respond to my classmates

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Please write a 1/2 page paper to each student in response to their post (4 students + ½ page =2 pages). Each essay will only address one students response, meaning do not address multiple students in one essay; each student will have their own essay.  No title page needed and only use references that I have enclosed at the bottom of the page. Additionally, write in the first person but keep it professionally. DO NOT Critique their views, instead add to what they have posted, offer additional insight, and answer their questions any questions they have asked. Be thoughtful and considerate!
Directions
Please write a 1/2 page paper to each student in response to their post (4 students + ½ page =2 pages). Each essay will only address one students response, meaning do not address multiple students in one essay; each student will have their own essay.  No title page needed and only use references that I have enclosed at the bottom of the page. Additionally, write in the first person but keep it professionally. DO NOT Critique their views, instead add to what they have posted, offer additional insight, and answer their questions any questions they have asked. Be thoughtful and considerate!
 
Classmates were asked too

Unit 5 – Week 10 – Discussion

  • Unit 5 Discussion Video: Why Use Assessments?
  • How would you go about determining the quality of assessments and the assessment process?
  • How would you persuade others to consider spending a good amount of money to make a better hiring decision?
  • How would you deal with a very popular leader, one who is currently considered quite successful, who is being consider for a big promotion who doesn’t do very well on an assessment?
  • What role do you think assessments could play in systematically changing a culture? What road blocks might you encounter in this regard?

Use these questions to guide your thinking and help you jump into dialogue with your classmates. Just find something related to the discussion video that genuinely interests you and discuss it. Incorporate APA-formatted citations and references from the course readings and/or videos in your responses, as needed, to demonstrate your understanding of key concepts.
 
 
My Classmates Posts
TARA’s Post

  • In my career, I have probably hired close to fifty employees. To get to fifty employees I have interviewed well over a couple hundred. There was a time I got so tired of interviews that I created a system of bringing in four perspective candidates for every vacancy I had. I would strategically schedule 2-3 days of non-stop interviews to fill 4-5 positions. It was a grueling process that left me and the other managers emotionally and mentally exhausted. It was however, a successful tactic to get employees hired. Hiring employees is a time consuming process that saps manager’s time resulting in organizational loss of production and money. Dyer (2015) states interviews fail to determine a perspective employees cognitive ability, rather, they are tools used to determine if the individual will align into the current organizational culture. He is absolutely correct. I have often trained upcoming managers that I can teach just about anyone how to perform the technical aspects of the job, however, I cannot teach someone how to have a personality that aligns with the team. That is the purpose of the interview, to determine if a candidate will “fit”. Using a tool such as the valid assessment that Schein (2010) identifies is an organizational benefit. To persuade my management team on the benefits of such a tool, I can easily show them the cost savings value of utilizing a process such as this to identify candidates faster than simply bringing them in and shot-gunning people through an interview process and hoping for the best.

In your organization, what hiring methods have you or your managers utilized? Where they effective?
References
Dyer, P. (2015, October 7). Cultures in organizations Unit 5: Discussion video – Why use assessments?[Video file]. Retrieved from https://www.youtube.com/watch?v=imr2tUWxEVI
Schein, E. (2010). Organizational culture and leadership (4th ed.). San Francisco, CA: Jossey-Bass.
RACHEL’s POST

  • Dyer (2015) and Schein (2010) both recognize the importance of assessments regarding the selection and advancement of personnel within an organization.  It is critical to note the connection between a leader effectively leveraging valuable assessment tools and the leader’s ability to impact the underlying culture of the organization.

Leaders can affect incremental yet profound change on an organization’s culture by selecting personnel to assimilate into the organization who demonstrate the appropriate skills and abilities, but also demonstrate the aptitudes, tendencies, values, and personality which would fit best with the leader’s ultimate end state vision of the organization.  Simply, if a leader wants to change the culture of his organization to one that values tenure, organizational memory, and internal advancement, he is not likely to select even a well-qualified candidate who does not demonstrate a sense of loyalty to the organization, has a work history reflecting very short stays in each position, or expresses an intent to ultimately work for another organization or in another industry.  While the candidate may have the knowledge, skills, and abilities (KSA) to do the specific job for which the leader is hiring, further assessments would reveal this individual is not suited to work within the construct of the culture the leader is attempting to build.  Similarly, prospective candidates who take assessments that demonstrate opportunities for improvement in areas like trust, integrity, accountability, or problem solving would likely not be selected for positions within organizations attempting to improve these aspects of their cultures.  If you were the top leader in your organization and were able to leverage an assessment against new, prospective recruits, what would your assessment measure, and what traits would you be looking for to improve the culture of your current organization?
References
Dyer, P. (2015, October 7). Cultures in organizations Unit 5: Discussion video – Why use assessments?[Video file]. Retrieved from https://www.youtube.com/watch?v=imr2tUWxEVI
TOMMIE’s Post

  • To persuade others to consider spending a good amount of money to make a better hiring decision I would gather organizational data and research data to present my argument for it. The organizational data that I would present would include the organization’s turnover rate, reasons for terminations and resignations, and the amount of money spent for additional training and education that some employees needed outside of the basic orientation. I would use the turnover rate to prove the point that wrong hires were made and to show how much money it cost the organization to train new employees rather than hiring and retaining employees who are a better fit. The reasons for employee terminations and resignations could bolster the argument by showing that bad hiring decisions had been made. The money spent on additional training that some employees require can also show that bad hiring decisions were being made since the employees did not have the proper skills or abilities to perform the job for which they were hired.

Dyer (2015) stated that “the statistical correlation between job performance and job interviews is not much better than flipping a coin” (0:49). I would use research data such as this to prove that hiring based on the job interview alone is not very effective and that money should be spent to make better hiring decisions. I would also use data to bolster Dyer’s (2015) claim that using valid assessments that are designed to predict person and culture fit can be a good way to “systematically build the desired culture” (2:10). What are some other ways that you would persuade others to invest in improving hiring decisions? What kind of successful and unsuccessful hiring decisions/methods have you or your organizational leaders made?
Tommie
Reference
Dyer, P. (2015, October 7). Cultures in organizations Unit 5: Discussion video – Why use assessments?[Video file]. Retrieved from https://www.youtube.com/watch?v=imr2tUWxEVI
JOHN’s Post

  • I have very little experience with job interviews; so, as I watched Dr. Dyer’s (2015) video, I reflected on how my Branch selects its Commanding Officers. The process is lead by the Branch Director, who is responsible for senior leadership appointments within the Engineers. Each fall, the Director has a meeting with the Branch’s Colonels, and they review the Commanding Officer billets that will open up in two to three years. They assess potential candidates, and primaries and alternates are listed and sent to the Commander of the Canadian Army for his or her approval. The branch announces new Commanding Officers about six to nine months ahead of time.

There are several aspects that the Council of Colonels examines in each candidate, including experience, performance in past command roles, recommendations from past Commanders, training, education, bilingualism, and fitness. Of the aspects, experience and performance in past command roles are the most importance. Suitable candidates are expected to have a breadth of experience, having served on operations and having held key roles. Their performance in sub-unit command roles is also important. Branches hold boards each year to assess outgoing sub-unit commanders and whether they are suitable to command at the next level. The Branch pushes suitable files forward. They remove the unsuccessful files, and the candidate does not get reassessed.
There are a few reasons that I think the process works for us but would not for others. First, the process requires frequent and predictable turnover. Commanding Officers hold their positions for two years, so the selection process is routine and well established. It is not meant to select Commanding Officers out of sequence. Second, the Branch internally selects Commanding Officers. The typical candidate has twenty years in the Branch, which makes them known to the Colonels who select them. Selected Commanding Officers are always from within the occupation. Third, because the branch is small, more effort can be taken to select individuals. Only about ten positions are assigned each year. The process works because it is designed to meet the organization’s needs. I think the problem that Dr. Dyer (2015) alludes to is that organizations use the generic process because of simplicity rather than reflecting the organizations’ needs,
 
John
 
Reference:
Dyer, P. (2015, October 7). Cultures in organizations Unit 5: Discussion video – Why use assessments?[Video file]. Retrieved from https://www.youtube.com/watch?v=imr2tUWxEVI.
 
