What’s Happening?! Fixing Social Security!. Fixing Social Security President Franklin D. Roosevelt established social President Franklin D. Roosevelt.

What’s Happening?!What’s Happening?!

Fixing Social Security!Fixing Social Security!

Fixing Social SecurityFixing Social Security

President Franklin D. Roosevelt established social President Franklin D. Roosevelt established social security 70 years ago to help lift seniors out of poverty.security 70 years ago to help lift seniors out of poverty. There was no up-front funding. There was no up-front funding. The current average annual check is $14,000.The current average annual check is $14,000. 2/3 of 36 million seniors count this as half of their 2/3 of 36 million seniors count this as half of their income.income. A financial solvency problem looms as baby boomers A financial solvency problem looms as baby boomers reach retirement agereach retirement age Can the stock market help fix the problem?Can the stock market help fix the problem?

Private AccountsPrivate Accounts Workers would have 1/3 of their payroll taxes put into an Workers would have 1/3 of their payroll taxes put into an

individual account.individual account. Social Security returns about 2% a year.Social Security returns about 2% a year. Like PERS workers would select from various investment options.Like PERS workers would select from various investment options. The premise is that higher risk investments will produce higher The premise is that higher risk investments will produce higher

returns and result in more retirement income.returns and result in more retirement income. Could also encourage additional savings through added incentives. Could also encourage additional savings through added incentives.

i.e. workers under 55 could divert 4% of theirs earnings up to i.e. workers under 55 could divert 4% of theirs earnings up to $1,000 to a private account.$1,000 to a private account.

The private account approach would require the federal The private account approach would require the federal government to borrow about $160 billion for the first two or three government to borrow about $160 billion for the first two or three years.years.

Alternative to Private AccountsAlternative to Private Accounts

Raise the current 6.2% rate or increase the taxable amount Raise the current 6.2% rate or increase the taxable amount from first $90,000 to maybe $150,000.from first $90,000 to maybe $150,000.

Eliminate the current inheritance tax that expires in 2010.Eliminate the current inheritance tax that expires in 2010. Raise the retirement age from the current 67 for those born Raise the retirement age from the current 67 for those born

after 1960 to 70.after 1960 to 70. Reduce the payment rate.Reduce the payment rate.

So what is going to happen?So what is going to happen?

Continue to contend that the $3.7 trillion financial shortfall Continue to contend that the $3.7 trillion financial shortfall won’t happen if there is decent economic and population won’t happen if there is decent economic and population growth.growth.

Politics will play a major role in determining if anything Politics will play a major role in determining if anything will be done.will be done.

Who is paying federal taxes?Who is paying federal taxes?

To be in the top 25% of all tax payers you need to earn:

$52,965.

To be in the top 50% of all tax payers you need to earn:

$26,415

Who is paying federal taxes?Who is paying federal taxes?

Percentiles Share of AGI % of Fed. Taxes Paid

Top 1% 19.5% 36.2%

Top 5% 34.0% 55.5%

Top 10% 44.9% 66.5%

Top 25% 66.5% 83.5%

Top 50% 86.8% 96.0%

Bottom 50% 13.2% 4.0%

Course ScheduleCourse Schedule

Section I and II of ATP is due a week from today, Feb. 1.

Midterm exam is a week later on Feb. 8.

Midterm exam clinic on Wednesday, Feb. 2 at 4 to 5 PM.

Paper ObjectivePaper ObjectiveThe battle between digital and analog continues. Actually it

is not much of a battle since digital always wins because of

accuracy and the fact that it is more cost effective. This was

the case with telecommunications and is becoming the norm

for an increasing number of consumer products. Media is

becoming digital such as cameras, DVDs, music and

television. For this reason the traditional distinction between

computers and consumer products is gone. This results in a

competitive battlefield between computer companies like

Apple, HP and Dell and consumer product companies like

Sony, Phillips and Matsushita.

Their goal is to maximize their role in providing a wide range

of digital capabilities. It is the intent of this paper to evaluate

this competition with a specific focus on Apple Computer.

There is not an established industry term to identify this new

competition, digital hub industry will be used throughout the

paper.

To accomplish this analysis section I will describe the

industry and the major competitors. Section II will . . .

