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Turning Goals into Results: The

power of Catalytic Mechanisms


- Deepthi S (A061)
Ishita Tibrewal (A062)
Rahul Tiwari(A063)
Nagendra Upadhayayula(A064)
Kshitij Vig (A065)
Omkar Yadwadkar (A066)
Agenda

Introduction to Catalytic Mechanisms


How Graniterock approached its BHAG
Characters of an effective Catalytic Mechanism
Tips for Implementation
Indian Examples
Key Learnings
Catalytic Mechanisms

BHAGs Catalytic Performance


(Objectives) Mechanisms (Results)

Simple yet effective tool that helps


organizations turn goals into results
Catalytic
Mechanism Foundation to the castles built in the
air (BHAG)

Specific, concrete and powerful device


which lends discipline to vision
How Graniterock approached its BHAG

The what in the BHAG The how in the BHAG

• Implemented a radical new policy


• A 99-yr old company in Watsonville,
called “short pay”
CA that sells crushed gravel,
• The bottom of every invoice read
concrete, sand and asphalt
“If you are not satisfied for any
• Bruce and Steve Woolpert gave it a
reason, don’t pay us for it. Simply
new BHAG : Provide total customer
scratch out the line item with a
satisfaction
brief note about the problem, and
• Galvanizing leadership not an
return a copy of this invoice along
option as the Woolperts are a
with your check for the balance”
quiet, thoughtful and bookish clan
• Consistently gained market share
• They also believed that hosting
while charging a 6% price premium.
hoopla events or grand customer
• Won the prestigious Malcolm
service initiative had very little
Baldrige National Quality Award in
lasting effect
1992.
Characters of an effective
Catalytic Mechanism
Produces desirable results in unpredictable ways

Traditional Managerial Mechanisms

Big Procedures,
Controls Mediocre
Organizational Bureaucracy
Results
Goal (Alignment)

Catalytic Mechanisms

• Aim to introduce new and effective products • Class getting hindered due to a lot of DCP
• In 1956, scientists are urged to spend 15% of by students
their time experimenting and inventing in the • Red Flag given per student for the quarter
area of their own choice to state their opinion
• Results: Post-IT Notes, Reflective License Plates • Red Flag made a CEO listen to a MBA
student , improving the knowledge of the
whole class
Distributes power or the benefit the overall system!

Traditional Managerial • Concentrates power in the hands of authorities who can force people to
Mechanisms obey their commands

Catalytic Mechanisms
Power corrupts, absolute power corrupts absolutely

The crime of washed uniform  Effect of power


• A new government rule that vested power of approval dispersion on
with senior officials but power of denial only with the
head of the agency those with
vested interest
Constitution of India
• The system of checks and balances inherent in the  Vast reservoir
Indian Constitution which is characterized by
distribution of power of energy and
competence
Red Flag for CP that flow due
• The class participation system employed by the author to distribution
which gave the red flag users the power of being heard
of power
A Catalytic mechanism has teeth

TRADITIONAL MANAGENERIAL MECHANISM CATALYTIC MECHANISM


 It is understood by employees and executives as  It puts a process in place that guarantees that the
merely an intention. vision will be fulfilled. i.e .it has a sharp set of teeth.
 Executives spend hours drafting, redrafting  E.g. Nucor Corporation
statements of core values, missions and visions
but a statement by itself will not accomplish
anything.

Vision Catalytic measures


• Base hourly pay is 25 to 33% below the
To be an organization industry average.
whose • Team productivity rankings are posted daily.
workers and management • A bonus of 80% to 200% of base pay is paid to
share the common goal of team that exceeds expectations
being the most efficient • If a person is 5 min late, he/she would bonus
high quality steel for one day.
operation in the world. • If a product is returned for poor quality bonus
pay declines accordingly
A catalytic mechanism ejects viruses.

Traditional Managerial • Attempts to simulate the right behaviors from the wrong
Mechanisms people.

• Attempts to follow the old adage that “People aren’t your


Catalytic mechanism
most important asset, right people are”

…continuing the case of Nucor The case of W.L. Gore & Associates
• Nucor does not make lazy people • Followed the principle that you
productive, it creates an are a leader as along as people
environment which leaves no room choose you
for the inefficient
• It was essentially a strategy
• Nucor’s rural employment strategy – where employees had authority
“you can’t teach a person work to fire their bosses
ethic.…. But you can teach him steel
making” • Attracted people who thrived in
the system and scared the rest
A catalytic mechanism produces an ongoing effect.

Traditional Managerial Mechanisms Catalytic mechanism - On-going


– short lived impact caused by the effect as catalytic measures follow
catalytic event the catalytic event

Kimberly-Clark’s ongoing catalytic measures

Vision
Transform a mediocre forest and paper product company to a
world class consumer product company in the likes of P&G

Catalytic event : Sale of paper- production mills and commitment to


compete head to head with P&G
Catalytic measures : From launch of diaper pants and to the ongoing
growth in the personal care industry
Tips for Implementation

Don’t just add, remove

Create, don’t copy

Use money but not only money

Allow the catalytic mechanism to evolve

Build an integrated set


Indian Examples
Nirma- Karsanbhai Patel

Created a whole new segment in Indian detergent market and


challenged MNCs. Took huge risk with the money back guarantee and
low prices

In 2004, Nirma's detergent approached 800,000 tones – one of


the largest volumes sold in the world – under a single brand
'NIRMA'.

The best case of – Give your consumer what he wants, when he


wants, where he wants and at the price he wants, selling will be done
quite automatically.
Reliance Reliance - Dhiru Bhai Ambani

Did something that was unpredicted for then Indian market, stepped
out of the scripted path.

The vision of keeping on moving put a process in place that all but
guaranteed that the vision will be fulfilled

“Think big, think fast, think ahead.”- These made sure that the effect
of the mechanism is an ongoing one, rather that just a passing buzz
or a fading fad.
Key Takeaways

• Catalytic mechanism is a simple yet effective tool that helps


organizations achieve BHAG in a systematic manner
• Catalytic mechanisms are unique, non-bureaucratic and inherently
disciplined solutions for achieving BHAG
• Catalytic mechanism is NOT a one off event which instigates change,
but a continuous process that drives organization towards BHAG
• Greater efficiency in catalytic mechanism can be achieved when it is
original, flexible and integrated
• This methodology of implementation of strategy has wide application
in varied sphere of business as well as personal life.
Thank You !