Viewpoint

What Shaun White Teaches Business


In the recently concluded Winter Olympics in Vancouver, Shaun White's incredible snowboarding performance stands out. Shaun had already won the Gold Medal before he did his final jump. Even his coach told him: "Shaun, we have achieved what we came here for. You can take it easy now."

What did White do instead? He took a risk. Instead of being satisfied with the gold medal, he tried a breathtaking move, the Double McTwist 1260. Why? Because he wanted a perfect score. White is not about benchmarking against his competitors; he is interested in creating next practices.

There are parallels with corporations. Companies that have outperformed rivals—won the gold medal in the business world, so to speak—more often than not become complacent, even arrogant. Over time, they lose relevance. Business history is littered with "once-great performers"&mdashMotorola (MOT), Blockbuster, and Microsoft (MSFT), to name a few.

Moonshots and Space

Does your organization have the capacity to change when it doesn't have to? The starting point for building that capacity is to have huge ambition. White's ambition reminded me of John F. Kennedy's dream and vision for America in the early 1960s: "We will put a man on the moon and bring him back before the end of this decade."

History is full of examples of greatness sowed in a child's vision when the family could ill afford even the basic necessities. The essence of a vision is that it works in an "opportunity-backward" manner, not a "constraint-forward" manner. In other words, the act of such visioning disregards the scarcity of resources in the present. The style of thinking changes from a "budgeting" orientation to an "innovation" orientation. It's the same with organizations. In those that are built to change, there is an articulated vision that is often bold and ambitious.

In many organizations, vision is either nonexistent or sounds so much like "motherhood and apple pie" that it hardly galvanizes employees. Successful organizations imagine the future in bold terms; the details are not always fixed, but the big picture and the direction are clear, and all employees are aligned. The vision of Ratan Tata, CEO of the Indian multinational Tata Group, comes to mind: "Our intent is to create a high-quality, 4-passenger automobile priced at $2,000 that meets all emission requirements."

Challenging Orthodoxy

Performance is a function of expectations, since we rarely exceed our expectations or outperform our ambition. A bold vision has the potential to produce breakthrough innovation. The only way Tata Motors could realize its vision was through out-of-the-box thinking. If it were to succeed, it had to challenge every industry orthodoxy and radically rethink the five major areas of cost in an automobile: interiors, engine and transmission, suspension and wheels, electrical, and the body. Tata Motors did precisely that. Its ultra low-cost car—the Tata Nano, introduced in early 2009—weighs between 1,500 and 1,800 lbs., boasts a 600 cc, two-cylinder, rear-mounted engine, a continuously variable transmission, and a metal skin bonded with industrial adhesives.

With all its breakthrough innovations, Tata succeeded in building a $2,500 car. A naive view would suggest that this means Ratan Tata failed to meet his goal. But in reality, the company created a huge untapped market among the Indian middle class, which currently uses two-wheel vehicles priced at $2,000. In contrast, if the company's goal had been realistic—say, to reduce costs 10% on a $20,000 automobile platform, as American automakers have tried to do in India—it would likely never have invented the $2,500 car.

Most organizations have goal-setting processes that limit ambition rather than opening up possibilities. Consider two managers: One promises 30% growth but ends up delivering only 28%. The other manager promises 1% growth but beats the budget and delivers 2%. Who deserves the bonus? Which manager typically ends up getting it?

Does your organization have a bold, even unrealistic, dream? Do your employees understand and embrace it?

Vijay_govindarajan
Vijay Govindarajan is the Earl C. Daum 1924 Professor of International Business at the Tuck School of Business at Dartmouth. He writes a blog and a newsletter on innovation and execution. His most recent book is Reverse Innovation: Create Far From Home, Win Everywhere.

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