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A review of Good To Great by Jim Collins

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  2. 2. <ul><li>presents </li></ul>
  3. 3. Review <ul><li>of </li></ul>
  4. 4. penned by GOOD TO GREAT JIM COLLINS
  5. 5. » The Genesis : <ul><li>The genesis of the book was conceived by the very idea to investigate as to how GOOD companies might become the GREAT ones, while others don’t and further it traces the trajectory that led to the radical metamorphosis. </li></ul>
  6. 6. » Methodology Adopted : <ul><li>The investigation studied the performance of 1,435 companies that appeared in the “Fortune-500” list during 1965 to 1995, out of which only eleven confirmed to the following criteria that the author and his Research Group had set up: </li></ul><ul><li>That the corporates must have underperformed the stock market for 15 years in a row , followed by a transition and subsequently returned at least 3 times the stock market for at least 15 years in a row ; </li></ul><ul><li>That the corporates must also have outperformed the growth of the sector they belonged to. </li></ul>
  7. 7. <ul><li>Eleven corporates were found confirming to the criteria and were subsequently analyzed at length vis-à-vis their competitors in their respective fields. These corporates were: </li></ul><ul><li>Abbot Laboratories </li></ul><ul><li>Circuit City </li></ul><ul><li>Fannie Mae </li></ul><ul><li>Gillette </li></ul><ul><li>Kimberly-Clark </li></ul><ul><li>Kroger </li></ul><ul><li>Nucor </li></ul><ul><li>Philip Morris </li></ul><ul><li>Pitney Bowes </li></ul><ul><li>Walgreens </li></ul><ul><li>Wells Fargo </li></ul>» Corporates Analyzed:
  8. 8. <ul><li>What WE have discovered after going through and musing over the contents of the book, that Mr. Collins tries to prescribe a panacea for running a Great business, irrespective of its size, by driving home the point that GOOD IS THE ENEMY OF GREAT; </li></ul><ul><li>We can pin-point this, because it is the GOOD factor that turns out to be an impedimenta in making something GREAT. This equally holds even in the lives of ordinary individuals as well. Simply put up, Mr. Collins urges organizations to lay equal emphasis upon: </li></ul><ul><li>What to do, </li></ul><ul><li>What not to do, and finally, </li></ul><ul><li>What to stop doing. </li></ul>» Kernel of the book:
  9. 9. » Peripheral Concepts: <ul><li>In OUR opinion, the 300-pages book postulates five peripheral concepts, other than the central theme; that are, and of course have been, detrimental to the transition from Good-to-Great. They are: </li></ul><ul><li>I. “Level-5 Leaders” Concept: </li></ul><ul><li>All the companies that have achieved Good-to-Great had invariably “Level-5 Leaders” in the saddle. </li></ul><ul><li>The term “Level-5 Leaders” refers to people with an unwavering will and smouldering fire within to do what is necessary to propel their organization to dizzy heights. Such people are very humble on a personal level, but have a great deal of inbuilt drive-n-desire to succeed. </li></ul><ul><li>“ Level-5 Leaders”, are, in any case, the kind of people who do not point to themselves as the cause for an organization’s success. </li></ul>
  10. 10. II. The “Hedgehog” or The “Three Circles’ Concept”: <ul><li>The “Hedgehog concept” refers to a parable of a Hedgehog and a Fox, where the fox knew many things, but the hedgehog knew only one, albeit a BIG thing. </li></ul><ul><li>In this parlance, the Good-to-Great corporates were by and large built by “hedgehogs”, meaning thereby that they were able to focus on one important BIG thing that made their companies GREAT. Needless to say, it takes a real genius to see through all the clutter and grab the just one basic instinct that lends one the adage. </li></ul>
  11. 11. The “Three Circles’ Concept” is nothing, but the culmination of the “Hedgehog Concept”. As per this concept, at the intersection of the three interlocking circles---representing (1) What one is passionate about, (2) What one can make money at, and (3) What one can be the best at---lies the winning target. Therefore, if one can bring all the three things to bear, one can pave a way to excel. What one is passionate about What one can make money at What one can be the best at
