Because this strategy impacts directly on the creation of shareholder value I work only with CEOs as my client.
For example, in New York in the 80s I worked with Jack Welch on GE X10 which was a bespoke project for multiplying GE shareholder value by ten. GE became the most valuable company in the world. Jack said, “I wish I had a management team that really understood the XIO equation. It’s the value-added role of management. Michael, you are a friend of our company.”
That was the 1980s. Today, Google is the most valuable company in the world and Larry Page lives by the gospel of XIO.
XI0 is an enterprise strategy which offers a much better Return On Payroll by using XIO THINKING to raise the decision-making intelligence of the enterprise.
Total Shareholder Return (TSR), is a function of the decision-making intelligence across your enterprise.
In the mid-80’s, when Jack Welch launched GE x10 he said: “I would love to have a management team that really understood the x10 equation. It’s the value-added role in the management process”.
At that time GE was a USD35 billion manufacturer of everything from locomotives to light bulbs. By the time Jack left in 2001 GE market value had maximised to USD484 billion making it the most valuable company in the world.
Today, the most valuable company in the world is Google. In February 2013, WIRED Magazine’s Steven Levy interviewed Larry Page of Google and wrote: “Larry Page lives by the gospel of 10x. Most companies would be happy to improve a product by 10 percent. Not the CEO and cofounder of Google. The way Page sees it, a 10 percent improvement means that you’re basically doing the same thing as everybody else. That’s why Page expects his employees to create products and services that are 10 times better than the competition.”
MICHAEL HEWITT-GLEESON designed GE x10 for Jack Welch and is acknowledged as the ‘father of x10 thinking’. He is the author of The XIO Memeplex: Multiply Your Business By Ten! (Prentice Hall, 2000).
Recently in May 2013, Michael spoke about x10 at the Geelong Innovation Expo …
Creating x10 Value: Ten Heads Are Better Than One!
“There is a small number of celebrated CEOs of businesses–like GE, Toyota and Google–who know that the secret of creating shareholder value through enterprise innovation is … bottom-up! Bottom-up innovation. Bottom-up cost-savings. Bottom-up sales revenues.
These successful CEOs know that when it comes to adding value ten heads are better than one. They have found ways to engage their employees (paid thinkers) to transform their enterprise through x10 thinking.
They maximise cost-savings from bottom-up innovation because these dollars go straight to the bottom-line. They create new products and services to stay ahead of their competitors.
Other CEOs have watched these x10 thought-leaders and are now adopting this clever productivity strategy in their own business. The ROI is unusually high, is sustainable, and can be fully proof-tested in just one business quarter.
What is the bottom-up strategy? Bottom-up is when the customers are king. The employees are second only to the customers because they are there to serve the customer. Management is there to serve the employees and the leadership role of the CEO is to create a climate to help multiply the business by ten.
That’s the logic and the physics of the bottom-up philosophy.
To draw attention to this insight I have stated The Rule of Bottom Up Innovation: Bottom-up innovation creates ten times the value of top-down.
There are two main reasons why this is a strategic rule: 1. Because bottom up innovation has ten times the brainpower of top-down innovation, and 2. because 85-90% of all productivity gains occur at the bottom local group level of paid thinkers leaving only 10-15% potential gains for top-down management intervention.
This contrarian insight has been one of the great secrets of successful business leadership. x10 CEOs know this. Jack Welch of GE knew this in the 80s. Larry Page of Google knows this today”.
| Bottom-Up Thought-Leaders
WIRED Magazine, February 2013 by Steven Levy:
“Larry Page lives by the gospel of 10x. Most companies would be happy to improve a product by 10 percent. Not the CEO and cofounder of Google. The way Page sees it, a 10 percent improvement means that you’re basically doing the same thing as everybody else. That’s why Page expects his employees to create products and services that are 10 times better than the competition.”
JACK WELCH of General Electric, (Introducing Michael Hewitt-Gleeson to GE senior managers at Florida meeting):
“You’ve gotta grab, you’ve gotta seize, you’ve gotta grope for the BVS. I would love to have a management team that really understood Michael’s x10 equation. It’s the value-added role in the management process. Michael, you are a friend of our company”.
“One of the features of the Japanese workers is that they use their brains as well as their hands. Our workers provide 1.5 million suggestions a year and 95% per of them are put to practical use”.
“One has to assume, first, that the individual human being at work knows better than anyone else what makes him more productive … even in routine work the only true expert is the person who does the job”.
X10 thinking solutions have been sought by CEOs of Fortune 500 corporations like The General Electric Company and IBM to create many billions of dollars of value for their shareholders. Also, School of Thinking has created x10 strategic value for global institutions like The Gallup Poll and Marie Stopes International, competitive value for the Australian Institute of Sport and creative value for recognised Australian innovators like Aussie Bodies, Newcrest Mining, Volgren and Defence Bank.
| Return on Payroll
XI0 impacts directly on the creation of shareholder value. The payroll is one of the company’s most strategic capital investments and is the cost of total enterprise decision-making. Total Shareholder Return (TSR) is a function of both the quality and quantity of enterprise decision-making.