Digital Hub IndustryDigital Hub Industry

1.1. The personal computer is transforming itself into the hub of The personal computer is transforming itself into the hub of people’s digital lives. people’s digital lives.

2.2. The PC industry is pursuing growth on a broader consumer The PC industry is pursuing growth on a broader consumer front while the consumer product industry is recognizing the front while the consumer product industry is recognizing the disappearance of the distinction between their products and disappearance of the distinction between their products and computers and its related potential.computers and its related potential.

3.3. So they are meeting somewhere in between. So they are meeting somewhere in between.

4.4. The key to market opportunity is to figure out how to make The key to market opportunity is to figure out how to make the technology easy to use by the average consumer and not the technology easy to use by the average consumer and not just computer gurus.just computer gurus.

Digital HubDigital Hub Personal Computer.Personal Computer. Internet Access.Internet Access. Video Recorder.Video Recorder. DVD video player. DVD video player. MP3 music server. MP3 music server. Advanced telephone and fax machine. Advanced telephone and fax machine. Digital photography and video hub. Digital photography and video hub. Video chat via the TV screen. Video chat via the TV screen.

Major CompetitorsMajor CompetitorsTraditional computer companies:Traditional computer companies:

– AppleApple– DellDell– Hewlett-PackardHewlett-Packard– GatewayGateway– MicrosoftMicrosoft

Traditional Consumer Product Companies:

• Sony

• Matsushita Electric

• Phillips

• Numerous smaller niche companies

Digital Hub IndustryDigital Hub Industry

Traditional Computer Service Companies:Traditional Computer Service Companies:

– AOLAOL

– YahooYahoo

– Service organizations of computer companies.Service organizations of computer companies.

Potential New Entrants:

Media companies

Substitutes:

Services versus equipment

Chapter 5 SummaryChapter 5 Summary

Information Systems Can Information Systems Can Redefine Competitive Redefine Competitive

BoundariesBoundaries

Major Chapter MessagesMajor Chapter Messages

Network-based systems (interorganizational sytems) are Network-based systems (interorganizational sytems) are providing the vehicle to create alliances between multiple providing the vehicle to create alliances between multiple companies to strengthen their competitive positions.companies to strengthen their competitive positions.

This approach frequently dictates the need for on-going This approach frequently dictates the need for on-going communication that is possible through the network links.communication that is possible through the network links.

Extranets through the use of Internet technology have Extranets through the use of Internet technology have become the preferred way for new efforts.become the preferred way for new efforts.

EDI systems remain unless company needs or priorities EDI systems remain unless company needs or priorities change.change.

Dell Computer is the role model for these types of systems Dell Computer is the role model for these types of systems because of their success with the direct business model. because of their success with the direct business model.

How does this chapter fit within the How does this chapter fit within the bigger scheme of things?bigger scheme of things?

Networks are the delivery vehicle for business communication Networks are the delivery vehicle for business communication

traffic.traffic.

Representative of the companies we are evaluating: Representative of the companies we are evaluating:

Dell – Direct business model.Dell – Direct business model.

Intel – Rosettanet link with customers.Intel – Rosettanet link with customers.

Knight-Ridder – Links for news article between 31 Knight-Ridder – Links for news article between 31

newspapers.newspapers.

Plantronics – Links with distributors.Plantronics – Links with distributors.

Better customer service:

• We are available.

• We are interested in you.

• We are responsive.

• You can count on us.

• We want to earn your trust and respect.

Interorganizational SystemsInterorganizational Systems

Why?• Tough for a company to face the challenges of a

global market by itself• Enables a company to build combined capabilities

to make it a stronger competitor• Creation of an extended enterprise: Us Versus Them

Strategic AlliancesStrategic Alliances

Figure 5-1

Interorganizational SystemsInterorganizational Systems

Industry Forces

Company

Customers

Vendors

Support Services

Business Partners

Competitors

• Providing access to a new product or geographic market

• Significantly improving a position in an existing market

• Accelerating the time to bring new products to market

• Dramatically changing product cost structure

Strategic Alliance ObjectivesStrategic Alliance Objectives

Alliances Provide Growth Alliances Provide Growth OpportunitiesOpportunities

Considerations when going global:

• Who are your customers?

• Can you tailor your products to specific markets?

• How do you deal with foreign competitors?

• Do you have the skills and resources necessary to compete outside of your home market?

