From Vision To Value - Building Sustainable Advantage

From Vision to Value:
Building
Sustainable Advantage
NIGEL A.L. BROOKS
Building Sustainable Advantage
About Nigel A.L Brooks...
Nigel A.L Brooks is a management consultant to entrepreneurs, business enterprise owners, executives, and managers, and the
enterprises they serve. He specializes in developing the entrepreneurial, leadership, and managerial competencies that build
sustainable advantage from vision to value. He is an author and a frequent speaker.
He obtained his professional experience as a partner at Andersen Consulting (now Accenture, Ltd.), as a vice president at Booz Allen
Hamilton, Inc. (now Booz and Company), as a senior vice president at the American Express Company, as president of Javazona Cafes,
Inc., and as president of The Business Leadership Development Corporation. He has been a contributing editor for the Bank
Administration Institute magazine, and has served on boards of entrepreneurial networks. He was educated at the University of
Exeter, Devon, United Kingdom.
His clients are in the financial services, food services, high-tech, manufacturing and distribution, pharmaceuticals, oil and gas,
professional services, retail and wholesale, transportation, and government industries.
He has experience in North and Latin America, Europe and Asia-Pacific.
www.nigelalbrooks.com
About The Business Leadership Development Corporation...
The Business Leadership Development Corporation (BLD) is a professional services firm that works with entrepreneurs, lifestyle
business enterprise owners, executives, and managers, and the enterprises they serve.
BLD develops entrepreneurial, leadership, and managerial competencies that achieve performance excellence by building sustainable
advantage from vision to value through:
 Strategic Management Consulting

 Executive Coaching and Mentoring
 Professional Training via The Center For Business Leadership Development
 Motivational Speaking
www.bldsolutions.com
About this article...
First published in October 2002; revised and republished in September 2008. This article is a broad introduction to the subject of
building sustainable advantage, and provides the foundation for BLD's intellectual capital: Building SustainableAdvantage <>From
Vision to Value™. It is intended to be thought-provoking.
© Copyright 2002, 2008: The Business Leadership Development Corporation. All rights reserved.
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From Vision to Value: Building Sustainable Advantage
TABLE OF CONTENTS
Ease of navigation
“From Vision to Value – Building Sustainable Advantage” is equipped with internal hyperlinks for ease of
navigation throughout the document, and with external hyperlinks to reference material on the internet.
The Table of Contents is hyperlinked to the various sections, which are hyperlinked back to the Table of
Contents by clicking the To TOC link in the footer.
Consequently, it is possible to quickly move from one subject to another within the document, and to reference
material on the internet very easily.
Hyperlinks:
 Overview 1
 The Governance Disciplines - A Three-Legged Stool 3
 Stewardship... 4
 Strategy... 6
 Structure... 8
 Leadership: A Key Success Factor for Building Sustainable Advantage 8
 The Importance of Leadership Capabilities... 8
 Leadership Style... 10
 People and Process 11
 Values: Walking The Talk... 11
 Tightly Coupled Constituencies... 13
 Anatomy of the High Performance Enterprise... 13
 Evidence of High Performance... 14
 Constituency-Based Process Design... 15
 Value and Impact of Constituencies 15
 Employees, Customers and Investors... 16
 Best versus Right... 17
 Planning, Deployment and Measurement 19
 From Vision To Value: Building Sustainable Advantage 20
 Appendix 22
 References 25
 Terminology 26
Exhibit: The Constituency Value Pie 2