References
Dyer, P. (2015, October 7). Cultures in organizations Unit 5: Discussion video – Why use assessments?[Video file]. Retrieved from https://www.youtube.com/watch?v=imr2tUWxEVI
Collins, J. C., & Porras, J., I. (1996, September-October). Building your company’s vision. Harvard Business Review, 65-77.
Kegan, R., & Lahey, L. L. (2001). The reason people won’t change. Harvard Business Review, 2-9.
Kotter, J. P. (1995, March-April). Leading change: Why transformation efforts fail. Harvard Business Review, 1-8.
Schein, E. (2010). Organizational culture and leadership (4th ed.). San Francisco, CA: Jossey-Bass.
Senge, P. (2014). Peter Senge introduction to systems thinking [Video file]. Retrieved from https://www.youtube.com/watch?v=eXdzKBWDraM
HBR
OnPoint
FROM THE HARVARD BUSINESS REVIEW
ARTICLE
Building Your
Company’s Vision
by James C. Collins and Jerry I. Porras
New sections to
guide you through
the article:
• The Idea in Brief
• The Idea at Work
• Exploring Further. . .
PRODUCT NUMBER 410X
An enduring
corporate vision guides
you through change.
It also spells out
what will never change.
THE IDEA
Hewlett-packard. 3M. Sony. Companies
with exceptionally durable visions that are
“built to last.” What distinguishes their visions
from most others, those empty muddles that
get revised with every passing business fad, but
never prompt anything more than a yawn?
Enduring companies have clear plans for how
they will advance into an uncertain future.
But they are equally clear about how they will
remain steadfast, about the values and purposes
they will always stand for. This Harvard
Business Review article describes the two components
of any lasting vision: core ideology
and an envisioned future.
Building Your Company’s Vision
Acompany’s practices and strategies should
change continually; its core ideology should
not. Core ideology defines a company’s timeless
character. It’s the glue that holds the enterprise
together even when everything else is
up for grabs. Core ideology is something you
discover—by looking inside. It’s not something
you can invent, much less fake.
A core ideology has two parts:
1. Core values are the handful of guiding
principles by which a company navigates.
They require no external justification. For
example, Disney’s core values of imagination
and wholesomeness stem from the
founder’s belief that these should be nurtured
for their own sake, not merely to capitalize
on a business opportunity. Instead of
changing its core values, a great company
will change its markets—seek out different
customers—in order to remain true to its
core values.
2. Core purpose is an organization’s most fundamental
reason for being. It should not be
confused with the company’s current product
lines or customer segments. Rather, it
reflects people’s idealistic motivations for
doing the company’s work. Disney’s core
purpose is to make people happy—not to
build theme parks and make cartoons.
HBR OnPoint © 2000 by Harvard Business School Publishing Corporation. All rights reserved.
An envisioned future, the second component of
an effective vision, has two elements:
1. Big, Hairy, Audacious Goals (BHAGs) are
ambitious plans that rev up the entire
organization. They typically require 10 to
30 years’ work to complete.
2. Vivid descriptions paint a picture of what
it will be like to achieve the BHAGs. They
make the goals vibrant, engaging—and
tangible.
EXAMPLE:
In the 1950s, Sony’s goal was to “become the company
most known for changing the worldwide
poor-quality image of Japanese products.” It made
this BHAG vivid by adding,“Fifty years from now,
our brand name will be as well known as any in
the world . . . and will signify innovation and quality.
. . .‘Made in Japan’ will mean something fine,
not something shoddy.”
Don’t confuse your company’s core ideology
with its envisioned future—in particular, don’t
confuse a BHAG with a core purpose. A BHAG
is a clearly articulated goal that is reachable
within 10 to 30 years. But your core purpose
can never be completed.
THE IDEA AT WORK
IN BRIEF
We shall not cease from exploration
And the end of all our exploring
Will be to arrive where we started
And know the place for the first time.
T.S. Eliot, Four Quartets
Companies that enjoy enduring success have
core values and a core purpose that remain fixed
while their business strategies and practices endlessly
adapt to a changing world. The dynamic of
preserving the core while stimulating progress
is the reason that companies such as HewlettPackard,
3M, Johnson & Johnson, Procter & Gamble,
Merck, Sony, Motorola, and Nordstrom became
elite institutions able to renew themselves
and achieve superior long-term performance.
Hewlett-Packard employees have long known that
radical change in operating practices, cultural
norms, and business strategies does not mean losing
the spirit of the HP Way – the company’s core
principles. Johnson & Johnson continually questions
its structure and revamps its processes while
preserving the ideals embodied in its credo. In 1996,
3M sold off several of its large mature businesses –
a dramatic move that surprised the business press–
to refocus on its enduring core purpose of solving
unsolved problems innovatively. We studied companies
such as these in our research for Built to
Last: Successful Habits of Visionary Companies
and found that they have outperformed the general
stock market by a factor of 12 since 1925.
HARVARD BUSINESS REVIEW September-October 1996 Copyright © 1996 by James C. Collins and Jerry I. Porras. All rights reserved.
HBR
SEPTEMBER-OCTOBER 1996
James C. Collins is a management educator and writer
based in Boulder, Colorado, where he operates a management
learning laboratory for conducting research
and working with executives. He is also a visiting professor
of business administration at the University of Virginia
in Charlottesville. Jerry I. Porras is the Lane Professor
of Organizational Behavior and Change at Stanford
University’s Graduate School of Business in Stanford,
California, where he is also the director of the Executive
Program in Leading and Managing Change. Collins and
Porras are coauthors of Built to Last: Successful Habits of
Visionary Companies (HarperBusiness, 1994).
by James C. Collins and Jerry I. Porras
Truly great companies understand the difference
between what should never change and what
should be open for change, between what is genuinely
sacred and what is not. This rare ability to
manage continuity and change – requiring a consciously
practiced discipline – is closely linked to
the ability to develop a vision. Vision provides guidance
about what core to preserve and what future to
stimulate progress toward. But vision has become
one of the most overused and least understood
words in the language, conjuring up different images
for different people: of deeply held values, outstanding
achievement, societal bonds, exhilarating
goals, motivating forces, or raisons d’être. We recommend
a conceptual framework to define vision,
add clarity and rigor to the vague and fuzzy concepts
swirling around that trendy term, and give
practical guidance for articulating a coherent vision
within an organization. It is a prescriptive framework
rooted in six years of research and refined and
tested by our ongoing work with executives from a
great variety of organizations around the world.
A well-conceived vision consists of two major
components: core ideology and envisioned future.
(See the exhibit “Articulating a Vision.”) Core ideology,
the yin in our scheme, defines what we stand
for and why we exist. Yin is unchanging and complements
yang, the envisioned future. The envisioned
future is what we aspire to become, to
achieve, to create – something that will require significant
change and progress to attain.
Core Ideology
Core ideology defines the enduring character of
an organization – a consistent identity that transcends
product or market life cycles, technological
breakthroughs, management fads, and individual
leaders. In fact, the most lasting and significant
contribution of those who build visionary companies
is the core ideology. As Bill Hewlett said
about his longtime friend and business
partner David Packard upon
Packard’s death not long ago, “As far
as the company is concerned, the
greatest thing he left behind him was
a code of ethics known as the HP
Way.” HP‘s core ideology, which has
guided the company since its inception
more than 50 years ago, includes
a deep respect for the individual, a dedication to affordable
quality and reliability, a commitment to
community responsibility (Packard himself bequeathed
his $4.3 billion of Hewlett-Packard stock
to a charitable foundation), and a view that the
company exists to make technical contributions for
the advancement and welfare of humanity. Company
builders such as David Packard, Masaru Ibuka of
Sony, George Merck of Merck, William McKnight
of 3M, and Paul Galvin of Motorola understood that
it is more important to know who you are than
where you are going, for where you are going will
change as the world around you changes. Leaders
die, products become obsolete, markets change,
new technologies emerge, and management fads
come and go, but core ideology in a great company
endures as a source of guidance and inspiration.
Core ideology provides the glue that holds an
organization together as it grows, decentralizes, diversifies,
expands globally, and develops workplace
diversity. Think of it as analogous to the principles
of Judaism that held the Jewish people together for
centuries without a homeland, even as they spread
throughout the Diaspora. Or think of the truths
held to be self-evident in the Declaration of Independence,
or the enduring ideals and principles of
the scientific community that bond scientists from
every nationality together in the common purpose
of advancing human knowledge. Any effective vision
must embody the core ideology of the organization,
which in turn consists of two distinct parts:
core values, a system of guiding principles and
tenets; and core purpose, the organization’s most
fundamental reason for existence.
Core Values. Core values are the essential and enduring
tenets of an organization. A small set of
timeless guiding principles, core values require no
external justification; they have intrinsic value and
importance to those inside the organization. The
Walt Disney Company’s core values of imagination
and wholesomeness stem not from market requirements
but from the founder’s inner belief that
imagination and wholesomeness should be nurtured
for their own sake. William Procter and James
Gamble didn’t instill in P&G’s culture a focus on
product excellence merely as a strategy for success
but as an almost religious tenet. And that value has
been passed down for more than 15 decades by P&G
people. Service to the customer – even to the point
of subservience – is a way of life at Nordstrom that
traces its roots back to 1901, eight decades before
VISION
66 HARVARD BUSINESS REVIEW September-October 1996
Core ideology provides the glue
that holds an organization
together through time.
customer service programs became stylish. For Bill
Hewlett and David Packard, respect for the individual
was first and foremost a deep personal value;
they didn’t get it from a book or hear it from a management
guru. And Ralph S. Larsen, CEO of Johnson
& Johnson, puts it this way: “The core values
embodied in our credo might be a competitive
advantage, but that is not why we have them. We
have them because they define for us what we stand
for, and we would hold them even if they became
a competitive disadvantage in certain situations.”
The point is that a great company decides for
itself what values it holds to be core, largely independent
of the current environment, competitive
requirements, or management fads. Clearly, then,
there is no universally right set of core values.
A company need not have as its core value customer
service (Sony doesn’t) or respect for the individual
(Disney doesn’t) or quality (Wal-Mart Stores
doesn’t) or market focus (HP doesn’t) or teamwork
(Nordstrom doesn’t). A company might have operating
practices and business strategies around those
qualities without having them at the essence of its
being. Furthermore, great companies need not have
likable or humanistic core values, although many
do. The key is not what core values an organization
has but that it has core values at all.
Companies tend to have only a few core values,
usually between three and five. In fact, we found
that none of the visionary companies we studied in
our book had more than five: most had only three or
four. (See the insert “Core Values Are a Company’s
Essential Tenets.”) And, indeed, we should expect
that. Only a few values can be truly core–that is, so
fundamental and deeply held that they will change
seldom, if ever.
To identify the core values of your own organization,
push with relentless honesty to define what
values are truly central. If you articulate more than
five or six, chances are that you are confusing core
values (which do not change) with operating practices,
business strategies, or cultural norms (which
should be open to change). Remember, the values
must stand the test of time. After you’ve drafted a
preliminary list of the core values, ask about each
one, If the circumstances changed and penalized us
for holding this core value, would we still keep it? If
you can’t honestly answer yes, then the value is not
core and should be dropped from consideration.
A high-technology company wondered whether
it should put quality on its list of core values. The
CEO asked, “Suppose in ten years quality doesn’t
make a hoot of difference in our markets. Suppose
the only thing that matters is sheer speed and
horsepower but not quality. Would we still want to
put quality on our list of core values?” The members
of the management team looked around at one
another and finally said no. Quality stayed in the
strategy of the company, and quality-improvement
programs remained in place as a mechanism for
stimulating progress; but quality did not make the
list of core values.
The same group of executives then wrestled with
leading-edge innovation as a core value. The CEO
asked, “Would we keep innovation on the list as
a core value, no matter how the world around us
changed?” This time, the management team gave
a resounding yes. The managers’ outlook might be
summarized as, “We always want to do leadingedge
innovation. That’s who we are. It’s really important
to us and always will be. No matter what.
And if our current markets don’t value it, we will
find markets that do.” Leading-edge innovation
went on the list and will stay there. A company
should not change its core values in response to
market changes; rather, it should change markets,
if necessary, to remain true to its core values.
Who should be involved in articulating the core
values varies with the size, age, and geographic dispersion
of the company, but in many situations we
have recommended what we call a Mars Group. It
works like this: Imagine that you’ve been asked to
re-create the very best attributes of your organization
on another planet but you have seats on the
rocket ship for only five to seven people. Whom
should you send? Most likely, you’ll choose the
people who have a gut-level understanding of your
core values, the highest level of credibility with
their peers, and the highest levels of competence.
HARVARD BUSINESS REVIEW September-October 1996 67
Articulating a Vision
Core Ideology
Core values
Core purpose
Envisioned Future
10-to-30-year BHAG
(Big, Hairy, Audacious Goal)
Vivid description
We’ll often ask people brought together to work on
core values to nominate a Mars Group of five to
seven individuals (not necessarily all from the assembled
group). Invariably, they end up selecting
highly credible representatives who do a super job
of articulating the core values precisely because
they are exemplars of those values–a representative
slice of the company’s genetic code.
Even global organizations composed of people
from widely diverse cultures can identify a set of
shared core values. The secret is to work from the
individual to the organization. People involved in
articulating the core values need to answer several
questions: What core values do you personally
bring to your work? (These should be so fundamental
that you would hold them regardless of whether
or not they were rewarded.) What would you tell
your children are the core values that you hold at
work and that you hope they will hold when they
become working adults? If you awoke tomorrow
morning with enough money to retire for the rest of
your life, would you continue to live those core values?
Can you envision them being as valid for you
100 years from now as they are today? Would you
want to hold those core values, even if at some
point one or more of them became a competitive
disadvantage? If you were to start a new organization
tomorrow in a different line of work, what core
values would you build into the new organization
regardless of its industry? The last three questions
are particularly important because they make the
crucial distinction between enduring core values
68 HARVARD BUSINESS REVIEW September-October 1996
that should not change and practices and strategies
that should be changing all the time.
Core Purpose. Core purpose, the second part of
core ideology, is the organization’s reason for being.
An effective purpose reflects people’s idealistic motivations
for doing the company’s work. It doesn’t
just describe the organization’s output or target
customers; it captures the soul of the organization.
(See the insert “Core Purpose Is a Company’s Reason
for Being.”) Purpose, as illustrated by a speech
David Packard gave to HP employees in 1960, gets
at the deeper reasons for an organization’s existence
beyond just making money. Packard said,
I want to discuss why a company exists in the first place.
In other words, why are we here? I think many people
assume, wrongly, that a company exists simply to make
money. While this is an important result of a company’s
existence, we have to go deeper and find the real reasons
for our being. As we investigate this, we inevitably come
to the conclusion that a group of people get together and
exist as an institution that we call a company so they are
able to accomplish something collectively that they
could not accomplish separately – they make a contribution
to society, a phrase which sounds trite but is fundamental.…
You can look around [in the general business
world and] see people who are interested in money and
nothing else, but the underlying drives come largely from
a desire to do something else: to make a product, to give
a service – generally to do something which is of value.1
Purpose (which should last at least 100 years)
should not be confused with specific goals or busiCore
Values Are a Company’s Essential Tenets
Encouraging individual initiative
Opportunity based on merit; no one is entitled
to anything
Hard work and continuous self-improvement
Sony
Elevation of the Japanese culture and
national status
Being a pioneer – not following others; doing
the impossible
Encouraging individual ability and creativity
Walt Disney
No cynicism
Nurturing and promulgation of “wholesome
American values”
Creativity, dreams, and imagination
Fanatical attention to consistency and detail
Preservation and control of the Disney magic
Merck
Corporate social responsibility
Unequivocal excellence in all aspects of
the company
Science-based innovation
Honesty and integrity
Profit, but profit from work that benefits
humanity
Nordstrom
Service to the customer above all else
Hard work and individual productivity
Never being satisfied
Excellence in reputation; being part of
something special
Philip Morris
The right to freedom of choice
Winning – beating others in a good fight
ness strategies (which should change many times
in 100 years). Whereas you might achieve a goal or