EDI and/or ExtranetsEDI and/or Extranets

• More of a business than technical issue• Can improve relationships between a firm and its

partners• Implementation obstacles along the lines of:

- Data- Communications- Applications- Business Processes

Conclusions Conclusions

Three ways to extend the capabilities of an enterprise through the use of IT:

1) Interorganizational systems

2) Multiple forms of strategic alliances

3) Business process changes involving customers and suppliers

Possible Exam QuestionsPossible Exam Questions

1.1. Explain the term extended enterprise and the Explain the term extended enterprise and the possible benefits for a company in attempting to possible benefits for a company in attempting to establish a better competitive position.establish a better competitive position.

2.2. Explain and contrast the current extranet Explain and contrast the current extranet emphasis with the more traditional EDI emphasis with the more traditional EDI approach.approach.

Chapter 6 IntroductionChapter 6 Introduction

Business VisionBusiness Vision

Chapter GoalChapter Goal

The intent of this chapter is to position vision

as the starting point in directing, posturing,

and running a business.

Chapter SpecificsChapter Specifics

Define and understand visionDefine and understand vision

Two successful company examplesTwo successful company examples

USAAUSAA

WhirlpoolWhirlpool

Conclude with the importance of visionConclude with the importance of vision

What is a Vision?What is a Vision?

A vision is a photograph of what the company wants to

be look like in the future.

A vision is realistic, credible, and attractive.

Not a dream, but something achievable.

Must be concrete and easy to understand.

The Uncertainties of a VisionThe Uncertainties of a Vision

The dynamics of the market (customers)The dynamics of the market (customers)

Rapidly changing technologies that frequently offer Rapidly changing technologies that frequently offer new product life cyclesnew product life cycles

The logic and need to address changing employee The logic and need to address changing employee values and traditional ways that work is donevalues and traditional ways that work is done

The shift from the old to new regulatory practices The shift from the old to new regulatory practices in many industriesin many industries

The Vision-to-Action ProcessThe Vision-to-Action Process

Sensing Opportunity

Vision

Strategy

Tactic and Business Plan

Agreement and Commitment

Implementation (Action)Figure 6-1

USAA and WhirlpoolUSAA and Whirlpool

Two organizations that successfully Two organizations that successfully

implemented a vision processimplemented a vision process

A Leader With a VisionA Leader With a Vision

General Robert F. McDermott, CEO of USAA, and his vision:

“To become a company that provides the best possible customer service.

Our goal is to become a paperless insurance company. We may never get there, but that is where we are going.”

Customer Service and Employees

Customers keep the company running

Customer service is the vision driver

Service comes before either profits or growth

The Golden Rule: to serve others as you would want to be served

Employees make the vision happen

Quality service comes from employees’ satisfaction with the company and work place.

New CEO, David Whitwam in 1987, first initiated his vision in 1988 to become the global leader in the large appliance industry.

The World’s The World’s Manufacturer and Marketer of Major Manufacturer and Marketer of Major

Home AppliancesHome Appliances

LargestLargest

Whirlpool CorporationWhirlpool Corporation

The Whirlpool Global Vision:The Whirlpool Global 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.” Whirlpool 1993 Annual report.

““Think Global But Act Local”Think Global But Act Local”

In ConclusionIn Conclusion

As General McDermott said, “How As General McDermott said, “How do you know what you should be do you know what you should be doing today, if you don’t know where doing today, if you don’t know where you are going?”you are going?”

Chapter 6Chapter 6


CEO Job DescriptionCEO Job Description

The primary job of a CEO is deal with the long-term viability of the business.

Leaders combine vision with communication that leads to a shared purpose.

A leader sets the vision which is different from being a visionary.

The essence of competitiveness isvision, leadership and a hunger to succeed.

P. R. VagelosChairman and CEOMerck

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.

Jack Welch Vision for GEJack Welch Vision for GEHis vision was for GE to become the most competitive enterprise on earth.

He wanted to create a small company spirit in a big company, to build an organization out of an old line industrial company that would be high spirited, more adaptable, and more agile than companies one-fiftieth the size.

He wanted GE to be a company where people dared to try new things—where people felt assured in knowing that only the limits of creativity and drive, their own standards of personal excellence, would be the ceiling on how far and how fast they move.

