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Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
Good to Great by Jim Collins
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Good to Great by Jim Collins

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Best Book I have read sofar, the book is a completely mind blowing, attacking traditional thinking... …

Best Book I have read sofar, the book is a completely mind blowing, attacking traditional thinking...
Following are certain shocking facts:
1. Celebrity leaders who ride in from outside are negatively correlated.
2. 10 out of 11 good to great companies, leaders came from within
3. Idea that salary structure of management is a key performance driver is not supported by data
4. No evidence that Good to Great companies devised strategies differently than the comparison companies
5. Good to Great companies not only focused on WHAT TO DO but equally focused on WHAT NOT TO DO
6. Technology and Technology driven change has nothing to do while transformation to Good to Great
for more read the presentation...

And yes.. Kindly don't ignore Stockdale's Paradox!

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  • 1. Good to Great Jim Collins PGDM Executive 1 Ajit Kumar - 12 Sandeep Mukhia - 17 Punya Trivedi - 24
  • 2. Good is the enemy of Great Jim Collins PGDM Executive 2
  • 3. About Research • Team of 21 people • Five years • It took 6 months to select a sample set of companies and 15 years of data was evaluated • Criteria for selection was cumulative stock returns • Those selected sample 28 Companies following aspects were studied: ▫ Acquisitions ▫ Executive Compensation ▫ Business Strategy ▫ Layoff’s ▫ Leadership Style ▫ Financial Turnover and Ratios • Series of Weekly debates • Theory was directly built from ground, derived from evidence PGDM Executive 3
  • 4. The Focus Good companies PGDM Executive 4
  • 5. Shock of your life! PGDM Executive 5
  • 6. Shocking facts • Celebrity leaders who ride in from outside are negatively correlated. • 10 out of 11 good to great companies, leaders came from within • Idea that salary structure of management is a key performance driver is not supported by data • No evidence that Good to Great companies devised strategies differently than the comparison companies • Good to Great companies not only focused on WHAT TO DO but equally focused on WHAT NOT TO DO • Technology and Technology driven change has nothing to do while transformation to Good to Great PGDM Executive 6
  • 7. Shocking facts • M&A virtually played no role in igniting a transfer from Good to Great • Good to Great companies paid scant attention to managing change and motivating people • Good to Great companies had no name, tag-line, launch event or program to signify transformation • Good to Great companies were not by and large in great industries, but they were also present in terrible industries. PGDM Executive 7
  • 8. Steps for becoming good to great PGDM Executive 8 Level 5 Leadership First Who… Then What Confront the Brutal Facts Hedgehog Concept Culture of Discipline Technology Accelerators Disciplined People Disciplined Thought Disciplined Action Buildup
  • 9. Steps for becoming good to great PGDM Executive 9 Level 5 Leadership First Who… Then What Confront the Brutal Facts Hedgehog Concept Culture of Discipline Technology Accelerators Disciplined People Disciplined Thought Disciplined Action Buildup
  • 10. Level 5 leader PGDM Executive 10
  • 11. Level 5 vs Level 4 PGDM Executive 11
  • 12. What did comparison company’s leaders do? • Look outside of the window for something or someone outside to blame for poor results • However, when the results are great, they would look in front of the mirror and credit themselves when things went well. PGDM Executive 12
  • 13. First WHO... Then WHAT • Good to Great Executives did not first figure out where to drive the bus and then get people to take it there. • Instead they first got the right people on the bus and (Wrong people off the bus) and then figured out where to drive. • If you begin with “Who” rather than “What” you can more easily adapt to a changing world • If people join the bus primarily because of where you are going, what happens if you get ten miles down the road and you need to change direction? PGDM Executive 13
  • 14. First WHO... Then WHAT • If you have right people on the bus, the problem is how to motivate and manage people largely goes away. (Right people don’t need to be rightly managed or fired up; they will be self motivated) • Great companies hire outstanding people whenever and wherever they found them, often without any specific job in mind. • It is not how you compensate your executives, it’s which executives you have to compensate in first place. PGDM Executive 14