Every business day, the company’s most valuable output across the enterprise is decisions. Each and every one of these decisions has immediate and long term consequences which directly impacts on the minute-by-minute performance of the share price. Each decision either costs the company a dollar or makes a dollar.
The critical business problem facing the CEO is how to create value from this investment by engaging employees–paid thinkers–to increase their productivity and create value. This means directors and shareholders can get a much better return on payroll. This also means shareholders can make a much greater reinvestment back into the payroll for the growth of the company and the benefit of the employees. x10 can be a win-win for ALL the stakeholders.
Clever CEOs like Larry Page of Google and Jack Welch of GE have shown that bottom-up innovation can lead to higher and sustained productivity and a much better return on payroll. And, much better job security for employees.
| Enterprise Solutions
What are SOT Enterprise Solutions? SOT has had many years of successfully implementing the bottom-up strategy to small and big clients alike. SOT Enterprise Solutions are self-funding and offer clients a much better return on payroll. They are bespoke bottom-up innovation and thought-leadership projects designed for creating x10 results from bottom-up participation of all the stakeholders across our client’s enterprise. An SOT enterprise solution offers a Return On Payroll by raising the quality and quantity of enterprise decision-making by upgrading to x10 THINKING.
| Case Studies
• The General Electric Company was the #1 brand in the US making everything from locomotives to light bulbs. The 100-year-old global business enterprise was undergoing a cultural transformation under the leadership of the new Chairman, Jack Welch. His vision was to change the culture of GE from a traditional post-WWII industrial, top-down hierarchical company to a modern “boundaryless” communications and market-aware company. At Jack’s request Michael worked as his personal strategic advisor for several years installing and training GE executives in the use of his cvs2bvs brain software across the GE enterprise. Combining multi-media presentations, live masterclasses and consulting Michael played a key role in one of the most successful corporate transformations ever undertaken in the US. Jack wrote to Michael: Michael, you are a friend of our company. I wish I had a management team that really understood your x10 equation. It’s the simplest idea in the world and yet it’s the value-added role in the management process.
• The Victorian Government, through the Department of Primary Industries (DPI) and LaTrobe University is investing AUD$280 million to build a world-class centre for agricultural biosciences research and development. The Biosciences Research Centre (BRC) will accommodate up to 400 staff, including scientists and support staff, from DPI and La Trobe and will join La Trobe’s existing biosciences staff and activities in plant and animal genomics, plant pathology, animal health and agricultural sustainability. For 5 years, Michael has been consulting to the Biosciences Research Division providing advice and training for scientists and supporting staff to enhance the innovation resources at BRD. For 2009/2010 he was asked to design and conduct a 12-month Leadership Project to assist in raising the level of leadership resources across this unique science R&D enterprise. Professor German Spangenberg, Executive Director, Biosciences Research Division, Department of Primary Industries: Many thanks to you, Michael, for your wisdom and independence of thinking.
• Aussie Bodies (now a division of Vitaco) is a leading Australian sports nutrition company specializing in the development of innovative and high energy protein products and drinks for sportspeople and the health foods market. For 15 years Michael has advised senior management on strategy both for business structuring and development. The company has used Michael’s strategic thinking and newsell ideas to design and grow their commercial business to sales leadership positions in Australia and New Zealand. Maria Deveson-Crabbe, CEO and Founder: We have grown our business tenfold using your ideas and training. I can’t imagine doing business any other way than newsell and cvs2bvs is a natural part of our daily business thinking. Michael, your support and advice has been invaluable to me and my team.
• Historically, the Santa Barbara Learn To Think Project was the first SOT enterprise solution in the early 80s. In California, the City of Santa Barbara became the first community in the history of the world to formally teach itself and all its stakeholders how to think for themselves. It became the world’s first cognocracy and was published in Reason Magazine. It attracted the public support of the ultra prestigious MacArthur Foundation. Even the Reagan Western White House got involved! As a result the School of Thinking’s famous Learn-To-Think Coursebook became the cover story of all April 1983 Readers Digest international editions to 68 million readers worldwide. This viral spread of SOT lessons in the 80s has never since been equalled by any competitor of SOT in the field of teaching thinking skills.
• The second enterprise solution became internationally famous and was featured in The Wall Street Journal, prime time TV news in the US, and in the UK and Australian press. It was a bottom-up solution for the hospitals of New York City and involved over 50,000 hospital employees. It was replicated around the world.
• The third enterprise solution was to get THINKING on the school curriculum, as a school subject in its own right. This has been the biggest success of all and has taken off virally around the world since we did the first major city, starting with all the school principals of the San Francisco Unified School District in the middle 80s and more recently at Melbourne Grammar School and Latrobe University.