Forsyth Consulting Group - Insights into Excellence

Forsyth Consulting Group has as its purpose to share and integrate the insights that develop excellence in organisations. Below is a sample of our monthly Insights Into Excellence publication. To receive the monthly update on what leading organisations world-wide are doing, become a member of our Leaders in Excellence Network. To do this, please complete the Membership Form at the Forsyth Consulting Group Website (www.fcg.com.au).

Insights (November/December:03) Participatory Management: Semco
Insights (July/August:03) Sustainable Industries: Stuart Energy
Insights (May/June:03) Corporate Purpose: Medtronics
Insights (Feb/March:03) Customer Partnering: Ansell
Insights (Dec02/Jan03) Social Responsibility: SAFECO
Insights (Oct/Nov:02) Management Effectiveness: IKEA
Insights (July:02) Customer Focus: Wal-Mart
Insights (June:02) Leadership Succession: GE
Insights (May:02) Innovation: Hewlett Packard
Insights (April:02) Vision: Dow Chemicals
Insights (March:02) Sustainable Development: Dupont

American retailing giant Wal-Mart Stores manages to do something special. In 1979 it racked up a billion dollars in sales. By 1993 it did that much business in a week. By 2001 it could do it in a day. It is now America's largest corporation with over 1 million employees.

Wal-Mart has been ranked No.3 in Fortune's 2001 Global Top 100 Most Admired Companies by a survey of 10,000 directors, executives and analysts. Growth and the ability to make consistent shareholder returns is a big part of the survey. (Note that Enron was ranked 25 last year and is now no more). But there is something else.

Wal-Mart demonstrates the ability to balance the apparently irreconcilable opposites for success. This has been described by authors Goldsmith and Clutterbuck as managing the ten conflicting key balances for sustained high performance. This is when the compromise of the 'either/or' is managed to become an 'and'. This skill is one of the five components of Sustainable Excellence.

An example is how Wal-Mart has maintained its approach to customer service as it expanded. "We still think of our company as a small company," says John Menzer, president and CEO of Wal-Mart's international division. "We believe in one store at a time, one customer at a time." Wal-Mart may have a small-company mentality to getting customer service right, but it continues to expand globally, acquiring the British supermarket chain ASDA and adding more than 100 stores outside the U.S. last year. Wal-Mart has identified the core value that makes its business work - a "strong belief in the dignity of each individual" . Not such a bad thing to base a successful company on.

A group of dedicated business people (and high profile corporates) are forming the cornerstone of the Australian Corporate Citizenship Alliance now operating in Western Australia. The ACCA is a group of businesses and individuals who believe successful firms of the future will be concerned with much more than the financial bottom line. Topics such as sustainability, ethics, governance, community consultation and spirituality in the workplace are typical items for discussion in the forums created to explore what makes a good Corporate Citizen. Richard Taylor (Chairman of the WA branch of the ACCA) said:

“ACCA’s formation signals a new era for WA business. By seeking input from business and the wider community on peoples’ expectations of how business should behave in those communities’ backyards, we will receive information vital in setting the business agenda for the future.”

Ethical alignment is hard to find in many organisations. In the words of Ghandi 'You must be the change you want to see in the world'. Here is an organisation that in exploring and adhering to its own charter will be creating a roadmap to the future for others. Read more (and join up) at http://www.accalliance.asn.au/

The new article now available on Forsyth Consulting Group's Reflections in Excellence website is a light metaphorical story to illustrate all the parts of a complete strategic management process - in a simple way.

There is an old maxim that says ‘if you do not know which port you are heading for any sail set will do’. Navigating a future in uncharted territory can leave some skippers all at sea. So what do experienced captains do when they lose sight of the shore?

If you would like to receive direct links to future articles as they are published, join our Leaders in Excellence Network (www.fcg.com.au). If you would like copies in WP or pdf formats, just e-mail us.

William Varey and Robyn Williams presented two sessions on Dialogue Theory at the 11th National Students and Sustainability Conference earlier this month. Dialogue is the process used by Joseph Jarworski for Royal Dutch Shell in their scenario planning and is considered by Peter Senge as an essential skill in creating learning organisations. For those that believe enhanced communication in organisations leads to better performance - details of the process are now available at the FCG website http://www.fcg.com.au/dialogue.shtml

Forsyth Consulting Group organised an end-of-financial-year lunch last month for FCG contributors and friends, which was attended by two dozen free thinkers and enlightened experts. Being inspired by the dynamic conversation (and having proved that even the self-employed can get the boss to give them time off to enjoy themselves) we'll look forward to a similar event later in the year.

