCE: THE BALANCE SCORECARD
Financial perspective
Internal business
processes
Customer perspective
•
•
•
•
Client profitability
Supplier cross-selling
Customer satisfaction
Territorial market share
Vision
&
Goals
•
•
•
•
•
Quality review
Staff review
Sales activity
Cost monitoring
Incentive scheme
monitoring
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Significant shareholders
Share price volatility
Relative performance
External published accounts
Public announcement
tracking
• Group financial status
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•
•
•
•
•
Innovation and learning
• Research and development
initiatives
• IT performance review
• Staff development
• Internal strategy
N/B: The scorecard provides the cornerstone of a strategic management system
33
6/13/2012
K. B. OMANE
GETTING BEYOND COUNTING
Where is the company going?
Is it optimizing its potential for profit?
Is it cash position adequate to support
the current business trend?
What are the most pressing problems?
What opportunities might we be able
to take advantage of?
What are the areas for improvement
with a high return?
34
K. B. OMANE
Are there areas that expose the company to
excessive risk?
Is there adequate information to assess
individual performance and support a
corresponding reward system?
Is the information system providing an
acceptable level of detail and timeliness to all
levels of management?
Does the company overmanage cost and
undermanage sales or vice versa?
6/13/2012
GETTING BEYOND COUNTING- Cont’d
35
PART II
THE CHANGE PROCESS
Transition
Refreeze
Disconfirm
present
State
Provide
guidance,
Confidence,
and trust
Confirm the
desired state
K. B. OMANE
6/13/2012
Unfreeze
Promote
movement
away form
current
behaviors
Encourage
movement
Promote
acceptance of
new behaviors
36
TODAY
Expectation of
cost, quantity and
timeliness
TOMORROW
Demanding
value &
involvement
K. B. OMANE
YESTERDAY
Recipients of
product and
services
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THE CUSTOMER IS CHANGING
37
THE OFFERING IS CHANGING
YESTERDAY
Value adding
K. B. OMANE
6/13/2012
Commodity/Manufac
turing-based
TOMORROW
TODAY
Knowledge-based
solution
38
THE ORGANIZATION IS CHANGING
Functional
Extended value
chain
TOMORROW
Global
Network
6/13/2012
TODAY
Customer focus
K. B. OMANE
YESTERDAY
Internal focus
39
TODAY
Managing extended
Value chain
TOMORROW
Developing
Value Networks
K. B. OMANE
YESTERDAY
Manufacturing/
Product cycle
6/13/2012
LEADERSHIP FOCUS IS
CHANGING
40
OUTCOMES (PERFORMANCE
MEASUREMENTS) ARE CHANGING
TOMORROW
Sustainable growth
Developments
Intellectual capital
The future as an Asset
6/13/2012
Profit and loss
TODAY
K. B. OMANE
YESTERDAY
Focus on financials/
41
LEADERSHIP IS CHANGING
Vocationally-based
Action learning, speed
Learning enterprises
TOMORROW
Value web
Competencies
Intellectual capital
A key resource
6/13/2012
Teachers/classroom
TODAY
Strategically driven
K. B. OMANE
YESTERDAY
Individual focus
42
“Turning the future itself into an asset.”
K. B. OMANE
Customer
Relationship
Value
Creation
6/13/2012
DEVELOPING ORGANIZATIONAL CAPABILITY
Core
Competencies
Learning
Competence
Centers
43
THE CHALLENGE FOR LEADERS
For Companies:
• Sustainable growth, renewal and development
For Employees:
• The development of intellectual capital as a key
resource
K. B. OMANE
• Comprehensive value-adding packages offered
seamlessly, globally
6/13/2012
For customers:
44
K. B. OMANE
• Planning
- to meet market trends
• Action
- to develop the organizational & operation
capability to achieve world class performance
• Speed
- to outstrip competitors
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Leaders must have the
capability for…
45
Organizational,
Team & Employee
capability
• Roles
• Comparison
• Behaviours
• Culture
Customer driven &
Aligned
• Offering
• Product &Service
• Value Proposition
Operational & Process
Capability
Aligning Business & People
Processes to achieve
Strategy/Measures
K. B. OMANE
Planning
Strategy, Vision
Mission,
Structure
6/13/2012
High Performance Organizations
46
Adapting to the turbulence: from the WHAT to the HOW
Environment is
unstable
operate
Condition the organization for
the future
Score card:
WHAT have
we
done?