Exhibit: Paradigm Shifts and Maslow's Hierarchy of Needs: Emerging Opportunities 21
The body of this article should be read in conjunction with the terminology section to provide clarity and context.
The terminology presented here is sourced from BLD's The Language of Value and applies to the broader
fields of both enterpriship and building sustainable advantage.
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Overview
Fueled by free enterprise, possibilities for innovation make the United States' economy the most vibrant in the world —
in times of both abundance or scarcity. However, those striving to take advantage of opportunities in any country’s
economy must respect the fact that focusing on products and/or services ✝ alone is insufficient for building a sustainable
enterprise that attracts the right employees, customers, suppliers, and investors over time.
In the context of this article, the term “right” means the best for all concerned.
When entrepreneurs start enterprises, they tend to focus on the benefits and features of their products and/or services.
However, strength of the management team, and size, readiness, and awareness of the market are more important factors
to investors.
Source: BLD research
From emerging enterprises to those in their maturity, a universal problem arises from concentrating solely on products
and/or services as opposed to people, processes, and products and/or services. In fact, unless an enterprise focuses on its
people and process capabilities in addition to products and/or services, it will decline and ultimately fail.
Without people there is nothing in business. Without duplicable processes that are measurable, predictable, repeatable,
and trainable, it is hard to build an infrastructure that is economical, effective, and efficient at delivering products
and/or services that will last over time.
The solution to building sustainable advantage lies in leveraging values-based governance disciplines — stewardship,
strategy and structure — that dictate successful people, process, and product and/or service capabilities. This solution
helps enterprises generate and sustain competitive, collaborative and cooperative advantage over time.
Vision is an inspirational statement of a future state (reasonable achievable) within the context of a longer term
aspiration (dream); value is something of worth or usefulness.
Sustainable is defined as being able to continue over time, either by developing, enhancing, or maintaining the current
state, or by changing it; advantage means favorable, superior, and beneficial.
While business conditions in the United States create an ideal setting for achieving sustainable advantage, even in hard
times, the principles for building such advantage from vision to value apply globally.
✝ Note that the term “products and/or services” refers to tangible “hard” products and “soft” service-oriented
products. The term “product and/or services” is used throughout this earticle to mean both. However, for clarity,
some title headings and diagrams, use the label “products” to mean both products and/or services.
The supporting text provides the context.
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The Constituency Value Pie
Whereas most businesspeople believe that the ultimate purpose is to build shareholder value, value can only
be built for shareholder investors under the notion of sustainable advantage if it is shared with other
constituencies also. Of course, building shareholder value is important, because without investors no
enterprise could be sustainable over time.
If value is shared with employees, then they will contribute more to customers. If value is shared with
customers, they will be more loyal. If value is shared with suppliers, they will provide higher quality at lower
cost. Hence, the shareholder investor benefits.
The sustainable enterprise shares value earned with its constituencies – the constituency value pie shows the
allocation of value to the four primary constituencies in certain circumstances.
The constituency value pie is a managerial accounting and reporting concept to be used in making decisions
about the allocation of value with respect to opportunity costs within and beyond the normal course of
business, in part for economic reasons, and in part for goodwill.
Successful entrepreneurial and institutional enterprises use governance disciplines to focus on their people, processes,
and products and/or services throughout each broad stage of development.
An entrepreneurial enterprise is not yet established as an ongoing concern. An institutional enterprise is both
established and stable; the term refers to both small and large established enterprises.
In general, entrepreneurial enterprises migrate through three broad waypoints: transforming an innovative idea into a
product and/or service (as a venture), transforming a product and/or service into an entrepreneurial enterprise, and
transforming an entrepreneurial enterprise into an institutional enterprise.
Institutional enterprises migrate through three broad waypoints iteratively: transforming an innovative idea into a
product and/or service, integrating the product and/or service into the enterprise, and building sustainable advantage.
For example, Microsoft is institutionalized as a provider of office applications and operating system software, but began
as an entrepreneurial enterprise.
The General Electric Company, one of the largest enterprises in the world, has its roots in Thomas Edison's laboratory.
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An enterprise’s constituencies are the six key groups that influence its success: employees, customers, suppliers,
investors, regulators, and competitors. Of these, the first four groups are considered primary constituencies because
they contribute to the value-creation process, and share the value pie in a sustainable enterprise. Regulators and
competitors participate as secondary constituencies.
Regulators develop laws granting the right for enterprises to do business in certain arenas, and competitors impact
enterprises by forcing them to select counter-moves in response to competitive initiatives.
The community-at-large can be considered to be a tertiary constituency, which can be local-to-global.
A constituent is a member of a group of employees, customers, suppliers, investors, regulators, and competitors, i.e., a
specific individual or enterprise. Ultimately, all constituents are made up of people whether incorporated or not.
The Governance Disciplines: A Three-Legged Stool
High-performance enterprises deliver sustainable value to their employees, customers, suppliers, and investors over
time. These primary constituencies directly influence and are influenced by governance disciplines.
The term “management” refers to those with authority and responsibility for directing and controlling the events and
activities of an enterprise who, of course, should behave as a team. In highly political environments, management often
does not behave as a team. Managers must be leaders when they have to direct and support people, otherwise they
mange process.
By virtue of its responsibility for enacting change and earning value, management as stewards of an enterprise formulates
strategy and dictates the structure of relationships among constituencies for competitive, collaborative, and cooperative
advantage.
The overriding disciplines of stewardship, strategy and structure — the governance disciplines — regulate people,
process, and products and/or services, the three capabilities that enable enterprises to gain competitive, collaborative
and cooperative advantage.
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Competitive advantage is defined as the position and posture that offers consistencies better value than competitors.
Competitive advantage has been written about extensively by Michael Porter.
Collaborative advantage is defined as the relationships between suppliers, or customers, or peers as a partnership with a
common mission, and operating dependently for mutual value. This type of arrangement is common in general
contractor/subcontractor relationships, where many different enterprises are working together to complete a common
project, such as in the aerospace and construction industries.
No major project can be completed without collaborative efforts from multiple parties who bring diverse knowledge and
skills to the endeavor.
Cooperative advantage is defined as the relationships between suppliers, or customers, or peers as an association with a
similar mission, but operating independently for mutual value. This type of arrangement is common in outsourcing
relationships, where one enterprise is providing services for another, but is managed independently.
For example, in the business of outsourced telemarketing call centers, the service provider will initiate and respond to
telephone calls in the names of their clients. Cooperative relationships are popular when enterprises move away from
being fully vertically integrated, and no longer control the entire process from raw materials to finished products and/or
services.
The governance disciplines act as “a three-legged stool” - the stewardship leg, the strategy leg, and the structure leg (the
three “s”s). Although the specifics of this governance discipline model may vary among enterprises, the methods of all
successful high performance enterprises follow similar lines.
Ken Blanchard, Steven Covey, and John Maxwell have written extensively about leadership topics - the stewardship leg.
Gary Hammel, Robert Kaplan, David Norton, Michael Porter, C.K. Prahalad, and Michael Treacy have written extensively
about the strategy leg. James Champy and Michael Hammer have written extensively about process design – the
structure leg.
Tom Hopkins and Brian Tracy have written extensively about selling (the fourth “s”).
Stewardship...
Stewardship dictates responsibility for both the performance of an enterprise and the delivery of value. Stewardship is
comprised of enabling, domain, and core competencies.
Stewards are collectively responsible for the activities and assets of the enterprise, employ stewardship competencies
and commitment, share values and vision, collectively have the vision to transform opportunities into value, and are
capable of performing their activities responsibly.
An employee is a steward only if they share the values and vision of the enterprise, otherwise they are more like an
independent contractor, even if not defined as such.
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The enabling competencies are a management discipline and consist of the entrepreneurial, leadership and managerial
roles played not only by management, but by every employee in the enterprise to some extent.
Domain competencies represent the specific functional knowledge and technical skills (and enabling technologies) that
are required to perform an activity, and are essential to the enterprise. Domain competencies are found within subject
areas such as legal, finance, human resources, information technology, operations, and marketing and sales.
Core competencies are activities done well that can give the enterprise a competitive advantage.
Values are a system of beliefs that sets expectations for behavior, establishes positions and priorities, and provides a
framework for decision making.
The entrepreneurial role — both a process-oriented and product-oriented role — is that through which stewards turn
innovative ideas into value. Stewards must exercise this role at every phase of an enterprise’s development, not just the
early phases.
The leadership role — a people-oriented role — is that through which stewards set the direction others will follow to
achieve results. In this capacity a steward could be a top-level executive, or a team leader within a function, or anywhere
in between.
The managerial role — a process-oriented role — is that through which stewards apply resources to activities to achieve
results.
Enterprises differ as to their development stage: emerging, growth, mature, decline. To support an enterprise at
whatever its development stage, stewards will often assume two or even all three stewardship roles. An steward’s ability
to do this is critical to the enterprise's agility, and hence increases the value of his or her contribution to the enterprise.
For example, a single employee might function in the entrepreneurial role by introducing an innovative idea, act as a
leader by influencing others, and leverage managerial skills by executing processes. As indicated in this example,
entrepreneurial skills are valuable in any enterprise at any stage of business. Enterprises should not limit use of these
skills to the emerging stage.
For example, an employee on the front line in a retail establishment can play the entrepreneurial role by asking
customers how can they help; can play the leadership role by showing other employees how to better serve customers,
and can play the managerial role by using resources efficiently and effectively.
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For example, an employee may site on the side lines, do nothing constructive, speak negatively of the enterprise, and
deliver poor service – in which case, they are not a steward.
Institutional enterprises must either innovate internally through the practice of intrapreneurship, or acquire
entrepreneurial enterprises in order to survive.
Entrepreneurial enterprises and intrapreneurial institutional enterprises usually have well-developed research and
development functions; otherwise innovation has to be acquired from the outside in order for an institutional enterprise
to remain competitive.
For example, even though IBM is an innovative institutional enterprise in its own right, it acquired Lotus Development
Corporation in order to strengthen its position in client/server and collaborative software markets.
Strategy...
The second governance discipline, strategy, focuses on the beneficial positioning of an enterprise in the marketplace so
as to deliver value over time. Strategy begins by establishing the enterprise values and guiding principles, vision,
mission, and value proposition, and ends with delivered value. A strategy is only as good as the underlying assumptions.
Note: in the case of entrepreneurial enterprises, the establishment of a vision will usually precede the establishment of a
mission; in the case of institutional enterprises, the establishment of a mission will usually precede the establishment of
vision because they already have a track record (for better or for worse). However, values and guiding principles should
always come first because they define the basis for all behaviors.
Vision has two components: external – what a community can become as a consequence of the enterprise's activities and
the products and/or services that it offers, and internal – what the enterprise itself can become.
Strategy establishes the direction for competitive, collaborative and cooperative advantage, and performance excellence.
Performance excellence means doing the right things, and then doing those things well.
Strategy can be developed for competitive positioning and posture, improving performance, and achieving constituency-
based objectives, goals and strategic initiatives. Breakthroughs arise from cultivating innovation. They rarely result
from planned events, but rather unexpected events including competitive moves. In fact, breakthroughs often occur right
after the strategic plan has been finalized when the planning team steps back and looks at its work globally and holistically.
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The performance improvement component of strategy sets the agenda for continuous improvement between
breakthroughs through repositioning, restructuring or reengineering activities, addressing both revenue increase and
expense reduction opportunities.
An enterprise’s aspirations for the future state of the environment in which it does business may require long-term plans
spanning 10 to 15 years — usually the time frame required for new technologies or innovations to fully mature and
become common in the marketplace.
For example, debit cards, mobile phones, personal computers, and even the internet have taken at least a decade to
become widely accepted and used.
While it is nearly impossible to plan reliably over 10 to 15 years, an enterprise should develop its vision with a three- to
five-year horizon for achievement of realistic and reachable results.
When management divides time frames for strategic plans into three- to five-year chunks, the likelihood of success
increases. With technology rapidly changing the methods by which business is conducted, even five years is a long time,
so one-to-three years may be best in highly technological environments. However, management can be surprised at how
long it really takes to develop new products and/or services and for the marketplace accept them.
Most major product development projects run behind schedule. For example, the Airbus A380 and Windows Vista, both
complex projects and products, delivered results much later than anticipated. Many software products have to migrate
through several rewrites until they are usable by the community-at-large because of the difference between the process-
orientation of the developers and the people-orientation of the users.
Strategy is not just for the long-term; short-term initiatives that can gain “quick hits” should always be included. Short-
term improvements are often necessary to enable long-term initiatives to take place.
The process begins by rolling back the aspiration to the present, i.e., starting with the end-game – what aspiration
actually is and what are management's first thoughts on getting there from the present.
Starting at the current point of departure, a strategic plan should extend to a targeted point of arrival three to five years
out – a meaningful timeframe. From there as a point of departure, an enterprise can determine what the next point of
