Good togreat


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  • * Level 5 leader is an individual who blends extreme personal humility with intense professional will Hence, the equation is  HUMILITY + WILL = LEVEL 5 * Level 5 leaders are the one who takes companies from good results to great results * Getting right people and creating a culture of discipline (which consists of disciplined people, disciplined thought & disciplined action) are important factors along with Level 5 * Level 5 leader should possess capabilities of all lower levels along with Level 5 characteristics * An individual can show Level 5 Leadership & it is not necessary to move from one level to another * Level 5 framework is like a flywheel in which transformation process buildup momentum, reaches breakthrough & sustaining those great results.
  • The Level 5 Hierarchy Level 1 – Highly Capable Individual  – Makes productive contributions through talent, knowledge, skills, and good work habits Level 2 – Contributing Team Member  – Contributes to the achievement of group objectives; works effectively with others in a group setting Level 3 – Competent Manager  - Organizes people and resources toward the effective and efficient pursuit of predetermined objectives Level 4 – Effective Leader  - Catalyzes commitment to and vigorous pursuit of a clear and compelling vision; stimulates the group to high performance standards Level 5 – Executive  - Builds enduring greatness through a paradoxical combination of personal humility plus professional will
  • Good togreat

    1. 1. Good to Great Jim Collins OB Group 1
    2. 2. Great to Great Good to Great
    3. 3. Companies Studied (15-year return compared to general stock market)
    4. 4. “ Why Some Companies Make the Leap... and Others Don’t"
    5. 6. Level 5 Leadership First Who… Then What Confront the Brutal Facts Hedgehog Concept Culture of Discipline Technology Accelerators Disciplined People Disciplined Thought Disciplined Action Level 5 Leadership Flywheel Buildup Breakthrough
    6. 8. FIRST WHO….. THEN WHAT <ul><li>General Expectations in conventional companies, sets a : </li></ul><ul><li> New Direction </li></ul><ul><li> New Vision </li></ul><ul><li> New Strategy </li></ul><ul><li> Then Get People </li></ul><ul><li>Good to Great companies expectations follows: </li></ul><ul><li>New Direction </li></ul><ul><li>New Vision </li></ul><ul><li>Then, New Strategy </li></ul><ul><li>Get People </li></ul><ul><li>Eg. – Microsoft, Walgreen, Google </li></ul>
    7. 9. Reasons behind this Strategy <ul><li>Self-motivation- Inner drive to product the best result </li></ul><ul><li>Building the future by hiring outstanding people </li></ul><ul><li>Wrong people wait for the directions </li></ul><ul><li>Right people – Right questions – Vigorous debate </li></ul>
    8. 10. <ul><li>Rigorous in people decisions means first become rigorous about top management people decisions . </li></ul><ul><li>How to be Rigorous </li></ul><ul><li>When in doubt, don’t hire – Keep Looking </li></ul><ul><li>When you know you need to make a people change, act </li></ul><ul><li>Put your best people on your biggest opportunities, not your biggest problems </li></ul>Follow Rigorous Culture, Not Ruthless Culture
    9. 11. Noticeable points about Right People <ul><li>Level 5 atmosphere at the top executive level of every good-to-great company. </li></ul><ul><li>Never agreed on anything without arguing </li></ul><ul><li>Constantly searching for best answer </li></ul><ul><li>Strong leader in their own right </li></ul><ul><li>Maintains remarkable balance between life and work </li></ul><ul><li>Has more to do with character traits and innate capabilities than with specific knowledge, background, or skills. </li></ul>
    10. 12. CONFRONT THE BRUTAL FACTS (Yet Never Lose Faith) Facts are better than dreams
    11. 13. Change Completely Entire System in Response or Stuck Head in the Sand <ul><li>Start with an honest and diligent effort </li></ul><ul><li>Infuse the entire process with an honest confrontation of the brutal facts </li></ul><ul><li>Create a culture wherein people have opportunity to be heard </li></ul><ul><li>Eg. – Kroger vs A&P (Grocery Chain) </li></ul>
    12. 14. How to create a climate where truth can be heard <ul><li>Lead with questions, not answers </li></ul><ul><li>Engage in dialogue and debate, not coercion </li></ul><ul><li>Conduct autopsies, without blame </li></ul><ul><li>Build “red flag” mechanism </li></ul>
    13. 15. THE STOCKDALE PARADOX <ul><li>Retain faith that you will prevail in the end, regardless of the difficulties, and at the same time, Confront the most brutal facts of your current reality, whatever they might be. </li></ul><ul><li>In confronting the brutal facts, the good to great companies left themselves stronger and more resilient, not weaker and more dispirited </li></ul>
    14. 16. The Hedgehog Concept <ul><li>“ The fox knows many things, but the hedgehog knows one big thing.” </li></ul><ul><li>Truly Great Companies all Hedgehog </li></ul><ul><li>Councils to help reach Hedgehog. </li></ul>