complete a strategy, you cannot fulfill a purpose; it
is like a guiding star on the horizon – forever pursued
but never reached. Yet although purpose itself
does not change, it does inspire change. The very
fact that purpose can never be fully realized means
that an organization can never stop stimulating
change and progress.
In identifying purpose, some companies make
the mistake of simply describing their current product
lines or customer segments. We
do not consider the following statement
to reflect an effective purpose:
“We exist to fulfill our government
charter and participate in the secondary
mortgage market by packaging
mortgages into investment
securities.” The statement is merely
descriptive. A far more effective
statement of purpose would be that
expressed by the executives of the
Federal National Mortgage Association, Fannie
Mae: “To strengthen the social fabric by continually
democratizing home ownership.” The secondary
mortgage market as we know it might not even exist
in 100 years, but strengthening the social fabric
by continually democratizing home ownership can
be an enduring purpose, no matter how much the
world changes. Guided and inspired by this purpose,
Fannie Mae launched in the early 1990s a series
of bold initiatives, including a program to develop
new systems for reducing mortgage underwriting
costs by 40% in five years; programs to
eliminate discrimination in the lending process
(backed by $5 billion in underwriting experiments);
and an audacious goal to provide, by the year 2000,
$1 trillion targeted at 10 million families that had
traditionally been shut out of home ownership –
minorities, immigrants, and low-income groups.
Similarly, 3M defines its purpose not in terms of
adhesives and abrasives but as the perpetual quest
to solve unsolved problems innovatively–a purpose
that is always leading 3M into new fields. McKinsey
& Company’s purpose is not to do management
consulting but to help corporations and governments
be more successful: in 100 years, it might
involve methods other than consulting. HewlettPackard
doesn’t exist to make electronic test and
measurement equipment but to make technical
contributions that improve people’s lives – a purpose
that has led the company far afield from its
origins in electronic instruments. Imagine if Walt
VISION
HARVARD BUSINESS REVIEW September-October 1996 69
Core ideology consists of core
values and core purpose.
Core purpose is a raison d’être,
not a goal or business strategy.
Core Purpose Is a Company’s Reason for Being
3M: To solve unsolved problems innovatively
Cargill: To improve the standard of living around
the world
Fannie Mae: To strengthen the social fabric by
continually democratizing home ownership
Hewlett-Packard: To make technical contributions
for the advancement and welfare of humanity
Lost Arrow Corporation: To be a role model and a
tool for social change
Pacific Theatres: To provide a place for people to
flourish and to enhance the community
Mary Kay Cosmetics: To give unlimited opportunity
to women
McKinsey & Company: To help leading corporations
and governments be more successful
Merck: To preserve and improve human life
Nike: To experience the emotion of competition,
winning, and crushing competitors
Sony: To experience the joy of advancing and applying
technology for the benefit of the public
Telecare Corporation: To help people with mental
impairments realize their full potential
Wal-Mart: To give ordinary folk the chance to buy the
same things as rich people
Walt Disney: To make people happy
Disney had conceived of his company’s purpose as
to make cartoons, rather than to make people
happy; we probably wouldn’t have Mickey Mouse,
Disneyland, EPCOT Center, or the Anaheim Mighty
Ducks Hockey Team.
One powerful method for getting at purpose is
the five whys. Start with the descriptive statement
We make X products or We deliver X services, and
then ask, Why is that important? five times. After
a few whys, you’ll find that you’re
getting down to the fundamental
purpose of the organization.
We used this method to deepen
and enrich a discussion about purpose
when we worked with a certain
market-research company. The executive
team first met for several hours
and generated the following statement
of purpose for their organization:
To provide the best marketresearch
data available. We then asked the following
question: Why is it important to provide the
best market-research data available? After some
discussion, the executives answered in a way that
reflected a deeper sense of their organization’s purpose:
To provide the best market-research data
available so that our customers will understand
their markets better than they could otherwise.
A further discussion let team members realize that
their sense of self-worth came not just from helping
customers understand their markets better but also
from making a contribution to their customers’
success. This introspection eventually led the company
to identify its purpose as: To contribute to our
customers’ success by helping them understand
their markets. With this purpose in mind, the company
now frames its product decisions not with the
question Will it sell? but with the question Will it
make a contribution to our customers’ success?
The five whys can help companies in any industry
frame their work in a more meaningful way. An
asphalt and gravel company might begin by saying,
We make gravel and asphalt products. After a few
whys, it could conclude that making asphalt and
gravel is important because the quality of the infrastructure
plays a vital role in people’s safety and experience;
because driving on a pitted road is annoying
and dangerous; because 747s cannot land safely
on runways built with poor workmanship or inferior
concrete; because buildings with substandard
materials weaken with time and crumble in earthquakes.
From such introspection may emerge this
purpose: To make people’s lives better by improving
the quality of man-made structures. With a
sense of purpose very much along those lines, Granite
Rock Company of Watsonville, California, won
the Malcolm Baldrige National Quality Award–not
an easy feat for a small rock quarry and asphalt
company. And Granite Rock has gone on to be one
of the most progressive and exciting companies
we’ve encountered in any industry.
Notice that none of the core purposes fall into
the category “maximize shareholder wealth.” A primary
role of core purpose is to guide and inspire.
Maximizing shareholder wealth does not inspire people
at all levels of an organization, and it provides
precious little guidance. Maximizing shareholder
wealth is the standard off-the-shelf purpose for
those organizations that have not yet identified
their true core purpose. It is a substitute – and a
weak one at that.
When people in great organizations talk about
their achievements, they say very little about earnings
per share. Motorola people talk about impressive
quality improvements and the effect of the
products they create on the world. Hewlett-Packard
people talk about their technical contributions to
the marketplace. Nordstrom people talk about
heroic customer service and remarkable individual
performance by star salespeople. When a Boeing engineer
talks about launching an exciting and revolutionary
new aircraft, she does not say, “I put my
heart and soul into this project because it would
add 37 cents to our earnings per share.”
One way to get at the purpose that lies beyond
merely maximizing shareholder wealth is to play
the “Random Corporate Serial Killer” game. It
works like this: Suppose you could sell the company
to someone who would pay a price that everyone
inside and outside the company agrees is more
than fair (even with a very generous set of assumptions
about the expected future cash flows of the
company). Suppose further that this buyer would
guarantee stable employment for all employees at
the same pay scale after the purchase but with no
guarantee that those jobs would be in the same industry.
Finally, suppose the buyer plans to kill the
company after the purchase – its products or services
would be discontinued, its operations would
VISION
70 HARVARD BUSINESS REVIEW September-October 1996
Listen to people in truly great
companies talk about their
achievements–you will hear
little about earnings per share.
be shut down, its brand names would be shelved
forever, and so on. The company would utterly and
completely cease to exist. Would you accept the
offer? Why or why not? What would be lost if the
company ceased to exist? Why is it important that
the company continue to exist? We’ve found this
exercise to be very powerful for helping hard-nosed,
financially focused executives reflect on their organization’s
deeper reasons for being.
Another approach is to ask each member of the
Mars Group, How could we frame the purpose of
this organization so that if you woke up tomorrow
morning with enough money in the bank to retire,
you would nevertheless keep working here? What
deeper sense of purpose would motivate you to continue
to dedicate your precious creative energies to
this company’s efforts?
As they move into the twenty-first century, companies
will need to draw on the full creative energy
and talent of their people. But why should people
give full measure? As Peter Drucker has pointed
out, the best and most dedicated people are ultimately
volunteers, for they have the opportunity to
do something else with their lives. Confronted
with an increasingly mobile society, cynicism
about corporate life, and an expanding entrepreneurial
segment of the economy, companies more
than ever need to have a clear understanding of
their purpose in order to make work meaningful
and thereby attract, motivate, and retain outstanding
people.
Discovering Core Ideology
You do not create or set core ideology. You discover
core ideology. You do not deduce it by looking
at the external environment. You understand it by
looking inside. Ideology has to be authentic. You
cannot fake it. Discovering core ideology is not an
intellectual exercise. Do not ask, What core values
should we hold? Ask instead, What core values do
we truly and passionately hold? You should not
confuse values that you think the organization
ought to have – but does not – with authentic core
values. To do so would create cynicism throughout
the organization. (“Who’re they trying to kid? We
all know that isn’t a core value around here!”) Aspirations
are more appropriate as part of your envisioned
future or as part of your strategy, not as part
of the core ideology. However, authentic core values
that have weakened over time can be considered
a legitimate part of the core ideology – as long
as you acknowledge to the organization that you
must work hard to revive them.
Also be clear that the role of core ideology is to
guide and inspire, not to differentiate. Two companies
can have the same core values or purpose.
Many companies could have the purpose to make
technical contributions, but few live it as passionately
as Hewlett-Packard. Many companies could
have the purpose to preserve and improve human
life, but few hold it as deeply as Merck. Many companies
could have the core value of heroic customer
service, but few create as intense a culture around
that value as Nordstrom. Many companies could
have the core value of innovation, but few create
the powerful alignment mechanisms that stimulate
the innovation we see at 3M. The authenticity,
the discipline, and the consistency with which the
ideology is lived – not the content of the ideology –
differentiate visionary companies from the rest of
the pack.
Core ideology needs to be meaningful and inspirational
only to people inside the organization; it
need not be exciting to outsiders. Why not? Because
it is the people inside the organization who need to
commit to the organizational ideology over the
long term. Core ideology can also play a role in determining
who is inside and who is not. A clear and
well-articulated ideology attracts to the company
people whose personal values are compatible with
the company’s core values; conversely, it repels
those whose personal values are incompatible. You
cannot impose new core values or purpose on people.
Nor are core values and purpose things people
can buy into. Executives often ask, How do we get
people to share our core ideology?
You don’t. You can’t. Instead, find
people who are predisposed to share
your core values and purpose; attract
and retain those people; and let those
who do not share your core values go
elsewhere. Indeed, the very process
of articulating core ideology may
cause some people to leave when
they realize that they are not personally compatible
with the organization’s core. Welcome that outcome.
It is certainly desirable to retain within the
core ideology a diversity of people and viewpoints.
People who share the same core values and purpose
do not necessarily all think or look the same.
HARVARD BUSINESS REVIEW September-October 1996 71
You discover core ideology by
looking inside. It has to be
authentic. You can’t fake it.
Don’t confuse core ideology itself with coreideology
statements. A company can have a very
strong core ideology without a formal statement.
For example, Nike has not (to our knowledge) formally
articulated a statement of its core purpose.
Yet, according to our observations, Nike has a powerful
core purpose that permeates the entire organization:
to experience the emotion of competition,
winning, and crushing competitors. Nike has a
campus that seems more like a shrine to the competitive
spirit than a corporate office complex.
Giant photos of Nike heroes cover the walls, bronze
plaques of Nike athletes hang along the Nike Walk
of Fame, statues of Nike athletes stand alongside
the running track that rings the campus, and buildings
honor champions such as Olympic marathoner
Joan Benoit, basketball superstar Michael Jordan,
and tennis pro John McEnroe. Nike people who do
not feel stimulated by the competitive spirit and
the urge to be ferocious simply do not last long in
the culture. Even the company’s name reflects a
sense of competition: Nike is the Greek goddess of
victory. Thus, although Nike has not formally articulated
its purpose, it clearly has a strong one.
Identifying core values and purpose is therefore
not an exercise in wordsmithery. Indeed, an organization
will generate a variety of statements over
time to describe the core ideology. In HewlettPackard‘s
archives, we found more than half a
dozen distinct versions of the HP Way, drafted by
David Packard between 1956 and 1972. All versions
stated the same principles, but the words used varied
depending on the era and the circumstances.
Similarly, Sony’s core ideology has been stated
many different ways over the company’s history.
At its founding, Masaru Ibuka described two key
elements of Sony’s ideology: “We shall welcome
technical difficulties and focus on highly sophisticated
technical products that have great usefulness
for society regardless of the quantity involved; we
shall place our main emphasis on ability, performance,
and personal character so that each individual
can show the best in ability and skill.”2 Four
decades later, this same concept appeared in a statement
of core ideology called Sony Pioneer Spirit:
“Sony is a pioneer and never intends to follow others.
Through progress, Sony wants to serve the
whole world. It shall be always a seeker of the unVISION
72 HARVARD BUSINESS REVIEW September-October 1996
Big, Hairy, Audacious Goals Aid Long-Term Vision
Target BHAGs can be quantitative or qualitative
Become a $125 billion company by the year 2000
(Wal-Mart, 1990)
Democratize the automobile (Ford Motor
Company, early 1900s)
Become the company most known for changing
the worldwide poor-quality image of Japanese
products (Sony, early 1950s)
Become the most powerful, the most serviceable,
the most far-reaching world financial institution
that has ever been (City Bank, predecessor to
Citicorp, 1915)
Become the dominant player in commercial
aircraft and bring the world into the jet age
(Boeing, 1950)
Common-enemy BHAGs involve
David-versus-Goliath thinking
Knock off RJR as the number one tobacco
company in the world (Philip Morris, 1950s)
Crush Adidas (Nike, 1960s)
Yamaha wo tsubusu! We will destroy Yamaha!
(Honda, 1970s)
Role-model BHAGs suit up-and-coming
organizations
Become the Nike of the cycling industry
(Giro Sport Design, 1986)
Become as respected in 20 years as
Hewlett-Packard is today (Watkins-Johnson, 1996)
Become the Harvard of the West
(Stanford University, 1940s)
Internal-transformation BHAGs suit large,
established organizations
Become number one or number two in every
market we serve and revolutionize this company
to have the strengths of a big company combined
with the leanness and agility of a small company
(General Electric Company, 1980s)
Transform this company from a defense contractor
into the best diversified high-technology company
in the world (Rockwell, 1995)
Transform this division from a poorly respected
internal products supplier to one of the most
respected, exciting, and sought-after divisions in
the company (Components Support Division of a
computer products company, 1989)
known.… Sony has a principle of respecting and encouraging
one’s ability…and always tries to bring
out the best in a person. This is the vital force of
Sony.”3 Same core values, different words.
You should therefore focus on getting the content
right – on capturing the essence of the core values
and purpose. The point is not to create a perfect
statement but to gain a deep understanding
of your organization’s core
values and purpose, which can then
be expressed in a multitude of ways.
In fact, we often suggest that once
the core has been identified, managers
should generate their own
statements of the core values and
purpose to share with their groups.
Finally, don’t confuse core ideology with the concept
of core competence. Core competence is a strategic
concept that defines your organization’s capabilities–what
you are particularly good at–whereas
core ideology captures what you stand for and
why you exist. Core competencies should be well
aligned with a company’s core ideology and are often
rooted in it; but they are not the same thing. For
example, Sony has a core competence of miniaturization
– a strength that can be strategically applied
to a wide array of products and markets. But it does
not have a core ideology of miniaturization. Sony
might not even have miniaturization as part of its
strategy in 100 years, but to remain a great company,
it will still have the same core values described
in the Sony Pioneer Spirit and the same fundamental
reason for being–namely, to advance technology
for the benefit of the general public. In a visionary
company like Sony, core competencies change over
the decades, whereas core ideology does not.
Once you are clear about the core ideology, you
should feel free to change absolutely anything that
is not part of it. From then on, whenever someone
says something should not change because “it’s
part of our culture” or “we’ve always done it that
way” or any such excuse, mention this simple rule:
If it’s not core, it’s up for change. The strong version
of the rule is, If it’s not core, change it! Articulating
core ideology is just a starting point, however. You
also must determine what type of progress you
want to stimulate.
Envisioned Future
The second primary component of the vision
framework is envisioned future. It consists of two
parts: a 10-to-30-year audacious goal plus vivid descriptions
of what it will be like to achieve the goal.
We recognize that the phrase envisioned future is
somewhat paradoxical. On the one hand, it conveys
concreteness – something visible, vivid, and real.
On the other hand, it involves a time yet unrealized–with
its dreams, hopes, and aspirations.
Vision-level BHAG. We found in our research
