A brief overview and comparison

[Note: A comparison table appears at the bottom]

The Agenda (Michael Hammer), Good to Great (Jim Collins), and ValueSpace

OVERVIEW

The Agenda (Michael Hammer)

Hammer begins his book with two declarations: (1) The New Economy is customer-dominated. And (2) Business organizations are ill-prepared to survive in that economy. In the customer-dominated economy, businesses would need, Hammer argues, a new set of tools—his nine item “agenda”:

1) Become easy to do business with (ETDBW);

2) Deliver customer more value-added, MVA (e.g., offer total solution);

3) Focus on Processes -- processes that are tied to goals, transcend functional boundaries, and have performance metric;

4) Streamline all activities hitherto left to ad hoc style of freewheeling “creatives”;

5) Substitute myriad, useless measures with those that relate to producing results and are controllable;

6) Eliminate divisional and SBU structures headed by autonomous managers, replacing them with market-centric or process-organizations;

7) Shun ‘disintermediation’ and make distributors your partners in serving final-customers

8) Partner with suppliers and customers to reduce costs of interfacing; And,

9) Instead of vertical integration, create a virtual organization, outsourcing all but the core competence activities.

Hammer also offers guidance on how to implement his agenda. Two key points: 1. Implement the entire 9-point agenda in an integrated manner, building it around a compelling issue facing the organization (e.g., stopping current market-share slide) ; and 2. Display committed executive leadership, through the requisite resource allocation, committing the best and the brightest, demanding widespread participation, and, most important, displaying passion for change.

Hammer argues passionately both about the malaise and about his remedy, illustrating both with vivid corporate stories based on his decades of first-hand experience. Hammer manages to go substantially beyond his process forte, yet he never loses touch with his compassion for the process—while only one agenda item bears the “process” nomenclature, in fact, all nine agenda items entail some process reengineering. One would expect no less from this Reengineering Guru, and Hammer delivers on his implied promise.

You may disagree on a point or two, but you cannot ignore him.

Good to Great (Jim Collins)

What makes “merely good” companies Great? Jim Collins’ answer: Seven attributes (paraphrased):

Corporate leaders who are self-effacing but passionate about the organization’s agenda (Level 5 Leadership)
These leaders assemble a competent management and employee group, letting talent drive the task agenda. (First who.. then what)
Fact based management—confronting brutal facts rather than wishful thinking;
A business strategy anchored in (a) ‘differential competence’ – “what can we do better than others,” (b) passion – “Is this something we are passionate about,” and (c) “an economic engine” – “what economic metric would best drive business”. (Hedgehog Concept)
An organizational culture that values and harbors systematic, disciplined processes for doing all of the organization’s work;
Using technology to accelerate (rather than create) the agenda, first selected through disciplined thought;
Viewing and pursuing Greatness as a steady-step, continuous, enduring, deliberated long journey;

On the way, Collins also explodes some popular myths. A sampler of his counter-intuitive findings:

§ Charismatic, larger-than-life leaders may often be a liability and often create an organization that at best achieves, if at all, transient Greatness (e.g., Chrysler under Iacocca) (Jack Welch must surely be an exception that proves the rule!).

§ Core competence is not enough; the crucial question is “what can you be best at in the world”!

§ The role of budgeting shouldn’t be to allocate resources over projects, but to select projects to be funded fully or not at all!

§ Technology by itself is not the primary cause of either greatness or mediocrity;

§ Radical leapfrog move doesn’t make a company Great;

§ “Motivating the troops,” “managing change,” “creating alignment” is unnecessary; alignment follows from results and momentum.

This book is a tour de force —intellectually challenging, extreme thought provoker. After reading the book, your mind will not be able to rest for quite a few days!

P.S. One gem of wisdom from the book for immediate implementation: You already have a ‘To do” list; now prepare a “Stop doing” list!

* * * * * * * * * * * * *

ValueSpace, Good to Great, and The Agenda: An Integrative View

ValueSpace answers two critical questions: what exactly do customers value, and what business processes create that value. ValueSpace offers a first and the only comprehensive guide on these questions. Good, Great, and Lasting organizations have no doubt pursued customer value for decades, but at best with an intuitive and often piecemeal understanding of customer value components and drivers. ValueSpace offers a guide to string those efforts into a comprehensive framework for planning and action.