Budgets:
WHAT will
we do?
Contingent
planning:
WHAT
will we do IF?
Surprise
management:
HOW do we organize
to be reactive,
innovative and
able to operate IF?
6/13/2012
Continuum of turbulence
K. B. OMANE
Effectiveness of the system
stable
47
K. B. OMANE
1. Establish a sense of urgency
Examine market realities identify crisis
2. Form a Powerful Guiding Coalition
someone in the group with enough power to
lead the change effort.
3. Create a vision
Easier said than done
4. Communicate the vision
use every possible vehicle, teach new
behaviors.
6/13/2012
THE EIGHT STEPS TO TRANSFORM
THE ORGANIZATION
48
K. B. OMANE
5. Empower others to act on the vision
get rid of obstacles, change systems instructions, and
encourage risk taking.
6. Plan for and Create Short-Term Wins
plan visible performance improvements, create those
improvements.
7. Consolidate Improvements and Produce Even
More Change
Using the increased credibility to change system
structures and policies that don’t fit the vision. Hire,
promote, and develop employees who can implement the
vision.
6/13/2012
THE EIGHT STEPS TO TRANSFORM THE
ORGANIZATION – Cont’d
49
THE EIGHT STEPS TO TRANSFORM
THE ORGANIZATION – Cont’d
between
new
K. B. OMANE
Articulate the connections
behaviors and success.
6/13/2012
8. Institutionalize New Approaches
50
K. B. OMANE
a.Align with the strategy of
the business
b.Clearly linked to the
business objectives; and
c.Practical and measurable
6/13/2012
THE FINANCIAL STRATEGY SHOULD BE:
51
K. B. OMANE
a.Strong commercial ‘acumen’
b.Good analytical skills
c. Effective interpersonal skills
d.A consultative approach; and
e.An excellent coaching ability
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THE PROFESSIONAL STAFF WILL NEED:
52
K. B. OMANE
a.Focused on adding value
b.Integrate with other business
processes
c. Automated where it is cost
effective to do so; and
d.Efficiency and effectiveness
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THE FINANCE PROCESSES SHOULD BE:
53
K. B. OMANE
a. Being flexible
b. Using emerging technologies where
appropriate
c. Being integrated across the business
d. Reflecting user’s requirement
e. Having controls embedded within them;
and
f. Enabling, rather than constraining
6/13/2012
THE FINANCIAL SYSTEMS SHOULD
SUPPORT THE CHANGE BY:
54
K. B. OMANE
a. Be forward looking rather than
backward looking
b. Appreciate value, rather than cost
c. Encourage openness and the
sharing of best practices; and
d. Encourage
partnership
with
business
6/13/2012
THE FINANCE CULTURE SHOULD:
55
K. B. OMANE
6/13/2012
PART III
56
K. B. OMANE
• Exploit before you explore.
• Diversify your business
portfolio.
• Remember your mistakes.
• Be conservative about change.
6/13/2012
FOUR PRINCIPLES OF
ENDURING SUCCESS
57
K. B. OMANE
• To measure exploration, Stadler used
R&D spending as a percentage of sales
and patents issued as a percentage of
sales. For exploitation, he used return on
equity, return on sales, and return on
investment.
• Though they did not neglect exploration,
as a strategy the winners consistently
preferred
exploitation efforts to
exploration initiatives.
