1. ©2000, Michael A. Mische MOR 559 – Strategic Renewal University of Southern California High-Performance Organizations Key Indicators LECTURE 2 (Supplement) Key Indicators LECTURE 2 (Supplement)

2. Competing at the Speed of Life ©2000, Michael A. Mische MOR 559 – Strategic Renewal University of Southern California ©2000, Michael A. Mische Financial Performance & Shareholder Value Creation 1.Achieves and sustains 25% plus growth in revenue and/or profits over a 5 year-period. 2.On the average, generates and sustains an annual return for shareholders of 2.0 times greater than the overall S&P 500 as a benchmark. 3.Consistently meets official revenue and earnings forecasts and estimates with minimal surprises and variances. 4.Effectively manages investor relations and communications. 5.Assets are fully deployed in a manner that optimizes their use and return to shareholders. 6.Consistently demonstrates that asset allocation and investment decisions are made with a clear purpose, distinct economic value proposition and with the best interests of shareholders in mind.

3. Competing at the Speed of Life ©2000, Michael A. Mische MOR 559 – Strategic Renewal University of Southern California ©2000, Michael A. Mische Strategic Positioning 1.Demonstrates a commitment driven by a single or integrated set of strategic visions, focus or imperatives. 2.Achieves and sustains superior global market penetration and representation. 3.Extends and expands the enterprise through the selective and effective use of alliances. 4.Leverages information technology to increase market presence, customer reach and vendor relations. 5.Consistently creates new “markets” and opportunities through new business venues, products and organizational designs. 6.Consistently sets the standard and rules so other competitors must react, expend resources and counter.

4. Competing at the Speed of Life ©2000, Michael A. Mische MOR 559 – Strategic Renewal University of Southern California ©2000, Michael A. Mische Leadership and Innovativeness 1.Actively demonstrates and exemplifies leadership characteristics. 2.Aggressively cultivates pluralism as a source of leadership and competitive advantage. 3.Creates leadership development opportunities through job rotation, enrichment and investment programs. 4.Demonstrates and promotes a culture of customer/client focus and service. 5.Practices long term succession planning and development for next generation leaders. 6.Consistently cultivates an environment of creativity and innovation. 7.Actively manages knowledge through the use of a knowledge architecture and KMP. 8.Fosters and encourages learning, probing, discovery and is tolerant of mistakes and setbacks. 9.Hires and nurtures highly talented employees. 10.Generates 30% of revenues from new product introductions. 11.Creates and sustains a collaborative working environment.

5. Competing at the Speed of Life ©2000, Michael A. Mische MOR 559 – Strategic Renewal University of Southern California ©2000, Michael A. Mische Governance and Social Responsibility 1.Cultivates active and engaged board involvement. 2.Board has a vested economic and moral interest in the financial and social behavior of the organization. 3.Board demonstrates a commitment to strategic positioning and long-term competitive advantage. 4.Board governance is relatively open; board members are accessible to shareholders. 5.CEO reports to the board and board actively manages and evaluates CEO performance against strategic objectives and predefined operating results. 6.Board actively participates in setting the strategic direction of the organization. 7.Board aggressively acts on behalf of the shareholders as opposed to the CEO. 8.Demonstrates a significant financial commitment to the local economies and environments in which it does business. 9.Invests in the social structure of the local communities. 10.Actively manages its relationships with the local communities. 11.Sets and sustains a higher level of ethical and moral behavior. 12.Sets a standard for communicating with customers and the community on important matters. 13.Compensation practices and programs accurately reflect organizational performance and financial results.

6. Competing at the Speed of Life ©2000, Michael A. Mische MOR 559 – Strategic Renewal University of Southern California ©2000, Michael A. Mische Brand Recognition and Quality of Products 1.Has a preeminent brand name and image. 2.Has rationalized its brand identity and image at the enterprise level. 3.Generates high consumer confidence from the brand. 4.Generates high consumer interest in the brand. 5.Consistently sets the highest quality benchmarks and standards relative to its competitors. 6.Consistently creates/generates a high-value image and acceptance among consumers relative to price and performance. 7.Practices successful TQM methods designed to continuously improve value, quality and performance.

7. Competing at the Speed of Life ©2000, Michael A. Mische MOR 559 – Strategic Renewal University of Southern California ©2000, Michael A. Mische High-Performance Companies… As They Compare…