that visionary companies often use bold missions –
or what we prefer to call BHAGs (pronounced
BEE-hags and shorthand for Big, Hairy, Audacious
Goals)–as a powerful way to stimulate progress. All
companies have goals. But there is a difference between
merely having a goal and becoming committed
to a huge, daunting challenge–such as climbing
Mount Everest. A true BHAG is clear and compelling,
serves as a unifying focal point of effort,
and acts as a catalyst for team spirit. It has a clear
finish line, so the organization can know when it
has achieved the goal; people like to shoot for finish
lines. A BHAG engages people – it reaches out and
grabs them. It is tangible, energizing, highly focused.
People get it right away; it takes little or no
explanation. For example, NASA’s 1960s moon
mission didn’t need a committee of wordsmiths to
spend endless hours turning the goal into a verbose,
impossible-to-remember mission statement. The
goal itself was so easy to grasp–so compelling in its
own right – that it could be said 100 different ways
yet be easily understood by everyone. Most corporate
statements we’ve seen do little to spur forward
movement because they do not contain the powerful
mechanism of a BHAG.
Although organizations may have many BHAGs
at different levels operating at the same time, vision
requires a special type of BHAG–a vision-level
BHAG that applies to the entire organization and
requires 10 to 30 years of effort to complete. Setting
the BHAG that far into the future requires thinking
beyond the current capabilities of the organization
and the current environment. Indeed, inventing
such a goal forces an executive team to be visionary,
rather than just strategic or tactical. A BHAG
should not be a sure bet – it will have perhaps only
a 50% to 70% probability of success – but the organization
must believe that it can reach the goal anyway.
A BHAG should require extraordinary effort
and perhaps a little luck. We have helped companies
create a vision-level BHAG by advising them
HARVARD BUSINESS REVIEW September-October 1996 73
Companies need an audacious
10-to-30-year goal to progress
toward an envisioned future.
to think in terms of four broad categories: target
BHAGs, common-enemy BHAGs, role-model
BHAGs, and internal-transformation BHAGs. (See
the insert “Big, Hairy, Audacious Goals Aid LongTerm
Vision.”)
Vivid Description. In addition to vision-level
BHAGs, an envisioned future needs what we call
vivid description – that is, a vibrant, engaging,
and specific description of what it will be like to
achieve the BHAG. Think of it as translating the vision
from words into pictures, of creating an image
that people can carry around in their heads. It is a
question of painting a picture with your words. Picture
painting is essential for making the 10-to-30-
year BHAG tangible in people’s minds.
For example, Henry Ford brought to life the goal
of democratizing the automobile with this vivid description:
“I will build a motor car for the great
multitude.… It will be so low in price that no man
making a good salary will be unable to own one
and enjoy with his family the blessing of hours of
pleasure in God’s great open spaces.… When I’m
through, everybody will be able to afford one, and
everyone will have one. The horse will have disappeared
from our highways, the automobile will be
taken for granted…[and we will] give a large number
of men employment at good wages.”
The components-support division of a computerproducts
company had a general manager who was
able to describe vividly the goal of becoming one of
the most sought-after divisions in the company:
“We will be respected and admired by our peers.…
Our solutions will be actively sought by the endproduct
divisions, who will achieve significant
product ‘hits’ in the marketplace largely because of
our technical contribution.… We will have pride in
ourselves.… The best up-and-coming people in the
company will seek to work in our division.… People
will give unsolicited feedback that they love
what they are doing.… [Our own] people will walk
on the balls of their feet.… [They] will willingly
work hard because they want to.… Both employees
and customers will feel that our division has contributed
to their life in a positive way.”
In the 1930s, Merck had the BHAG to transform
itself from a chemical manufacturer into one of the
preeminent drug-making companies in the world,
with a research capability to rival any major university.
In describing this envisioned future, George
Merck said at the opening of Merck’s research facility
in 1933, “We believe that research work carried
on with patience and persistence will bring to industry
and commerce new life; and we have faith
that in this new laboratory, with the tools we have
supplied, science will be advanced, knowledge increased,
and human life win ever a greater freedom
from suffering and disease.… We pledge our every
aid that this enterprise shall merit the faith we have
in it. Let your light so shine – that those who seek
the Truth, that those who toil that this world may
be a better place to live in, that those who hold aloft
that torch of science and knowledge through these
social and economic dark ages, shall take new courage
and feel their hands supported.”
Passion, emotion, and conviction are essential
parts of the vivid description. Some managers are
uncomfortable expressing emotion about their
dreams, but that’s what motivates others. Churchill
understood that when he described the BHAG facing
Great Britain in 1940. He did not just say, “Beat
Hitler.” He said, “Hitler knows he will have to
break us on this island or lose the war. If we can
stand up to him, all Europe may be free, and the life
of the world may move forward into broad, sunlit
uplands. But if we fail, the whole
world, including the United States,
including all we have known and
cared for, will sink into the abyss of
a new Dark Age, made more sinister
and perhaps more protracted by the
lights of perverted science. Let us
therefore brace ourselves to our
duties and so bear ourselves that if
the British Empire and its Commonwealth
last for a thousand years, men
will still say, ‘This was their finest hour.’”
A Few Key Points. Don’t confuse core ideology
and envisioned future. In particular, don’t confuse
core purpose and BHAGs. Managers often exchange
one for the other, mixing the two together or failing
to articulate both as distinct items. Core purpose –
not some specific goal – is the reason why the organization
exists. A BHAG is a clearly articulated
goal. Core purpose can never be completed, whereas
the BHAG is reachable in 10 to 30 years. Think
of the core purpose as the star on the horizon to
be chased forever; the BHAG is the mountain to be
climbed. Once you have reached its summit, you
move on to other mountains.
VISION
74 HARVARD BUSINESS REVIEW September-October 1996
You must translate the vision
from words to pictures with a
vivid description of what it will
be like to achieve your goal.
Identifying core ideology is a discovery process,
but setting the envisioned future is a creative
process. We find that executives often have a great
deal of difficulty coming up with an exciting
BHAG. They want to analyze their way into the future.
We have found, therefore, that some executives
make more progress by starting first with the
vivid description and backing from there into the
BHAG. This approach involves starting with questions
such as, We’re sitting here in 20 years; what
would we love to see? What should this company
look like? What should it feel like to employees?
What should it have achieved? If someone writes an
article for a major business magazine about this
company in 20 years, what will it say? One biotechnology
company we worked with had trouble envisioning
its future. Said one member of the executive
team, “Every time we come up with something
for the entire company, it is just too generic to be
exciting – something banal like ‘advance biotechnology
worldwide.’” Asked to paint a picture of the
company in 20 years, the executives mentioned
such things as “on the cover of Business Week as a
model success story…the Fortune most admired
top-ten list…the best science and business graduates
want to work here…people on airplanes rave
about one of our products to seatmates…20 consecutive
years of profitable growth…an entrepreneurial
culture that has spawned half a dozen new divisions
from within…management gurus use us as an
example of excellent management and progressive
thinking,” and so on. From this, they were able to
set the goal of becoming as well respected as Merck
or as Johnson & Johnson in biotechnology.
It makes no sense to analyze whether an envisioned
future is the right one. With a creation – and
the task is creation of a future, not prediction–there
can be no right answer. Did Beethoven create the
right Ninth Symphony? Did Shakespeare create the
right Hamlet? We can’t answer these questions;
they’re nonsense. The envisioned future involves
such essential questions as Does it get our juices
flowing? Do we find it stimulating? Does it spur
forward momentum? Does it get people going? The
envisioned future should be so exciting in its own
right that it would continue to keep the organization
motivated even if the leaders who set the goal
disappeared. City Bank, the predecessor of Citicorp,
had the BHAG “to become the most powerful, the
most serviceable, the most far-reaching world financial
institution that has ever been” – a goal that
generated excitement through multiple generations
until it was achieved. Similarly,
the NASA moon mission continued
to galvanize people even though
President John F. Kennedy (the leader
associated with setting the goal) died
years before its completion.
To create an effective envisioned
future requires a certain level of unreasonable
confidence and commitment.
Keep in mind that a BHAG is
not just a goal; it is a Big, Hairy, Audacious
Goal. It’s not reasonable for a small regional
bank to set the goal of becoming “the most powerful,
the most serviceable, the most far-reaching
world financial institution that has ever been,” as
City Bank did in 1915. It’s not a tepid claim that
“we will democratize the automobile,” as Henry
Ford said. It was almost laughable for Philip
Morris – as the sixth-place player with 9% market
share in the 1950s – to take on the goal of defeating
Goliath RJ Reynolds Tobacco Company and becoming
number one. It was hardly modest for Sony, as
a small, cash-strapped venture, to proclaim the goal
of changing the poor-quality image of Japanese
products around the world. (See the insert “Putting
It All Together: Sony in the 1950s.”) Of course, it’s
not only the audacity of the goal but also the level
of commitment to the goal that counts. Boeing
didn’t just envision a future dominated by its commercial
jets; it bet the company on the 707 and, later,
on the 747. Nike’s people didn’t just talk about
the idea of crushing Adidas; they went on a crusade
to fulfill the dream. Indeed, the envisioned future
should produce a bit of the “gulp factor”: when it
dawns on people what it will take to achieve the
goal, there should be an almost audible gulp.
But what about failure to realize the envisioned
future? In our research, we found that the visionary
companies displayed a remarkable ability to achieve
even their most audacious goals. Ford did democratize
the automobile; Citicorp did become the
most far-reaching bank in the world; Philip Morris
did rise from sixth to first and beat RJ Reynolds
worldwide; Boeing did become the dominant commercial
aircraft company; and it looks like WalMart
will achieve its $125 billion goal, even without
Sam Walton. In contrast, the comparison comHARVARD
BUSINESS REVIEW September-October 1996 75
What’s needed is such a big
commitment that when people
see what the goal will take,
there’s an almost audible gulp.
panies in our research frequently did not achieve
their BHAGs, if they set them at all. The difference
does not lie in setting easier goals: the visionary
companies tended to have even more audacious
ambitions. The difference does not lie in charismatic,
visionary leadership: the visionary companies
often achieved their BHAGs without such
larger-than-life leaders at the helm. Nor does the
difference lie in better strategy: the visionary companies
often realized their goals more by an organic
process of “let’s try a lot of stuff and keep
what works” than by well-laid strategic plans.
Rather, their success lies in building the strength of
their organization as their primary way of creating
the future.
Why did Merck become the preeminent drugmaker
in the world? Because Merck’s architects
built the best pharmaceutical research
and development organization
in the world. Why did Boeing
become the dominant commercial
aircraft company in the world? Because
of its superb engineering and
marketing organization, which had
the ability to make projects like the
747 a reality. When asked to name
the most important decisions that
have contributed to the growth and
success of Hewlett-Packard, David Packard answered
entirely in terms of decisions to build the
strength of the organization and its people.
Finally, in thinking about the envisioned future,
beware of the We’ve Arrived Syndrome – a complacent
lethargy that arises once an organization has
achieved one BHAG and fails to replace it with another.
NASA suffered from that syndrome after the
successful moon landings. After you’ve landed on
the moon, what do you do for an encore? Ford suffered
from the syndrome when, after it succeeded in
democratizing the automobile, it failed to set a new
goal of equal significance and gave General Motors
the opportunity to jump ahead in the 1930s. Apple
Computer suffered from the syndrome after achieving
the goal of creating a computer that nontechies
could use. Start-up companies frequently suffer
from the We’ve Arrived Syndrome after going public
or after reaching a stage in which survival no
longer seems in question. An envisioned future
helps an organization only as long as it hasn’t yet
been achieved. In our work with companies, we frequently
hear executives say, “It’s just not as exciting
around here as it used to be; we seem to have
lost our momentum.” Usually, that kind of remark
signals that the organization has climbed one
mountain and not yet picked a new one to climb.
Many executives thrash about with mission
statements and vision statements. Unfortunately,
76 HARVARD BUSINESS REVIEW September-October 1996
The basic dynamic of visionary
companies is to preserve the
core and stimulate progress. It is
vision that provides the context.
Putting It All Together: Sony in the 1950s
Envisioned Future
BHAG
Become the company most known for changing the
worldwide poor-quality image of Japanese products
Vivid Description
We will create products that become pervasive
around the world.… We will be the first Japanese
company to go into the U.S. market and distribute
directly.… We will succeed with innovations that
U.S. companies have failed at – such as the transistor
radio.… Fifty years from now, our brand name will be
as well known as any in the world…and will signify
innovation and quality that rival the most innovative
companies anywhere.… “Made in Japan” will mean
something fine, not something shoddy.
Core Ideology
Core Values
Elevation of the Japanese culture and
national status
Being a pioneer – not following others; doing
the impossible
Encouraging individual ability and creativity
Purpose
To experience the sheer joy of innovation and the
application of technology for the benefit and pleasure
of the general public
most of those statements turn out to be a muddled
stew of values, goals, purposes, philosophies, beliefs,
aspirations, norms, strategies, practices, and
descriptions. They are usually a boring, confusing,
structurally unsound stream of words that evoke
the response “True, but who cares?” Even more
problematic, seldom do these statements have a
direct link to the fundamental dynamic of visionary
companies: preserve the core and stimulate
progress. That dynamic, not vision or mission
statements, is the primary engine of enduring companies.
Vision simply provides the context for
bringing this dynamic to life. Building a visionary
company requires 1% vision and 99% alignment.
When you have superb alignment, a visitor could
drop in from outer space and infer your vision from
the operations and activities of the company without
ever reading it on paper or meeting a single senior
executive.
Creating alignment may be your most important
work. But the first step will always be to recast your
vision or mission into an effective context for
building a visionary company. If you do it right, you
shouldn’t have to do it again for at least a decade.
1. David Packard, speech given to Hewlett-Packard’s training group on
March 8, 1960; courtesy of Hewlett-Packard Archives.
2. See Nick Lyons, The Sony Vision (New York: Crown Publishers, 1976).
We also used a translation by our Japanese student Tsuneto Ikeda.
3. Akio Morita, Made in Japan (New York: E.P. Dutton, 1986), p. 147.
Reprint 410X To place an order, call 1-800-545-7685.
VISION
HARVARD BUSINESS REVIEW September-October 1996 77
ARTICLES
“What Leaders Really Do” by John P. Kotter
(Harvard Business Review, May–June 1990,
Product no. 3820)
This article sets the work of vision building
within the larger context of leadership.
Effective management and leadership are
both necessary in order for a company to
prosper—but they involve different tasks.
Management copes with complexity; leadership
deals with change. The leader’s job is to
set the direction of change by communicating
a vibrant vision of the company’s future—and
the strategies to achieve it—in ways that will
inspire and energize employees.
“Successful Change Programs Begin with
Results” by Robert H. Schaffer and Harvey A.
Thomson (Harvard Business Review,
January–February 1992, Product no. 92108)
A compelling vision is not enough: senior
management must identify the crucial business
challenges that change programs will
meet and then link them to the vision. Most
corporate change programs have a negligible
impact on operational and financial performance
because management focuses on the
activities, not the results. By contrast,
results-driven improvement programs focus
on achieving specific, measurable improvements
within a few months.
“Managing Change: The Art of Balancing”
by Jeanie Daniel Duck (Harvard Business
Review, November–December 1993,
Product no. 5416)
This article maintains that people issues are
at the heart of realizing a vision. Managing
change is like balancing a mobile. You have to
keep two conversations in balance: the one
between the people leading the change effort
and the one between those who are expected
to implement the new strategies. You also
have to manage emotional connections—
even though they have traditionally been
banned from the workplace, they are essential
for a successful transformation. By encouraging
this activity, management communicates
its understanding that transformation is diffi-
cult for everyone involved, and that people
issues are at the heart of change.
BOOK
Leading Change by John P. Kotter
(Harvard Business School Press, 1996,
Product no. 7471)
A Big, Hairy, Audacious Goal (BHAG) isn’t
realized overnight—you have to carefully lay
the groundwork, and that can sometimes take
years. Kotter identifies eight errors common
to transformation efforts and offers an eightstep
process for overcoming them: establishing
a greater sense of urgency; creating the
guiding coalition; developing a vision and
strategy; communicating the change vision;
empowering others to act; creating shortterm
wins; consolidating gains and producing
even more change; and institutionalizing new
approaches in the future.
EXPLORING FURTHER… Building Your Company’s Vision
U.S. and Canada: 800-988-0886
617-783-7500 • Fax: 617-783-7555
Visit us on the Web at:

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respond to my classmates

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Please write a 1/2 page paper to each student in response to their post (4 students + ½ page =2 pages). Each essay will only address one students response, meaning do not address multiple students in one essay; each student will have their own essay.  No title page needed and only use references that I have enclosed at the bottom of the page. Additionally, write in the first person but keep it professionally. DO NOT Critique their views, instead add to what they have posted, offer additional insight, and answer their questions any questions they have asked. Be thoughtful and considerate!
Directions
Please write a 1/2 page paper to each student in response to their post (4 students + ½ page =2 pages). Each essay will only address one students response, meaning do not address multiple students in one essay; each student will have their own essay.  No title page needed and only use references that I have enclosed at the bottom of the page. Additionally, write in the first person but keep it professionally. DO NOT Critique their views, instead add to what they have posted, offer additional insight, and answer their questions any questions they have asked. Be thoughtful and considerate!
 
Classmates were asked too

Unit 5 – Week 10 – Discussion

  • Unit 5 Discussion Video: Why Use Assessments?
  • How would you go about determining the quality of assessments and the assessment process?
  • How would you persuade others to consider spending a good amount of money to make a better hiring decision?
  • How would you deal with a very popular leader, one who is currently considered quite successful, who is being consider for a big promotion who doesn’t do very well on an assessment?
  • What role do you think assessments could play in systematically changing a culture? What road blocks might you encounter in this regard?

Use these questions to guide your thinking and help you jump into dialogue with your classmates. Just find something related to the discussion video that genuinely interests you and discuss it. Incorporate APA-formatted citations and references from the course readings and/or videos in your responses, as needed, to demonstrate your understanding of key concepts.
 
 
My Classmates Posts
TARA’s Post

  • In my career, I have probably hired close to fifty employees. To get to fifty employees I have interviewed well over a couple hundred. There was a time I got so tired of interviews that I created a system of bringing in four perspective candidates for every vacancy I had. I would strategically schedule 2-3 days of non-stop interviews to fill 4-5 positions. It was a grueling process that left me and the other managers emotionally and mentally exhausted. It was however, a successful tactic to get employees hired. Hiring employees is a time consuming process that saps manager’s time resulting in organizational loss of production and money. Dyer (2015) states interviews fail to determine a perspective employees cognitive ability, rather, they are tools used to determine if the individual will align into the current organizational culture. He is absolutely correct. I have often trained upcoming managers that I can teach just about anyone how to perform the technical aspects of the job, however, I cannot teach someone how to have a personality that aligns with the team. That is the purpose of the interview, to determine if a candidate will “fit”. Using a tool such as the valid assessment that Schein (2010) identifies is an organizational benefit. To persuade my management team on the benefits of such a tool, I can easily show them the cost savings value of utilizing a process such as this to identify candidates faster than simply bringing them in and shot-gunning people through an interview process and hoping for the best.

In your organization, what hiring methods have you or your managers utilized? Where they effective?
References
Dyer, P. (2015, October 7). Cultures in organizations Unit 5: Discussion video – Why use assessments?[Video file]. Retrieved from https://www.youtube.com/watch?v=imr2tUWxEVI
Schein, E. (2010). Organizational culture and leadership (4th ed.). San Francisco, CA: Jossey-Bass.
RACHEL’s POST

  • Dyer (2015) and Schein (2010) both recognize the importance of assessments regarding the selection and advancement of personnel within an organization.  It is critical to note the connection between a leader effectively leveraging valuable assessment tools and the leader’s ability to impact the underlying culture of the organization.

Leaders can affect incremental yet profound change on an organization’s culture by selecting personnel to assimilate into the organization who demonstrate the appropriate skills and abilities, but also demonstrate the aptitudes, tendencies, values, and personality which would fit best with the leader’s ultimate end state vision of the organization.  Simply, if a leader wants to change the culture of his organization to one that values tenure, organizational memory, and internal advancement, he is not likely to select even a well-qualified candidate who does not demonstrate a sense of loyalty to the organization, has a work history reflecting very short stays in each position, or expresses an intent to ultimately work for another organization or in another industry.  While the candidate may have the knowledge, skills, and abilities (KSA) to do the specific job for which the leader is hiring, further assessments would reveal this individual is not suited to work within the construct of the culture the leader is attempting to build.  Similarly, prospective candidates who take assessments that demonstrate opportunities for improvement in areas like trust, integrity, accountability, or problem solving would likely not be selected for positions within organizations attempting to improve these aspects of their cultures.  If you were the top leader in your organization and were able to leverage an assessment against new, prospective recruits, what would your assessment measure, and what traits would you be looking for to improve the culture of your current organization?
References
Dyer, P. (2015, October 7). Cultures in organizations Unit 5: Discussion video – Why use assessments?[Video file]. Retrieved from https://www.youtube.com/watch?v=imr2tUWxEVI
TOMMIE’s Post

  • To persuade others to consider spending a good amount of money to make a better hiring decision I would gather organizational data and research data to present my argument for it. The organizational data that I would present would include the organization’s turnover rate, reasons for terminations and resignations, and the amount of money spent for additional training and education that some employees needed outside of the basic orientation. I would use the turnover rate to prove the point that wrong hires were made and to show how much money it cost the organization to train new employees rather than hiring and retaining employees who are a better fit. The reasons for employee terminations and resignations could bolster the argument by showing that bad hiring decisions had been made. The money spent on additional training that some employees require can also show that bad hiring decisions were being made since the employees did not have the proper skills or abilities to perform the job for which they were hired.

Dyer (2015) stated that “the statistical correlation between job performance and job interviews is not much better than flipping a coin” (0:49). I would use research data such as this to prove that hiring based on the job interview alone is not very effective and that money should be spent to make better hiring decisions. I would also use data to bolster Dyer’s (2015) claim that using valid assessments that are designed to predict person and culture fit can be a good way to “systematically build the desired culture” (2:10). What are some other ways that you would persuade others to invest in improving hiring decisions? What kind of successful and unsuccessful hiring decisions/methods have you or your organizational leaders made?
Tommie
Reference
Dyer, P. (2015, October 7). Cultures in organizations Unit 5: Discussion video – Why use assessments?[Video file]. Retrieved from https://www.youtube.com/watch?v=imr2tUWxEVI
JOHN’s Post

  • I have very little experience with job interviews; so, as I watched Dr. Dyer’s (2015) video, I reflected on how my Branch selects its Commanding Officers. The process is lead by the Branch Director, who is responsible for senior leadership appointments within the Engineers. Each fall, the Director has a meeting with the Branch’s Colonels, and they review the Commanding Officer billets that will open up in two to three years. They assess potential candidates, and primaries and alternates are listed and sent to the Commander of the Canadian Army for his or her approval. The branch announces new Commanding Officers about six to nine months ahead of time.

There are several aspects that the Council of Colonels examines in each candidate, including experience, performance in past command roles, recommendations from past Commanders, training, education, bilingualism, and fitness. Of the aspects, experience and performance in past command roles are the most importance. Suitable candidates are expected to have a breadth of experience, having served on operations and having held key roles. Their performance in sub-unit command roles is also important. Branches hold boards each year to assess outgoing sub-unit commanders and whether they are suitable to command at the next level. The Branch pushes suitable files forward. They remove the unsuccessful files, and the candidate does not get reassessed.
There are a few reasons that I think the process works for us but would not for others. First, the process requires frequent and predictable turnover. Commanding Officers hold their positions for two years, so the selection process is routine and well established. It is not meant to select Commanding Officers out of sequence. Second, the Branch internally selects Commanding Officers. The typical candidate has twenty years in the Branch, which makes them known to the Colonels who select them. Selected Commanding Officers are always from within the occupation. Third, because the branch is small, more effort can be taken to select individuals. Only about ten positions are assigned each year. The process works because it is designed to meet the organization’s needs. I think the problem that Dr. Dyer (2015) alludes to is that organizations use the generic process because of simplicity rather than reflecting the organizations’ needs,
 
John
 
Reference:
Dyer, P. (2015, October 7). Cultures in organizations Unit 5: Discussion video – Why use assessments?[Video file]. Retrieved from https://www.youtube.com/watch?v=imr2tUWxEVI.
 
