Business Vision

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Chapter 6

• Business Vision

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Course Schedule
Today - Chapter 6 Business Vision Thursday -
Chapter 7 Business Strategy, Tactics and
Business Plan Following Tuesday - Midterm Exam
(Bring a sample question to class this
Thursday) Thursday - Chapter 8 and Section I and
II are due. These are not drafts but final to be
graded papers.
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A Systematic Approach
Vision Strategy Tactics Business Plan

• Competitive Options
• Roles, Roles and Relationships
• Redefine and/or Define
• Telecommunications
• as the Delivery Vehicle
• Success Factor Profile

Figure 1-4
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State of the Business
Economist A Tale of Two Debtors. InformationWe
ek Inside Intel Wall Street Journal How
Steve Ballmer is Already Remaking Microsoft GE
Chief Takes Well-read Look into Future.
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Intel Vision
Our mission statement for years was to be the
building-block supplier to the computer industry.
We must become an integral part of the new
hearts and brains of the Internet economy.
Craig Barrett Intel CEO
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Inside Intel
Evolving into a supplier of the building blocks
of the Net economy.
Four pillars of the Internet economy 1. Client
microprocessors 2. High-end server
components 3. Network hardware 4. Host
E-Business services
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Intel Foundation
Record 1999 revenue and earnings. Know-how,
clout and cash to succeed. What it is doing is
without precedent in its history. Can it
successfully break new ground while sustaining
the success of its core microprocessor
business. Technology company acquisitions during
the past sixteen months. Still has 12 billion to
fund other ventures. Has become a successful
E-Business (1 B/month).
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Approach Attitude and Strategy
The big mistake that companies make when the set
out to do something like this is that they are
too timid because they are worried about
corrupting their existing business.
Intel has 6,000 Web sites doing business in 57
countries and realizes that when companies move
to an E-Business approach they dont go back to
doing things the old way.
It feels that building and maintaining this
network has provided the understanding and
experience to drive the development of components
optimized for E-Business and ultimately to
construct E-Business architectures.
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Why Change Business Strategies?
The days of compounded 35 growth in
microprocessor sales (1990-1998) are over.
We need to grow in other areas according to
Craig Barrett.
Businesses ought to do things that they have
competency and capabilities in and bring value to
customer. They dont run their own telephone
company.
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Intel Online Services Group
Spent 200 million in 1999 to launch this
business group. Will open twelve service farms
(data center) worldwide by the end of 2000. The
first is in Santa Clara and was built to house
10,000 servers. It is currently limiting its
services to front end E-Commerce applications and
leaving development to others.
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The Ballmer Microsoft Era
Represents a shift from technical leadership to
an ability to fuse technology with business sense
and customer concerns. More willing to address
the need to find new areas for growth. Will
probably slow down acquisitions. More willing to
negotiate a settlement of its antitrust suit.
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Bill Gates - Chief Software Architect
Next Generation Windows Services
(NGWS) Operating System for the Internet

• Smarter ways to store data simultaneously on
  hard disks
• and central servers.
• Advances in user interfaces to include voice
  recognition.
• Building out the Internet infrastructure that
  make it easier to
• build new applications.
• New tools for application developers for
  Internet
• applications.

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A Leader at General Electric
Jack Welch, CEO History should be very kind to
his accomplishments in reshaping GE into the
worlds most valued company. Why he didnt invent
the term he did a major restructuring of a
well-established company having replaced a highly
respected executive in Reginald Jones. In some
cases this resulted in significant downsizing of
a business unit.
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What it takes to be a leader at GE

• Have a passion for excellence and hate
  bureaucracy.
• Be open to ideas from anywhere.
• Live quality and drive cost and speed for
• competitive advantage.
• Have the confidence to involve everyone and
• behave in a boundary-less fashion.
• Create a clear, simple, reality-based vision.

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GE Leaders

• Have enormous energy and the ability to
• energize others.
• Stretch, set aggressive goals, reward progress
• yet understand accountability and commitment.
• See change as an opportunity and not a threat.
• Have global brains and build diverse and global
• teams.

