4. Empirical
Evidence
• Answer:
“How
does
a
good
company
become
great?”
• Research:
1435
companies
down
to
11
plus
peer
firms
for
comparison
purposes,
• 20
researchers
for
5
years,
• QualitaDve
and
quanDtaDve
analyses,
• 15
years
at
market,
inflecDon,
15
years
at
3x
market
threshold
• Firms
on
p.
7.
5. What
they
didn’t
find…
• Larger-‐than-‐life,
self-‐promoDonal
leaders
from
outside
the
firm
–
10
of
11
from
within,
• Specific
linkage
between
the
specific
forms
of
execuDve
compensaDon
and
movement
from
GTG,
using
incenDves
not
to
moDvate
but
to
get
and
keep
the
right
people
• Evidence
that
GTG
companies
spent
more
Dme
on
long-‐range
strategic
planning,
• A
focus
on
what-‐to-‐do
as
much
as
what
not-‐to-‐do
and
what
to
stop
doing,
6. What
they
didn’t
find…
• That
technology
causes
transformaDons,
but
yet
accelerates
transformaDons,
• That
mergers
necessarily
ignite
a
transformaDon,
• That
GTG
companies
spend
Dme
managing
change,
moDvaDng
people
or
creaDng
alignment
–
they
don’t
need
to,
• TransformaDonal
slogans,
and
no
revoluDons,
but
evoluDons,
• GTG
companies
in
great
industries,
many
in
terrible
industries.
8. Level
5
Leader!
Personal
Humility
• Modest
• Inspired
standards,
not
inspired
charisma
• Focus
on
Company,
not
the
self
• ApporDons
credit
for
success
+
Professional
Will
• Creates
superb
results
• Unwavering
commitment
to
long-‐term
results
• Sets
the
standard
for
and
enduring
company
• Looks
inward,
not
outward
to
apporDon
responsibility
for
poor
results
5
9.
First,
Who,
Then
What
Teach
for
America
•
1988:
1
idea,
1
person,
and
a
$26,000
grant
•
2005:
14,000
new
teachers
a
year,
and
$40
million
in
annual
support
First
Who,
Then
What:
Success
Factors
• ProducDve,
self-‐moDvated,
disciplined
volunteers
• The
more
selecDve
the
process,
the
more
adracDve
the
opportunity
• The
opportunity
must
be
meaningful
10. The
5
DysfuncDons
Absence of TRUST: Invulnerable
Fear of CONFLICT: Artificial Harmony
Lack of COMMITMENT: Ambiguity
Avoidance of ACCOUNTABILITY:
Low Standards
Inattention to
Results
Status and Ego
11.
The
5
“FuncDons”
Trust & Vulnerability
Unfiltered Conflict around Ideas,
Not People
Buy-in to Plan of Action
Peer
ACCOUNTABILITY
Collective,
Team Goals
12. QuesDons?
Thank
you
Don
McDaniel
dmcdaniel@sage-‐growth.com
410.534.1161
443.904.2882
11