References
Dyer, P. (2015, October 7). Cultures in organizations Unit 5: Discussion video – Why use assessments?[Video file]. Retrieved from https://www.youtube.com/watch?v=imr2tUWxEVI
Collins, J. C., & Porras, J., I. (1996, September-October). Building your company’s vision. Harvard Business Review, 65-77.
Kegan, R., & Lahey, L. L. (2001). The reason people won’t change. Harvard Business Review, 2-9.
Kotter, J. P. (1995, March-April). Leading change: Why transformation efforts fail. Harvard Business Review, 1-8.
Schein, E. (2010). Organizational culture and leadership (4th ed.). San Francisco, CA: Jossey-Bass.
Senge, P. (2014). Peter Senge introduction to systems thinking [Video file]. Retrieved from https://www.youtube.com/watch?v=eXdzKBWDraM
HBR
OnPoint
FROM THE HARVARD BUSINESS REVIEW
ARTICLE
Building Your
Company’s Vision
by James C. Collins and Jerry I. Porras
New sections to
guide you through
the article:
• The Idea in Brief
• The Idea at Work
• Exploring Further. . .
PRODUCT NUMBER 410X
An enduring
corporate vision guides
you through change.
It also spells out
what will never change.
THE IDEA
Hewlett-packard. 3M. Sony. Companies
with exceptionally durable visions that are
“built to last.” What distinguishes their visions
from most others, those empty muddles that
get revised with every passing business fad, but
never prompt anything more than a yawn?
Enduring companies have clear plans for how
they will advance into an uncertain future.
But they are equally clear about how they will
remain steadfast, about the values and purposes
they will always stand for. This Harvard
Business Review article describes the two components
of any lasting vision: core ideology
and an envisioned future.
Building Your Company’s Vision
Acompany’s practices and strategies should
change continually; its core ideology should
not. Core ideology defines a company’s timeless
character. It’s the glue that holds the enterprise
together even when everything else is
up for grabs. Core ideology is something you
discover—by looking inside. It’s not something
you can invent, much less fake.
A core ideology has two parts:
1. Core values are the handful of guiding
principles by which a company navigates.
They require no external justification. For
example, Disney’s core values of imagination
and wholesomeness stem from the
founder’s belief that these should be nurtured
for their own sake, not merely to capitalize
on a business opportunity. Instead of
changing its core values, a great company
will change its markets—seek out different
customers—in order to remain true to its
core values.
2. Core purpose is an organization’s most fundamental
reason for being. It should not be
confused with the company’s current product
lines or customer segments. Rather, it
reflects people’s idealistic motivations for
doing the company’s work. Disney’s core
purpose is to make people happy—not to
build theme parks and make cartoons.
HBR OnPoint © 2000 by Harvard Business School Publishing Corporation. All rights reserved.
An envisioned future, the second component of
an effective vision, has two elements:
1. Big, Hairy, Audacious Goals (BHAGs) are
ambitious plans that rev up the entire
organization. They typically require 10 to
30 years’ work to complete.
2. Vivid descriptions paint a picture of what
it will be like to achieve the BHAGs. They
make the goals vibrant, engaging—and
tangible.
EXAMPLE:
In the 1950s, Sony’s goal was to “become the company
most known for changing the worldwide
poor-quality image of Japanese products.” It made
this BHAG vivid by adding,“Fifty years from now,
our brand name will be as well known as any in
the world . . . and will signify innovation and quality.
. . .‘Made in Japan’ will mean something fine,
not something shoddy.”
Don’t confuse your company’s core ideology
with its envisioned future—in particular, don’t
confuse a BHAG with a core purpose. A BHAG
is a clearly articulated goal that is reachable
within 10 to 30 years. But your core purpose
can never be completed.
THE IDEA AT WORK
IN BRIEF
We shall not cease from exploration
And the end of all our exploring
Will be to arrive where we started
And know the place for the first time.
T.S. Eliot, Four Quartets
Companies that enjoy enduring success have
core values and a core purpose that remain fixed
while their business strategies and practices endlessly
adapt to a changing world. The dynamic of
preserving the core while stimulating progress
is the reason that companies such as HewlettPackard,
3M, Johnson & Johnson, Procter & Gamble,
Merck, Sony, Motorola, and Nordstrom became
elite institutions able to renew themselves
and achieve superior long-term performance.
Hewlett-Packard employees have long known that
radical change in operating practices, cultural
norms, and business strategies does not mean losing
the spirit of the HP Way – the company’s core
principles. Johnson & Johnson continually questions
its structure and revamps its processes while
preserving the ideals embodied in its credo. In 1996,
3M sold off several of its large mature businesses –
a dramatic move that surprised the business press–
to refocus on its enduring core purpose of solving
unsolved problems innovatively. We studied companies
such as these in our research for Built to
Last: Successful Habits of Visionary Companies
and found that they have outperformed the general
stock market by a factor of 12 since 1925.
HARVARD BUSINESS REVIEW September-October 1996 Copyright © 1996 by James C. Collins and Jerry I. Porras. All rights reserved.
HBR
SEPTEMBER-OCTOBER 1996
James C. Collins is a management educator and writer
based in Boulder, Colorado, where he operates a management
learning laboratory for conducting research
and working with executives. He is also a visiting professor
of business administration at the University of Virginia
in Charlottesville. Jerry I. Porras is the Lane Professor
of Organizational Behavior and Change at Stanford
University’s Graduate School of Business in Stanford,
California, where he is also the director of the Executive
Program in Leading and Managing Change. Collins and
Porras are coauthors of Built to Last: Successful Habits of
Visionary Companies (HarperBusiness, 1994).
by James C. Collins and Jerry I. Porras
Truly great companies understand the difference
between what should never change and what
should be open for change, between what is genuinely
sacred and what is not. This rare ability to
manage continuity and change – requiring a consciously
practiced discipline – is closely linked to
the ability to develop a vision. Vision provides guidance
about what core to preserve and what future to
stimulate progress toward. But vision has become
one of the most overused and least understood
words in the language, conjuring up different images
for different people: of deeply held values, outstanding
achievement, societal bonds, exhilarating
goals, motivating forces, or raisons d’être. We recommend
a conceptual framework to define vision,
add clarity and rigor to the vague and fuzzy concepts
swirling around that trendy term, and give
practical guidance for articulating a coherent vision
within an organization. It is a prescriptive framework
rooted in six years of research and refined and
tested by our ongoing work with executives from a
great variety of organizations around the world.
A well-conceived vision consists of two major
components: core ideology and envisioned future.
(See the exhibit “Articulating a Vision.”) Core ideology,
the yin in our scheme, defines what we stand
for and why we exist. Yin is unchanging and complements
yang, the envisioned future. The envisioned
future is what we aspire to become, to
achieve, to create – something that will require significant
change and progress to attain.
Core Ideology
Core ideology defines the enduring character of
an organization – a consistent identity that transcends
product or market life cycles, technological
breakthroughs, management fads, and individual
leaders. In fact, the most lasting and significant
contribution of those who build visionary companies
is the core ideology. As Bill Hewlett said
about his longtime friend and business
partner David Packard upon
Packard’s death not long ago, “As far
as the company is concerned, the
greatest thing he left behind him was
a code of ethics known as the HP
Way.” HP‘s core ideology, which has
guided the company since its inception
more than 50 years ago, includes
a deep respect for the individual, a dedication to affordable
quality and reliability, a commitment to
community responsibility (Packard himself bequeathed
his $4.3 billion of Hewlett-Packard stock
to a charitable foundation), and a view that the
company exists to make technical contributions for
the advancement and welfare of humanity. Company
builders such as David Packard, Masaru Ibuka of
Sony, George Merck of Merck, William McKnight
of 3M, and Paul Galvin of Motorola understood that
it is more important to know who you are than
where you are going, for where you are going will
change as the world around you changes. Leaders
die, products become obsolete, markets change,
new technologies emerge, and management fads
come and go, but core ideology in a great company
endures as a source of guidance and inspiration.
Core ideology provides the glue that holds an
organization together as it grows, decentralizes, diversifies,
expands globally, and develops workplace
diversity. Think of it as analogous to the principles
of Judaism that held the Jewish people together for
centuries without a homeland, even as they spread
throughout the Diaspora. Or think of the truths
held to be self-evident in the Declaration of Independence,
or the enduring ideals and principles of
the scientific community that bond scientists from
every nationality together in the common purpose
of advancing human knowledge. Any effective vision
must embody the core ideology of the organization,
which in turn consists of two distinct parts:
core values, a system of guiding principles and
tenets; and core purpose, the organization’s most
fundamental reason for existence.
Core Values. Core values are the essential and enduring
tenets of an organization. A small set of
timeless guiding principles, core values require no
external justification; they have intrinsic value and
importance to those inside the organization. The
Walt Disney Company’s core values of imagination
and wholesomeness stem not from market requirements
but from the founder’s inner belief that
imagination and wholesomeness should be nurtured
for their own sake. William Procter and James
Gamble didn’t instill in P&G’s culture a focus on
product excellence merely as a strategy for success
but as an almost religious tenet. And that value has
been passed down for more than 15 decades by P&G
people. Service to the customer – even to the point
of subservience – is a way of life at Nordstrom that
traces its roots back to 1901, eight decades before
VISION
66 HARVARD BUSINESS REVIEW September-October 1996
Core ideology provides the glue
that holds an organization
together through time.
customer service programs became stylish. For Bill
Hewlett and David Packard, respect for the individual
was first and foremost a deep personal value;
they didn’t get it from a book or hear it from a management
guru. And Ralph S. Larsen, CEO of Johnson
& Johnson, puts it this way: “The core values
embodied in our credo might be a competitive
advantage, but that is not why we have them. We
have them because they define for us what we stand
for, and we would hold them even if they became
a competitive disadvantage in certain situations.”
The point is that a great company decides for
itself what values it holds to be core, largely independent
of the current environment, competitive
requirements, or management fads. Clearly, then,
there is no universally right set of core values.
A company need not have as its core value customer
service (Sony doesn’t) or respect for the individual
(Disney doesn’t) or quality (Wal-Mart Stores
doesn’t) or market focus (HP doesn’t) or teamwork
(Nordstrom doesn’t). A company might have operating
practices and business strategies around those
qualities without having them at the essence of its
being. Furthermore, great companies need not have
likable or humanistic core values, although many
do. The key is not what core values an organization
has but that it has core values at all.
Companies tend to have only a few core values,
usually between three and five. In fact, we found
that none of the visionary companies we studied in
our book had more than five: most had only three or
four. (See the insert “Core Values Are a Company’s
Essential Tenets.”) And, indeed, we should expect
that. Only a few values can be truly core–that is, so
fundamental and deeply held that they will change
seldom, if ever.
To identify the core values of your own organization,
push with relentless honesty to define what
values are truly central. If you articulate more than
five or six, chances are that you are confusing core
values (which do not change) with operating practices,
business strategies, or cultural norms (which
should be open to change). Remember, the values
must stand the test of time. After you’ve drafted a
preliminary list of the core values, ask about each
one, If the circumstances changed and penalized us
for holding this core value, would we still keep it? If
you can’t honestly answer yes, then the value is not
core and should be dropped from consideration.
A high-technology company wondered whether
it should put quality on its list of core values. The
CEO asked, “Suppose in ten years quality doesn’t
make a hoot of difference in our markets. Suppose
the only thing that matters is sheer speed and
horsepower but not quality. Would we still want to
put quality on our list of core values?” The members
of the management team looked around at one
another and finally said no. Quality stayed in the
strategy of the company, and quality-improvement
programs remained in place as a mechanism for
stimulating progress; but quality did not make the
list of core values.
The same group of executives then wrestled with
leading-edge innovation as a core value. The CEO
asked, “Would we keep innovation on the list as
a core value, no matter how the world around us
changed?” This time, the management team gave
a resounding yes. The managers’ outlook might be
summarized as, “We always want to do leadingedge
innovation. That’s who we are. It’s really important
to us and always will be. No matter what.
And if our current markets don’t value it, we will
find markets that do.” Leading-edge innovation
went on the list and will stay there. A company
should not change its core values in response to
market changes; rather, it should change markets,
if necessary, to remain true to its core values.
Who should be involved in articulating the core
values varies with the size, age, and geographic dispersion
of the company, but in many situations we
have recommended what we call a Mars Group. It
works like this: Imagine that you’ve been asked to
re-create the very best attributes of your organization
on another planet but you have seats on the
rocket ship for only five to seven people. Whom
should you send? Most likely, you’ll choose the
people who have a gut-level understanding of your
core values, the highest level of credibility with
their peers, and the highest levels of competence.
HARVARD BUSINESS REVIEW September-October 1996 67
Articulating a Vision
Core Ideology
Core values
Core purpose
Envisioned Future
10-to-30-year BHAG
(Big, Hairy, Audacious Goal)
Vivid description
We’ll often ask people brought together to work on
core values to nominate a Mars Group of five to
seven individuals (not necessarily all from the assembled
group). Invariably, they end up selecting
highly credible representatives who do a super job
of articulating the core values precisely because
they are exemplars of those values–a representative
slice of the company’s genetic code.
Even global organizations composed of people
from widely diverse cultures can identify a set of
shared core values. The secret is to work from the
individual to the organization. People involved in
articulating the core values need to answer several
questions: What core values do you personally
bring to your work? (These should be so fundamental
that you would hold them regardless of whether
or not they were rewarded.) What would you tell
your children are the core values that you hold at
work and that you hope they will hold when they
become working adults? If you awoke tomorrow
morning with enough money to retire for the rest of
your life, would you continue to live those core values?
Can you envision them being as valid for you
100 years from now as they are today? Would you
want to hold those core values, even if at some
point one or more of them became a competitive
disadvantage? If you were to start a new organization
tomorrow in a different line of work, what core
values would you build into the new organization
regardless of its industry? The last three questions
are particularly important because they make the
crucial distinction between enduring core values
68 HARVARD BUSINESS REVIEW September-October 1996
that should not change and practices and strategies
that should be changing all the time.
Core Purpose. Core purpose, the second part of
core ideology, is the organization’s reason for being.
An effective purpose reflects people’s idealistic motivations
for doing the company’s work. It doesn’t
just describe the organization’s output or target
customers; it captures the soul of the organization.
(See the insert “Core Purpose Is a Company’s Reason
for Being.”) Purpose, as illustrated by a speech
David Packard gave to HP employees in 1960, gets
at the deeper reasons for an organization’s existence
beyond just making money. Packard said,
I want to discuss why a company exists in the first place.
In other words, why are we here? I think many people
assume, wrongly, that a company exists simply to make
money. While this is an important result of a company’s
existence, we have to go deeper and find the real reasons
for our being. As we investigate this, we inevitably come
to the conclusion that a group of people get together and
exist as an institution that we call a company so they are
able to accomplish something collectively that they
could not accomplish separately – they make a contribution
to society, a phrase which sounds trite but is fundamental.…
You can look around [in the general business
world and] see people who are interested in money and
nothing else, but the underlying drives come largely from
a desire to do something else: to make a product, to give
a service – generally to do something which is of value.1
Purpose (which should last at least 100 years)
should not be confused with specific goals or busiCore
Values Are a Company’s Essential Tenets
Encouraging individual initiative
Opportunity based on merit; no one is entitled
to anything
Hard work and continuous self-improvement
Sony
Elevation of the Japanese culture and
national status
Being a pioneer – not following others; doing
the impossible
Encouraging individual ability and creativity
Walt Disney
No cynicism
Nurturing and promulgation of “wholesome
American values”
Creativity, dreams, and imagination
Fanatical attention to consistency and detail
Preservation and control of the Disney magic
Merck
Corporate social responsibility
Unequivocal excellence in all aspects of
the company
Science-based innovation
Honesty and integrity
Profit, but profit from work that benefits
humanity
Nordstrom
Service to the customer above all else
Hard work and individual productivity
Never being satisfied
Excellence in reputation; being part of
something special
Philip Morris
The right to freedom of choice
Winning – beating others in a good fight
ness strategies (which should change many times
in 100 years). Whereas you might achieve a goal or