6/13/2012
EXPLOIT BEFORE YOU EXPLORE
58
K. B. OMANE
• Companies can compensate for insufficient
exploration capabilities by being more
efficient exploiters. But they are not able,
over the long run, to make up for a lack of
exploitation capabilities through better
exploration.
• In other words, great companies don’t only
innovate. They grow by efficiently exploiting
the fullest potential of existing innovations.
6/13/2012
EXPLOIT BEFORE YOU EXPLORECONT’D
59
K. B. OMANE
• Few people today would dispute that
conglomeration is a poor strategy. But
firms fo cusing on a single business or
set of capabilities too do not seem
much better when viewed from a longterm perspective.
• Single-business companies perform
very well in the short run, but over
several decades, a different picture
emerges.
6/13/2012
DIVERSIFY YOUR BUSINESS
PORTFOLIO
60
K. B. OMANE
• Many of the single-business firms
simply cease to exist. Once their
primary offering reaches the end of its
life span, the only possible next steps
are decline, merger, or sale.
• Which is why great companies are as
suspicious of focusing too narrowly as
they are careful about diversifying.
6/13/2012
DIVERSIFY YOUR BUSINESS PORTFOLIO
CONT’D
61
K. B. OMANE
• What really separates the great
companies from the good ones is
that the great companies also
remember their mistakes.
• They take learning from mistakes
very seriously, taking care not to
make the same mistake again.
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REMEMBER YOUR MISTAKES
62
K. B. OMANE
• Great companies go through radical
change only at very selective moments
in their history.
• Jumping onto every new management
wave is not for them.
• These companies use their core values
and principles as guidelines and
approach change in a culturally
sensitive manner that requires patience
to work through.
6/13/2012
BE CONSERVATIVE ABOUT CHANGE
63
K. B. OMANE
Jim Collins makes some pertinent observations,
in his book, based on extensive research:
• Larger-than-life, celebrity leaders who ride in
from the outside are negatively correlated
with taking a company from good to great.
• The good-to-great companies do not focus
principally on what to do to become great.
They focus equally on what not to do and
what to stop doing.
6/13/2012
GOOD TO GREAT
64
K. B. OMANE
• Technology and technology-driven change
have virtually nothing to do with the
transformation from good to great.
Technology
can
accelerate
a
transformation, but cannot cause a
transformation.
• Mergers and acquisitions play virtually no
role in igniting a transformation from good
to great. Two big mediocre entities joined
together never make one great company.
6/13/2012
GOOD TO GREAT- CONT’D
65
K. B. OMANE
• The good-to-great companies pay scant
attention
to
managing
change,
motivating
people,
or
creating
alignment. They create the right
conditions so that the problems of
commitment, alignment, motivation,
and change do not have to be dealt
with separately.
6/13/2012
GOOD TO GREAT- CONT’D
66
K. B. OMANE
• The good-to-great companies have no
name, tag line, launch event, or program to
signify their transformations. Indeed, some
were unaware of the magnitude of the
transformation at the time.
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GOOD TO GREAT- CONT’D
Only later, in retrospect, did it become clear.
They produced a truly revolutionary leap in
results, but not by a revolutionary process.
67
K. B. OMANE
• The good-to-great companies are not, by and
large, in inherently attractive industries. In
fact, some are in terrible industries.
Greatness is not a function of circumstances.
Greatness, is largely a matter of conscious
choice.
• Compared to high-profile leaders with big
personalities who make headlines and
become celebrities, the good-to-great leaders
are self-effacing, quiet, reserved, even shy.
These leaders are a paradoxical blend of
personal humility and professional will.
6/13/2012
GOOD TO GREAT- CONT’D
68
K. B. OMANE
• Good-to-great leaders first get the right
people on the bus, the wrong people off the
bus, and the right people in the right seats.
Then they figure out where to drive it.