Reading 'Creative Destruction' and 'The Alchemy of Growth' (both of which profile Enron as a successful model company) it becomes clear that very few management books understand the distinction between 'sustained growth' and 'sustainable growth'. If you are interested in the latter: The End of Shareholder Value: Corporations at the Cross Roads by Allan A. Kennedy provides a clear perspective on creating enduring value as well as returns.

"The art of discovery is to see that which everybody sees - but to think what nobody has yet thought" Stephen Forsyth

GE's Jack Welsh has been hailed as an inspired business leader. In 2001 (the year of his departure as CEO), GE achieved US$125 billion in annual revenues, increased its dividends again for the 26th consecutive year in a row and completed a 20 year massive quality program. It has produced sustainable returns on its share price averaging 23% per year over the last 10 years. GE was Fortune's "Most Admired Company" five years in a row and named "The World's (sic) Most Respected Company" by the Financial Times four times. GE has a single minded focus on business results.

But what makes GE unique is their leadership development and succession planning. GE cultivates leaders. Jack Welsh wasn't headhunted to run GE, he was made by GE. In 1961 he was a junior engineer with GE and about to quit. Spotting talent, they convinced him to stay. Nurtured by his boss for 12 years, Jack then announced his ambition to become CEO in 1973. Succession planning for his pre-decessor, Reg Jones, began 7 years before Jack's appointment as CEO in 1981, but Jack wasn't even on the short list initially. Climbing through 29 levels of management took guts - and Welsh (one of only 9 CEOs in 109 years of GE's history) has tried to pave the way for similarly ambitious CEO's through an intensive development and promotion program.

However, the real test for GE is not whether Jack Welsh's successor (Jeff Immelt) can out do him, but whether Jack has built a 'leaderful' organisation to succeed him. Building a great company is to be respected - having a great company outlive your contribution is to be truly admired. 20 years work can end overnight or continue for a lifetime. The question is: Will GE's 20th century leadership enable GE to continue its success this century? Read more at:

WMC Limited (Western Mining Corporation) gets a special mention for its insight into sustainable business development. Although they have been a triple-bottom-line reporter for a few years, in the latest (and very impressive) Sustainability Report (2001) they note they are only mid-way on a continuum towards sustainable development. This acknowledgement says that they really understand. CEO Hugh Morgan introduces the Report by saying:

" While this Report highlights many things we are doing which demonstrate our contribution to sustainable development, nevertheless, we need to firmly embed the integration of social and environmental considerations into our day to day decision making, and demonstrate the business case for doing so. In this regard, I believe the business case for pursuing such a strategy, company-wide, is becoming increasingly compelling."

This month's new article, already available on Forsyth Consulting Group's Reflections in Excellence website, is contributed by Jeff Pow. His article is based on an inspirational account of the leadership successes from Sir Ernest Shackleton's (1914 -1917) Antarctic expedition (and is good background to the national television special to be screened soon). Jeff's insights into the business of survival are just as relevant to you today as they were to Shackleton then.

If you would like to receive direct links to future articles as they are published, join our Leaders in Excellence Network (www.fcg.com.au). If you would like print friendly copies in WP formats, just e-mail us.

Forsyth Consulting Group congratulates Jen Sheridan and Greg Winter on the completion of their 9 month strategic development project. Their newborn son, little Oscar Sheridan Winter, joined the family as the next in a generation of legendary leaders on 23 April. We look forward to hearing of his first conquest of Mt Everest sometime in 2025 and his leadership development through many eco-encounters in the meantime. EEA's calendar of events is available at http://www.environmentalencounters.com.au/

Richard Koch (former Bain & Co Partner and a 'serial entrepreneur') shares his business knowledge and passion for science in his new book The Power Laws of Business: The Science of Success.

While many management theorists make cross-over parallels from other disciplines, Koch does so with a healthy, pragmatic respect for reality. If you have ever wondered what Darwinian evolution, ecological co-existence, bounded rationality, chaos theory, quantum physics, fractals and self-organising holistic systems had to do with the development of your organisation ... this book has the answer. Richard makes these complex theories both simple and relevant, without being simplistic. Intriguing, thought provoking and useful.

" [ Excellence ] consists not of doing extraordinary things, but in doing ordinary things extraordinarily well." Angelique Arnauld (1591-1661)

Last Tuesday Hewlett Packard (formed in 1939) successfully completed an extremely difficult $US20 billion transaction to merge with computing giant Compaq (formed in 1982). This will create the worlds largest computer company (worth $US87 billion) with 148,000 employees. There are two reasons why we have been following this eight month struggle closely.