  12. 12. III. A Culture of Discipline: <ul><li>A perfect blend of a culture of discipline with an ethic of entrepreneurship, yields the magical alchemy of great outcomes. </li></ul><ul><li>Great companies have both latitude for individual action and a culture of disciplined behavior as well. Both of these are necessary, as without the passion to try new things and some degree of independence, an organisation becomes a rigid, stifling hierarchy. On the other hand, without some sense of discipline, things begin to fall apart with the growth of the organisation. </li></ul><ul><li>The Smart approach to discipline is to have a “Stop doing” list. Stop doing the things that are not in your “Three Circles”. </li></ul>
  13. 13. IV. Technology Accelerators: <ul><li>Good-to-Great organisations think differently about the role of technology and technological strides made vis-à-vis the mediocre ones. </li></ul><ul><li>Good-to-Great organisations use technology as an accelerator of momentum and not as its creator. They use it to further their leverage, in a conscious and focussed way, rather than resorting to a mad-rush to embrace it for the sake of emergence. </li></ul><ul><li>Technology is a harbringer of change, not the cause of it. Great companies have an inherent drive for judicious application of emerging technologies that propels them to the apex in their chosen field. </li></ul>
  14. 14. V . The “Flywheel” and the “Doom Loop” Concept: <ul><li>The twin concepts of “Flywheel” and the “Doom Loop” represent positive and negative momenta respectively. </li></ul><ul><li>A Flywheel is a heavy wheel that takes a lot of constant and steady input of energy to set in motion, rather than a quick acceleration. The Good-to-Great metamorphosis is a similar process. </li></ul><ul><li>With everything in place, lots of constant and steady hard work got the great companies going faster and faster, with a lot of momentum. Once it’s set in motion, all that conserved energy tends to keep it moving in the right direction. </li></ul>
  15. 15. <ul><li>The “Doom Loop Concept”, contrary to the “Flywheel Concept”, refers to the vicious circle that unsuccessful companies fall into--- rushing first in one direction, then another---in the hope of creating a sudden, sharp break with the past that will propel them to success. Some attempt to do this through acquisitions, others through bringing in a new leader who decides to change direction completely, in a direction incompatible with the company. The results are never good. </li></ul><ul><li>The difference between the two approaches is characterized by the slow, steady, methodical preperation inherent in the flywheel, as compared to the abrupt, radical, and often revolutionary, rather than evolutionary changes within the company. </li></ul>
  16. 16. » Critic: <ul><li>After a judicious churning of the contents of the book, G-5 is of the opinion that: </li></ul><ul><li>Life is a GAME of Wins and Loses and being the Winner does NOT always mean that one necessarily posses some skill(s). Sometimes, it is the “Zo Zeeta, Wahi Sikandar” concept that is prevalent and has nothing at all to do with the “Good-to-Great Skills”. </li></ul><ul><li>The book maintains a stoic silence about corporates that do all the Good-to-Great things, but have mediocre performance. </li></ul>
  17. 17. <ul><li>In the book Mr. Collins says “RIGHT PEOPLE ON THE BUS”; but he falls short of mentioning whether they are born, they can be made or how they can be identified. </li></ul><ul><li>Every organization employs right people in the best possible way it can, but it is only later one really realizes whether one is in fact RIGHT or WRONG. Any body can say it is the RIGHT PEOPLE, RIGHT STRATEGY, RIGHT DECISIONS; but no body could spell it out its source accurately. </li></ul>
  18. 18. » Conclusion: <ul><li>Simply put up, what G-5 has concluded after a review of this book is that it is a must read not only for corporate leaders/executives, but also for ordinary individuals who dare to achieve something Great, as it infuses a great mantra for success. </li></ul><ul><li>Collins's philosophy can be summed up in just one noteworthy phrase, that WE prefer to quote from the book:- </li></ul><ul><li>“… GREATNESS IS NOT A FUNCTION OF CIRCUMSTANCE… AS IT TURNS OUT, IT IS LARGELY A MATTER OF CONSCIOUS CHOICE...” </li></ul>
  19. 19. THANK YOU <ul><li>Acknowledgements: </li></ul><ul><li>Good To Great by Jim Collins; </li></ul><ul><li>r a a z LAPPYE:C I M PTerm-IO BASSIGNMENTS </li></ul>