6/23/2020 Welcome (back) • You’ve watched intro • VUCA, change, friction/confusion/underperformance • Sustainable competitive advantages are difficult • You’ve practiced in the simulation • Team quiz scores • Team Liaisons introduce teams: Mark, Tim, Mike, Ryan, Paul • Name, tagline, executive team • Show portal • Discuss “rules” 1 Suggested (virtual) rules … • We will start on time (we will end on time) • Mute/unmute as needed • Keep camera on as much as possible • Stand up and stretch frequently (feel free to turn off video) • Got questions? • Send in chat message to everyone & wait, or • Unmut e and say “question” & wait • For help outside of this room, text Max @ 312-757-0908 (& wait) • In catastrophic failure (or Zoom bomb), look for email 2 1
6/23/2020 Recall: behaving “naturally” … 45 692 business 40 unit’s ROI comparison 35 over time 30 25 ROI % Top Half Bottom Half 20 t 1 2 3 4 5 6 7 8 9 0 r 1 a . . . . . . . . . 15 r r r r r r r r r t . S Y Y Y Y Y Y Y Y Y r Y 10 5 0 Source: Ghemawat, Commitment 7 “ Built to Last ” & “ Good to Great ” • Studied “Great” companies • Finding 1. ⁻ “We’ve learned that, if anything, we underestimated the importance of alignment ” • Finding 2. ⁻ Leadership is key • However, beware of the myth that visionary companies require charismatic leaders: “A charismatic visionary leader is absolutely NOT REQUIRED.” • Think of ARCHITECTS Built to Last , Collins and Porras; and Good to Great , Collins 8 2
6/23/2020 Leadership "Coping with Change" S h o r t e r - T e r m L o n g e r - T e r m R i s k A v e r s e S e e k R i s k Change Focus Order Focus Process Focus Substance Focus O p t i o n s I n c r e a s e m p r o m i s e C o Control Influence Management "Coping with Complexity" Source: Kotter, What Leaders Really Do 9 Common “Blind Spots” & Methodology Thinking Points Customer Satisfaction • About the “whole” picture (business • You run a business ( active , not passive acumen or a “Total Business” Product learning – a “laboratory”) Development perspective & the need for integrated & and aligned decision-making) • Total immersion ( overwhelmed with data. A Technology representation of reality, not a replication) • About how you make money (i.e., financial reports, metrics, KPIs) By doing it! (making mistakes ) • Finance Marketing Market, • About long-term positioning (i.e., Competitive, • Focus on the bigger picture (get outside your and Internal strategic thinking) Analysis specialty area – talk to others, listen to others) About “customers” • • As an organized team (divide/conquer/report) • About external forces and the need for adaptability (i.e. markets, • Competing ( focusing on end-goals) Manufacturing Distribution competitors) Fun! • The advantages of teams • 10 lbs in 5 lb bag • The role of “management” vs. Company “leadership” Outcome: Performance An opportunity to share Improved Decision-Making thoughts & best practices in real-time 18 3
6/23/2020 Performance Measurement Worksheet PERFORMANCE MEASUREMENT WORKSHEET Corporate Governance dictates that the following measures will be used to determine success. KPI’s Weighting Revenue Growth: (Yr 6 – Yr 1)/Yr 1 40% (NOTE: no “winning”/bonus if < 20% revenue growth) Average Profit 40% circle one: $ or % Average Inventory Days 20% =100% Performances are Scored (1-100) across the whole industry E.g., Highest sales = $50 MM. Score = (your $)/$50 MM x 100 E.g., Lowest inventory days = 8. Score = 8/(your days*) x 100 20 “To - Be”: Focus Objectives & Goals “As - Is”: Learn Strengths, Weaknesses, Opportunities, Threats 36 4
6/23/2020 Defining the “As - Is” with SWOT Internal S trengths W eaknesses Assessment External O pportunities T hreats Assessment “My conclusion… is that a good managerial record is far more a function of what business boat you get into than it is of how effectively you row.” Warren Buffett , in The Essays of Warren Buffett, 2015 “Discovery consists of seeing what everybody has seen and thinking what nobody has thought.” Albert Szent-Gyorgyi , in Irving Good, The Scientist Speculates (1962) US (Hungarian-born) biochemist (1893 - 1986) . Discovered Vitamin C 37 5
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