• Every good-to-great company embraces
unwavering faith that it will succeed,
regardless of the difficulties. At the same
time, such companies have the discipline to
confront
the
hard
reality,
however
unpleasant it might be.
6/13/2012
GOOD TO GREAT- CONT’D
69
• All companies have a culture, some companies have
discipline, but few companies have a culture of
discipline. When there is
discipline, hierarchy,
bureaucracy and excessive controls are not needed. A
culture of discipline combined with entrepreneurship,
leads to great performance.
K. B. OMANE
• Going from good to great implies a better understanding
of competence. Just because something is a company’s
core business, or because it has been doing it for years
does not necessarily mean it can be the best in the
world at it. And if it cannot be the best in the world in
its core business, then its core business cannot form the
basis of a great company.
6/13/2012
GOOD TO GREAT- CONT’D
70
6/13/2012
K. B. OMANE
LET US EXAMINE SOME OF
THESE POINTS IN A LITTLE
MORE DETAIL
71
K. B. OMANE
• Compared to high-profile leaders with
big personalities who make headlines
and become celebrities, the good-togreat leaders seem to have come from
Mars.
Self-effacing, quiet, reserved, even shy –
these leaders are a paradoxical blend of
personal humility and professional will.
They are more like Lincoln and Socrates
than Patton or Caesar.
6/13/2012
Level 5 Leadership
72
K. B. OMANE
• Good-to-great leaders first got the
right people on the bus, the wrong
people off the bus, and the right
people in the right seats – and
then they figured out where to
drive it.
6/13/2012
First who… Then What.
73
K. B. OMANE
Good-to-great
companies
embrace
the
Stockdale Paradox.
They maintain unwavering faith that they can
and will prevail in the end, regardless of the
difficulties,
AND
at the same time have the discipline to
confront the most brutal facts of their
current reality, whatever they might be.
6/13/2012
Confront the Brutal Facts
(Yet Never Lose Faith)
74
K. B. OMANE
To go from good to great requires transcending the
curse of competence. Just because something is a
core business – just because the company has
been doing it for years or perhaps even decades –
does not necessarily mean the company can be
the best in the world at it.
And if the company cannot be the best in the
world at its core business it absolutely cannot
from the basis of a great company.
It must be replaced with a simple concept that
reflects deep understanding of three intersecting
circles.
6/13/2012
The Hedgehog Concept (Simplicity
within the Three Circles)
75
When there is
disciplined thought,
bureaucracy is not needed. Disciplined action
obviates the need for excessive controls.
A culture of discipline combined with
entrepreneurship leads to great performance
K. B. OMANE
All companies have a culture, some
companies have discipline, but few
companies have a culture of discipline.
When a company has disciplined people, it
does not need hierarchy.
6/13/2012
A Culture of Discipline
76
Yet, paradoxically, they are pioneers in the
application of carefully selected technologies.
K. B. OMANE
Good-to-great companies think differently
about the role of technology. They never use
technology as the primary means of igniting a
transformation.
6/13/2012
Technology Accelerators
77
K. B. OMANE
Those who launch revolutions, dramatic change
programs, and wrenching restructuring are unlikely
to succeed.
No matter how dramatic the end result, the good-togreat transformations never happened in one fell
swoop.
There was no single defining action, no grand
program, no one killer innovation, no solitary lucky
break, no miracle moment.
Rather, the process resembled relentlessly pushing a
giant heavy flywheel in one direction, turn upon
turn, building momentum until a point of
breakthrough, and beyond.
6/13/2012
The Flywheel and the Doom Loop
78
Built to last
K. B. OMANE
According to Collins, the Good-to-Great ideas
lay the groundwork for the ultimate success
of the Built to Last ideas.
• Good-to-Great provides the core ideas for
getting a flywheel turning from build up
through breakthrough, while Built to Last
outlines the core ideas for keeping a flywheel
accelerating long into the future and
elevating a company to iconic stature.