Larry Ellison Vision for OracleLarry Ellison Vision for Oracle

To be the world leader in providing software applications over a network and hardware designed and priced to serve those needs.

Ellison suggests that the software industry as we know it today will vanish and be replaced by a service industry.

Microsoft Vision

Empower people through great software, anyplace, any time and on any device.

ValuesBeliefs

Principles

VisionMission

Goals

Culture

Objectives and

Measurements

Strategies

Tactics

Authorityand

ResponsibilityBusinessPlan

George Bush: The Vision ThingGeorge Bush: The Vision Thing

His inability to grasp "the vision thing" was an important part of

George Bush's undoing in the '92 election; but he's not the only

one to have a hard time articulating wishes and dreams for the

future.

Organizations are frequently brought to crisis by conflicts over

basic issues of mission, values, and vision.

Without these basic agreements in place, no organization is truly

viable.

Mission, values, and vision are the glue that holds an organization

together.

Gerstner’s Lack of Vision for Gerstner’s Lack of Vision for IBMIBM

Lou Gerstner caused a stir at his first major press

conference when he declared that the last thing IBM

needed was to proclaim a grand vision.

Executive VisionExecutive Vision

If a company has restructured, where do they turn for business performance and financial improvement?

A broad grounding in a particular industry is a often a necessary prerequisite to successful direction setting.

Visionaries can draw a conceptual roadmap to some imagined future.

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 McGowanFormer CEO of MCI

VisionStrategyTactics

Business Plan

• Competitive Options• Roles, Roles and Relationships• Redefine and/or Define• Telecommunications

as the Delivery Vehicle• Success Factor Profile

A Systematic Approach

A Shared Vision Positions IT

1. Achieves Strategic Synergy.

2. Puts the Onus on the Owners.

3. Leverages Learning.

4. Extends Externally.

5. Chucks the Organization Chart.

6. Indulges in Information.

7. Makes a Bee-line for Benefits.

““The Vision Trap”The Vision Trap”

Grand, abstract visions can be too inspirational.

The company may wind up making more poetry than products.

Gerard H. Langeler

President, Mentor Graphics

Sensing Opportunity

Vision

Strategy

Tactics and Business Plan

Agreement &Commitment

Implementation(Action)

Feedback

The Vision to ActionProcess

Figure 6-1

Vision ExamplesVision Examples

• Robert McDermott at USAA

• David Whitwam at Whirlpool

• Peter Lewis at Progressive Corp.

If Starting TodayIf Starting Today

Charles Schwab, Charles Schwab & Co.

Jeff Bezos, Amazon.com

Meg Whitman, eBay

Michael Dell, Dell Computer

Fred Smith, Federal Express

Louis Gerstner, IBM

Sam Walton, Wal-Mart Stores

Lee Kuan Yew, Singapore, Inc.

Morita, Sony

Peter Lewis, Progressive Corp.

USAAUSAA• Financial Services Company.

• Headquartered in San Antonio, Texas.

• A member owned association.

• Started by Army officers who had difficulty getting insurance.

• Historically managed by former military officers.

• Top-rated for customer service and financial

performance.

Information systems are strategic weapons, not cost centers.

Robert F. McDermott, Former USAA CEO

• Increased assets from $207 million to $8.5 billion. • Grew customer base 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.

McDermott LeadershipMcDermott Leadership

USAA Vision 2000An Events Oriented Organization

Needs WantsMember (Customer)

Key Points Security Quality Asset of Life Management

Supporting Insurance Consumer FinancialSystems Products Services Services Products Products

Figure 6-2

USAA’s ultimate goal is to manage its customer relationships and not its individual products.

How does this relate to information systems?

USAA Products and ServicesUSAA Products and Services

So integrated that members lose

something if they go elsewhere.

1. Customer Convenient

2. Operator Efficient

3. Cost Effective

USAA Business and IS GoalsUSAA Business and IS Goals

Information Systems StrategiesInformation Systems Strategies

• Executive Partnership

• Strategic Architectures

• Technology Experimentation

• External Resource Leverage

• Technology Assimilation

• Horizontal Integration

IT at USAAIT at USAA

• 28,000 workstations for 22,709 employees.• 7 mainframe computers.• 750 client server systems.• Own and operate a communications company.• 4,300 AT&T Trunk Lines: 94 million annual

telephone calls representing 90% of business transactions.