complete a strategy, you cannot fulfill a purpose; it
is like a guiding star on the horizon – forever pursued
but never reached. Yet although purpose itself
does not change, it does inspire change. The very
fact that purpose can never be fully realized means
that an organization can never stop stimulating
change and progress.
In identifying purpose, some companies make
the mistake of simply describing their current product
lines or customer segments. We
do not consider the following statement
to reflect an effective purpose:
“We exist to fulfill our government
charter and participate in the secondary
mortgage market by packaging
mortgages into investment
securities.” The statement is merely
descriptive. A far more effective
statement of purpose would be that
expressed by the executives of the
Federal National Mortgage Association, Fannie
Mae: “To strengthen the social fabric by continually
democratizing home ownership.” The secondary
mortgage market as we know it might not even exist
in 100 years, but strengthening the social fabric
by continually democratizing home ownership can
be an enduring purpose, no matter how much the
world changes. Guided and inspired by this purpose,
Fannie Mae launched in the early 1990s a series
of bold initiatives, including a program to develop
new systems for reducing mortgage underwriting
costs by 40% in five years; programs to
eliminate discrimination in the lending process
(backed by $5 billion in underwriting experiments);
and an audacious goal to provide, by the year 2000,
$1 trillion targeted at 10 million families that had
traditionally been shut out of home ownership –
minorities, immigrants, and low-income groups.
Similarly, 3M defines its purpose not in terms of
adhesives and abrasives but as the perpetual quest
to solve unsolved problems innovatively–a purpose
that is always leading 3M into new fields. McKinsey
& Company’s purpose is not to do management
consulting but to help corporations and governments
be more successful: in 100 years, it might
involve methods other than consulting. HewlettPackard
doesn’t exist to make electronic test and
measurement equipment but to make technical
contributions that improve people’s lives – a purpose
that has led the company far afield from its
origins in electronic instruments. Imagine if Walt
VISION
HARVARD BUSINESS REVIEW September-October 1996 69
Core ideology consists of core
values and core purpose.
Core purpose is a raison d’être,
not a goal or business strategy.
Core Purpose Is a Company’s Reason for Being
3M: To solve unsolved problems innovatively
Cargill: To improve the standard of living around
the world
Fannie Mae: To strengthen the social fabric by
continually democratizing home ownership
Hewlett-Packard: To make technical contributions
for the advancement and welfare of humanity
Lost Arrow Corporation: To be a role model and a
tool for social change
Pacific Theatres: To provide a place for people to
flourish and to enhance the community
Mary Kay Cosmetics: To give unlimited opportunity
to women
McKinsey & Company: To help leading corporations
and governments be more successful
Merck: To preserve and improve human life
Nike: To experience the emotion of competition,
winning, and crushing competitors
Sony: To experience the joy of advancing and applying
technology for the benefit of the public
Telecare Corporation: To help people with mental
impairments realize their full potential
Wal-Mart: To give ordinary folk the chance to buy the
same things as rich people
Walt Disney: To make people happy
Disney had conceived of his company’s purpose as
to make cartoons, rather than to make people
happy; we probably wouldn’t have Mickey Mouse,
Disneyland, EPCOT Center, or the Anaheim Mighty
Ducks Hockey Team.
One powerful method for getting at purpose is
the five whys. Start with the descriptive statement
We make X products or We deliver X services, and
then ask, Why is that important? five times. After
a few whys, you’ll find that you’re
getting down to the fundamental
purpose of the organization.
We used this method to deepen
and enrich a discussion about purpose
when we worked with a certain
market-research company. The executive
team first met for several hours
and generated the following statement
of purpose for their organization:
To provide the best marketresearch
data available. We then asked the following
question: Why is it important to provide the
best market-research data available? After some
discussion, the executives answered in a way that
reflected a deeper sense of their organization’s purpose:
To provide the best market-research data
available so that our customers will understand
their markets better than they could otherwise.
A further discussion let team members realize that
their sense of self-worth came not just from helping
customers understand their markets better but also
from making a contribution to their customers’
success. This introspection eventually led the company
to identify its purpose as: To contribute to our
customers’ success by helping them understand
their markets. With this purpose in mind, the company
now frames its product decisions not with the
question Will it sell? but with the question Will it
make a contribution to our customers’ success?
The five whys can help companies in any industry
frame their work in a more meaningful way. An
asphalt and gravel company might begin by saying,
We make gravel and asphalt products. After a few
whys, it could conclude that making asphalt and
gravel is important because the quality of the infrastructure
plays a vital role in people’s safety and experience;
because driving on a pitted road is annoying
and dangerous; because 747s cannot land safely
on runways built with poor workmanship or inferior
concrete; because buildings with substandard
materials weaken with time and crumble in earthquakes.
From such introspection may emerge this
purpose: To make people’s lives better by improving
the quality of man-made structures. With a
sense of purpose very much along those lines, Granite
Rock Company of Watsonville, California, won
the Malcolm Baldrige National Quality Award–not
an easy feat for a small rock quarry and asphalt
company. And Granite Rock has gone on to be one
of the most progressive and exciting companies
we’ve encountered in any industry.
Notice that none of the core purposes fall into
the category “maximize shareholder wealth.” A primary
role of core purpose is to guide and inspire.
Maximizing shareholder wealth does not inspire people
at all levels of an organization, and it provides
precious little guidance. Maximizing shareholder
wealth is the standard off-the-shelf purpose for
those organizations that have not yet identified
their true core purpose. It is a substitute – and a
weak one at that.
When people in great organizations talk about
their achievements, they say very little about earnings
per share. Motorola people talk about impressive
quality improvements and the effect of the
products they create on the world. Hewlett-Packard
people talk about their technical contributions to
the marketplace. Nordstrom people talk about
heroic customer service and remarkable individual
performance by star salespeople. When a Boeing engineer
talks about launching an exciting and revolutionary
new aircraft, she does not say, “I put my
heart and soul into this project because it would
add 37 cents to our earnings per share.”
One way to get at the purpose that lies beyond
merely maximizing shareholder wealth is to play
the “Random Corporate Serial Killer” game. It
works like this: Suppose you could sell the company
to someone who would pay a price that everyone
inside and outside the company agrees is more
than fair (even with a very generous set of assumptions
about the expected future cash flows of the
company). Suppose further that this buyer would
guarantee stable employment for all employees at
the same pay scale after the purchase but with no
guarantee that those jobs would be in the same industry.
Finally, suppose the buyer plans to kill the
company after the purchase – its products or services
would be discontinued, its operations would
VISION
70 HARVARD BUSINESS REVIEW September-October 1996
Listen to people in truly great
companies talk about their
achievements–you will hear
little about earnings per share.
be shut down, its brand names would be shelved
forever, and so on. The company would utterly and
completely cease to exist. Would you accept the
offer? Why or why not? What would be lost if the
company ceased to exist? Why is it important that
the company continue to exist? We’ve found this
exercise to be very powerful for helping hard-nosed,
financially focused executives reflect on their organization’s
deeper reasons for being.
Another approach is to ask each member of the
Mars Group, How could we frame the purpose of
this organization so that if you woke up tomorrow
morning with enough money in the bank to retire,
you would nevertheless keep working here? What
deeper sense of purpose would motivate you to continue
to dedicate your precious creative energies to
this company’s efforts?
As they move into the twenty-first century, companies
will need to draw on the full creative energy
and talent of their people. But why should people
give full measure? As Peter Drucker has pointed
out, the best and most dedicated people are ultimately
volunteers, for they have the opportunity to
do something else with their lives. Confronted
with an increasingly mobile society, cynicism
about corporate life, and an expanding entrepreneurial
segment of the economy, companies more
than ever need to have a clear understanding of
their purpose in order to make work meaningful
and thereby attract, motivate, and retain outstanding
people.
Discovering Core Ideology
You do not create or set core ideology. You discover
core ideology. You do not deduce it by looking
at the external environment. You understand it by
looking inside. Ideology has to be authentic. You
cannot fake it. Discovering core ideology is not an
intellectual exercise. Do not ask, What core values
should we hold? Ask instead, What core values do
we truly and passionately hold? You should not
confuse values that you think the organization
ought to have – but does not – with authentic core
values. To do so would create cynicism throughout
the organization. (“Who’re they trying to kid? We
all know that isn’t a core value around here!”) Aspirations
are more appropriate as part of your envisioned
future or as part of your strategy, not as part
of the core ideology. However, authentic core values
that have weakened over time can be considered
a legitimate part of the core ideology – as long
as you acknowledge to the organization that you
must work hard to revive them.
Also be clear that the role of core ideology is to
guide and inspire, not to differentiate. Two companies
can have the same core values or purpose.
Many companies could have the purpose to make
technical contributions, but few live it as passionately
as Hewlett-Packard. Many companies could
have the purpose to preserve and improve human
life, but few hold it as deeply as Merck. Many companies
could have the core value of heroic customer
service, but few create as intense a culture around
that value as Nordstrom. Many companies could
have the core value of innovation, but few create
the powerful alignment mechanisms that stimulate
the innovation we see at 3M. The authenticity,
the discipline, and the consistency with which the
ideology is lived – not the content of the ideology –
differentiate visionary companies from the rest of
the pack.
Core ideology needs to be meaningful and inspirational
only to people inside the organization; it
need not be exciting to outsiders. Why not? Because
it is the people inside the organization who need to
commit to the organizational ideology over the
long term. Core ideology can also play a role in determining
who is inside and who is not. A clear and
well-articulated ideology attracts to the company
people whose personal values are compatible with
the company’s core values; conversely, it repels
those whose personal values are incompatible. You
cannot impose new core values or purpose on people.
Nor are core values and purpose things people
can buy into. Executives often ask, How do we get
people to share our core ideology?
You don’t. You can’t. Instead, find
people who are predisposed to share
your core values and purpose; attract
and retain those people; and let those
who do not share your core values go
elsewhere. Indeed, the very process
of articulating core ideology may
cause some people to leave when
they realize that they are not personally compatible
with the organization’s core. Welcome that outcome.
It is certainly desirable to retain within the
core ideology a diversity of people and viewpoints.
People who share the same core values and purpose
do not necessarily all think or look the same.
HARVARD BUSINESS REVIEW September-October 1996 71
You discover core ideology by
looking inside. It has to be
authentic. You can’t fake it.
Don’t confuse core ideology itself with coreideology
statements. A company can have a very
strong core ideology without a formal statement.
For example, Nike has not (to our knowledge) formally
articulated a statement of its core purpose.
Yet, according to our observations, Nike has a powerful
core purpose that permeates the entire organization:
to experience the emotion of competition,
winning, and crushing competitors. Nike has a
campus that seems more like a shrine to the competitive
spirit than a corporate office complex.
Giant photos of Nike heroes cover the walls, bronze
plaques of Nike athletes hang along the Nike Walk
of Fame, statues of Nike athletes stand alongside
the running track that rings the campus, and buildings
honor champions such as Olympic marathoner
Joan Benoit, basketball superstar Michael Jordan,
and tennis pro John McEnroe. Nike people who do
not feel stimulated by the competitive spirit and
the urge to be ferocious simply do not last long in
the culture. Even the company’s name reflects a
sense of competition: Nike is the Greek goddess of
victory. Thus, although Nike has not formally articulated
its purpose, it clearly has a strong one.
Identifying core values and purpose is therefore
not an exercise in wordsmithery. Indeed, an organization
will generate a variety of statements over
time to describe the core ideology. In HewlettPackard‘s
archives, we found more than half a
dozen distinct versions of the HP Way, drafted by
David Packard between 1956 and 1972. All versions
stated the same principles, but the words used varied
depending on the era and the circumstances.
Similarly, Sony’s core ideology has been stated
many different ways over the company’s history.
At its founding, Masaru Ibuka described two key
elements of Sony’s ideology: “We shall welcome
technical difficulties and focus on highly sophisticated
technical products that have great usefulness
for society regardless of the quantity involved; we
shall place our main emphasis on ability, performance,
and personal character so that each individual
can show the best in ability and skill.”2 Four
decades later, this same concept appeared in a statement
of core ideology called Sony Pioneer Spirit:
“Sony is a pioneer and never intends to follow others.
Through progress, Sony wants to serve the
whole world. It shall be always a seeker of the unVISION
72 HARVARD BUSINESS REVIEW September-October 1996
Big, Hairy, Audacious Goals Aid Long-Term Vision
Target BHAGs can be quantitative or qualitative
Become a $125 billion company by the year 2000
(Wal-Mart, 1990)
Democratize the automobile (Ford Motor
Company, early 1900s)
Become the company most known for changing
the worldwide poor-quality image of Japanese
products (Sony, early 1950s)
Become the most powerful, the most serviceable,
the most far-reaching world financial institution
that has ever been (City Bank, predecessor to
Citicorp, 1915)
Become the dominant player in commercial
aircraft and bring the world into the jet age
(Boeing, 1950)
Common-enemy BHAGs involve
David-versus-Goliath thinking
Knock off RJR as the number one tobacco
company in the world (Philip Morris, 1950s)
Crush Adidas (Nike, 1960s)
Yamaha wo tsubusu! We will destroy Yamaha!
(Honda, 1970s)
Role-model BHAGs suit up-and-coming
organizations
Become the Nike of the cycling industry
(Giro Sport Design, 1986)
Become as respected in 20 years as
Hewlett-Packard is today (Watkins-Johnson, 1996)
Become the Harvard of the West
(Stanford University, 1940s)
Internal-transformation BHAGs suit large,
established organizations
Become number one or number two in every
market we serve and revolutionize this company
to have the strengths of a big company combined
with the leanness and agility of a small company
(General Electric Company, 1980s)
Transform this company from a defense contractor
into the best diversified high-technology company
in the world (Rockwell, 1995)
Transform this division from a poorly respected
internal products supplier to one of the most
respected, exciting, and sought-after divisions in
the company (Components Support Division of a
computer products company, 1989)
known.… Sony has a principle of respecting and encouraging
one’s ability…and always tries to bring
out the best in a person. This is the vital force of
Sony.”3 Same core values, different words.
You should therefore focus on getting the content
right – on capturing the essence of the core values
and purpose. The point is not to create a perfect
statement but to gain a deep understanding
of your organization’s core
values and purpose, which can then
be expressed in a multitude of ways.
In fact, we often suggest that once
the core has been identified, managers
should generate their own
statements of the core values and
purpose to share with their groups.
Finally, don’t confuse core ideology with the concept
of core competence. Core competence is a strategic
concept that defines your organization’s capabilities–what
you are particularly good at–whereas
core ideology captures what you stand for and
why you exist. Core competencies should be well
aligned with a company’s core ideology and are often
rooted in it; but they are not the same thing. For
example, Sony has a core competence of miniaturization
– a strength that can be strategically applied
to a wide array of products and markets. But it does
not have a core ideology of miniaturization. Sony
might not even have miniaturization as part of its
strategy in 100 years, but to remain a great company,
it will still have the same core values described
in the Sony Pioneer Spirit and the same fundamental
reason for being–namely, to advance technology
for the benefit of the general public. In a visionary
company like Sony, core competencies change over
the decades, whereas core ideology does not.
Once you are clear about the core ideology, you
should feel free to change absolutely anything that
is not part of it. From then on, whenever someone
says something should not change because “it’s
part of our culture” or “we’ve always done it that
way” or any such excuse, mention this simple rule:
If it’s not core, it’s up for change. The strong version
of the rule is, If it’s not core, change it! Articulating
core ideology is just a starting point, however. You
also must determine what type of progress you
want to stimulate.
Envisioned Future
The second primary component of the vision
framework is envisioned future. It consists of two
parts: a 10-to-30-year audacious goal plus vivid descriptions
of what it will be like to achieve the goal.
We recognize that the phrase envisioned future is
somewhat paradoxical. On the one hand, it conveys
concreteness – something visible, vivid, and real.
On the other hand, it involves a time yet unrealized–with
its dreams, hopes, and aspirations.
Vision-level BHAG. We found in our research