6/13/2012
By Collins and Porras
79
K. B. OMANE
• Each of the Good-to-Great findings
enables all four of the key ideas from
Built-to-Last. Those four key ideas are:
• Clock Building, Not Time Telling.
Building an organization that can
endure and adapt through multiple
generation of leaders and multiple
product life cycles; as opposed to
being built around a single great leader
or a single great idea.
6/13/2012
Built to last –Cont’d
80
K. B. OMANE
• Genius of AND. Embracing both extremes on a
number of dimensions at the same time.
Instead of choosing A or B, the built to last
companies figure out how to have A and B –
purpose and profit, continuity and change,
freedom and responsibility, etc.
• Core Ideology. Instilling core values and core
purpose as principles to guide decisions and to
inspire people throughout the organization over
a long period of time.
6/13/2012
Built to last –Cont’d
81
Built to last –Cont’d
K. B. OMANE
Preserving the core ideology as an
anchor point while stimulating change,
improvement, innovation, and renewal in
everything else. Change practices and
strategies while holding core values and
purpose fixed. Set and achieve Bhags
consistent with the core ideology.
6/13/2012
Preserve the Core/Stimulate Progress.
82
K. B. OMANE
• Peters & Waterman identified eight
attributes that characterised excellent,
innovative companies:
• A bias for action. These companies like
to get on with it. Even though these
companies may
be analytical in their
approach to decision making, they are not
paralyzed by endless analysis. In many of
these companies the standard operating
procedure is ”Do it, fix it, try it.“
6/13/2012
The 8 attributes of excellent
companies
83
K. B. OMANE
• Close to the customer. These companies
learn from the people they serve. They
provide unparalleled quality, service, and
reliability – things that work and last.
• Autonomy and entrepreneurship. These
companies foster many leaders and many
innovators throughout the organization. They
don’t try to hold everyone on so short a rein
that they can’t be creative. They encourage
practical risk taking, and support good hires.
6/13/2012
The 8 attributes of excellent
companies- Cont’d
84
K. B. OMANE
• Productivity through people. The
excellent companies treat the rank and
file as the root source of quality and
productivity gain. They do not regard
capital investment as the fundamental
source of efficiency improvement.
• Hands-on value driven. CEOs walk
the plant floors and regularly visit retail
outlets and assess them on the factors
the company holds dear.
6/13/2012
The 8 attributes of excellent
companies- Cont’d
85
K. B. OMANE
• Stick to the knitting. While there
were a few exceptions, the odds for
excellent performance seem strong to
favour those companies that stayed
reasonably close to businesses they
know.
• Simple form, lean staff. The
underlying
structure,
forms
and
systems in the excellent companies are
elegantly simple. Top-level staffs are
lean.
6/13/2012
The 8 attributes of excellent
companies- Cont’d
86
K. B. OMANE
• Simultaneous loose-tight
properties. The excellent companies
are both centralized and decentralized.
Even as they push autonomy down to
the shop floor or product development
team, they are fanatic centralists
around the few core values they hold
dear.
6/13/2012
The 8 attributes of excellent
companies- Cont’d
87
K. B. OMANE
The trap of overwhelming
demands
The trap of unbearable
constraints.
The trap of unexplored choices.
6/13/2012
The Three Traps of
Nonaction
88
K. B. OMANE
Purposeful action-takers manage
their demands by:
• developing an explicit personal
agenda
• practicing slow management
• structuring contact time
• shaping demands and managing
expectations.
6/13/2012
The trap of overwhelming
demands.
89
K. B. OMANE
To unshackle themselves from this trap,
purposeful action-takers adopt
strategies like:
• Mapping relevant constraints
• Accepting trade-offs
• Selectively breaking rules
• Tolerating conflicts and ambiguity
6/13/2012
The trap of unbearable
constraints.
90
K. B. OMANE
• The third trap of non action is
unexplored choices.
• Many managers concentrate on
immediate needs and requirements.
