Introduction: Building the Bridge from "What" to "Why"
Welcome to Session 3. Let's connect the dots:
- Session 1: "What is Strategy?" We debated the nature of strategy itself, contrasting Porter's deliberate "Blueprint" (Position, Trade-offs) with Mintzberg's emergent "Craft" (Learning, adaptation).
- Session 2: "What was Tesla's Strategy?" We applied Porter's "Blueprint" to Tesla. We saw their radical Strategic Position (Vertical Integration) and the painful Trade-offs (Production Hell, bypassing dealers) they made.
This leaves us with the most important question: WHY?
What force could possibly be powerful enough to justify that level of chaos, risk, and financial loss? Why not just be a "better" car company?
Today, we find the answer. We move beyond the "What" (Strategy) to discover the "Why" (the Vision). Using the frameworks from our readings (Collins & Porras), we'll see how an organization's vision acts as the engine for its strategy.
The "Yin & Yang" of a Company's Vision
Our reading from James Collins and Jerry Porras, "Building Your Company's Vision," gives us a powerful framework. A vision isn't just a fluffy statement; it's a disciplined framework of two distinct parts:
The Collins & Porras Vision Framework: A balance of preserving the core and stimulating progress.
1. Core Ideology (The "Yin")
This defines who you are. It is stable, timeless, and to be *preserved*.
Core Values --> Who I am?
The 3-5 essential and enduring principles. The "how you act."
- Reason from "First Principles": Solving problems by breaking them down to fundamental truths, not by analogy.
- Innovation and Risk-Taking: Challenging the status quo and viewing failure as an option on the path to innovation.
Core Purpose --> Why I exist?
The fundamental reason for being. The "why you exist." A guiding star you *never* reach.
- Ensure long-term survival of humanity.
- Accelerate transition to sustainable energy (Tesla).
- Make humanity multi-planetary (SpaceX).
2. Envisioned Future (The "Yang")
This defines where you are going. It is dynamic, time-bound, and to be *achieved*.
BHAG (Big, Hairy, Audacious Goal)
A 10-30 year "mountain" to climb. It's concrete, energizing, and has a finish line.
Tesla Example: "The Secret Master Plan (2006)" - Use a sports car to fund a sedan to fund a mass-market car. This was a *perfect* BHAG.
Vivid Description
Painting a picture of what success *looks* and *feels* like.
Tesla Example: Musk's descriptions of a future with solar roofs, Powerwalls, and EVs creating a complete, clean energy ecosystem.
Framework Examples (From Reading)
This is a summary of the classic business examples provided in the Collins & Porras reading, illustrating each component of the Vision Framework.
I. Core Ideology
Defines the enduring character of an organization. It remains fixed while strategies and practices adapt.
A. Core Values (Essential and Enduring Tenets)
| Company | Core Values Examples |
|---|---|
| The Walt Disney Company | Imagination and wholesomeness; No cynicism; Fanatical attention to consistency and detail. |
| Nordstrom | Service to the customer above all else; Hard work and individual productivity. |
| Merck | Corporate social responsibility; Science-based innovation; Unequivocal excellence. |
| Sony | Being a pioneer—not following others; Encouraging individual ability and creativity. |
B. Core Purpose (Fundamental Reason for Existence)
| Company | Core Purpose |
|---|---|
| 3M | To solve unsolved problems innovatively. |
| Walt Disney | To make people happy. |
| McKinsey & Company | To help leading corporations and governments be more successful. |
| Wal-Mart | To give ordinary folk the chance to buy the same things as rich people. |
II. Envisioned Future
What the organization aspires to become, achieve, or create. It is dynamic and time-bound.
A. Vision-Level BHAGs (Big, Hairy, Audacious Goals)
| BHAG Type | Company | Example Goal |
|---|---|---|
| Target | Wal-Mart (1990) | Become a $125 billion company by the year 2000. |
| Target | Ford (early 1900s) | Democratize the automobile. |
| Common-enemy | Nike (1960s) | Crush Adidas. |
| Common-enemy | Honda (1970s) | "Yamaha wo tsubusu!" (We will destroy Yamaha!). |
| Role-model | Giro (1986) | Become the Nike of the cycling industry. |
| Internal-transformation | General Electric (1980s) | Become number one or number two in every market we serve. |
B. Vivid Description (Making the BHAG Tangible)
| Company | Vivid Description Example |
|---|---|
| Ford Motor Company | "I will build a motor car for the great multitude... so low in price that no man making a good salary will be unable to own one... The horse will have disappeared from our highways...". |
| Sony (1950s) | "We will be the first Japanese company to go into the U.S. market... We will succeed with innovations that U.S. companies have failed at... 'Made in Japan' will mean something fine, not something shoddy." |
Synthesizing the Frameworks: A Clear Glossary
These terms are often confused, but they form a clear hierarchy. Here is a simple guide to keep them straight.
The Foundation (The "Yin")
Core Values(Who I am?)
The non-negotiable beliefs and principles that guide behavior and decision-making at all levels.
Core Purpose(Why I exist?)
Your organization's fundamental reason for existence, its "why" beyond just making money.
The Future (The "Yang")
Vision(Where I want to go?)
A bold, inspirational statement describing what the organization aspires to become in the long term. It provides a clear picture of the desired future.
Mission(How I want to go?)
A more specific statement that defines what the organization does, who it serves, and how it differentiates itself. It is the "how" to achieve the vision.
The Goal (The "How-Much")
BHAG (Big, Hairy, Audacious Goal)(What I want to do?)
A clear, compelling, long-term goal (10-30 years) that translates the vision into a specific, measurable, and ambitious target. It is the bridge between current execution and the long-term vision.