Collins recalls one gap in Built to Last (BtL): The BtL principle of ‘big hairy audacious goals’ (BHAG) did not distinguish between a good and a bad BHAG; ValueSpace argues that a BHAG is good if and only if it delivers in the customer’s value space. Collins argues that a BHAG is good if it follows the Hedgehog Concept. But Hedgehog concept itself lacks a built-in connection to customer value. None of the Hedgehog Concepts outlined in Collin’s page 101-103 captures the fullness of the customer’s ValueSpace—for example, except for Walgreen and Circuit City, ETDBW doesn’t figure for any of the other nine companies; except for Nucor and Abbott Lab, price value does not figure for the remaining nine companies. Given the high caliber of disciplined people, disciplined thought, and disciplined action (Collins’ three disciplines), it is highly likely that Good-to-Great companies will figure out customer value, but that thought is not an integral element of the Hedgehog Concept. ValueSpace bridges that gap.

At least three of Collins’ Great companies (Kimberly Clark, Kroger, and Circuit City) have been matched by their rivals in the recent past. From 1985 until 2000, P&G has delivered the same returns to shareholders as Kimberly Clark. Ditto for Kroger and Safeway over the last five years. [ Incidentally, SYSCO -- one of the ValueSpace companies--has matched Kroger over the past 20 years and has done twice as well over the past 5 years.] And Best Buy has beaten Circuit City hands down. To investors, Best Buy returned four times more than did Circuit City over the last 20 years, and 20 times more over the last five years; $1 invested five years ago in Best Buy would have been $20 today (versus staying at $1 for Circuit City). It would be of interest to see how today’s Best Buy stacks up on the ‘Good to Great’ traits; but what is most likely to explain the Best Buy’s stock performance lead is a comparative ValueSpace audit of the two companies. ‘Good to Great’ traits make a company Great; ValueSpace guides a company to harness that Greatness. Good-to-Great traits are foundational; ValueSpace, built on that foundation, is where rubber meets the road—in the marketplace.

Likewise, Hammer’s Agenda is a treatment program for the ailing corporate body; it substitutes orderly processes for chaos; redesigns those processes for efficiency, knocking down inter-turf walls, linking suppliers and customers, and managing with relevant measures. The post-Agenda corporate body is now trim and healthy, ready to pursue customer value. Two of the Agenda items (ETDBW and MVA) set it on that journey. But it needs more; it needs a roadmap of customer value. It needs ValueSpace.

A Table of Comparison.

Issue	Good to Great	*The Agenda*	ValueSpace
1. Main Theme	§ The DNA of sustained stock-market Superstars	§ A remedial program for an ailing corporate body	§ Market dominance through total devotion to customer value
2. Target Audience (Who would benefit the most): Level, function	§ CEO’s, CEO’s-in-making, Board members; cross-functional.	§ CEO’s, Senior and Functional Managers; Cross-functional.	§ CEO’s and managers at every level; Cross-functional.
3. Scope of Action	§ Organizational metamorphosis	§ Organizational renewal	§ Organizational navigation
4. Principal Guide to: - Principal Tool for change	§ How to build and lead an organization. o Leadership and vision	§ How to manage businesses. o Process redesign	§ What to manage a business for. o Commitment to customer value
5. Issues Addressed: § Choosing what business to be in § What markets to compete in § How to rejuvenate an ailing business § How to improve market performance over next 3-5 years § How to become “the customer’s choice”	§ Yes (Hedgehog concept) § Yes, partially. (Hedgehog concept stretch) § Maybe § No (Longer time-frame needed; at any rate, no direct guidance, that not being its goal) § No (Not per se) [Maybe indirectly in that a “Great”/capable organization will perhaps figure it out]	§ No § No § Yes, principal focus § Yes (but no detailed guide) § Partially (ETDBW and MVA)	· No · Yes (Assess each market’s VS needs and assess “fit” with your VS capability) · Yes (Implement driver processes) · Yes (Manage by VS Audit tool) · Yes, principal focus (Comprehensive, detailed guide)
6. Content Integration	§ Six Good-to-Great Traits arranged in a temporal order signifying systemic development	§ Nine agenda items stand in isolation	§ Nine ValueSpace Components Develop in an iterative hierarchy.
7. Implementation Guide Provided	§ Not relevant (Subject matter delivers a perspective and a world-view, not programmatic actions)	§ Yes, a chapter on “Make it Happen”	§ Yes, ValueSpace Implementation Processes fully described.
8. Strongest Attribute	§ Rigorous, painstaking, voluminous research	§ Draws on decades of personal experience	§ Concept-driven framework--juxtaposes theory with practice.
9. Weakest Attribute	§ Attempted connection between Good-to-Great and Build-to-Last attributes is sketchy and forced.	§ Portraits of malaise in ailing organizations sometimes over-dramatized.	§ The imperative to showcase all of the companies for each VS component dilutes other interesting narratives.
10. Minor bugaboo	§ You turn at random to a page and you won’t know what topic you are on!	§ Look Ma, No Figures!	§ Hard-to-pronounce author names.

Prepared by: Ban Mittal (Who is Ban Mittal?)