Page 193 - (DK) The Business Book

WORKING WITH A VISION 191

See also: Take the second step 43 ■ How fast to grow 44–45 ■ Effective leadership 78–79 ■
Investment and dividends 126–27 ■ Accountability and governance 130–31 ■ Profit versus cash flow 152–53

In 1994, James Collins and Jerry Today JCB is the third-largest
Porras studied companies such as manufacturer of earth-moving
General Electric, Marriott, and 3M machinery in the world, with 22 Preserve
that had been in business for more factories in Europe, Asia, and North the core
than a century and that consistently and South America. Bamford can
outperformed the stock market. invest when and where he chooses.
They used the Chinese yin-yang He decided to invest in India by
sign—symbolizing complementary opening a factory in 1978, a long-
opposites—to explain how term prospect that paid off; JCB Stimulate
successful businesses maintain is now market leader there. In 2012, progress
control of both the short- and long- JCB opened a factory in Brazil.
term. The organizations they Unlike many CEOs, who hold a
studied were able to manage post for a few years then move on,
contradictory ideas at the same Bamford saw that balancing the The yin-yang symbol reflects
time, by focusing on “both … and short- and long-term is critical. His the dual nature of visionary companies,
…” rather than “either … or …” dual focus has paid off: despite the according to Collins and Porras. They
suggest replacing the “tyranny of the
They also demonstrated the worldwide recession, JCB sales
‘OR’” with the “genius of the ‘AND.’”
concept by performing well both in grew 40 percent in 2011 and topped
the short-term and in the long-term. £2.75 ($4.3) billion in 2012.
In contrast, a typical public in the business, without regard to
Public and private limited company (plc), owned by the impact on long-term prospects.
In a private limited company (Ltd), shareholders and quoted on a stock This happened in 2013 at Apple.
managers can plan for different exchange, is under greater scrutiny. To ensure the right balance
time horizons without scrutiny from These investors look for returns, between short- and long-term,
shareholders. Sir Anthony Bamford, in the form of dividends, on an companies often split planning
for example, runs JCB, a privately annual basis. This can become a responsibility between different
owned British company. JCB was strategic issue, since institutional management teams. This allows
started by his father, Joseph Cyril shareholders may put pressure on the organization to manage the
Bamford, who began making directors of limited companies to immediate operation, while looking
agricultural tipping trailers in 1945. return cash, rather than to reinvest ahead for growth and innovation. ■

Jack Welch Born in 1935, John F. Welch followed the GE ethic of
studied chemical engineering at constant change and striving
the University of Massachusetts, to do better. In 1999, Fortune
then gained an MSc and PhD in magazine named him Manager
chemical engineering from the of the Century, and the
University of Illinois. In 1960, he Financial Times claimed he
joined General Electric (GE), rising was one of the three most
to become the company’s admired business leaders in the
chairman and CEO from 1981 until world. He founded the Jack
his retirement in 2001. During this Welch Management Institute at
time, Welch increased the value Strayer University, US, in 2009.
of the business from $13 billion
to several-hundred billion. His Key works
management skills became
legendary; he had little time for 2001 Jack: Straight from the Gut
bureaucracy and managers were (with John A Byrne)
given free reign as long as they 2005 Winning