All Elements Align for Decision-Making
Together, these elements create a framework for strategic decision-making, ensuring that daily activities and long-term goals are aligned with the company's fundamental purpose and values.
- Purpose and values fuel the vision: Your core purpose and values are the foundation from which your vision is built.
- The vision provides direction for the mission: The mission is designed to support the achievement of the long-term vision.
- The BHAG makes the vision actionable: The BHAG is a tangible, long-term goal that is a direct outcome of the vision. It acts as the anchor for the company's strategy.
Workshop 1: Discover Your Core Purpose (The 5 Whys)
Collins & Porras argue you don't *invent* a purpose, you *discover* it. A powerful method is the "5 Whys."
Your Task: Let's discover Tesla's purpose. Start with what they do, then ask "Why is that important?" five times. Type your answer for "Why #1" to unlock the rest of the chain.
Workshop 2: BHAG or Not?
A true BHAG is audacious, energizing, and has a clear finish line. Generic goals are *not* BHAGs.
Your Task: Read each statement and decide: Is this a true BHAG or just a generic goal?
"We will maximize shareholder value."
"Put a man on the moon and return him safely to Earth by the end of the 1960s." (NASA, 1961)
"We will be the #1 or #2 player in every market we serve." (General Electric, 1980s)
"We will pursue continuous improvement and operational excellence."
Simulation: The "Why" Behind the "Chaos"
Now let's connect the dots. The "chaos" we saw in Session 2 (Tesla's Strategy) was not random. It was the *necessary consequence* of their Vision (Session 3).
Your Task: Drag the "Why" (The Vision) from the left column to the "What" (The Strategic Choice) it *logically explains* on the right. Why did they *have* to make that move?
The "Why" (Our Vision)
The "What" (Our Strategy from Session 2)
Strategy: Vertical Integration (Gigafactories)
Why did we build our own battery factories instead of just buying from suppliers like every other car company?
Trade-off: Bypassing Dealerships
Why did we spend billions building stores and fighting legal battles instead of using the existing 18,000+ US car dealerships?
Execution: "Production Hell"
Why did we endure the chaos, risk bankruptcy, and sleep on the factory floor? Why not just grow slowly and safely?
Workshop 3: Bridge the "Value Gap" (Kaplan & Norton)
Kaplan & Norton's "Value Gap" is the gulf between our BHAG and our "status quo" reality. In 2016, Tesla's BHAG was 500,000 cars. Their status quo projection was perhaps ~100,000.
This created a Value Gap of 400,000 cars.
Your Task: As the strategist, you must *close this gap* by funding strategic themes. Use the sliders to allocate how much of the 400k-car gap you will try to close with each initiative.
Debate: What Happens When the Vision "Drifts"?
A visionary company *must* set a new BHAG after achieving its last one. If it doesn't, it suffers the "We've Arrived Syndrome" (like NASA post-moon landing).
Tesla largely achieved its 2006 Master Plan. Now, Elon Musk's vision has expanded to "AI & Robotics," "X (the 'everything app')," and "Neuralink."
The 2024 Governance Crisis: A Real-World Debate
In early 2024, Elon Musk publicly stated he was "uncomfortable" growing Tesla into an AI & robotics leader *unless* he had ~25% voting control. He threatened to build these new ventures *outside* of Tesla if his demands weren't met.
Your Task: As a board member, how do you interpret this? Click your choice.
He's holding the company hostage for a new, personal BHAG ("AI") that has nothing to do with the original purpose ("Sustainable Energy").
The *real* Core Purpose was always "Solve humanity's biggest problems." Sustainable energy was just the first. AI is the next.
This is the (messy) creation of the *next* BHAG. The Core Ideology is stable, but he's forcing the company to climb a new, bigger mountain.
Framework Analysis (Choice A):
This is a governance-first view. It implies the *company's* Core Ideology is fixed, and the *leader's* vision has now diverged from it. This is a classic "Founder's Dilemma" and a massive governance risk (linking back to Session 2). It suggests the leader is no longer aligned with the organization's purpose.
Framework Analysis (Choice B):
This is a leader-centric view. It implies the Core Ideology is not *Tesla's* but *Musk's*. The company is merely the *vehicle* for his personal Core Purpose. This is a very different, and much riskier, organizational model that makes the leader and the purpose inseparable.
Framework Analysis (Choice C):
This perfectly fits the Collins & Porras model. The "Envisioned Future" (Yang) is *supposed* to change. This is the painful, chaotic process of stimulating new progress. The Core Ideology (Yin) of "accelerating" and "first principles" is still there, but the *target* (the BHAG) is evolving from "cars" to "intelligence."
Conclusion: The Strategic Thread
Today, we completed our strategic picture. We've seen how all three sessions are deeply interconnected.
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S1:
Porter's "Blueprint" & Mintzberg's "Craft"
We learned the two big-picture theories of strategy.
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S2:
Tesla's "Blueprint" (The What)
We saw the radical Position and Trade-offs of Tesla's strategy, and the "Production Hell" Execution that resulted.
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S3:
Tesla's "Vision" (The Why)
Today, we saw that this chaos was not random. It was *driven* by a powerful Core Ideology and a massive, audacious BHAG.
The Final Synthesis
Tesla's strategy is the ultimate hybrid: It uses the *emergent, chaotic "craft"* (Mintzberg) of "Production Hell" to achieve a *deliberate, audacious "blueprint"* (Porter) which is itself *powered by* an uncompromising *Vision* (Collins & Porras).
Look-Ahead:
In our next sessions, we will ask: "How do you *manage* this?" We will move from strategy formulation to execution, exploring tools like the Balanced Scorecard to translate a high-level vision into day-to-day action.
Knowledge Check: Sessions 1-3
Test your understanding of the concepts from all three sessions. Select an answer to see immediate feedback.