Ownership (OWN): Define Success, Create Advantage, Build to Last, Engage Effectively
Course Number 1235
Exam
This course explores the power of ownership in shaping companies. Most of the world’s companies are not public, but rather privately held. Or they are publicly traded but privately controlled. For example, in the US, around 50% of publicly traded companies are controlled by founders or their descendants. In both cases, they have a relatively small number of owners who exercise significant influence. Within the constraints of what is legally allowed, these owners define the main parameters by which the company operates, for instance: what success means for the business, how decisions are made, and what strategic options are on/off the table. Owners can push the company to pursue strategies that are ethically driven (e.g., Patagonia), or the opposite (e.g., Purdue Pharma). By understanding these dynamics, students will be able to build long-term, sustainable strategies that account for the strengths/weaknesses that are built into both their companies as well as those of their competitors. Many students will work for companies that are not widely held public companies, and most of them will compete against such companies.
Students will gain exposure to the range of ownership models and the ways in which they differ from each other. We will analyze companies from the major types, including those owned by:
- Charities (e.g., Rolex, Tata)
- Employees (e.g., John Lewis Partnership, Mondragon)
- Families (e.g., New Balance, Wegmans)
- Founders (e.g., Dell)
- Governments (e.g., Tribal Councils Investment Group)
- Cooperatives/mutuals (Land O Lakes, Vanguard)
We will also explore “hybrid” companies that are publicly traded but controlled by a founder, foundation, or family (e.g., Hershey, Novo Nordisk).
The course is divided into four main modules:
- Defining success. The objectives of most companies are far more complex than a focus on maximizing shareholder value. Students will learn a methodology for assessing more complex owner goals and how to apply it to any business.
- Creating advantage: Ownership shapes both the resources that companies have access to (human, financial, and social capital) as well as how they allocate those resources to create advantage. Ownership models can be seen as solutions to specific strategic problems, such as scaling a business or sustaining a culture. We will explore the competitive advantages and disadvantages of different ownership models, how companies can use ownership as a competitive weapon, and how to predict what companies will do based on who owns them.
- Building to last: Not all companies care about longevity – for some, it is a purely financial decision, for others the goal is to be acquired, or to serve a time-limited purpose. However, for many companies, longevity is a critical part of how they define success. We will examine why once-prosperous companies fail and the ways in which ownership influences corporate mortality.
- Engage effectively: Ownership is a skill that can be learned and is distinct from management. Many students will be owners of a company at some points in their lives. We will investigate what it means to be effective at ownership, learning from the owners of sports teams. We will explore how a shift in ownership model (e.g., going from public to private) can be a tool for changing a company’s trajectory. We will also consider the “Founder’s Final Act,” which is the choice that a founder makes about where to locate ownership when they leave the business. That choice will have a profound impact on the company’s future path.
The pedagogical format will be primarily the case method. Guest speakers – current/former CEOs – will also be incorporated into the course to allow student to interactively explore how ownership shapes decision-making.
The final deliverable of the course will be a final exam, where students will analyze the ways in which a company’s ownership has shaped its strategic choices, how ownership has been a source of competitive advantage/disadvantage, and what they see as the primary strategic issues/options for that company in the future.
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