  • 15. First WHO... Then WHAT • If you have right people on the bus, the problem is how to motivate and manage people largely goes away. (Right people don’t need to be rightly managed or fired up; they will be self motivated) • Great companies hire outstanding people whenever and wherever they found them, often without any specific job in mind. • It is not how you compensate your executives, it’s which executives you have to compensate in first place. PGDM Executive 15
  • 16. First WHO... Then WHAT • If you find wrong people, clinger around with them, get them off the bus (Nucor sacked almost 50% of it’s people in first year) in subsequent years low turnover subsided as right people settled. • To attract and retain the best talent, pay them highest (Nucor) • In Good to Great transformation; people are not your most important asset. The RIGHT people are... • The only way to deliver to the people who are achieving is to not burden them with the people who are not achieving. PGDM Executive 16
  • 17. So do Good to Great Companies like Layoffs? • The Good to Great companies rarely used sacking and almost never used it as primary strategy. • Six of 11 Good to Great companies recorded zero layoffs for about ten years, and four others recorded only a couple of layoffs. • In contrast, comparison companies recorded 5 times more layoffs. • How to be rigorous rathern than ruthless: ▫ When in doubt, don’t hire – keep looking ▫ When you know, you need to change people – act ▫ Put your best people in your biggest opportunities, not your biggest problems. PGDM Executive 17
  • 18. Steps for becoming good to great PGDM Executive 18 Level 5 Leadership First Who… Then What Confront the Brutal Facts Hedgehog Concept Culture of Discipline Technology Accelerators Disciplined People Disciplined Thought Disciplined Action Buildup
  • 19. Confront the Brutal facts • In 1970’s Both Kroger and A&P had their major assets invested in Grocery Stores • Both companies had strong hold over outside growth areas in U.S. • Yet only Kroger confronted the Brutal fact that the business was changing i.e. from Traditional stores to Super Stores • Kroger decided to eliminate or replace every single store and depart every region that did not fit the new realities. • A&P crumbled since it did not change. PGDM Executive 19
  • 20. Confront the Brutal facts • No matter how Great is present, it is never going to be good enough to sustain us. • How to motivate people with Brutal Facts: ▫ Does compelling vision work – No ▫ Not that vision is unimportant, but trying to motivate people is largely a waste of time. ▫ If you have right people on the bus, they will be self motivated. • How to avoid demotivating people • Do not build false hopes, if you do, sooner or later they will be swept away. PGDM Executive 20
  • 21. Confront the Brutal facts • How to create a climate when People are heard: ▫ Lead with Questions not answers – Questions are used only for one and only one reason i.e. to gain understanding ▫ Engage in dialogue and debate not coercion ▫ Conduct Autopsies without blame ▫ Build Red Flag Mechanisms PGDM Executive 21
  • 22. Confront the Brutal facts • How to create a climate when People are heard: ▫ Lead with Questions not answers – Questions are used only for one and only one reason i.e. to gain understanding ▫ Engage in dialogue and debate not coercion ▫ Conduct Autopsies without blame ▫ Build Red Flag Mechanisms PGDM Executive 22
  • 23. Hedgehog Concept • Fox vs. Hedgehog ▫ Hedgehog knows only one big thing ▫ Fox knows many things • Foxes pursue many things at the same time and see the world as complex • Hedgehog simplifies complex world into single organizing idea, a basic principle. PGDM Executive 23
  • 24. Hedgehog Concept • Walgreens simplified their idea as “best and most convenient drugstores with high profit per customer visit, paying attention to choose best locations at whatever cost. • In comparison Eckerd competitor of Walgreens lurched after growth for growth’s stake, invested in Home Entertainment company by acquisition, subsequently it failed. • Strategy per se did not distinguish Good to Great Companies from the comparison companies • Just because its simple doesn’t mean its right. The world is filled with companies with simple but wrong ideas. (In short it should be a well thoughtful idea and not random) PGDM Executive 24