arrival is going to be three to five more years out.
As new information about constituency preferences emerges and high order effects “kick-in,” mid-course corrections are
necessary, sometimes the vision as to be “corrected.”
Higher order effects are events or situations that could not have been envisioned or anticipated at the point of
departure, but become apparent as activity proceeds. Higher order effects are often where the real providing additional
opportunities or threats lie.
Higher order effects may make it possible to achieve an aspiration that seemed unachievable when the activity was
started – conversely, higher offer effects can destroy any aspiration or vision from ever being feasible for many reasons
including economic, environmental, political, regulatory, social, technological, etc.
Understandably, actual arrival points will differ from the original aspiration, which is a good reason for limiting strategic
plan scope to five years at most. Based on experience gained over time, the aspiration itself might also change, as
described by. the effect of paradigm shifts and Maslow’s Hierarchy of Needs.
Link to Paradigm Shifts and Maslow's Hierarchy of Needs
In developing strategy, an enterprise primarily uses its proprietary intellectual capital developed internally. The
enterprise also blends its resources with intellectual capital acquired from external sources, particularly when it comes
to methodologies and tools required for enterprise building.
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The term “tribal knowledge” is used to describe the “know how” among the employees to manage processes and deliver
products and/or services. Tribal knowledge is essential to the achievement of strategy, but is often fragmented and
undocumented.
Structure...
Structure is the third governance discipline. Solid structure should be a result from effective strategic planning.
Structure is the enabler of relationships between an enterprise's infrastructure, products and/or services, markets, and
constituencies that deliver value. Structure pertains to the business model; infrastructure consists of processes,
functions, facilities, and equipment.
Every successful enterprise needs to further its vision and expand upon its results in order to remain sustainable. To
facilitate sustainability, business systems processes must be integrated from their components in a form that is
duplicable, measurable, predictable, repeatable, and trainable – “duplicable principle.”
All successful enterprises apply the duplicable principle when they enter unexplored marketplaces — such as new global
arenas — and follow their tried-and-true processes as a standard roadmap, adapting for local practices and culture as
necessary.
The duplicable principle has been used by operators of chain department stores, drug stores, fast-food restaurants, gas
stations, supermarkets, etc. to take a business system that works in one marketplace and apply it in another.
Franchise systems rely on solid structure for their success by systematizing proven processes and duplicating them
within each franchised unit. A solid, duplicable structure eliminates the need for “reinventing the wheel” and makes
customers more familiar and comfortable with the establishments.
For example, “fries are always on the left, and shakes are always on the right.”
The duplicable principle enabled Walmart to grow from a single location in Rogers, Arkansas to the world's largest
enterprise in terms of revenue in less than fifty years. The principle been used by other enterprises, such as Royal Dutch
Shell for gas stations and Starbucks for retail stores.
Leadership: A Key Success Factor for Building Sustainable Advantage
Investors will more readily finance an enterprise on the basis of the strength of its management team, and when the
market is large, ready and aware of its products and/or services, than the benefits and features of the products and/or
services themselves. That concept suggests that a successful management team may repeat their successes as serial
entrepreneurs knowing how to entertain, inform, convince, persuade, and negotiate with people, and manage process.
It is the leadership ability of the management team to generate confidence that they can execute strategy and deliver
results that makes the difference to investors. It's about the management team's ability to deploy people to execute
processes that deliver products and/or services to people. Larry Bossidy, Ram Charan, and Charles Burck have written
extensively about execution: getting things done.
The management team must be able to demonstrate that they can enact change, both by being able to cause it or
respond to it depending upon opportunities and conditions (especially crises). Causing change affects competitors, but
being able to respond to change caused by competitors is essential to sustainability.
The acceptance of new products and/or services in existing markets, or existing products and/or services in new
markets is based upon employee, customer, and even supplier constituencies being willing to change their own
behaviors.
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Hence management must play the leadership role in order to establish an environment that motivates specific
constituents to change. This means being able to communicate both aspirational and inspirational messages that cause
change.
Therefore, a management team seeking financing is apt to lose their investor audience if they focus solely on presenting
a product and/or service. This rule generally applies even if the product and/or service has strong benefits and features.
What is important to investors is the ability of the management team to spearhead change in receptive markets to earn a
multiple of the original investment.
The Importance of Leadership Capabilities...
Of the three stewardship roles — entrepreneurial, leadership and managerial — the quality of leadership ability indicates
to investors the potential to gain (or lose) from financing an enterprise.
Every enterprise needs its stewards collectively to have proficiency in six general areas of subject matter expertise: legal,
finance, human resources, information technology, operations and business development. If an area of expertise cannot
be found within the enterprise, it must be acquired externally from service providers.
These six subject matter areas become the basis for the Administrative functions and Operational functions of the
enterprise. The Administrative functions include legal, finance, human resources, and information technology; the
Operational functions include operations and business development. Operations includes procurement, manufacturing
(or its equivalent in non-manufacturing enterprises), and distribution; business development includes marketing, sales,
and service.
Any of these functions can be insourced or outsourced depending upon the core competencies of the enterprise,
although the ultimate responsibility must remain in-house. An argument can be made that the responsibility for
marketing must always be in-house, because without marketing, nothing else in the enterprise matters. This is why
there is a tight relationship between strategy and marketing.
There are two additional functions that must be considered in any organizational design – the “enterprise” function and
the research and development function, for a total of eight functions across six subject matter areas.
The enterprise function (Administrative) is where activities such as planning and policy development, performance
measurement, brand management, facilities management, relations (community, government and investor),
ombudsman, and internal audit are housed. This function may be consolidated as one, or split into many. It is rarely
called the “enterprise” function, so that term is purely descriptive. Not all enterprises perform all activities.
The research and development function (Operational) relies upon “cross-functional” participation from elsewhere in the
enterprise, and is heavily “project-oriented” focusing on market, product and/or service, and infrastructure-related
activities. Employees should be rotated in and out of the research and development function so that a real-world
orientation is always present within the function as opposed to purely a laboratory environment.
The Governance function, which consists of the board of directors and the chief executive of a corporation or the
members of an LLC, has the ultimate responsibility for the enterprise.
When filling the eight functional roles, “fit” is essential. Functional fit means that a function manager has the ability to
lead regardless of prior experience in the area. In this scenario, fit relates to decision making capability and judgment, in
addition to functional knowledge and technical skill.
All function managers are leaders by default because they have to lead people; team leaders of smaller groups may be
present within the function regardless of whether they hold a managerial position or not, and may also exist cross-
functionally.
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Managers must have strong leadership capabilities to get results achieved through others otherwise they become purely
managers of process. To be effective leaders, mangers must be “people-oriented” to be equipped for the activities of
directing and supporting employees. Ultimately all employees manage process to some extent.
According to research by BLD, inter-personal skills as just as important as professional skills for success in business
because nothing gets done without people.
Link to Understanding Personal Styles
An enterprise can either appoint leaders or allow them to emerge from within. Those appointed are “institutional
leaders,” while those that develop from within are “emergent leaders.” Employees are always observant as to how
leaders are selected.
When choosing leaders, one mistake that an ambitious enterprise can make is selecting experienced people who have the
functional fit but lack the capability (skill or will) to be team leaders. Such people cannot work together with superiors,
peers, and subordinates in a team formation. In many cases, it is better to engage people from within with willing
attitudes and behaviors and to train them, than to hire the most experienced subject matter experts from the outside
who may be unproven as leaders.
Selecting individuals whose values are in line with those of the enterprise is critical. Often an enterprise will place too
much emphasis on experience, while downplaying values. If a manager's values differ from those of the enterprise, the
likelihood of failure increases.
Guiding principles are standards of behavior and directives supporting the values statements. Values statements and
guiding principles provide a framework for decision making. Employees do pay attention to how well a manger's
decisions align with the values and guiding principles, and how consistently those decisions are made over time.
Leadership Style...
Critical to causing or responding change in the future is the emergence of new leaders. A high-performance enterprise
cannot exist unless managers continually develop new leaders to carry the enterprise forward. An enterprise cannot
remain sustainable unless new leaders emerge over time.
The nature of a leadership role is impacted by style. Leadership style combines both transformational and transactional
aspects. Transformational leadership is about enacting change – either in the external environment of the enterprise, or
within the enterprise, or both. Transactional leadership is about delegation and empowerment – the relationship
between the leader and the follower.
Transformational leadership is in effect macro leadership at the enterprise level; transactional leadership is micro
leadership at the individual level.
Transformational leaders influence followers to change their aspirations, wants and needs, objectives, and goals. Shared
learning and values emerge as individual efforts become team-based efforts under transformational leaders.
True transformational leaders build high-performance teams, who in turn build high-performance enterprises. Over
time an enterprise changes as its environment changes. As a consequence, leaders change, and new leaders emerge.
Leaders also change as a consequence of gaining experience in situations with specific teams of people — leadership
activity always results in learning.
Transformational leaders use empowered transactional techniques effectively to help increase their influence.
Transactional leadership is about the relationship between the leader and the follower.
There are two transactional leadership styles: power-centric (common definition) and empowered.
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Power-centric transactional leaders are command and control oriented and want results delivered to order. Elements of
power include reward and punishment – motivating by fear, if necessary. Power centric transactional leaders live by the
rules of the enterprise, agree to a reward system with a follower, and then expect results. Rewards are offered when the
follower performs according to the agreement, and punishments are given when the follower does not.
Power-centric transactional leaders use management by exception techniques – intervening when something is wrong,
but otherwise leaving the follower alone. Power-centric transactional leadership is a militaristic leadership style.
By contrast, empowered transactional leaders build new leaders through a process of migrating from a directive style to
a supportive style of leadership during each “transaction.”
The leader adapts their style based upon their assessment of the readiness of the follower for the activity (the
transaction) in terms of their commitment and competence.
The objective is to migrate the relationship from a command and control style to an empowered style as quickly as the
follower is capable of assuming the responsibility.
The transactional leadership process defines a very effective leadership development progression via a series of
interactions within the relationship between a leader and follower as the transaction proceeds.
These techniques were originally developed by Paul Hersey and Ken Blanchard, and are discussed in the book
“Leadership and the One-Minute Manager” by Kenneth H. Blanchard, Patricia Zigarmi, and Drea Zigarmi. Blanchard uses
the term “situational leadership” to describe the techniques.
The model begins with pairing a leader and a follower in a relationship that progresses to a point where the leader can
delegate entire tasks to the follower and effectively empower the follower to become a leader – hence the enterprise can
grow.
An enterprise cannot be sustainable unless it can develop new leaders from generation to generation.
People and Process
The phrase “soft management skills” refers to disciplines for handling people, while “hard management skills” refers to
disciplines for executing processes. However, the application of soft management skills does not necessarily mean
managing people, because in reality people manage themselves. Managers as leaders need to develop an environment to
motivate followers who can choose to become an integral part of the enterprise's strategy, or not.
The discipline of “soft management skills” is about understanding how people behave and communicating to them
effectively – what inspires and what motivates them.
The discipline of “hard management skills” is about operating efficiently. The three governance disciplines (stewardship,
strategy and structure) further competitive, collaborative and cooperative advantage by enabling enterprises to
effectively leverage both people and process capabilities.
For example, core competencies (things done well) result from effective people executing efficient processes. If shared
learning results, as promoted through the governance disciplines, core competences can only improve, which means that
competitive advantage is strengthened and the opportunities for sustainability improve.
When people and process are tightly coupled, competitive advantage results.
Link to Tightly Coupled Constituencies
Values: Walking the Talk...
Values form the basis for enterprise behavior because they form a system of management's beliefs that set expectations
for individual behavior, establish positions and priorities, and provide a framework for decision making.
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Values statements need to be well crafted and unambiguous to be useful.
The notion of managers “walking the talk” boosts an enterprise’s advantage if the words are perceived as genuine,
because employees sense that management really is “living the values” and will be motivated accordingly, assuming that
they agree with the values. If they don't, perhaps they should seek employment elsewhere.
The employees may display superficial allegiance to the the values if they don't believe them. For significant advantage
to emerge, and for employees to be willing to execute processes efficiently and effectively, enacted values must match
stated values. It's not just the words, but how the words are said and accompanying deeds that are important.
The fit between what is said and what is actually done must be absolute. Everyone in the enterprise — especially
management — should be “walking the talk,” i.e., communicating the values and behaving within them.
Employees can have significant positive impact when behaving according to the stated values of an enterprise.
If management does not live the values, lack of trust and cynicism set in because of perceived (and hence real) double
standards. Such standards can break down leading to misconduct including conflicts of interest and even the risk of
fraud and embezzlement.
An illustrative set of values includes statements for the enterprise itself, its constituencies, and the environmental
ecosystem within which the enterprise operates:
 Enterprise:
 Maintaining an environment of trust and integrity