• They do not perceive or exploit their
freedom to make choices about what
they would do and how they would do
it.
6/13/2012
The trap of unexplored choices
91
K. B. OMANE
The real challenge for most
organizations is to tap their energy
and channelize it into purposeful
action.
6/13/2012
Unleashing Organizational
Energy for Collective Action
92
K. B. OMANE
Corporations that have succeeded for long
periods in a relatively stable environment
often settle into the comfort zone.
Characterized by weak but positive emotions
such as calm and contentedness, they lack
the internal vitality, alertness, and emotional
tension necessary for initiating bold, new
strategic initiatives.
Inertia stems from the belief that they have
found the ultimate success formula.
6/13/2012
Comfort Zone
93
K. B. OMANE
• Companies in the resignation zone have the
same low-energy intensity as those in the
comfort zone.
• But these people find themselves in the grip
of weak emotions, such as frustration and
disappointment.
• Typically, they suffer from low levels of
emotional commitment, alertness, and
effort.
6/13/2012
Resignation zone
94
K. B. OMANE
• Persistent mediocrity makes people
lose their confidence in dealing with
problems or challenges.
• Believing that nothing they can do
would make any difference, they
passively resign themselves to their
fate.
• Companies in the resignation zone
believe that they are simply not good
enough to succeed.
6/13/2012
Resignation zone- Cont’d
95
K. B. OMANE
• Companies in the corrosion zone show
a high degree of energy, intense levels
of activity and emotional involvement.
• They draw that intensity from strong
emotions, such as anger, fear, or hate.
• The interplay of high energy and
destructive responses is one of the
most debilitating energy states in
which a company can find itself.
6/13/2012
Corrosion Zone
96
K. B. OMANE
• With much of the company’s energy
dedicated to internal conflicts, rumors,
micropolitics, or other destructive activities,
the effort needed to cope with fear,
suspicion, and rivalry drains people’s vitality
and stamina, leaving little left for productive
work.
6/13/2012
Corrosion Zone-Cont’d
97
K. B. OMANE
• Unlike companies in the corrosive, resignation
and comfort zones, those in the productive
zone display high emotional tension,
alertness, and activity.
• Employees work with a sense of urgency,
driven by enthusiasm, positive excitement,
joy, and pride in their work rather than anger,
fear, or internal rivalry.
• Typically, these companies strive for
challenges that surpass the routine, the
obvious, and the normal.
6/13/2012
Productive Zone
98
K. B. OMANE
• While low-energy companies look for standardization
and institutionalization, avoiding surprises and risks
whenever possible, companies in the productive zone
thrive on surprises, the excitement of the unknown,
and novel opportunities.
• A sense of urgency and alertness, allows them to
process information and mobilize resources rapidly.
• Inevitably, these organizations also have leaders who
direct their people toward shared purposes, channeling
the company’s potential by aligning its collective
perception, emotions, and activities to pursue
business-critical activities.
6/13/2012
Productive Zone- Cont’d
99
K. B. OMANE
• Companies that achieve truly radical
change have leaders who adopt one of
three approaches for focusing the
energy of their organizations and
moving them into the productive zone.
• Some adopt the slaying-the-dragon
strategy, driving their people out of the
comfort zone by focusing their emotion,
attention, and action on a crisis or a
threat to overcome.
6/13/2012
Slaying the dragon and
Winning the princess
100
K. B. OMANE
• Others pursue a winning-the princess
strategy, moving their organizations into the
productive zone by building people’s
enthusiasm
for realizing
a
specific,
motivating dream.
• A few others use a combination of these
strategies
6/13/2012
Slaying the dragon and Winning the
princess – Cont’d
101
K. B. OMANE
• There are six strategies that leaders can use
to help managers summon their will power
• Strategy 1: Help managers visualize their
intention
• Strategy 2: Prepare managers for obstacles
• Strategy 3: Encourage managers to confront
their ambivalence
• Strategy 4: Develop a climate of choice
• Strategy 5: Build a self-regulating system
• Strategy 6: Create a desire for the sea
6/13/2012
Strategies for summoning
willpower
102
K. B. OMANE
• Broad loyalty to an organization is increasingly difficult to
achieve and sustain.