  • 25. Hedgehog Concept PGDM Executive 25 What you are deeply passionate about What you can be the best in the world at What drives your economic engine
  • 26. How to adopt Hedgehog Thinking? • The right people • Engaged in vigorous dialogue and debate • Infused with the brutal facts • Guided by questions formed by the three circles PGDM Executive 26
  • 27. How to Implement Hedgehog Thinking? PGDM Executive 27 The Council All Guided by the Three Circles Ask Questions Dialogue & Debate Autopsies & Analysis Executive Decisions An Iterative Process
  • 28. Steps for becoming good to great PGDM Executive 28 Level 5 Leadership First Who… Then What Confront the Brutal Facts Hedgehog Concept Culture of Discipline Technology Accelerators Disciplined People Disciplined Thought Disciplined Action Buildup
  • 29. A Culture of Discipline As a company grows it becomes more complex, too many things to handle say people, new customers, new orders, new products. Lack of planning, lack of accounting, lack of systems, and lack of hiring constraints create friction. Problems surface-with customers, with cash flow, with schedules. Getting disciplined people who engage in disciplined thought and who then take disciplined action PGDM Executive 29
  • 30. How to develop culture of discipline • Getting disciplined people who engage in disciplined thought and who then take disciplined action, fanatically consistent with three circles. • People who rinse their cottage cheese i.e. those who are willing to go extreme lengths to fulfill their responsibilities. • Good to Great companies would not do anything beyond those three circles neither their leaders will get distracted e.g. Lee Iacocca of Chrysler PGDM Executive 30
  • 31. To Do and Not to Do List • Good to Great companies give equal importance to both To Do and Not to Do List’s. • Once you have the discipline to do the right thing, do you have discipline to stop doing wrong things. PGDM Executive 31
  • 32. Technology Accelerators • Technology induced change is nothing new, the real question is not about the role of technology, but how do Great organizations think about technology? • Good to Great companies never use pioneering technologies, instead they prefer to move slowly until they know which technologies are relevant. • Walgreens versus Drugstore.com • Technology by itself cannot turn a Good enterprise into a Great Enterprise e.g. Palm Computer invented Personal Digital Assistant, but Apple Pioneered it. • A technology when chosen must fit with Hedgehog concept PGDM Executive 32
  • 33. Technology Accelerators • “Crawl, walk, run” can be a very effective approach, even during times of rapid and radical technological change • A technology when chosen must fit with Hedgehog concept PGDM Executive 33
  • 34. Steps for becoming good to great PGDM Executive 34 Level 5 Leadership First Who… Then What Confront the Brutal Facts Hedgehog Concept Culture of Discipline Technology Accelerators Disciplined People Disciplined Thought Disciplined Action Buildup
  • 35. Fly Wheel • Good to Greatness is an outcome of sustained and continuous efforts • The initial push to move a fly wheel takes maximum efforts, eventually as fly wheel catches the momentum, the effort required gets lesser. • When the fly wheel catches good speed can we say “Was it one big push that caused fly wheel to move so fast” • The fly wheel concept captures the overall feel as to what was inside the company as it went from good to great. PGDM Executive 35
  • 36. Fly Wheel • Often media doesn’t cover a company until the flywheel is moving at a speed of thousand rotations per minutes. • Circuit city stores after 9 years of effort, when the flywheel started moving fast, media created an hype by calling it an overnight success, but can 9 years of efforts be called overnight success? • Picture an egg just sitting there. No one pays attention to it until it cracks open and jumps a chicken! All major magazines and newspaper would like to cover it through featured stories. PGDM Executive 36
  • 37. Fly Wheel • Excess media coverage creates a lot of short-term pressure also on the Good to Great Company, hence at times to avoid it, it uses a method of understating results to analysts, wherein its own targets are much higher. • E.g. Abbott use to say estimate at a growth rate of 15% to analysts, wherein its own internal target would be 25% PGDM Executive 37
  • 38. Conclusion • Lessons from this book as much applies to a startup as to an established firm • This book applies to all firms be it profit or non-profit oriented. PGDM Executive 38
  • 39. PGDM Executive 39 Thank You

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