Firstly, HP has been a world leader in innovation. Its corporate culture - described in the 'HP Way' - is the envy of many competitors and across industries. So why fix what isn't broken? Walter Hewlett, on behalf of the founders, was strongly opposed to the merger. But HP can see that the computer industry is changing. (For example, one of HP's competitors, Dell, does something very FCG - they dont make a product and sell it to you, they ask what you need and create it.) HP has the ability to transform, but it has made the courageous move to also be transformational.

Secondly, the leadership team of Carly Fiorina of HP and Michael Capellas of Compaq did something different with this merger. Even though the shareholder approvals have only just been counted, HP and Compaq have already had their 900 person teams working for months on the cultural and logistical integration. While a number of mergers pass the financial rationale test, few really get the integration part right. (For example- the AOL Time Warner merger, which posted a record $US54 billion loss and 70% stock price fall 2 years on - ouch!).

A merger to become #1 is one thing - ensuring the continuation of that success is another, and the real work has just begun. But HP understands the quote: "The important thing is this... To be able at any moment to sacrifice what we are for what we could become" - Charles DuBois.

HBF Health Funds (The Hospital Benefit Fund of WA) has been doing something excellent recently by catching its staff doing something right. Customers at service centres are not met by complaint forms or suggestion boxes, but instead by an 'Exceptional Service Recognition Card' - where customers can praise staff for exceptional service. Chris Kirk ( Regional Manager/Manager of Management Development), explained this initiative:

"We also conduct focus groups and regularly survey our members, but this was a method of providing direct feedback from our members to our staff. It may seem a risky strategy, but if we were really serious about exceptional service we needed to be able to effectively measure our staff's commitment to it. Once the initiative was up and running I was amazed at just how many people gave us positive feedback. Recognizing the individual efforts was great for staff and for our customers. It has now become part of our team culture."

To create a leading organisation you also need to focus, not only on the problems, but also on what is being done right. Making this part of your culture shows real success. Read more about HBF at http://www.hbf.com.au

This months new article on Forsyth Consulting Group's Reflections in Excellence website is a joint contribution by Mark Hevron and William Varey. They describe where an organisation's progress stalls and why it then becomes impossible to move forward.

To receive the links directly as future articles are published, join our Leaders in Excellence Network (www.fcg.com.au). If you would like copies in WP format, just e-mail us.

Forsyth Consulting Group welcomes Mark Hevron, Managing Director of Committed Action, as a contributor within the FCG network. Committed Action is a business mentoring consultancy. It helps committed business owners accomplish their goals by keeping them confidently moving on the paths to success that FCG has helped to define. Having worked with FCG on projects since November 2001 we now know Mark exemplifies our Five FCG Qualities and so his profile is available at http://www.fcg.com.au/profilemhevron.htm

Over 20 years ago consulting guru Peter Block developed Flawless Consulting, which underlies FCG's Consulting Excellence ™ process. Peter's work has led to a new book 'The Answer to How is Yes'. The cryptic title explains that once you know you have the capabilities covered, the real question is not 'How' but 'Why'. Accomplishing a result is fairly easy, but what was the result that was really required? Peter explains how helping to ask the right question may be as important as just getting an answer. You can read an extracted summary of the first chapter and his 'Insights' at : http://www.designedlearning.com/main.asp

"To have foresight (Forsyth) is to be blessed, but to have insight is to be blessed one thousand times." Chinese Proverb

Sustainable Business Excellence - The Vision Mission Thing - Leading Players

How can we put this simply and powerfully:

Dow Chemicals: (100+ years, 41,000 employees, $US23 billion sales, EBIT $US3.1 billion (2001 figures) Ranked 57 in Forbes 500 - outstanding track record)

Clarity of Mission: "Improving the Essentials of Life: To constantly improve what is essential to human progress by mastering science and technology."

Compared to:

Union Carbide: (became a wholly owned subsidiary of Dow in a merger in 2001 - 11,000 former employees)

Lost in Space: "To grow the value of the corporation by successfully pursuing strategies that capitalise on our business strengths in chemicals and polymers ... and .... to execute wealth creation strategies that consistently deliver value to all stakeholders over the course of a business cycle" . (1993 Annual Report)

Who would you rather work for? Which would you rather invest in?

Read more at:
http://www.dow.com/careers/who/essent.htm (Dow Vision and Guiding Principles)
http://www.dow.com/about/corp/corp.htm (Dow Sustainable Development)
http://www.bhopal.com/anr.htm (Union Carbide Bhopal Aid)

FCG favourite, the Aquarium of Western Australia - AQWA, gets this month's Play of the Day for their community sponsorship of the Cottesloe Sea Dragon Festival, establishment of the Marine Animal Rehabilitation Centre and support of the Save Ningaloo campaign. Jane Hough, the General Manager of AQWA, said:

"Our organisation goes beyond the walls of the aquarium. Being a part of both the human and marine communities of Western Australia is important to us - it is not only our business, but also our passion. Community events, marine issues and exploring new opportunities are just some of the ways we achieve our goals of advancing marine awareness and conservation."