    15. 17. The Hedgehog Concept <ul><li>Examples </li></ul><ul><li>Walgreens: the best, most convenient drugstores, with high profit per customer visit (viz., also Starbucks). </li></ul><ul><li>Wells Fargo: running a bank like a business, with a focus on the Western U.S. </li></ul><ul><li> A Hedgehog Concept is a simple, crystalline concept that flows from deep understanding about the intersection of the following three circles… </li></ul>
    16. 18. What you are deeply passionate about What you can be the best in the world at What drives your economic engine
    17. 19. The Hedgehog Concept <ul><li>You can be passionate about all you want, but if </li></ul><ul><li>you can’t be the best at it or if it doesn’t make </li></ul><ul><li>economic sense, then you might have a lot of fun, </li></ul><ul><li>but you won’t get great results. </li></ul><ul><li>If we can’t be the best at it, then why are we doing </li></ul><ul><li>it at all? </li></ul>
    18. 20. Culture of discipline
    19. 21. Culture of discipline <ul><li>Not about a tyrant who disciplines </li></ul><ul><li>Getting disciplined people who engage in disciplined thought and who then take disciplined action, fanatically consistent with three circles </li></ul><ul><li>`Gives people freedom and responsibility within framework of that system. Requires people who adhere to a consistent system </li></ul>
    20. 22. Culture of discipline <ul><li>“ Stop doing” lists are more important than “to do” lists. </li></ul><ul><li>“ Anything that does not fit with our Hedgehog Concept, we will not do.” </li></ul><ul><li>Includes willingness to shun opportunities that </li></ul><ul><li>fall outside the three circles. </li></ul>
    21. 23. Level 5 Leadership First Who… Then What Confront the Brutal Facts Hedgehog Concept Culture of Discipline Technology Accelerators Disciplined People Disciplined Thought Disciplined Action Technology Accelerators Flywheel Buildup Breakthrough
    22. 24. <ul><li>Good-to-great companies think differently about technology and technological changes than mediocre ones.`` </li></ul><ul><li>None of the Good to Great Companies began their transformation with pioneering technologies yet they all became pioneers in application of technology. Eg: </li></ul>V / S <ul><li>&quot;Crawl, walk, run&quot; can be a very effective approach, even during times of rapid and radical technological change. Eg: </li></ul><ul><li>Technology when used right is a accelerator rather than creator. </li></ul>
    23. 25. D oes it fit directly with your Hedgehog Concept? If yes, then you need to become a pioneer in the application of that technology.  If no, then you can settle for parity or ignore it entirely. <ul><li>What technologies intersect with your 3 circles? </li></ul>
    24. 26. Example : Hedgehog Concept in Technology Accelerators <ul><li>Eg : Wells Fargo </li></ul><ul><li>Application of Hedgehog concept – Profit measure not on per loan issued or customer added but rather on manual employee labour saved. </li></ul><ul><li>Thus added ATM’s, Internet Banking etc. </li></ul>
    25. 27. Application of technology in right way Case Study V/S <ul><li>While was trading at 398 times revenue, Walgreens was trading at 1.4 times revenue. </li></ul><ul><li>&quot;We're a crawl, walk, run company,&quot; Dan Jorndt statement against all criticism faced – like Walgreen is too old stodgy firm to grow etc. </li></ul><ul><li>Applied it’s Hedgehog concept of ‘Convenient corner drugstore for one and all” </li></ul><ul><li>(Convenience Store Concept). </li></ul><ul><li>Embraced Stockdale Paradox </li></ul><ul><li>Linked it’s sophisticated inventory with Internet. </li></ul><ul><li>In 2000 after careful planning and application Walgreen launched its website. Result Walgreen Stock price doubled and lost market share. </li></ul>
    26. 28. Unexpected Findings <ul><li>Reason of Decline is never Technology and Technology Alone </li></ul><ul><li>The idea that technological change is the principal cause in the decline of once-great companies (or the perpetual mediocrity of others) is not supported by the evidence.  Certainly, a company can't remain a legend and hope to be great, but technology by itself is never a primary root cause of either greatness or decline. </li></ul><ul><li>Practical Results / Feedback on Technology </li></ul><ul><li>Across eighty-four interviews with good-to-great executives, fully 80 percent didn't even mention technology as one of the top five factors in transformation.  This is true even in companies famous for their pioneering application of technology, such as Nucor one of the largest steel producers in the United States, and the largest of the &quot;mini-mill&quot; operators. </li></ul>
    27. 29. Level 5 Leadership First Who… Then What Confront the Brutal Facts Hedgehog Concept Culture of Discipline Technology Accelerations Disciplined People Disciplined Thought Disciplined Action Flywheel Flywheel Buildup Breakthrough
    28. 30. The Flywheel –Concept Imagine a Flywheel of the dimensions 30 feet in diameter 2 feet thick Weighing 5000 pounds The Motive: To rotate the flywheel as fast & as long as Possible. How & Why: First push-results in to rotation of an inch. Continuous & Persistent efforts results in to one full rotation Next, each turn results in to compound of investment of efforts & ultimately resulting in to unstoppable momentum & breakthrough.
