First Who… Then What1. Get the RIGHT people on the team (the wrongpeople off the team) then figure out where to go.2. With the RIGHT people on the team the problem ofhow to motivate and manage people go away3. Great vision without great people is irrelevant
Genius With A Thousand Helpers vs..Level 5+ Management TeamGWTH L5MT1. Set a vision forwhere the teamshould start andwhich direction theyshould go2. Enlist a crew ofhighly capable“helpers” to make thevision happen1. Get the RIGHTpeople with thesame goals to build agreat team2. Once they have theRIGHT people inplace, then figure outthe best path to godown
It‟s Who You Pay, Not How You PayThem The RIGHT people don‟t work for incentives they workto better the company Pay incentives and compensation to the RIGHTpeople to keep them on the team People are not your most important asset, the RIGHTpeople are
Rigorous, Not Ruthless Deal with things upfront, don‟t wait until it isconvenient The best people shouldn‟t have to worry abouttheir positions and can fully focus on their work
How to be Rigorous When in doubt, don‟t hire – keep looking When you know you need to make a people change,ACT Put your best people on your biggest opportunities,not your biggest problems
Great Team= Great life With a great team you are able to balance otheraspects of your life Being in a great team in the end creates long-term friendships with the people you work with
Don‟t de-motivate If you have the right people, they will be selfmotivated. How to avoid de-motivation: Don‟t hold out false hopes Create a climate where the truth is heard Lead with questions, not answers
The Stockdale Paradox Confront the brutal facts, and never lose faith. “I never doubted not only that I would get out, butalso that I would prevail and turn this experienceinto a defining event of my life.”
Good to great companies face just as muchadversity as the comparison companies, they justrespond differently. Face realities head on, remain faith, and you willemerge from adversity even stronger
The Hedgehog Concept Hedgehog Simple DefenseMechanism The fox Clever Complex Are you a Hedgehog or a Fox?
Three Circles of the HedgehogConcept1. What it can be best at in the world(and what youcannot be the best at) Walgreens vs. Eckerd2. What drives the economic engine3. What the business can be deeply passionateabout.
The Council The Hedgehog concept is a process and takesmany years to clarify your own hedgehog. There are twelve parts to building your council.
A Culture of Discipline Few start-ups become great companies partlybecause they respond to growth and success inthe wrong way They become to trip over their own success Entrepreneurial success is fueled by: Creativity Imagination Bold moves into uncharted waters Visionary zeal
A Culture of DisciplineSuccessful Companies: Build a culture around the idea of freedom andresponsibility. Avoid bureaucracy and hierarchy. Create a culture with self-disciplined people willing togo the extra mile to fulfill their responsibilities Create a “To-do” and “To-don‟t” list. The single most important for of discipline forsustained results is the fanatical adherence to theHedgehog Concept and the willingness to shunopportunities that fall outside the three circles.
Nucor‟s Three Circles Nucor‟s Three Circles(1975-1990) Passion: eliminating class distinctions and creating anegalitarian meritocracy that aligns management, labor, andfinancial interests. Economic Denominator: profit per ton of finished steel Could become the best in the world at: harnessingtechnology and culture to produce low-cost steel
Technology and the HedgehogConcept Technologies come and go just like innovativeconcepts throughout history Example: Railroads and electricity Good to Great companies have adapted aroundthese new technologies The companies that are known to betechnologically sophisticated are better known byhow they carefully selected the technology touse.
Technology as an Accelerator, Not aCreator of Momentum 2 Critical Questions:1. Does the technology fit directly with your Hedgehog Concept?2. Do you need that technology at all? The relationship with technology decisions is no different than any otherdecisions withon a company Without a clear Hedgehog Concept nor the discipline to stay withinthose three circles, there is no way to make your company “great”.
The Technology Trap Interviews at the Masters Forum Seminars The CEO of Nucor which is the most aggressive company in mini-mill steelmanufacturing and also know for applying advanced new technology. Companies that were once great fell behind, partially from technology, but it wasmost certainly not the principal cause. In conclusion, when you carelessly rely primarily on technology it turns into aliability, not an asset.
Technology and the Fear of BeingLeft Behind Something to remember: No technology that hasever been created has single handedly turned acompany from good to great. Companies that build on mediocrity, aremotivated by the fear of being left behind asthey look other companies changes. Great companies thrive off of creativity and aredriven by excellence for the their own sake.
Buildup and Breakthrough Good to great companies have never transformedfrom just one single defining action It is a cumulative process taking everything stepby step over time. Companies most of the time are blinded by theirhuge breakthrough.
Not Just a Luxury of Circumstances All companies have had short term pressures. But great companies have patience and self-discipline. How? They followed the flywheel model.
The Flywheel Effect The simple truth: “ Tremendous power exists inthe fact of continued improvement and thedelivery of results.” Even if you gain a small accomplishment fromyour overall concept, they will eventually build. When they build, people can see and feelmomentum and gain enthusiasm to accomplishmore.
The Doom Loop Trying to obtain quick breakthrough results 2 distinctive patterns that most companies godown when falling into the doom loop: 1. The misguided use of acquisitions 2. Selection of leaders who undid the work ofprevious generations
The Misguided Use of Acquisitions Companies that have failed tried to useacquisitions to significantly grow, diversify theirway through troubles, or make their CEO lookgood. “You can buy your way to growth, but you canNEVER buy your way to greatness.”
Leaders Who Undid Work ofPrevious Generations Horrible Bosses:http://www.youtube.com/watch?v=CcJu53g2lFU
The Flywheel as a Wraparound Idea One word: consistency Through numerous generations and building eachpiece of a system upon one another, obtainsmaximum results. You need leaders who want results, not leaderswho just want to look like they‟re leading.
From Good to Great to Built to Last Early leaders follow strong framework Keep things simple Start from the ground up Discover your core values and purpose and combine with thedynamic of the preservation over time
Success Takes Time Process of buildup and breakthrough Don‟t rush the process or work Success does not happen over night “Somehow over the years people have gotten theimpression that Walmart was just this great idea thatturned into an overnight success but it was an outgrowth ofeverything we‟d been doing since 1945 and like mostovernight successes, it was about twenty years in themaking.” Sam Walton
Core Values The virtue of values, practices, and success has a tremendousimpact on the way an organization or team is managed There is no specific „right‟ core values to become a great teamIt‟snot what core values have but that your team is aware of whatthey are and build upon them to become successful Preserving your core values over time is just as important asdeveloping them Must be able to adapt to changing world, situations, andproblems you face
Leadership is Keyhttp://www.youtube.com/watch?v=i5cPT2xoPnw
Level 5 Leader Endure and adapt over time Be able to adjust to different leaders Embrace both extremes of a situation trying totake the benefits of each option Instill core values and purpose Change practices and strategies while holdingcore values and purposes fixed
Passion for Excellence Turning good into great takes energy, but the building of momentumadds more energy back into the pool that it takes from The process is just as important as the outcome and result Be passionate about what you present even if its passion for excellenceitself These concepts can be applied to anything in life not just the Businessworld “It is very difficult to have a meaningful life without meaningful work”