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A Recent Challenge
dyb.com
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CEO Job Description
The primary job of a CEO is deal with the
long-term viability of the business.
Visionary leadership is vision communication
that leads to shared purpose.
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Executive Vision
If a company has restructured where do they turn
for business performance and financial
improvement?
There is a big difference between leaders and
managers.
Job experience can easily count more than
intuition.
A broad grounding in a particular industry is a
prerequisite to successful direction setting.
Visionaries can draw a conceptual roadmap to some
imagined future.
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Values Beliefs Principles
C u l t u r e
Mission Goals
Vision
Strategies
Tactics
Objectives and Measurements
Authority and Responsibility
Business Plan
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A Business Vision

• A vision is a photograph of the future.
• It is a self-image that deals with what the
  business wants to look like over the long range
  future.
• Business visions are realistic, credible and
  attractive to people within the organization.

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The Vision Trap1
Grand, abstract visions can be too inspirational.
The company may wind up making more poetry than
products.
Gerard H. Langeler President, Mentor Graphics
1 Harvard Business Review, Mar.-Apr. 1992
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A Shared Vision Positions IT
1. Achieve Strategic Synergy. 2. Put the Onus on
the Owners. 3. Leverage Learning. 4. Extend
Externally. 5. Chuck the Organization Chart. 6.
Indulge in Information. 7. Make a Bee-line for
Benefits.
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The essence of competitiveness is vision,
leadership and a hunger to succeed.
P. R. Vagelos Chairman and CEO Merck
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To carry out its work, the organization needs
from a leader a clear statement of its vision and
strategy.
Max DuPree Chairman of the Board Herman Miller,
Inc.
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By instilling
You create
Which results in
Improved Performance
Leadership
Vision
Market Impact
A Great Company
Strategy
Excellent Reputation
Tactical Excellence
Sustained Success
Innovation
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2020Vision
Marginal improvement wont be enough to stay
competitive. You can get 5, 10 or even 15
percent improvements in what you are doing by
improving how you are currently doing things.
But your competition can go for improvements in
multiples. To attain 100, 200 or 500 percent
improvements, you cant do the same thing better.
You have to be fundamentally different and, in
the process, transform your business.
Bill Davidson and Stan Davis
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Vision Elements

• Business scope and diversification.
• Time and geographic boundaries.
• Best of breed product and/or service approach.
• Product and service introduction.
• Scope of communications network.
• Education and training of management and
• employees.

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A Company Vision

• To remain in our core business.
• To not allow either time nor geography to be a
  barrier to
• deliver product or services.
• To match the best level of customer service in
  the
• industry.
• To build and maintain a global communication
  network.
• To not to be pre-empted in terms of products or
  services
• in primary markets.
• To educate all employees to do the best job of
  delivering
• services.

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A Good Vision Statement

• Provides a clear picture of what the company
  wants to be in the future.
• Excites and motivates people and gains consensus
  and commitment.
• Focuses on operations.
• Is measurable at least in general terms.
• Establishes a standard of excellence.
• Changes the basis for competition.

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Business Vision
Increasingly, companies are using vision
statements to explain who they are, where they
are going and why customers and employees should
follow them there.
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Good Vision Statement?
We want to sell a variety of products on a
daily basis to every living person on the earth.
PepsiCo.
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Good Vision Statement?
To be the world leader in transportation
products and services.
General Motors Corp.
Source 1993 Annual Report
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Good Vision Statement?
Absolutely, positively overnight!
Federal Express
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Good Vision Statement?
Empower people through great software, anyplace,
any time and on any device.
Microsoft
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Good Vision Statement?
Do it, try it, fix it!
Wal-Mart Stores
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Good Vision Statement?
-
Be the company that everyone wants to work
for. Be the company that everyone wants to do
business with. Be the company that everyone wants
to own.
Hammersley Iron Ltd.
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AMR Corporate Vision

• We will be the global leader in air
  transportation and
• related information services.
• That leadership will be attained by
• Setting the industry standard for safety and
  security.
• Providing world class service.
• Creating an open and participative work
  environment which seeks positive change, rewards
  innovation, and provides growth, security and
  opportunity to all employees.
• Producing consistently superior financial returns
  for shareholders.