 Being a good citizen in the community and industry
 Striving continually for innovation, quality, and continuous improvement
 Avoiding conflict of interest
 Constituencies:
 Developing employees as teams

 Listening to customers
 Treating suppliers as partners
 Delivering superior returns to investors
 Complying rigorously with laws, regulations, and agreements
 Encouraging healthy competition
 Ecosystem:
 Being environmentally responsible

 Being economically responsible
 Being socially responsible
Walking the talk is an example of “management by walking around.” The concept of management by walking around
was a principle espoused by Bill Hewlett and Dave Packard when they established the Hewlett-Packard Company in 1939.
By creating Hewlett-Packard Company, they established an enterprise that at that time was based upon the principles of
staying together, without knowing what the exact nature of the products and/or services that would be offered.
Other principles espoused by Hewlett-Packard included the “open door” policy, “positive expectations,” and
“management by objectives.”
Source: www.hp.com
- 12 - To TOC
Tightly Coupled Constituencies...
The most successful enterprises have tight coupling between people and processes. Tight coupling of constituencies
with the business process increases the likelihood of realizing competitive advantage.
Employees whose activities are efficiently integrated with the enterprise reduce inefficiencies and increase competitive
advantage, just as a tight fit with suppliers and customers creates collaborative or cooperative advantage.
The result of tight coupling is a differentiated, distinctive enterprise that is hard to replicate by others, but easy to
duplicate by the enterprise itself.
An example of use of tight coupling is Southwest Airlines, which has built an entire culture around its processes for
providing air transportation. Southwest relies upon a high degree of standardization in processes, facilities, and
equipment which is duplicable from destination to destination.
Southwest also demonstrates that competitive advantage is found in the intangibles — people and the resulting culture
and processes are difficult to separate because they are so tightly coupled. For example, the employees “luv” to work at
Southwest (NYSE: LUV – for Love Field – Southwest's home base).
Other airlines have tried to mimic Southwest but have been unable to replicate the concept because they could not
achieve the same degree of coupling between people and process.
Customers become tightly coupled with the enterprise through loyalty programs and products and/or services that
convenient and easy to use.
For example, frequent flyer programs tightly couple customers to airlines; internet banking systems tightly couple
customers to banks. When tight coupling occurs, switching from enterprise to enterprise is hard and costly to customers
– therefore, competitive advantage results.
The more tightly coupled the supply chain is between suppliers and customers, the more advantage the participants
have in the chain collaboratively. The use of information technology can make a big difference in the tightness of the
coupling.
For example, suppliers who send package tracing information to their customers as provided by Fedex and UPS establish
a three way relationship between themselves, their supplier, and the customer.
Suppliers who share information with customers, and vice versa about demographics and psychographics of customers,
product preferences and usage, have a much greater advantage than those who are locked out of the chain.
The Walt Disney Company is another example of an excellent fit between people and process. Disney uses its employees,
who are in effect “cast members,” and processes to bring magic to its customers - the product is very much vested in the
experience.
In effect, people represent a set of intangibles that provide increased advantage when they closely fit with an
enterprise’s processes.
Anatomy of the High-Performance Enterprise
A high performance enterprise consists of one or more high performance teams. The term team means “together
everyone achieves more.” A high performance team has shared values, vision, mission, objectives, and goals, leverages
the knowledge and skills of each member, shares in the learning, and is mutually accountable to each other.
Jon Katzenbach and Douglas Smith have written extensively about building high performance teams in their book “The
Wisdom of Teams.”
- 13 - To TOC
To build the high performance enterprise that achieves performance excellence , the Governance function must listen to
and respond to high performance teams and vice versa.
The high performance enterprise is built on shared values between the reflected in enterprise and societal culture across
the geographic markets in which the enterprise does business and has a presence.
The high performance enterprise:
 Has shared values
 Balances innovation with continuous improvement
 Applies core competencies to competitive advantage
 Has an energized productive workforce dedicated to both enterprise and individual learning
 Makes fact based decisions based upon open discussions, but with opportunity and risk/return in mind
 Focuses on results
 Is environmentally, economically, and social responsible
 Strives for excellence
Why build a high-performance enterprise? The answer is simply because such an enterprise attracts the right
customers, employees, suppliers, and investors – the best for all concerned.
Because the cost of obtaining new constituents can be high relative to retaining existing ones, enterprises seek to build
loyalty — not with any constituents, but the right ones – the ones that provide fit with its people, processes, and
products and/or services, and contribute to the value pie.
Evidence of High Performance...
To help promote a healthy economy, the United States Government created the Malcolm Baldrige National Quality
Program in memory of Malcolm Baldrige, who served as Secretary of Commerce from 1981 to 1987.
Malcolm Baldrige demonstrated superior managerial skills that helped increase government efficiency for the long-term.
The award itself provides an incentive for enterprises in the United States to focus on issues promoting improvements in
quality and productivity.
Specific guidelines and winning examples are useful as a roadmap for all enterprises to follow. Today, a review of the
Malcolm Baldrige criteria by every manager is essential for effective process design, as well as knowing what others are
doing.
Link to the Baldrige National Quality Program and list of winners
Many enterprises have demonstrated noteworthy evidence of high performance whether Baldrige winners or not.
- 14 - To TOC
The following enterprises can be characterized by, but not limited to, specific aspects of high performance that have
given them sustainable advantage:
 Dell Computer Corporation — Builds collaborative relationships with its suppliers
 Microchip — Espouses sound values
 Southwest Airlines — Uses tightly coupled people and process capabilities to focus on being the low cost provider
 Starbucks — Focuses on the employee constituency as the basis for building customer relationships
 Ritz-Carlton Hotels — Creates value through outstanding customer service
 Walgreens — Balances bricks and clicks
Constituency-Based Process Design...
Effective processes are constituency-driven. By designing processes around their constituencies, high performance
enterprises lay the groundwork for efficiency. If processes are not built around constituencies, chaos can result.
For example, it is extremely frustrating as a customer to switched from department to department within an enterprise
because no employee knows quite how to resolve an issue. The further employees are removed from the customer, the
less likely they will be able to solve problems.
Be wary of those enterprises where the managements never have direct contact with the customers.
Enterprises seeking to develop constituency-based processes can look to the framework displayed in the Baldrige award
criteria for suggestions. These criteria provide a plethora of guidelines for designing processes that are employee-,
customer-, supplier-, and investor-based.
Personal growth author and speaker Stephen R. Covey chose “begin with the end in mind,” as one of the seven habits of
highly successful people. Entrepreneurs can leverage this concept and get a head start to obtaining financing by
considering ahead of time the design concepts involved in developing a high performance enterprise from the Baldrige
criteria.
These concepts include designing the processes around the constituencies. Of course, until an entrepreneurial
enterprise gains experience in its marketplace, and its consistencies gain experience with it, processes are likely to
change. However, it is easier to change processes that have been designed around the constituencies than those that
have not.
Terms such as “customer-driven” and “process-driven” enterprises result from constituency-based process design.
Value and the Impact of Constituencies
Value is the creation of wealth, and the four primary constituencies — employees, customers, suppliers, and investors —
hold components of an enterprise’s wealth. All four constituencies have a significant role in the “value pie.”
Employee-based value lies in compensation for the performance of activities and training provided for ongoing career
development in exchange for performance which is efficient and effective and delivers quality to either internal or
external customers, or both.
Customer-based value is based upon the revenue (price earned) from customers less the cost of the revenue expensed in
exchange for the perceived quality of the products and/or services offered.
- 15 - To TOC
Supplier-based value lies in the cost of materials and supplies, and services (price paid) in exchange for the actual quality
and timeliness of the products and/or services delivered.
Investor-based value lies in the return on investment above the cost of capital in exchange for capital.
Michael Porter's Five Forces Model shows the relationship between an enterprise and its supplier and competitor
constituencies in terms of bargaining power, threats, and rivalry. Employees have bargaining power too as unionized
enterprises are well aware of!
Michael Porter is also associated with term “value chain” - the chain of activities that earn value and add value to
materials and supplies, resulting in finished products and/or services.
Keith Oliver at Booz & Company is associated with the originating term “supply chain” - the chain of value chains
between suppliers of raw materials and supplies (suppliers) and users of end-products and/or services (customers).
Employees, Customers and Investors
Traditionally, the field of management science has emphasized increasing shareholder value from the investors'
perspective alone. After all, without investor capital, enterprises cannot exist. However, over time the customer
constituency and more recently the employee constituency, have received attention in management science as being
related to shareholder value.
Generating shareholder value is critical in all industries, especially in highly capital intensive industries where it may be
difficult to liquid assets quickly.
As enterprises become more service oriented, either though service-oriented products or through supporting services or
both, the value offered to the customer constituency becomes extremely important. Therefore, the increased breadth
and depth of product and/or services leads to the need for improved customer relationship management, customer
satisfaction, and customer loyalty.
Value offered to customers in terms of price and cost to serve are inter-related with shareholder value. Hence the
emphasis on customer relationship/demand chain management in management science.
More recently however, led by enterprises such as Southwest Airlines and Starbucks, the emphasis in management
science has included employees, leading to the notion of effectiveness of human capital.
The concept is simple: if employees perceive that they are being treated well, they in turn will take care of the customer,
who in turn will take care of the investor. The notion of being treated well includes not only appropriate compensation
in exchange for performance and career development opportunity, but also the quality of the work environment.
Whereas price may not be the most important purchase criterion for customers, who also place emphasis on
convenience and quality of products and/or services offered, compensation may not necessarily be the most important
criterion for employees. Job satisfaction, learning, safe environment, intangible benefits and opportunity are other
criteria that are taken into to consideration by employees.
For example, close proximity to day care facilities is often cited as an important employment criterion for working
mothers.
Source: BLD research
Most recently, the 21st century has ushered a supplier focus to the forefront – hence the emphasis on supply chain
management.
For example, the notion of paying suppliers early unless a discount is involved is rarely practiced by many enterprises,
holding payment until the very last moment possible – making “net 30 days become a net 45 day or more standard.
- 16 - To TOC
For enterprises with cash flow problems (which is most over the long haul), slow paying is standard.
This practice can create havoc in the supply chain, because an upstream supplier is dependent upon cash flow from
customers downstream, who may have different vested interests.
However, there is an intrinsic value in supplier relationships. Suppliers have access to information about competitive
trends, and can choose which customer gets what product and/or service when, and at what level of quality.
Consequently, if an enterprise treats its suppliers well, the suppliers will treat the enterprise well, which can be a
competitive advantage and a contributor to shareholder value.
Paying suppliers on-time helps their own cash flow and contributes to their profitability, and simultaneously opens the
door to rewards for loyalty to the enterprise itself such as price breaks, faster delivery time, and early exposure to new
products. Paying on time is vital for collaborative and cooperative relationships because supplier examine costs to serve
too.
If the enterprise can sell it products and/or services effectively, cash flows from customers to employees, suppliers, and
investors efficiently.
Hence, the notion of “constituency value chain” which represents the relationship between investors, employees,
customers, suppliers, and investors in the value sharing process. The constituency value chain begins with investors
because they supply the capital, and ends with investors with the return on capital.
Economic profit to investors results when returns are greater than the cost of capital.
Best versus Right...