    29. 31. A Jim Collins Perspective <ul><li>G2G comes about by a cumulative process—step by step, action by action, decision by decision, turn by turn of the flywheel—that adds up to sustained and spectacular results. </li></ul><ul><li>Media attention often comes to G2G organizations after years of slow build-up and then break-through. </li></ul><ul><li>Flywheel transitions look like dramatic revolutionary breakthroughs from the outside (when the wheel is fully turning).From the inside they feel completely different, more like an organic development process. </li></ul>
    30. 32. It`s Not A Miracle ! <ul><li>Egg sitting there. </li></ul><ul><li>No one pays attention. </li></ul><ul><li>Egg cracks open. </li></ul><ul><li>Out jumps chick. </li></ul><ul><li>Media: </li></ul><ul><ul><li>“ The transformation of Egg to Chicken!” </li></ul></ul><ul><ul><li>“ The remarkable revolution of the Egg!” </li></ul></ul><ul><ul><li>“ Stunning turnaround at Egg!” </li></ul></ul><ul><li>The point? </li></ul><ul><li>G2G companies had no name for their transformations. There was no launch event, no tag line, no programmatic feel whatsoever. </li></ul><ul><li>There was no miracle moment </li></ul>
    31. 33. Some Example-U.S. <ul><li>UCLA won 10 NCAA championships and 61 games in a row. </li></ul><ul><li>How many years did Wooden coach UCLA before the 1 st championship? </li></ul><ul><li>15 </li></ul><ul><li>Point to tangible accomplishments—however incremental at first—and show how these steps fit into the context of an overall working concept. </li></ul><ul><ul><li>Step forward, consistent with hedgehog concept </li></ul></ul><ul><ul><li>Accumulate visible results </li></ul></ul><ul><ul><li>People line up, energized by results </li></ul></ul><ul><ul><li>Flywheel momentum builds </li></ul></ul>
    32. 34. The Doom Loop-Concept Now imagine the same wheel keeps changing the direction of rotation i.e. sometimes it is made to run from right to left & sometimes vice versa which ultimately affects the organization's ability to function efficiently & persistently. -Keep launching new programs -Shout about it Guess what happened….!!
    33. 35. Two Popular Doom loops to avoid.. <ul><li>Misguided use of acquisitions—making deals for the sake of making deals. </li></ul><ul><ul><li>“ When the going gets tough, we go shopping!” </li></ul></ul><ul><ul><li>G2G companies did acquisitions after the Hedgehog Concept and after the flywheel had significant momentum. </li></ul></ul><ul><ul><li>Acquisitions are accelerators not creators of flywheel momentum. </li></ul></ul><ul><li>Leaders who stop the flywheel—leaders who step in, stop an already spinning flywheel, and throw the organization in entirely different direction. </li></ul>
    34. 36. Level 5 Leadership First Who… Then What Confront the Brutal Facts Hedgehog Concept Culture of Discipline Technology Accelerators Disciplined People Disciplined Thought Disciplined Action Good to Great Flywheel Buildup Breakthrough
    35. 37. Level 5 Leadership First Who… Then What Confront the Brutal Facts Hedgehog Concept Culture of Discipline Technology Accelerators Disciplined People Disciplined Thought Disciplined Action From Good To Great to Built To Last Flywheel Buildup Breakthrough
    36. 38. <ul><li>Compares this book with Jim Collin’s earlier book, ‘Built to Last’. ‘Good to Great’ is not a sequel to ‘Built to Last’, but can be considered as a prequel. </li></ul><ul><li>Built to Last represented the findings of a six-year study into the factors that determined whether a new company would survive in the long-term. </li></ul><ul><li>Companies need a set of core values in order to achieve the kind of long-term sustainable success that may lead to greatness. </li></ul><ul><li>Enduring great companies also have to go through a process of buildup to breakthrough, following the good-to-great framework during their formative years. Companies do not become great overnight. </li></ul><ul><li>Eg.: Walmart, Hewlett and Packard </li></ul>From Good To Great to Built To Last
    37. 39. <ul><li>Companies need to exist for a higher purpose than mere profit generation in order to transcend the category of merely good </li></ul><ul><li>Good-to-Great findings enables all four of the key ideas from Built to Last: </li></ul><ul><ul><ul><ul><li>Clock Building, Not Time Telling </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Genius of AND </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Core Ideology </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Preserve the CorelStimulate Progress </li></ul></ul></ul></ul><ul><li>Why Greatness? - Do something one really cares about, about which one has great passion. It is no harder build something great than to build something good. </li></ul>From Good To Great to Built To Last