• 1,300 Information Systems people. (ITCo)

12/31/99

USAA Image Processing

Direct AccessStorage Drive

Document DatabaseDirect AccessStorage Drive

Token Ring LAN

StorageManager

FolderManagementApplication

A

P

I

A

P

I

InnerServer

API

On-line Optical Disks

Service RepresentativesM

ailr

oom

ScannerImage Workstation

Application Workstation

Image Workstation

ApplicationWorkstation

Optical StorageLibrary

(Not On-line)

][

Mainframe Computer

Figure 6-3

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.

USAA Success ConclusionsUSAA Success Conclusions

• Traditionally, 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

• Promoted a theme of “Thinking global but acting local.”


Whirlpool Corp.Whirlpool Corp.

Manufactures in 13 countries, has nearly 50 product technology centers and markets products under 13 brands in 170 countries.

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.

Has become a new Whirlpool.

Financial PerformanceFinancial Performance

1991 - $6.5 billion in global sales

2002 - $11 billion in global sales.

2003 - $11.8 billion in global sales.

1991 - $353 million in operating profit



Stock PerformanceStock Performance

Whitwam StatementWhitwam Statement

We entered 2003 with continuing economic uncertainty in most of the global markets we serve. We took the appropriate cost and productivity actions to deal with that uncertainty.

We believe that Whirlpool’s global leadership position, the company’s unique global platform and innovation activities focused on building customer loyalty will drive continued performance improvements in 2004 and beyond.

Whirlpool Corporation

Principal ProductsAutomatic Dryers

Automatic Washers

Dehumidifiers

Dishwashers

Freezers

Microwave Ovens

Ranges

Refrigerators

Trash Compactors

Room Air Conditioners

Who Buys Large AppliancesWho Buys Large Appliances

1. Contractors for new homes.

2. Home owners for replacements.

3. Appliance service businesses.

4. Businesses and public sector entities.

5. First time appliance buyers.

Appliance BrandsWhirlpool

Kitchen AidRoperWhirlpool

Kenmore*

* Manufactured for Sears

Maytag

AdmiralHardwickHooverJenn-AirMagic ChefMaytagNorge

GE

GERCAHot Point

Electrolux

FrigidaireGibsonElnaEurekaKelvinatorO’Keefe and MerrittTappanWhite- Westinghouse

Differentiation Strategy!?Differentiation Strategy!?

• Clothes Management System

• Food Management System

Whirlpool Strategic Design

• Mission Statement

• Vision

• Value Creating Objectives

• Shared Values

• Worldwide Excellence System

Whirlpool CorporationWhirlpool CorporationHow We Must Work, Think, Plan and Manage to Reach Our ObjectivesHow 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

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 worldwide large appliance industry.

Four Whirlpool OptionsFour Whirlpool Options

Whirlpool Mission StatementWhirlpool Mission Statement

To shape and lead the major home appliance industry globally, becoming one of the world’s great companies while creating value for shareholders, employees, customers, suppliers, government leaders and communities.

WhirlpoolWhirlpool Vision 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.

Pyramid of ExcellenceStakeholder Value

Measurement

& Results

Customer

Satisfaction

Strategic

PlanningFact-Based

Management

Customer Satisfaction

People

Commitment

Values

Vision

WorldwideExcellence

System

Value CreatingObjectives

WhirlpoolPeople Quality Process

& Products

Leadership

Growth & Innovation

TotalQuality

Where

Way

What

How


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. WhitwamWhirlpool CEO

1. Product Technology.

2. Procurement.

3. Information Systems

Platform for Global SuccessPlatform for Global Success

Worldwide Major Appliance Industry

United States Whirlpool General Electric Maytag

Sweden Electrolux

Figure 6-5

Japan Matshushita Electric Hitachi

Korea Samsung

Morita and SonyMorita and Sony

Sony was started in 1946 when Morita, the oldest son of a rice wine brewer, joined former Japanese navy colleague Masaru Ibuka, a fellow engineer, to start a business repairing radios on borrowed $500.

A significant number of firsts:

- Japan’s first transistors in 1954.

- Japan’s first transistor radio in 1955.

- First Japanese company to be listed on the NYSE.

- First Japanese company to build a U.S. factory.