Being a leading organisation means your values and convictions don't stop at the front door ! Read more about AQWA at http://www.aqwa.com.au/history.html

There is a new article at Forsyth Consulting Group's Reflections in Excellence website. It takes a fresh perspective on the old issue of Vision Statements arising out of the strategy and OD work we have recently been doing:

To link there now, go to http://www.fcg.com.au./reflectionsintro.shtml and log into our Leaders in Excellence Network.

To receive the links directly as future articles are published, join our Leaders in Excellence Network (www.fcg.com.au). If you would like copies in WP format, just e-mail us.

FCG welcomes Hydraulic Manifolds Australia as a new customer. A company that makes high precision components for the hydraulics industry's best (with a near zero defects rate) must be doing something 'right'. Another outstanding company working towards Sustainable Excellence, strategically and consciously. Read more at: http://www.hydraulicmanifolds.com.au

For those wondering what makes the difference, James Collins and Jerry Porras' Built to Last: Successful Habits of Visionary Companies (1994) is a retrospective analysis of American corporates that have sustained excellence (GE, Merck, Motorola, Hewlett Packard, etc) many of them for 100+ years. Having a basis in research, it is a management book worth a re-read. An oldie but a goodie. You can preview extracts from a copy at Amazon: http://www.amazon.com/exec/obidos/tg/stores/detail/-/books/0887307396/reader/13/103-3959716-7777424#reader-link

"Perfectionism is 'the uncompromising pursuit of excellence'. Being a perfectionist - is just being unable to compromise". Stephen Forsyth

Dupont is a global corporate renowned for its innovation and corporate longevity. Its 93,000 employees provide annual revenues over US$2 billion and earnings of over $250 million (2000). It was Fortune's No 1. Most Admired Chemical Company, won the Financial Times' 'Best Environmental Practice' category in the Global Energy Awards and has been one of Industry Week's '100 Best Managed Companies' 5 years in a row. Clearly an outstanding company.

But here is one indication of what makes Dupont different. Dupont has created an internal award called the Sustainable Growth Excellence Award to recognise initiatives that have made a significant contribution toward the company becoming a 'sustainable growth corporation'.

The nominated projects in 2001 combined a focus on business returns, sales growth and efficiency with a reduction in waste and environmental emissions to also benefit communities. The Dupont employee teams who won, each received a US$5,000 grant to donate to an external 'safety, health, environmental or educational organization or project of their choice'. We'd call that worthwhile.

While many companies have awards to focus on one aspect of business, encouraging the initiative to balance them all is a good example of Sustainable Excellence. By putting its (tax deductible) money where its intent is, Dupont is encouraging a culture that develops, recognizes and rewards such initiatives. It shows it understands the link between community and business purpose, and this is why Dupont Canada makes this months Insights.

WA based internet service provider, Iinet, gets this months 'Play of the Day' for their Open Day in November 2001. Managing Director Michael Malone said:

"Our customers have often asked us how things work and what's it like, so we thought it would be a good idea to have them come on in and take a look under the hood. I think we gained more out of the exercise than the attendees did! To be quite honest, seeing it every day, it's all pretty 'normal' for us. As customers came through and ooh'ed and aah'ed, I felt like I was seeing the technology again for the first time myself. You could almost feel the pride growing in the staff who were there that day."

While many organisations (especially colleges and universities) have open days, for a corporate business to throw open its doors to customers, the public, competitors and investors, shows a real confidence and commitment to stakeholder relations, a key element of Business Excellence.

FCG welcomes PCS Pty Ltd as a new customer. They provide project management solutions, and build project management capabilities for the future, to help customers achieve their strategic goals. Another outstanding company achieving something worthwhile. Read more at: http://www.pcs-pl.com.au

"The real journey of discovery consists not of seeking new territories , but in having new eyes". Marcel Proust

Thank you for taking the time to read Insights Into Excellence. We hope it has been informative and worthwhile. If you know of someone who would (or should) be interested in these issues, please forward them a link to this site and encourage them to join the Leaders in Excellence Network through our website (www.fcg.com.au).

Forsyth Consulting Group makes no comment and expresses no opinion in relation to any of the policies, operations or future prospects of the organisations mentioned in this publication except as expressly stated. The specific examples identified do not provide an indication of the total activities of the organisations profiled and may not be current. Any content in this publication and its use is made subject to the legal notices set out in the Forsyth Consulting Group Website (www.fcg.com.au)

. For further information emailus@fcg.com.au