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Business Vision
One of the myths of management is that an
appropriate vision and good strategic planning
will ensure an institutions future. This is not
enough!
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Implementation (Action)
The Vision to Action Process
Agreement Commitment
Tactics and Business Plan
Strategy
Feedback
Vision
Sensing Opportunity
Figure 6-1
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The most important thing that I have learned is
that the time for a business to go from chump to
champ to chump used to be two to three decades
and now it is five to seven years.
Bill McGowan Former CEO of MCI
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Vision Examples

• Robert McDermott at USAA
• David Whitwam at Whirlpool
• Peter Lewis at Progressive Corp.
• Gil Amelio at National Semiconductor

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Information systems are strategic weapons, not
cost centers. Robert F. McDermott,
Former USAA CEO
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McDermott Vision and Leadership

• Increased assets from 207 million to 8.5
  billion.
• Grew customer based from 650,000 to 2.4 million.
• Significantly increased the level of customer
  service.
• Broadened the product base.
• Decreased the high annual employee turnover
  rate.
• Redefined the business from a property and
  casualty
• insurance company to a financial services
  organization.

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USAA Vision 2000
An Events Oriented Organization
Member (Customer)
Needs
Wants
Key Points Security Quality
Asset of Life
Management
Supporting Insurance Consumer
Financial Systems Products
Services Services
Products
Products
Figure 6-2
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USAAs ultimate goal is to manage its customer
relationships and not its individual products.
How does this relate to information systems?
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USAA Image Processing
Mainframe Computer
A P I
A P I
Folder Management Application
Inner Server
Storage Manager
Direct Access Storage Drive
Document Database Direct Access Storage Drive
API
Token Ring LAN
Application Workstation
On-line Optical Disks
Application Workstation


Service Representatives
Mailroom
Optical Storage Library (Not On-line)
Scanner
Image Workstation
Image Workstation
Figure 6-3
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USAA Business and IS Goals
1. Customer Convenient 2. Operator Efficient 3.
Cost Effective
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IT at USAA

• 22,000 workstations for 16,500 employees.
• 5 mainframe computers.
• 3.8 trillion characters of stored data.
• Own and operate a communications company.
• 4,300 ATT Trunk Lines 93 million annual
  telephone calls representing 90 of business
  transactions.
• 1,300 Information Systems people. (ITCo)

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Information Systems Strategies

• Executive Partnership
• Strategic Architectures
• Technology Experimentation
• External Resource Leverage
• Technology Assimilation
• Horizontal Integration

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USAA Products and Services
So integrated that members lose something if they
go elsewhere.
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USAA Success Conclusions
1. Provides quality service. 2. Attracts, trains,
retains and motivates employees. 3. Aggressively
and successfully uses information technology. 4.
Provides products and services to address the
changing needs of its customers. 5. Maintains
one of the lowest operating expense ratios in
the industry. 6. Achieves financial results that
warrant excellent to superior ratings. 7.
Makes business, organizational and management
changes on a timely basis. 8. Had an
outstanding CEO in General McDermott.
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Whirlpool Corporation

• A successful, well-managed company.
• A new CEO in 1987 who initiated a global vision
  in 1988.
• A global strategy that emphasized
• - Product Technology
• - Procurement
• Thinking global but acting local.
• Has the patience to allow the global strategy to
  evolve.
• Is the only company with a presence in four of
  the five
• global markets.
• Has realized impressive growth in revenue but
  not profits.
• Is becoming a new Whirlpool.