There is a distinction between the “best” and the “right” constituents when it comes to seeking an ideal fit with an
enterprise. Choosing specific constituents leads to segmentation of markets of employees, customers, suppliers, and
investors.
Although enterprises often claim that they want the best employees, it makes no sense to employ a university graduate
to flip hamburgers at a fast food establishment. Why pay a premium for unnecessary resources, unless there are other
underlying reasons? Such reasons may include employees gaining experience on the “shop floor” or in the “mail room”
or “over the counter” before advancing into management, thus knowing the enterprise from within.
The right employees may bring the required knowledge and skill to a given task, but an aptitude for advancement is just
as important, so that they can make further contributions in the future. In fact, future potential may be more important
for recruiting, developing, and retaining employees who enact the values of the enterprise, because functional
knowledge and technical skills can be acquired by both training and on the job experience.
Individuals whose values are not consistent with those of an enterprise do not fit – neither party will be happy about the
other.
There is an adage that states that, “if an employee is good, they will be good at anything given time.” Another adage
states that, “an enterprise is only as good as its people.”
The right employees are the ones who are willing to accept reasonable compensation, and begin at a level that allows
them to acquire knowledge and develop skills that benefit both the enterprise and themselves over time, in exchange for
advancement and future rewards.
Incentive-based compensation schemes may be more attractive to both the enterprise and its employees if performance
is fairly rewarded based upon contribution. However, be wary of those schemes that influence the wrong behaviors and
conflict with the values. Incentives should be based upon quality delivered and value/profit earned, not revenue, and
should allow for individual, team, and enterprise performance. Be wary of bonus schemes that pay for sales without
revenue being earned and collected.
- 17 - To TOC
Characteristics and capabilities that employees should bring to an enterprise:
 Knowledge — information that has been learned and applied effectively – functional subject matter expertise
 Skills:
 Personal
 Self – rational problem-solving and decision-making; the ability to handle emotion and balance it with
reason
 Inter-personal skills – the ability to entertain, inform, convince, persuade, and negotiate;
 Professional – stewardship competencies: entrepreneurial savvy, leadership aspiration, and managerial planning
and control; technical skills; core competencies
 Values — system of beliefs that models enacted attitudes and behaviors
 Culture — diversity, time perception and space perception
The selection process for any assignment should focus first personal and inter-personal skills. If an individual lacks
these skills or the aptitude for them, no amount of additional qualifications can make up for them. Then the process
should focus on how an employee would handle situations in the future.
Awareness of time perception is critical to helping people of different cultures be productive while working together.
For example, people who focus on strategy tend to think in terms of three- to five-year time horizons, while people
working in operations think in terms of the next several minutes, hours or days.
Space perception offers a similar challenge. Strategists, for example, tend to be global, but salespeople tend to focus on
their own local markets, which may be just a few miles in radius.
Understanding personal styles (sets of personality characteristics) of the self and others is essential to sustainability. It is
not possible to entertain, inform, convince, persuade, and negotiate without understanding the preferences of the other
party.
For example: effective salespeople know that the customers buy on emotion and then justify their purchases rationally.
Consequently, when communicating they have to raise the emotion of the customer to the point where they will buy. A
values-based enterprise must do this without taking advantage of the customer.
Whatever the obstacles, as the world globalizes, it is important to understand and leverage people from different
cultures. In some cultures, time perception is important; in others its irrelevant. In some cultures, family relationships
matter; in other cultures, family relationships hinder.
Globalization and the multicultural environment of the United States mean that enterprises must understand culture
and be able to assist people from different cultures contribute collectively.
Note that members of American born ethnic groups often differ in culture from their native ancestors.
Therefore, the global enterprise must begin with an understanding of all the different aspects of culture, including race,
ethnicity, religion, accepted personal and professional practices, etc., both locally and globally.
- 18 - To TOC
Whether local or global, the right customers for an enterprise are the ones who command a price at a meaningful cost to
serve.
Sometimes the customers who generate the most revenue may not be the most profitable. It is important to examine
gross profit and gross profit margin, operating expenses, and capital employed in making this determination. High gross
profit margin customers may not necessarily generate the scale required to provide an adequate return on invested
capital.
Usually the Pareto principle applies: eighty percent of profit is earned from twenty percent of customers. Therefore, it is
essential to examine the hidden costs of acquiring and serving customers from a managerial accounting and reporting
perspective in addition to examining the cost of sales from a financial accounting and reporting perspective.
For example, acquisition costs can outweigh profits earned from customers who do not “stick.” Therefore, an enterprise
must first identify its profit needs, then pursue the constituent groups that can earn that profit, and build loyalty with
them. Such loyalty yields sustainable value over time.
Not only does this practice require strong planning and policy development practices, but also strong performance
management techniques as employed by management information and decision support systems.
An enterprise can bifurcate into two business lines to support the economics of differing customer segments – one
offering premium-priced products to customers with a higher cost to serve – usually lower volume, and the other
offering discount-priced products to customers with a lower cost to serve – usually higher volume.
The concept applies to specialty boutique versus big box retailers. For example, Bang & Olufsen serves a different
customer segment of audio/visual equipment purchasers than Best Buy.
Capital requirements and risk/return expectations for return on capital usually differ by business line. Service-oriented
enterprises tend to be more human capital intensive (which is an expense) than product-oriented enterprises which can
be very financial capital intensive for inventory, facilities, and equipment.
An enterprise’s culture emerges from manner in which the governance disciplines integrate the values and culture of the
individual constituents. In effect, an enterprise can perform at the will of its employees, customers, and suppliers unless
it has strong governance disciplines.
An enterprise can be defined by its employees, customers, and suppliers, which is why entrepreneurial enterprises often
end up pursuing a different mission and objectives than those they started with.
For example, the decision by restauranteurs to offer alcohol or not is often dictated by customer preference, changing
format because alcoholic beverages are more profitable than food and non alcoholic beverages.
It is the responsibility of the management team to listen to its constituencies and adapt accordingly as conditions
dictate. Otherwise management may be surprised to find a different set of customers than the ones that they envisioned,
and products and/or services being used in a completely different way.
Planning, Deployment and Measurement
The three governance disciplines of stewardship, strategy and structure provide a solid and reliable roadmap for
successfully establishing processes that address planning and policy development, deployment, and performance
measurement.
Developing, enhancing, and maintaining plans and policies is best accomplished first on an enterprise basis with overall
objectives and goals, and then on a functional basis. Functional plans include research and development, operations,
business development, finance, human resources, and information technology.
Note: plans for the finance function, human resource function and information technology function should exist in their
own right in addition to financial, human resource and information technology plans for the entire enterprise.
- 19 - To TOC
The value chain can be defined by the process/function model, which shows the relationship between processes and
functions at the macro level – it maps the major activities of the enterprise. The process/function model is a useful tool
in strategic planning because it shows how value flows through the enterprise, and where leakages may exist.
Each functional area requires its own process maps and guidelines that must also integrate well with the other functional
areas within the enterprise, and with the enterprise as a whole, and as necessary with suppliers and customers.
Deployment activities include research and development, and sales and production. Research and development activities
are project-oriented with a finite beginning and end. Sales and production activities are either project-oriented or
perpetually-oriented, depending upon the product and/or services offered.
For example, the sales and production activities of a food service enterprise are perpetually-oriented, whereas the sales
and production activities of an aircraft manufacturer are project-oriented, varying by each contract.
Note: research and development is both a process and a function.
Performance measurements must address both financial and non-financial measures. Revenues, expenses, profits, cash
flows, and returns on investment involve financial measurements based upon rates, quantities of input and volumes of
output.
However, financial performance must be evaluated in terms of non-financial measures, such as market share and
penetration, product usage, employee and customer satisfaction, quality, time-to-market, cycle time, and asset
utilization.
Robert Kaplan's and David Norton's Balanced Scorecard approach provides a useful framework for performance
measurement.
Whether they are applied by an entrepreneur on a first-time venture or by the management of a well established
institutional enterprise, the values-based governance disciplines of stewardship, strategy, and structure supply a
consistent roadmap for enacting change that results in competitive, collaborative, and cooperative advantage.
An enterprise must focus on people, process, and product and/or service capabilities is the basis for building sustainable
advantage from the creation of a vision to the delivery of the resulting value.
- 20 - To TOC
Paradigm Shifts and Maslow’s Hierarchy of Needs: Emerging Opportunities
Paradigm shifts result from change. The term was first defined by Thomas Kuhn, and made popular by Joel
Barker. Any enterprise, from young entrepreneurial ventures to well established institutions, can take
advantage of the way emerging paradigm shifts generate unsatisfied customer “wants.”
Although human beings’ needs remain relatively constant over time, technology, innovation and market
developments create paradigm shifts that continuously generate new desires in the public.
For example, ever since people made their way across land on foot, there has been an ongoing shift in the
paradigm of transportation. Walking yielded to riding animals — such as camels or horses — and riding gave
way to taking a buggy pulled by an animal.
Eventually the stagecoach became available, followed by the iron horse, or train. Then there were buses,
automobiles, planes, and even the space shuttle. The need for transportation has always been the same, but
the preferred method of travel has not.
All along the transportation continuum, individuals and enterprises have benefited and continue to benefit from
markets generated by various forms of transportation.
From Dr. Scholl’s to Boeing, enterprises are taking advantage of customers’ transportation preferences. New
ways of meeting basic needs stimulate consumers to want a new product and/or service.
Maslow’s Hierarchy of Needs demonstrates the scope of a paradigm shift: on every level — physiological,
safety and security, social, esteem, and self-actualization — consumer needs can be met in different and
profitable ways by creating specific wants. Because enterprises are made up of people, they have an
equivalent set of needs.
Change creates paradigm shifts that represent opportunity. By focusing on customer wants in light of the
general need, entrepreneurs and intrapreneurs alike can enter new markets and find new avenues for profit –
the enablers. The barriers are feasibility, cost and human nature.
While needs are rational, wants are emotional, and playing into wants increases the likelihood of profit.
For example, an individual needs a car, but wants a Mercedes for the display of status. Similarly, a individual
may need a watch, but wants a Rolex.
Successful enterprises build brand identity around emotion.
- 21 - To TOC
APPENDIX
Background on BLD and the author He obtained his experience as a partner at two major international consulting
firms, as a member of the senior management team of a Fortune 100 company, as
“From Vision To Value: Building Sustainable Advantage” is a component of the a retail and food service enterprise owner, as a wellness enterprise owner, as a
intellectual capital of The Business Leadership Development Corporation (BLD), radio show host, as a board member, and as a community service volunteer.
which is based upon the professional experience of its president: Nigel A.L.
Brooks. He has local-to-global experience (North and Latin America, Europe, and Asia-
Pacific) from start-up entrepreneur to Fortune 100 executive.
The material contained herein has been developed from research and seminars
that BLD has conducted over several years. BLD's intellectual capital
BLD is a professional services firm that assists its clients achieve performance BLD's intellectual capital consists of a set of models, methodologies, and tools
excellence by building sustainable advantage from vision to value . that have been developed for strategic management consulting, executive
coaching and mentoring, and professional training engagements.
One of BLD's principal intellectual capital offerings to its clients is packaged as

