By: Spencer Brown, Laura Carr, Ike Huestis, Brad Klingberg, Treanne Turner

 “We simply do not know what the future holds.” ◦ Peter L. Bernstein  No one can predict with certainty what direction our lives will take.  Why do companies thrive in uncertainty, while others do not?

 They don’t merely succeed, they thrive.  Chaos, uncertainty, and instability are not good for business.  Successful leaders do not thrive on chaos, but they can thrive in chaos.

 Study selected companies based on above average performance AND extreme environmental conditions.  The future is unpredictable ◦ Understand the factors that distinguish great organizations in times of great uncertainty and adversity. ◦ Gain insights that might remain hidden

 Three basic tests were used, 1)The company sustained truly spectacular results for an era of 15+ years relative to the general stock market and relative to its industry. 2)The company achieved these results in a turbulent environment, full of uncontrollable and uncertain events. 3)The company began its rise to greatness from a position of vulnerability, being young or small at the start of the 10X study period.

10X CaseDynastic Era of Study Value of $10,000 invested Performanc e Relative to Market Performance Relative to Industry Amgen1980 – 2002$4.5 million24.0X the market 77.2X the industry Biomet1977 – 2002$3.4 million18.1X the market 11.2X the industry Intel1968 – 2002$3.9 million20.7X the market 46.3X the industry Microsoft1975 – 2002$10.6 million 56.0X the market 118.8X the industry Progressive Insurance 1965 – 2002$2.7 million14.6X the market 11.3X the industry Southwest Airlines 1967 – 2002$12.0 million 63.4X the market 550.4X the industry Stryker1977 – 2002$5.3 million28.0X the market 10.9X the industry

 Critical Question is NOT: What did the great companies share in common?  Critical Question is: What did the great companies share in common that distinguished them from their direct comparisons?

 Amgen vs. Genentech  Biomet vs. Kirschner  Intel vs. AMD  Microsoft vs. Apple  Progressive vs. Safeco  Southwest Airlines vs. PSA  Stryker vs. USSC (U.S. Surgical Corporation)

 Industry dynamics  Founding roots  Organization  Leadership  Culture  Innovation  Technology  Risk  Financial management  Strategy  Strategic change  Speed  Luck

 Successful leaders are bold, risk-seeking visionaries  Innovation distinguishes 10x companies  Threat filled world favors the speedy  Radical change on the outside requires radical change on the inside  Great enterprises have a lot more good luck

 The best leaders are actually more disciplined, more empirical, and more paranoid.  No evidence to support that 10x companies are more innovative than their comparisons.  Successful leaders figure out when to go fast, and when not to.  The 10x cases changed less in reaction to their changing environment than the comparisons.  10x companies do not have any more luck than their competitors.

 Primary purpose of the book is to share the new concepts of this particular study, instead of dwelling on the well covered materials in previous books.  The book is not fundamentally about business, but about the principles that distinguish great organizations from good ones.  The overall goal is for the reader to not only be able to react to events, but to also shape events.

 Reconstruct market boundaries  Focus on the big picture, not the numbers  Reach beyond existing demand  Get the strategic sequence right  Overcome key organizational hurdles  Build execution into strategy  Blue Ocean Strategy

 1. Goals that are simple, consistent and long term  2. Profound understanding of the competitive environment  3. Objective appraisal of resources  4. Effective Implementation  Foundations of Strategy

 1960: Financial Budgeting  1970: Corporate Planning  1980: Strategy as Positioning  1990: Quest for Competitive Advantage  2000: Strategy for the New Economy  2009: Strategy in the New Millennium  2011: Strategy in Turbulent Times  Foundations of Strategy

 Faster overall travel time  More comfortable  Less subject to delay  Less noise and pollution  Dallasnews.com

 Financial Goals  Basic Understanding of Finance  Time Value Money  Budgeting

 Weathering a storm  Building companies to last  Lead Employees

 Theory, methods and concerns ◦ Time Value of Money ◦ Capital Budgeting Techniques ◦ Risk and Risk Assessment ◦ Dividend Policy  Long term relationships with clients

 Portfolio Analysis  Investment Performance ◦ Long Term ◦ Value of the Company  Pension Funds

 Macroeconomics Microeconomics ◦ Macro-Performance, Structure and behavior of the economy as a whole ◦ Micro-behavior of individual households  Global Economics ◦ Behavior of employment ◦ Inflation ◦ Demand and Surplus

 Released IPO in  Listed on the NASDAQ.  Part of the Cable Television industry (CATV).  Turbulent industry, rapid innovation.  Is being outperformed by many competitors.

 Acquisition of Blockbuster.  Focusing innovation on DVR technology.  Lack of innovation in on demand technology.

 Dish’s main innovations and marketing campaigns have been based around DVR’s, such as the Hopper.  Other companies have used ulterior methods, such as Virgin Media TiVo applications.

 Is very important in retaining customers with the introduction of companies like Redbox and Netflix.  Has on demand services, but are very limited.  Other companies offer better services, such as Virgin on Demand TV.