• Besides, such general commitment, even if achieved,
does not necessarily lead to purposeful action on specific
tasks.
• A diffused sense of organizational loyalty often creates a
taken-for-granted kind of relationship between managers
and the company that actually dulls the edge of
execution.
• The best way leaders can build effective organizational
commitment, is through a bottom-up style that
emphasizes personal ownership and commitment to
specific initiatives and goals.
6/13/2012
Building employee loyalty
103
K. B. OMANE
In helping organizations to manage change
and the future, one factor is certain.
The pace of complexity of change will
continue relentlessly. We are living in a
period of global transformation, which is
affecting
every aspect of society and
business.
6/13/2012
CONCLUSION
104
K. B. OMANE
We need capabilities and skills to
understand global trends and establish
visions,
missions
and
performance
measures needed to set their companies
apart from their competitor. In setting
directions, ongoing learning needs to be
built into the process of:
• Reviewing market trends and establishing
the organization’s competitive position
6/13/2012
CONCLUSION – Cont’d
105
K. B. OMANE
• Understanding known and as yet unknown
customer
desires,
and
determining
the
organizations’ offerings and key value propositions
• Analyzing
competitor
performance
and
determining world-class performing measures in
their industry
• Establishing organizational performance targets
• Analyzing current organizational competencies
and capabilities, and establishing required
organizational competencies and capabilities for
the future
6/13/2012
CONCLUSION – Cont’d
106
K. B. OMANE
As part of the process, the organization will
need to build an appropriate ‘stretch’ to its
vision, mission and performance measures.
World class performance targets will need to e
established in relation to:
• Financial shareholder return
• Measures of customer profitability
• Team and employee capability and
• Intellectual capital and leadership
6/13/2012
CONCLUSION – Cont’d
107
K. B. OMANE
One fact is clear, there will be a change.
Simply, change is the enviable outcome of
progress and innovation. Innovation is the
learning perspectives, which continues to
improve and create future value. Strategyfocused change supported by action research
and learning is one way of ensuring that
organizational, team and individual capabilities
are constantly structured and developed to
meet new challenges.
6/13/2012
EPILOGUE
108
K. B. OMANE
It is insufficient to monitor strategic success
and capability merely by financial measures of
past performance. Instead a scorecard of
integrated measures- financial returns,
customer profitability, operational capability,
and intellectual capital – represent a balance
of measures for today and tomorrow. World
class performance in terms of this integrated
scorecard indicates organizational capability
for sustainable growth and renewal.
6/13/2012
EPILOGUE – Cont’d
109
Strive for acceptable sheet by upholding strong values
and ethical business principles, integrity, upholding
utmost professionalism, non-acceptance of mediocrity
and above all have God (Allah) on your side and your
company will be great and different.
K. B. OMANE
Remember that an acceptable balance sheet is
achieved by increasing assets through, profitability
and success, liabilities on the balance sheet increase
when there are non-satisfying stakeholders’ interest,
particularly that of employees, communities and
investors.
6/13/2012
EPILOGUE – Cont’d
110
THE END
THANK YOU
Prof. Kwame Boasiako
Omane-Antwi
PhD, MBA, MA, ITP (HARVARD)
AMP(OXON),FCCA,
FRSA(UK), FBI(Hon),
FIOD(UK), FIOD(GH), FCIM,
MCIPD, MIMIS
Professor of Accounting
& Vice Rector
Pentecost University
College
Sowutuom
Tel 0244-320448/0202011775
E-mail:
FACILITATOR
[email protected] KWAME BOASIAKO OMANE – ANTWI
[email protected]
111