that visionary companies often use bold missions –
or what we prefer to call BHAGs (pronounced
BEE-hags and shorthand for Big, Hairy, Audacious
Goals)–as a powerful way to stimulate progress. All
companies have goals. But there is a difference between
merely having a goal and becoming committed
to a huge, daunting challenge–such as climbing
Mount Everest. A true BHAG is clear and compelling,
serves as a unifying focal point of effort,
and acts as a catalyst for team spirit. It has a clear
finish line, so the organization can know when it
has achieved the goal; people like to shoot for finish
lines. A BHAG engages people – it reaches out and
grabs them. It is tangible, energizing, highly focused.
People get it right away; it takes little or no
explanation. For example, NASA’s 1960s moon
mission didn’t need a committee of wordsmiths to
spend endless hours turning the goal into a verbose,
impossible-to-remember mission statement. The
goal itself was so easy to grasp–so compelling in its
own right – that it could be said 100 different ways
yet be easily understood by everyone. Most corporate
statements we’ve seen do little to spur forward
movement because they do not contain the powerful
mechanism of a BHAG.
Although organizations may have many BHAGs
at different levels operating at the same time, vision
requires a special type of BHAG–a vision-level
BHAG that applies to the entire organization and
requires 10 to 30 years of effort to complete. Setting
the BHAG that far into the future requires thinking
beyond the current capabilities of the organization
and the current environment. Indeed, inventing
such a goal forces an executive team to be visionary,
rather than just strategic or tactical. A BHAG
should not be a sure bet – it will have perhaps only
a 50% to 70% probability of success – but the organization
must believe that it can reach the goal anyway.
A BHAG should require extraordinary effort
and perhaps a little luck. We have helped companies
create a vision-level BHAG by advising them
HARVARD BUSINESS REVIEW September-October 1996 73
Companies need an audacious
10-to-30-year goal to progress
toward an envisioned future.
to think in terms of four broad categories: target
BHAGs, common-enemy BHAGs, role-model
BHAGs, and internal-transformation BHAGs. (See
the insert “Big, Hairy, Audacious Goals Aid LongTerm
Vision.”)
Vivid Description. In addition to vision-level
BHAGs, an envisioned future needs what we call
vivid description – that is, a vibrant, engaging,
and specific description of what it will be like to
achieve the BHAG. Think of it as translating the vision
from words into pictures, of creating an image
that people can carry around in their heads. It is a
question of painting a picture with your words. Picture
painting is essential for making the 10-to-30-
year BHAG tangible in people’s minds.
For example, Henry Ford brought to life the goal
of democratizing the automobile with this vivid description:
“I will build a motor car for the great
multitude.… It will be so low in price that no man
making a good salary will be unable to own one
and enjoy with his family the blessing of hours of
pleasure in God’s great open spaces.… When I’m
through, everybody will be able to afford one, and
everyone will have one. The horse will have disappeared
from our highways, the automobile will be
taken for granted…[and we will] give a large number
of men employment at good wages.”
The components-support division of a computerproducts
company had a general manager who was
able to describe vividly the goal of becoming one of
the most sought-after divisions in the company:
“We will be respected and admired by our peers.…
Our solutions will be actively sought by the endproduct
divisions, who will achieve significant
product ‘hits’ in the marketplace largely because of
our technical contribution.… We will have pride in
ourselves.… The best up-and-coming people in the
company will seek to work in our division.… People
will give unsolicited feedback that they love
what they are doing.… [Our own] people will walk
on the balls of their feet.… [They] will willingly
work hard because they want to.… Both employees
and customers will feel that our division has contributed
to their life in a positive way.”
In the 1930s, Merck had the BHAG to transform
itself from a chemical manufacturer into one of the
preeminent drug-making companies in the world,
with a research capability to rival any major university.
In describing this envisioned future, George
Merck said at the opening of Merck’s research facility
in 1933, “We believe that research work carried
on with patience and persistence will bring to industry
and commerce new life; and we have faith
that in this new laboratory, with the tools we have
supplied, science will be advanced, knowledge increased,
and human life win ever a greater freedom
from suffering and disease.… We pledge our every
aid that this enterprise shall merit the faith we have
in it. Let your light so shine – that those who seek
the Truth, that those who toil that this world may
be a better place to live in, that those who hold aloft
that torch of science and knowledge through these
social and economic dark ages, shall take new courage
and feel their hands supported.”
Passion, emotion, and conviction are essential
parts of the vivid description. Some managers are
uncomfortable expressing emotion about their
dreams, but that’s what motivates others. Churchill
understood that when he described the BHAG facing
Great Britain in 1940. He did not just say, “Beat
Hitler.” He said, “Hitler knows he will have to
break us on this island or lose the war. If we can
stand up to him, all Europe may be free, and the life
of the world may move forward into broad, sunlit
uplands. But if we fail, the whole
world, including the United States,
including all we have known and
cared for, will sink into the abyss of
a new Dark Age, made more sinister
and perhaps more protracted by the
lights of perverted science. Let us
therefore brace ourselves to our
duties and so bear ourselves that if
the British Empire and its Commonwealth
last for a thousand years, men
will still say, ‘This was their finest hour.’”
A Few Key Points. Don’t confuse core ideology
and envisioned future. In particular, don’t confuse
core purpose and BHAGs. Managers often exchange
one for the other, mixing the two together or failing
to articulate both as distinct items. Core purpose –
not some specific goal – is the reason why the organization
exists. A BHAG is a clearly articulated
goal. Core purpose can never be completed, whereas
the BHAG is reachable in 10 to 30 years. Think
of the core purpose as the star on the horizon to
be chased forever; the BHAG is the mountain to be
climbed. Once you have reached its summit, you
move on to other mountains.
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74 HARVARD BUSINESS REVIEW September-October 1996
You must translate the vision
from words to pictures with a
vivid description of what it will
be like to achieve your goal.
Identifying core ideology is a discovery process,
but setting the envisioned future is a creative
process. We find that executives often have a great
deal of difficulty coming up with an exciting
BHAG. They want to analyze their way into the future.
We have found, therefore, that some executives
make more progress by starting first with the
vivid description and backing from there into the
BHAG. This approach involves starting with questions
such as, We’re sitting here in 20 years; what
would we love to see? What should this company
look like? What should it feel like to employees?
What should it have achieved? If someone writes an
article for a major business magazine about this
company in 20 years, what will it say? One biotechnology
company we worked with had trouble envisioning
its future. Said one member of the executive
team, “Every time we come up with something
for the entire company, it is just too generic to be
exciting – something banal like ‘advance biotechnology
worldwide.’” Asked to paint a picture of the
company in 20 years, the executives mentioned
such things as “on the cover of Business Week as a
model success story…the Fortune most admired
top-ten list…the best science and business graduates
want to work here…people on airplanes rave
about one of our products to seatmates…20 consecutive
years of profitable growth…an entrepreneurial
culture that has spawned half a dozen new divisions
from within…management gurus use us as an
example of excellent management and progressive
thinking,” and so on. From this, they were able to
set the goal of becoming as well respected as Merck
or as Johnson & Johnson in biotechnology.
It makes no sense to analyze whether an envisioned
future is the right one. With a creation – and
the task is creation of a future, not prediction–there
can be no right answer. Did Beethoven create the
right Ninth Symphony? Did Shakespeare create the
right Hamlet? We can’t answer these questions;
they’re nonsense. The envisioned future involves
such essential questions as Does it get our juices
flowing? Do we find it stimulating? Does it spur
forward momentum? Does it get people going? The
envisioned future should be so exciting in its own
right that it would continue to keep the organization
motivated even if the leaders who set the goal
disappeared. City Bank, the predecessor of Citicorp,
had the BHAG “to become the most powerful, the
most serviceable, the most far-reaching world financial
institution that has ever been” – a goal that
generated excitement through multiple generations
until it was achieved. Similarly,
the NASA moon mission continued
to galvanize people even though
President John F. Kennedy (the leader
associated with setting the goal) died
years before its completion.
To create an effective envisioned
future requires a certain level of unreasonable
confidence and commitment.
Keep in mind that a BHAG is
not just a goal; it is a Big, Hairy, Audacious
Goal. It’s not reasonable for a small regional
bank to set the goal of becoming “the most powerful,
the most serviceable, the most far-reaching
world financial institution that has ever been,” as
City Bank did in 1915. It’s not a tepid claim that
“we will democratize the automobile,” as Henry
Ford said. It was almost laughable for Philip
Morris – as the sixth-place player with 9% market
share in the 1950s – to take on the goal of defeating
Goliath RJ Reynolds Tobacco Company and becoming
number one. It was hardly modest for Sony, as
a small, cash-strapped venture, to proclaim the goal
of changing the poor-quality image of Japanese
products around the world. (See the insert “Putting
It All Together: Sony in the 1950s.”) Of course, it’s
not only the audacity of the goal but also the level
of commitment to the goal that counts. Boeing
didn’t just envision a future dominated by its commercial
jets; it bet the company on the 707 and, later,
on the 747. Nike’s people didn’t just talk about
the idea of crushing Adidas; they went on a crusade
to fulfill the dream. Indeed, the envisioned future
should produce a bit of the “gulp factor”: when it
dawns on people what it will take to achieve the
goal, there should be an almost audible gulp.
But what about failure to realize the envisioned
future? In our research, we found that the visionary
companies displayed a remarkable ability to achieve
even their most audacious goals. Ford did democratize
the automobile; Citicorp did become the
most far-reaching bank in the world; Philip Morris
did rise from sixth to first and beat RJ Reynolds
worldwide; Boeing did become the dominant commercial
aircraft company; and it looks like WalMart
will achieve its $125 billion goal, even without
Sam Walton. In contrast, the comparison comHARVARD
BUSINESS REVIEW September-October 1996 75
What’s needed is such a big
commitment that when people
see what the goal will take,
there’s an almost audible gulp.
panies in our research frequently did not achieve
their BHAGs, if they set them at all. The difference
does not lie in setting easier goals: the visionary
companies tended to have even more audacious
ambitions. The difference does not lie in charismatic,
visionary leadership: the visionary companies
often achieved their BHAGs without such
larger-than-life leaders at the helm. Nor does the
difference lie in better strategy: the visionary companies
often realized their goals more by an organic
process of “let’s try a lot of stuff and keep
what works” than by well-laid strategic plans.
Rather, their success lies in building the strength of
their organization as their primary way of creating
the future.
Why did Merck become the preeminent drugmaker
in the world? Because Merck’s architects
built the best pharmaceutical research
and development organization
in the world. Why did Boeing
become the dominant commercial
aircraft company in the world? Because
of its superb engineering and
marketing organization, which had
the ability to make projects like the
747 a reality. When asked to name
the most important decisions that
have contributed to the growth and
success of Hewlett-Packard, David Packard answered
entirely in terms of decisions to build the
strength of the organization and its people.
Finally, in thinking about the envisioned future,
beware of the We’ve Arrived Syndrome – a complacent
lethargy that arises once an organization has
achieved one BHAG and fails to replace it with another.
NASA suffered from that syndrome after the
successful moon landings. After you’ve landed on
the moon, what do you do for an encore? Ford suffered
from the syndrome when, after it succeeded in
democratizing the automobile, it failed to set a new
goal of equal significance and gave General Motors
the opportunity to jump ahead in the 1930s. Apple
Computer suffered from the syndrome after achieving
the goal of creating a computer that nontechies
could use. Start-up companies frequently suffer
from the We’ve Arrived Syndrome after going public
or after reaching a stage in which survival no
longer seems in question. An envisioned future
helps an organization only as long as it hasn’t yet
been achieved. In our work with companies, we frequently
hear executives say, “It’s just not as exciting
around here as it used to be; we seem to have
lost our momentum.” Usually, that kind of remark
signals that the organization has climbed one
mountain and not yet picked a new one to climb.
Many executives thrash about with mission
statements and vision statements. Unfortunately,
76 HARVARD BUSINESS REVIEW September-October 1996
The basic dynamic of visionary
companies is to preserve the
core and stimulate progress. It is
vision that provides the context.
Putting It All Together: Sony in the 1950s
Envisioned Future
BHAG
Become the company most known for changing the
worldwide poor-quality image of Japanese products
Vivid Description
We will create products that become pervasive
around the world.… We will be the first Japanese
company to go into the U.S. market and distribute
directly.… We will succeed with innovations that
U.S. companies have failed at – such as the transistor
radio.… Fifty years from now, our brand name will be
as well known as any in the world…and will signify
innovation and quality that rival the most innovative
companies anywhere.… “Made in Japan” will mean
something fine, not something shoddy.
Core Ideology
Core Values
Elevation of the Japanese culture and
national status
Being a pioneer – not following others; doing
the impossible
Encouraging individual ability and creativity
Purpose
To experience the sheer joy of innovation and the
application of technology for the benefit and pleasure
of the general public
most of those statements turn out to be a muddled
stew of values, goals, purposes, philosophies, beliefs,
aspirations, norms, strategies, practices, and
descriptions. They are usually a boring, confusing,
structurally unsound stream of words that evoke
the response “True, but who cares?” Even more
problematic, seldom do these statements have a
direct link to the fundamental dynamic of visionary
companies: preserve the core and stimulate
progress. That dynamic, not vision or mission
statements, is the primary engine of enduring companies.
Vision simply provides the context for
bringing this dynamic to life. Building a visionary
company requires 1% vision and 99% alignment.
When you have superb alignment, a visitor could
drop in from outer space and infer your vision from
the operations and activities of the company without
ever reading it on paper or meeting a single senior
executive.
Creating alignment may be your most important
work. But the first step will always be to recast your
vision or mission into an effective context for
building a visionary company. If you do it right, you
shouldn’t have to do it again for at least a decade.
1. David Packard, speech given to Hewlett-Packard’s training group on
March 8, 1960; courtesy of Hewlett-Packard Archives.
2. See Nick Lyons, The Sony Vision (New York: Crown Publishers, 1976).
We also used a translation by our Japanese student Tsuneto Ikeda.
3. Akio Morita, Made in Japan (New York: E.P. Dutton, 1986), p. 147.
Reprint 410X To place an order, call 1-800-545-7685.
VISION
HARVARD BUSINESS REVIEW September-October 1996 77
ARTICLES
“What Leaders Really Do” by John P. Kotter
(Harvard Business Review, May–June 1990,
Product no. 3820)
This article sets the work of vision building
within the larger context of leadership.
Effective management and leadership are
both necessary in order for a company to
prosper—but they involve different tasks.
Management copes with complexity; leadership
deals with change. The leader’s job is to
set the direction of change by communicating
a vibrant vision of the company’s future—and
the strategies to achieve it—in ways that will
inspire and energize employees.
“Successful Change Programs Begin with
Results” by Robert H. Schaffer and Harvey A.
Thomson (Harvard Business Review,
January–February 1992, Product no. 92108)
A compelling vision is not enough: senior
management must identify the crucial business
challenges that change programs will
meet and then link them to the vision. Most
corporate change programs have a negligible
impact on operational and financial performance
because management focuses on the
activities, not the results. By contrast,
results-driven improvement programs focus
on achieving specific, measurable improvements
within a few months.
“Managing Change: The Art of Balancing”
by Jeanie Daniel Duck (Harvard Business
Review, November–December 1993,
Product no. 5416)
This article maintains that people issues are
at the heart of realizing a vision. Managing
change is like balancing a mobile. You have to
keep two conversations in balance: the one
between the people leading the change effort
and the one between those who are expected
to implement the new strategies. You also
have to manage emotional connections—
even though they have traditionally been
banned from the workplace, they are essential
for a successful transformation. By encouraging
this activity, management communicates
its understanding that transformation is diffi-
cult for everyone involved, and that people
issues are at the heart of change.
BOOK
Leading Change by John P. Kotter
(Harvard Business School Press, 1996,
Product no. 7471)
A Big, Hairy, Audacious Goal (BHAG) isn’t
realized overnight—you have to carefully lay
the groundwork, and that can sometimes take
years. Kotter identifies eight errors common
to transformation efforts and offers an eightstep
process for overcoming them: establishing
a greater sense of urgency; creating the
guiding coalition; developing a vision and
strategy; communicating the change vision;
empowering others to act; creating shortterm
wins; consolidating gains and producing
even more change; and institutionalizing new
approaches in the future.
EXPLORING FURTHER… Building Your Company’s Vision
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