Enterpriship BLDer, a set of capabilities that provide a systematized
approach to building enterprises through models, methodologies, and tools.
Enterpriship BLDer  provides material that develops both the functional

knowledge and technical skills required to establish the mindset and action
items for entrepreneurs, leaders, and managers.
Although this material has been used extensively on client engagements, it does
not include any client proprietary information or materials.
Because of the strategic and sensitive nature of its work with clients, BLD does
not discuss or mention client names.
The material contained herein is extracted from Enterpriship BLDer
The Center for Business Leadership Development
BLD offers professional training to both clients and non-clients through “The
Center for Business Leadership Development.”
www.bldsolutions.com
BLD offers consulting, coaching and mentoring, and training to entrepreneurs,

lifestyle business enterprise owners, executives, and managers, and the
enterprises they serve.
Nigel A.L. Brooks is an entrepreneur, business enterprise owner, management

consultant, and motivational speaker.
www.bldsolutions.com/cbld
Professional training includes both private and public seminars, ebooks, audio
books, and eseminars.
Eseminars are packaged sets of items including videos, audios, ebooks,

presentations, and reference materials.
Eseminars are condensed versions of both private and public seminars made
available for distribution to the public via the internet.
Eseminars provide an introduction to a subject that is further explored in live

private or public seminars.
www.nigelalbrooks.com
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APPENDIX
Enterpriship™
To build a sustainable enterprise also requires an understanding of subject areas
Enterpriship™, the art and science of entrepreneurship, leadership, and related to people including:
management, is the process of building enterprises with sustainable advantage.
 Physiology – with respect to human function (for example, compliance
with occupational, health, and safety rules)
 Sociology – with respect to product and/or service usage
 Politics – with respect to planning and policy development
 Philosophy – with respect to guiding principles for practical activities
 Psychology – with respect to understanding the behaviors of

constituencies:
 Primary
 Employees
 Customers
 Suppliers
 Investors
 Secondary
www.enterpriship.com  Regulators
 Competitors
Sustainable means being able to continue over time, either by developing,
enhancing, or maintaining the current state, or by changing it.  Community-at-large
Advantage means favorable, superior, and beneficial. Enterpriship BLDer provides the framework for entrepreneurs, leaders,
and managers through the Personal Styles model and other models,
The sustainable enterprise employs three criteria for sustainability in all decision methodologies, and tools, to understand these competencies and ensure that
making - are both the mindset and the intended actions responsible: they are present within the enterprise.
 Environmentally? BLD also offers intellectual capital packaged as SustainableAdvantage

 Economically? BLDer which provides a framework for BuildingSustainable
 Socially? Advantage<>From Vision to Value ™.
Focusing on products and/or services alone is insufficient for building an SustainableAdvantage BLDeris built on the notion of “stewardship” -
enterprise that attracts the right employees, customers, suppliers, and investors the responsibility for the performance of an enterprise and the delivery of value
that will ensure sustainability. to constituencies. Whereas enterpriship applies to the individual, stewardship
In fact, unless an enterprise focuses on its people and process capabilities, it will applies to the enterprise.
fail. The solution to building sustainable advantage lies in leveraging values-
based governance disciplines that dictate successful people-oriented and Background of From Vision to Value: Building Sustainable Advantage
process-oriented capabilities.
This earticle is intended to be an overview of both the Enterpriship
The phrase “soft management skills” refers to those disciplines for leading BLDer and SustainableAdvantage BLDer intellectual capital, and is
people, while the phrase “hard management skills” refers to disciplines for intended to be thought provoking.
managing processes.
The material in the earticle has been used on client engagements and in
The sustainable enterprise employs governance disciplines, leverages its seminars for many years.
capabilities effectively, and utilizes its capital efficiently to build advantage over
time. A note from the author
Entrepreneurs may not necessarily have the leadership and managerial I am lucky to have had a very interesting and diverse career as an entrepreneur,
competencies, nor may leaders have the entrepreneurial and managerial business enterprise owner, management consultant, executive, author, and
competencies, nor may managers have the entrepreneurial and leadership motivational speaker.
competencies to build a sustainable enterprise.
I began my entrepreneurial endeavors when I was fifteen. From my bedroom in
To build a sustainable enterprise requires an understanding of the traditional North London, England, I organized a poetry competition, and collected poems
enterprise functions including: from all over the world. I subsequently published a collection of the best as a
book entitled: “Versewise – A collection of poems,” and awarded prizes.
 Administrative functions
I became fascinated with computers when the industry was called “data
 Enterprise (multi-discipline) processing,” and spent many years building operational and analytical systems
 Legal in the financial services, high-tech, manufacturing and distribution,
 Finance pharmaceutical, retail and wholesale, transportation, and government
 Human Resources industries.
 Information Technology
By building transaction processing, management information, and decision
 Operational functions support systems, I understood how enterprises worked. By working in the
financial services industry, I understood how entire industries worked and fitted
 Research and Development together, because every enterprise has a relationship with at least one financial
 Operations institution.
 Business Development
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APPENDIX
Because I worked in many countries around the world, and many of the systems The material is integrated – meaning that it fits together in a way that is usable
that I built were related to foreign exchange, import/export, and shipping and for any enterprise in any stage of development.
distribution, I understood how global commerce worked.
However, the material is designed to provide “just-in-time” information in an
The genesis of the ideas for Enterpriship BLDer and Sustainable Advantage integrated (systematic) fashion for entrepreneurs, lifestyle business enterprise
BLDer began in 1986, when I wrote a position paper that contained a model that owners, executives, and managers as their enterprises migrate through their
showed how a commercial bank works. various stages of development.
That paper was based upon some ideas that I had formulated while developing Not only has this material been used on client engagements, but components of
strategic and information technology planning and development methodologies. it have been taught in both private and public seminars.
The paper described a hypothetical bank, the banking industry at large, and
relationships between a bank and both its consumer and commercial customers. Over time, the “Understanding Personal Styles” seminar emerged as both an
offering in its own right, and as a topic on the agenda of more comprehensive
It was a first attempt at defining process and function models for enterprises. seminars, although not necessarily under that name.
At about the same time, I wrote a series of articles for the magazine of the Bank At BLD, I promoted this seminar because people-oriented capabilities are just as
Administration Institute (www.bai.org) (“Bank Administration” later “Banking important as both product and service and process capabilities in the sustainable
Strategies”), as a contributing editor, that presented outlooks for the future of enterprise.
information technology in the global banking industry.
These seminars included exercises that enabled me to observe how the
I wrote an article entitled “Strategic Issues for Financial Services Marketing,” participants behaved and to listen to the words they used. Client engagements,
which was first published in 1987 in the United States, and in 1989 in the United including one-to-one coaching and mentoring situations, provided the same
Kingdom, that discussed forces driving change in the banking, insurance, and opportunities.
securities industries, and the implications for market segmentation, product
development, and delivery channels. Over time, at BLD, I developed the material for the Personal Styles model,
including the Profile Survey.
This article helped many financial institutions around the world apply the
concepts of demographics and psychographics to their customer databases. Understanding Personal Styles is an essential discipline for building a
sustainable enterprise that is environmentally, economically, and socially
Writing these articles shaped my thinking about the structure of industries. responsible.
During my tenure with Andersen (now Accenture: www.accenture.com) and It is also an essential discipline for building social relationships too.
Booz Allen Hamilton (now Booz & Company: www.booz.com), I worked with
many enterprises in the development of both business and technology strategy. I welcome comments at nigelbrooks@enterpriship.com
I understood how enterprises work and behave from the inside to the outside,
and from the top-down. I have been lucky to pick-up variations of my name during my travels.
Because I was an agent of change, I learned how individuals reacted to change, Nigel A.L. Brooks
both favorably and unfavorably, and whether welcomed or not. I began to Niguel
understand what is referred to herein as “Personal Styles.” 那杰
Na Jie
Naj
At American Express (www.americanexpress.com), I learned the importance of
values and quality, first as a customer, then as a client of mine, and later as a
September 2008
member of senior management.
In 1995, I opened my own retail and food service enterprise to apply much of
what I had learned in the corporate world to a small enterprise from the inside-
out (www.bldsolutions.com/javacentralemetrocenter ).
My career objective had been to combine my large enterprise management

experience with small business enterprise ownership experience, as a basis for
returning later to management consulting.
As a client, I worked with both Accenture and Booz Allen while at American
Express, and American Express was a client of my food service enterprise (both
individuals and the company itself).
Five years later, I sold my award-winning enterprise to return to management

consulting, applying my local-to-global experience with entrepreneurs, lifestyle
business enterprise owners, executives, and managers in start-ups to large
corporations.
Over time, I had become familiar with many personality tests.
From 2000 to 2008, I provided “project-based” consulting through BLD. From

2008, I provide seminars through BLD's “The Center for Business Leadership
Development.”
I developed a new set of models, methodologies, and tools for strategic planning,
deployment and execution, and performance measurement that is packaged as
Enterpriship BLDer and Sustainable Advantage BLDer .
This set of intellectual capital provides a systematized approach to enterprise

building, and has been used on client engagements from 2000 to the present
time.
- 24 -
REFERENCES
 Airbus:
 Jon Katzenbach and Douglas Smith:
www.airbus.com
www.etailia.com/amazon#Katzenbach
 Baldrige National Quality Program:
 Thomas Kuhn:
www.quality.nist.gov
des.emory.edu/mfp/Kuhnsnap.html
 Bang & Olufsen:  Abraham Maslow:
www.bang-olufsen.com www.maslow.com
 Joel Barker:  John Maxwell:
www.etailia.com/amazon#Barker www.johnmaxwell.com
 Best Buy:  Microchip:
www.bestbuy.com www.microchip.com
 Kenneth H. Blanchard, Patricia Zigarmi,  Microsoft:

Drea Zigarmi:
www.microsoft.com
www.etailia.com/amazon#Blanchard
 Larry Bossidy, Ram Charan, and Charles Burck:  Michael Porter:
www.etailia.com/amazon#Porter
www.etailia.com/amazon#Bossidy
 Nigel A. L. Brooks – The Business Leadership Development Corporation:  Ritz Carlton:
www.ritzcarlton.com
Understanding Personal Styles
www.understandingpersonalstyles.com  Royal Dutch Shell:
www.shell.com
 Stephen Covey:
 Southwest Airlines:
www.etailia.com/amazon#Covey
www.southwest.com
 Dell:
www.dell.com  Starbucks:
 Disney: www.starbucks.com
www.disney.go.com  Brian Tracy:
 Gary Hammel and C.K. Prahalad: www.etailia.com/amazon#Tracy
www.etailia.com/amazon#Hammel  Michael Treacy and Fred Wiersema:
 General Electric: www.etailia.com/amazon#Treacy
www.ge.com  UPS
 Fedex www.ups.com
www.fedex.com  Walgreens:
 Michael Hammer and James Champy: www.walgreens.com
www.etailia.com/amazon#Hammer  Walmart:
 Hewlett Packard: www.walmart.com
www.hp.com
 Tom Hopkins:
www.etailia.com/amazon#Hopkins
 Robert Kaplan and David Norton:
www.etailia.com/amazon#Kaplan
- 25 -
TERMINOLOGY
The terminology presented here is sourced from BLD's The Language of Business
Value  and applies to the broader fields of enterpriship and building
sustainable advantage :  As a discipline – delivering a product and/or service to a customer
for a profit
Advantage
 As an entity:
 Favorable
 Superior  Sole proprietorship (individual)
 Beneficial  Partnership (pass-through)
An ongoing concern  General

 Limited
An ongoing concern is an enterprise that does not intend to discontinue
operating activities  Limited liability
 Has the competence and commitment to:  Limited liability company (pass-through as a partnership or
as a “Subchapter S” corporation)
 Operate indefinitely, and will not:
 Corporation
 Become inactive
 General (“Subchapter C”)
 Seek bankruptcy protection
 Pass-through to individuals (“Subchapter S”)
 Professional – pass-through to individuals
 Liquidate its assets  Foreign
 Earn profit Business owner
 Finance operating and investing activities Link to lifestyle business enterprise owner
Capabilities
 Fund itself through seasonal and cyclical downturns
The capacity and ability of people, processes and functions, products
 Bootstrap organic growth and investment capital asset and/or services to realize potential quality and value
management
Causals
 Raise expansion and growth capital at attractive rates
Appreciate creativity and relationships
 Fosters the entrepreneurial mindset through intrapreneurship
Challengers
 Avoids business-as-usual
Appreciate action and optimism
Note: the definition of “ongoing concern” is based upon rational and
emotional factors - “going concern” is the definition under Generally Community-at-large
Accepted Accounting Principles
 Geographic
Art
 Local
An occupation that requires both knowledge and skills  Regional
 National
Associate  Continental
 Global
Employee in a non-managerial capacity (supervisor or staff) –
nevertheless, these individuals may hold leadership positions  Demographic - segmenting populations into different groups, such
as age, gender, occupation, and income
Attitudes
 Psychographic – segmenting populations based upon lifestyle,
States of mind or dispositions that cause an individual to act or react in a activities, opinions, beliefs, and interests – can be measured in
certain way towards an event, activity, or information terms of frequency, recency, and value of transactions
Behaviors Coaching
Any forms of action or reaction – usually defined by society or culture Providing guidance on entrepreneurship, leadership, and management
Belief Collaborative advantage
Something that is accepted as true, or placing trust or confidence in Relationships between suppliers, or customers, or peers:
another thing
 As a partnership with a common mission
 Operating dependently for mutual value
- 26 - To TOC
TERMINOLOGY
Competence Duplicable principle
 Knowledge (functional) Systematized processes that are:

 Skills
 Measurable
 Personal  Predictable
 Repeatable
 Intra  Trainable
 Inter
Efficiency
 Technical
Ratio of work performed to effort applied and is the difference between
Competitive advantage the budgeted cost of work performed and the actual cost of work
performed
Position and posture that offers constituencies better value than
competitors Enterprise
A group of activities intended to produce income organized for:

Constituencies
 Profit as a business of any size and type
Constituencies are the parties with whom an enterprise has relationships
for the purpose of earning revenue:  Unincorporated or incorporated
 One or many entities
 Primary  One entity is designated as the “holding entity” in a multi-
entity structure
 Employees  Note: an enterprise can incubate an enterprise
 Customers
 Suppliers  Not-for-profit associations
 Investors
 Public charities
 Secondary  Private foundations
 Regulators  Government agencies

 Competitors
Note: when an enterprise is referred to as entity, the reference is
 Community-at-large specifically to the holding entity, unless otherwise specified
Constituents Entity (business)
Members of a constituency class Accounting and tax reporting business structure
Cooperative advantage Entity (legal)
Relationships between suppliers, or customers, or peers: Something in real form:
 As an association with a similar mission  Individual
 Operating independently for mutual value  Corporation
Cost Entrepreneur
 Exchange value bid or paid by buyer (price paid) Individual who organizes, operates, and assumes risk for an enterprise
with the intention of transforming innovative ideas into products and/or
 Value that must be given up in order to acquire a product and/or services for profit
service
Entrepreneurial enterprise
Culture
 Not yet fully established as an ongoing concern
 Knowledge and skills learned from leaders and role models
 May have to rely upon external capital as opposed to bootstrapping
 Shared values, attitudes, behaviors, beliefs, and that influence to finance future growth (early to late stages)
further behaviors
 ...and is either in the emerging or growth stages of development (or
Data decline stage, if it cannot institutionalize)
Raw material for information – underlying facts and figures about events, Entrepreneurialism
items, and people
Innovative attitude within any enterprise – entrepreneurial or
institutional
- 27 - To TOC
TERMINOLOGY
Established Institutional enterprise
 First stage – founded and organized  Established
 Second stage – stabilized – predictable patterns become apparent  Stable – predictable constituency patterns emerging
 Third stage – permanent – enhancing or maintaining the current  Is becoming permanent as a consequence of product and/or
position or changing it enterprise institutionalization
Executive  Becoming, is, or was an ongoing concern
Top line of official management with major areas of authority and  In the growth or maturity stages of development (or decline stage,
responsibility (either functional or business unit) if it cannot remain an ongoing concern)
Feeling
Intrapreneur
Emotional response
Agent of change within an enterprise who takes the risk to transform an
Function innovative idea into value (or at least start the process)
A group of knowledge-related (subject area) activities that have a purpose Intrapreneurial enterprise (intrapreneurial institutional enterprise)
Goals Institutional enterprise that innovates internally that result in new

products and/or services and the incubation of entrepreneurial
Quantifiable measures of achievement – the target is the final goal enterprises
Going concern Intrinsic value
Generally Accepted Accounting Principles (GAAP) require an auditor to  Value of free cash flows from the enterprise plus the residual value
consider whether an entity can continue as a going concern based upon of the enterprise
its ability to meet its obligations – doubt arises from:
 Actual value based upon perceived value of tangible and intangible
 Inability to generate sufficient cash flows from operating activities factors
 Inability to sell assets to generate cash Intuition
 Inability to restructure debt Looking for meaning through insight and understanding
Guiding principles Investor constituency
Standards of behavior and directives supporting the values Providers of capital
Higher order effects If the entity is a sole proprietorship, the investor is an individual
 Events or situations that could not have been envisioned or If the entity is a partnership, the investors are partners (and owners), if
anticipated at the beginning of an endeavor, but become apparent the entity is a limited liability company, the investors are members (and
as activity proceeds – providing additional opportunities or threats owners)
 Higher order effects may make it possible to achieve an aspiration If the entity is a corporation, debtholder investors investors are the
after some activity that seemed unachievable when the activity was providers of debt capital and stockholders are the providers of equity
started – conversely, higher offer effects can destroy any aspiration capital issued in shares
or vision from ever being achieved
Stockholders are referred to as shareholder investors
 Expect the unexpected
Judging
Individual
Closure
A natural person (as opposed to a corporation)
 Forming an opinion
Information
 Evaluating a situation
Data organized in a form that is useful to people
Knowledge
Infrastructure
Information that has been learned and retained
The set of facilities and equipment, processes and functions (and data)
that enable value to be earned and added Leader
 Sets direction that others will follow with aspirational,

inspirational, and motivational statements
 Providing either directive or supportive guidance styles
 Either transformational or transactional
- 28 - To TOC
TERMINOLOGY
Leadership Manager
Competency (set of knowledge, skills, and activities) for setting direction  Member of the management team
that others will follow
 With a well defined area of responsibility for people, processes and
Lifestyle (business) enterprise owner functions, and/or products and/or services
Owner of an enterprise serving local community – may also be the  In a reporting line to an executive
founding entrepreneur:
 Either in an official or non-official capacity
 As an active owner-manager, making a living from its activities for
their own lifestyle Mentoring
 Or as a passive owner-manager, with a management team in place Providing guidance on subject matter; developing functional knowledge
(but always the ultimate manager performing the role of the and technical skills
Governance function)
Mission
Note: a lifestyle enterprise owner can be a sole proprietor, partner,
member of a limited liability company, or a shareholder investor in a An aspirational and inspirational statement of purpose, supported by a set
corporation of high level objectives and addressing core competencies
Note: for external use, the term “lifestyle business enterprise” is used; Objectives
however, for clarity the term “business” is usually omitted within
Enterpriship BLDer Specific realistic statements of direction and intended results in
accordance with values, vision, and mission
Owner
Organization
 Either a possessor of:
Generic term for enterprise, entity or a component thereof
 Capital in a:
Paradigm shift
 Partnership
Change in assumptions, concepts, practices, and values that model a
community's perspective on reality - paradigm shifts occur at inflection
 Limited liability company
points – a point of dramatic change
 Equity capital in a corporation
Pareto principle
 Or a sole proprietor
Eight percent of effect result from twenty percent of causes
Management – competency Perceiving
Practice discipline of directing and controlling events and activities Openness
Management – role
 Using senses
Those with authority and responsibility for directing and controlling the
events and activities of an enterprise  Being flexible
The stewards with the highest levels of authority and responsibility for the Performance excellence
enterprise to the shareholder investors/owners – directing and controlling
events and activities on their behalf – the Governance function has Doing the right things, and then doing those things well in terms of the
ultimate responsibility quantity, rate, volume, and quality of events, activities, and results:
 Board of directors  Aligning:
 Chief Executive Officer  Externally with constituencies