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Whirlpool Corporation
Principal Products Automatic Dryers Automatic
Washers Dehumidifiers Dishwashers Freezers Microwa
ve Ovens Ranges Refrigerators Trash
Compactors Room Air Conditioners
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Appliance Brands
Whirlpool Kitchen Aid Roper Whirlpool Kenmore
Manufactured for Sears
Maytag Admiral Hardwick Hoover Jenn-Air Magic
Chef Maytag Norge
GE GE RCA Hot Point
Electrolux Frigidaire Gibson Elna Eureka Kelvinat
or OKeefe and Merritt Tappan White-
Westinghouse
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Whirlpool Strategic Design

• Mission Statement
• Vision
• Value Creating Objectives
• Shared Values
• Worldwide Excellence System

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Whirlpool CorporationHow We Must Work, Think,
Plan and Manage to Reach Our Objectives
Whirlpool People Leadership Quality of Processes
and Products Fact-Based Management Strategic
Planning Measurement and Results Customer
Satisfaction
Figure 6-4
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Four Whirlpool Options
1. Stick to its large appliance knitting within
the North American market and fight for
increased market share with the hope that
economic factors would improve its market
conditions. 2. Diversify within the North
American market. 3. Pursue a global strategy as a
conservative player in multiple global
markets. 4. Pursue an aggressive global strategy
with the objective of leading the redefining
of the world- wide large appliance industry.
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Whirlpool Mission Statement
To shape and lead the major home appliance
industry globally, becoming one of the worlds
great companies while creating value for
shareholders, employees, customers, suppliers,
government leaders and communities.
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Whirlpool Vision
Whirlpool, in its chosen lines of business, will
grow with new opportunities and be the leader in
an ever-changing global market. We will be
driven by our commitment to continuous quality
improvement and to exceeding all of our
customers expectations. We will gain
competitive advantage through this, and by
building on our existing strengths and developing
new competencies. We will be market driven,
efficient and profitable. Our success will make
Whirlpool a company that worldwide customers,
employees and other stakeholders can depend on.
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Whirlpool Corporation
The market of tomorrow will be huge, filled with
tough savvy customers with a wide range of
preferences and choices. We must fulfill their
needs and meet their expectations in quality and
service. We must surprise them.
David R. Whitwam Whirlpool CEO
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GE Versus Whirlpool
Has tried for years to dislodge Whirlpool as No.
1 in the US. GE spent 100 million to develop a
new washer. Plastic washer basket versus
traditional porcelain. Lost a major battle to win
Sears washer business. Gained two percentage
points in market share in 1998. (2 is 400
million in a 20 billion market.) Offered
significant purchase rebates. Operating profits
were 12 (low for GE). President of GE Being in
this business is painful.
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Whirlpool Corporation
Reaching Worldwide to Bring Excellence Home
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Pyramid of Excellence
Stakeholder Value
Where
Vision
Way
Values
What
Total Quality
Value Creating Objectives
People Commitment
Growth Innovation
How
Customer Satisfaction
Worldwide Excellence System
Strategic Planning
Leadership
Whirlpool People
Fact-Based Management
Customer Satisfaction
Quality Process Products
Measurement Results
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Platform for Global Success
1. Product Technology. 2. Procurement. 3.
Information Systems
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Worldwide Major Appliance Industry
United States Whirlpool General Electric
Maytag Sweden Electrolux
Japan Matshushita Electric
Hitachi Korea Samsung
Figure 6-5
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A Logical Vision Process

• Define the Business Environment.
• Build a Company Vision.
• Turn the Vision into a Plan.
• Drive Action with the Plan.

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Invest
Vision
Save Money
Asset
Applications
Networks
Expense
Strategic
Tools
Tactical
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A Logical Action Plan

• First, A Vision
• Then a Strategy
• Then Some Thoughtful Tactics
• Supported by a Theme--A Rallying Point!

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A Vision that Works

• It gains commitment and energizes employees.
• It creates meaning in employees lives.
• It helps to establish a standard of excellence.
• It bridges the past and the future.
• It assures future business success.

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Vision
Which attitude would you support on this subject?
1. There is little hard evidence that companies
with vision statements perform better than
those without. 2. At the current rate of
change in the business environment,
companies need a clear, consistent sense of
where they are going.
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Vision Questions
1. How important is it for a company to have a
well understood vision? 2. Is there
something unique about a visionary
executive? 3. What factors influence the creation
of a vision? 4. What are the logical time
dimensions of a business vision?
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Vision Questions
5. What major challenges frequently accompany
establishing a new vision within a company? 6.
What impact does a vision have on information
systems? 7. Relate the concept of a vision to
an actual company situation.