SonySony

Morita told engineers to make Walkmans despite the lack of market research. “We don’t believe in market research for a new product unknown to the public. So we never do any.”

Preferred Approach: innovation in design, manufacturing and marketing.

Lee Kuan Yew and Singapore Inc.Lee Kuan Yew and Singapore Inc.

Although no nation's history can ever be reduced to the story of one man, Lee Kuan Yew had such a paramount role in making modem Singapore that an understanding of that country, its society and its business environment cannot be complete without an attempt at understanding Lee himself.

“Lee took the opportunity to assure Malays that they need not fear Hong Kong immigrants taking their jobs because the immigrants will all be high income earners.”

Increasingly, companies are usingvision statements to explain who theyare, where they are going and whycustomers and employees should follow them there.


A Good Vision StatementA 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.

Good Vision Statement?Good Vision Statement?

We want to sell a variety of

products on a daily basis to

every living person on the earth.

PepsiCo.


To be the world leader in

transportation products

and services.

General Motors Corp.

A Good Vision Statement?A Good Vision Statement?

To continue to be the world’s best way to pay and be paid for consumers and businesses.

Visa International


Absolutely, positively overnight!

Federal Express


To provide the best service and lowest fares to the short haul, frequent-flying, point-to-point, non-interlining traveler.

Southwest Airlines

When you have a vision and someone comes to you with some convoluted idea, you should be able to hold it up to the vision and ask: Does it fit? Does it fly? If not, don’t bother with it.

The ingredient that catapulted Southwest to the top of the industry is simple, elegant and well publicized.

Discipline, focus and execution.

Throughout its existence, Southwest has consistently adhered to a clearly defined purpose and a well thought out strategy for accomplishing it.


Do it, try it, fix it!

Wal-Mart Stores

Wal-Mart VisionWal-Mart Vision

“I concentrated all along on building the finest retailing company that we possibly could. Period.”

“Creating a huge personal fortune was never a goal of mine.”

Sam Walton

Wal-Mart Wal-Mart

If you are not serving the customer or supporting the folks that do, then we don’t need you.

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.

Built to Last CompaniesBuilt to Last Companies

1812 Citicorp

1837 Procter and Gamble

1847 Phillip Morris

1850 American Express

1886 Johnson & Johnson

1891 Merck

1892 General Electric

1901 Nordstrom

1903 3Com

1911 IBM

1915 Boeing

1923 Walt Disney

1927 Marriott

1928 Motorola

1938 Hewlett-Packard

1945 Sony

1945 Wal-Mart

Built to Last ConclusionsBuilt to Last Conclusions

1. A visionary company does not by definition start with a

great idea.

2. A charismatic leader is not required for a visionary company.

3. There are no standard core values to be a visionary company.

4. A visionary company is not built on frequent change but a

focus over time on its core ideology.


5. Visionary companies may appear conservative to outsiders but they are not afraid to make bold commitments and/or establish ambitious goals.

6. Only those people who fit well with the core ideology and the demanding standards of a visionary company will find it a great place to work.

7. Visionary companies make some of their best moves by experimentation, trail and error, opportunism and accidentally.

8. Great visionary companies seldom go outside to hire a new CEO.


9. Visionary companies focus primarily on beating themselves.

10. Visionary companies believe they can accomplish major objectives simultaneously without making major negative trade-offs.

11. Visionary companies attained their successful status not so much because they made visionary pronouncements (although they frequently did) but by pursuing a never-ending process of emphasizing the above factors.

A Logical Vision ProcessA Logical Vision Process

• Define the Business Environment.

• Build a Company Vision.

• Turn the Vision into a Plan.

• Drive Action with the Plan.

Vision

Applications

Tools

Networks

Tactical

Strategic

Expense

Asset

SaveMoney

Invest

By instilling:

Leadership

Vision

Strategy

Tactical Excellence

Innovation

A Great Company

You create:

Improved Performance

Market Impact

Sustained Success

Excellent Reputation

Which results in:

A Vision that WorksA 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.

What’s Happening?! Fixing Social Security!. Fixing Social Security President Franklin D. Roosevelt established social President Franklin D. Roosevelt.

Documents

social security returns

retirement income

private account approach

private accounts workers

current inheritance

higher returns

individual account

federal taxes