 Internally with stewards (shared values and vision)
 President
 Exceeding requirements and expectations:
Management – team
 Commitment
 Board of Directors – elected by shareholder investors/owners
 Effectiveness
 Use (frequency) and utilization (quantity of usage)
 Officers – elected by Board of Directors  Sustainability
 Executives Note: quantity relates to process inputs, volume relates to process outputs
 Other official members of management
Permanence (in the context of enterpriship)
 Non-official managers (appointed by officers)
Ability of the enterprise to generate income on an ongoing basis
- 29 - To TOC
TERMINOLOGY
Personal characteristics Product and/or enterprise institutionalization
Specific characteristics of each individual:  Becoming a permanent feature within society
 Intra-personal (self)  As defined by the constituencies within the marketplace
 Inter-personal (relationships with others)  Regardless of whether the founding entrepreneur or lifestyle
enterprise owner stays or not
Personal Style
Productivity
Set of personality characteristics
Rate at which units of output are produced per elapsed time unit
Personality
Professional
 External characteristics of an individual that determine values,
attitudes, beliefs, and behaviors Individual in an occupation that requires specialized knowledge and skills,
who has usually received formal training in such areas as (but not limited
 Derived from the Latin work “persona” meaning “mask” to):
Philosophy  Law
 Finance and accounting
To understand:  Human resources
 Information technology
 Guiding principles for practical activities  Architecture
 How to capture knowledge  Engineering
 Ethics  Marketing
 Aesthetics in design  Health care
 etc.
Physiology
Professional services firm
How living organisms function, especially with respect to human function
Enterprise that provides professional services such as legal, accounting,
Plan
architecture, engineering, consulting, etc.
Proposed statement of direction and course of action to achieve a desired
Price (earned)
result
Exchange value offered or earned by the seller
Policy
Guide to decisions and actions – what to do

Psychology
Politics
Understanding human behavior
To understand:
Quality
 Governance
 Perceived value of an item at premium or discount from expected
 Authority and power
or market value
Process
 Perceived value is based upon the value proposition, augmented by
A group of activities that: convenience or scarcity, and risk
 Take in one or more kinds of input  Minimal defects in research and development, and sales and
production
 Create output that is of value
Reengineering
 To external constituencies Improving the efficiency and effectiveness of infrastructure
 To internal constituents Relationship
Product An association or connection between parties
 Tangible output from a process that is something of value (“hard Repositioning
product”) - an item that meets a customer's want or need
Altering the composition of markets and products and/or services
 Products are either component products or end products
Restructuring
 Products are either commodities or value-added
Acquiring or divesting business units within an enterprise
Product and/or service
Science
Refers to either “hard” or “soft” products
Method for systematizing knowledge
Note: service delivery is assumed to be bundled with both hard and soft
products Sensing
Using the senses to understand reality
- 30 - To TOC
TERMINOLOGY
Stewards
Service
 Collectively responsible for activities and assets of an enterprise
Non-tangible output from a process which can be associated with tangible
items in three forms:  Employ stewardship competencies and commitment
 Service-oriented product (“soft product”) - represented by tangible  Share values and vision
items that support the service
 Collectively have the vision to transform opportunities into value
 Service delivery at the time of sale (or shortly thereafter)
 Capable
 Supporting service after a sale
Note: an employee is a steward only if they share the values and the vision
Service-oriented product of the enterprise
A non-tangible product represented by tangible items such as, but not Strategy
limited to: accounts, agreements, brochures, contracts, policies,
procedures, relationships, statements, and transactions The beneficial positioning of an enterprise in the marketplace so as to
Skill deliver value over time
Proficiency obtained by experience and/or training Structure
Social The enabler of relationships between an enterprise's infrastructure,

products and/or services, markets, and constituencies that deliver value
Community living
Society Supply chain
 Segment of a community or a group of communities Chain of value chains between suppliers of raw materials (suppliers) and
users of end-products and/or services (customers)
 Membership group organized for some purpose, including as an
enterprise Sustainable
Sociology Being able to continue over time
Understanding human social behavior  Either by developing, enhancing, or maintaining the current state
Stabilizer  Or by changing it
Appreciate law and order Sustainability

Stage Being able to provide for current generations without damaging the
ability of future generations to provide for themselves
Stage defines position in the product or enterprise development lifecycle
(which are related), or financing Targets
The migration stages of the product development lifecycle are: Criteria for achievement of results as defined by intermediate and final
goals
 Research and Development
 Introduction Three waypoints of entrepreneurship
 Growth
 Maturity  Transforming an innovative idea into a product or service (as a
 Decline venture)
The stages of the enterprise development lifecycle are:  Transforming the product or service into an emerging
entrepreneurial enterprise
 Start-up (no substantive revenue, positive cash flow, or profit)
 Emerging (little revenue, no substantive positive cash flow, or  Transforming the entrepreneurial enterprise into an institutional
profit) enterprise
 Growth
 Maturity Three waypoints of intrapreneurship
 Decline
 Transforming an innovative ideas into a product or service (as an
institutional enterprise)
Stewardship
Responsibility for the performance of an enterprise and the delivery of  Integrating the product or service into the enterprise
value to constituencies
 Building Sustainable Advantage
Thinker
Analyzes data innovatively and rationally
- 31 - To TOC
TERMINOLOGY
Upwardly mobile enterprise Vision
 A small to large enterprise focused on large market dominance Inspirational statement of a future state (reasonably achievable) within
(large share either industry-wide or in niches) with local-to-global the context of a longer term aspiration (dream)
aspiration in traditional or non-traditional industries
Vision – external
 With growth potential from highly innovative people, processes,
and products and/or services, and/or duplication of a business What a community (local-to-global) can become as a consequence of the
system enterprise's activities and the products and/or services that it offers
 Financed by third-party investors (closely or widely held) seeking Vision – internal

capital appreciation, and potentially cash flow from dividends
What the enterprise itself can become
and/or interest
Visionary
 With medium to high risk
Value Appreciate ideas and understanding
 Worth
 Usefulness
Value
Something of worth or usefulness
Value chain
The value added activities that earn value and add value to materials and
supplies
The activities to produce a component of a product or a finished product

and deliver it to a customer
The value chain is defined by the Process/Function model
Values
System of beliefs that:
 Sets expectations for behavior
 Establishes positions and priorities
 Provides a framework for decision making
Value proposition
A statements of benefits and differentiating features for the enterprise

and its products and/or services
Vertically integrated
Vertical integration – distinct activities in the value system under the

control of a single enterprise, although may be performed by different
entities such as subsidiaries
Venture
Start-up or early stage entrepreneurial enterprise (as a opposed to a

hobby)
 Start-up (no income):
 Unorganized
 Organized as a “development stage entity”
 Early stage of financing:
 With an uncertain outcome
A “development stage entity” does not have gross income or modest gross
income but with no substantive net income
- 32 - To TOC
Building Sustainable Advantage
NIGEL A.L. BROOKS
THE BUSINESS LEADERSHIP DEVELOPMENT CORPORATION

13835 North Tatum Boulevard, Suite 9-102
Phoenix, Arizona 85032
V: (602) 291-4595
I: www.bldsolutions.com
E: bld@bldsolutions.com
© Copyright 2002, 2008
The Business Leadership Development Corporation
All rights reserved
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From Vision To Value - Building Sustainable Advantage

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From Vision To Value - Building Sustainable Advantage

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From Vision to Value:

Building Sustainable Advantage

About Nigel A.L Brooks...

He has experience in North and Latin America, Europe and Asia-Pacific.

About The Business Leadership Development Corporation...

 Strategic Management Consulting

About this article...

Exhibit: The Constituency Value Pie 2

The supporting text provides the context.

The Constituency Value Pie

The community-at-large can be considered to be a tertiary constituency, which can be local-to-global.

The Governance Disciplines: A Three-Legged Stool

Link to Paradigm Shifts and Maslow's Hierarchy of Needs

Leadership: A Key Success Factor for Building Sustainable Advantage

The Importance of Leadership Capabilities...

Link to Understanding Personal Styles

People and Process

Link to Tightly Coupled Constituencies

Values: Walking the Talk...

Values statements need to be well crafted and unambiguous to be useful.

 Maintaining an environment of trust and integrity

 Developing employees as teams

 Being environmentally responsible

Tightly Coupled Constituencies...

Anatomy of the High-Performance Enterprise

The high performance enterprise:

 Has shared values

 Balances innovation with continuous improvement

 Applies core competencies to competitive advantage

 Is environmentally, economically, and social responsible

 Strives for excellence

Evidence of High Performance...

Link to the Baldrige National Quality Program and list of winners

 Dell Computer Corporation — Builds collaborative relationships with its suppliers

 Microchip — Espouses sound values

 Ritz-Carlton Hotels — Creates value through outstanding customer service

 Walgreens — Balances bricks and clicks

Constituency-Based Process Design...

Value and the Impact of Constituencies

Employees, Customers and Investors

Best versus Right...

Characteristics and capabilities that employees should bring to an enterprise:

 Values — system of beliefs that models enacted attitudes and behaviors

 Culture — diversity, time perception and space perception

Planning, Deployment and Measurement

Note: research and development is both a process and a function.

From Vision to Value: Building Sustainable Advantage

Paradigm Shifts and Maslow’s Hierarchy of Needs: Emerging Opportunities

Successful enterprises build brand identity around emotion.

One of BLD's principal intellectual capital offerings to its clients is packaged as

Enterpriship BLDer  provides material that develops both the functional

The material contained herein is extracted from Enterpriship BLDer

The Center for Business Leadership Development

BLD offers consulting, coaching and mentoring, and training to entrepreneurs,

Nigel A.L. Brooks is an entrepreneur, business enterprise owner, management

Eseminars are packaged sets of items including videos, audios, ebooks,

Eseminars provide an introduction to a subject that is further explored in live

 Sociology – with respect to product and/or service usage

 Politics – with respect to planning and policy development

 Philosophy – with respect to guiding principles for practical activities

 Psychology – with respect to understanding the behaviors of

 Environmentally? BLD also offers intellectual capital packaged as SustainableAdvantage

My career objective had been to combine my large enterprise management

Five years later, I sold my award-winning enterprise to return to management