BOOK REVIEW
GOOD TO GREAT
by Jim Collins
Six Key Elements of a
“Good to Great” (G2G) Company
Element 1 :
Level 5 Leadership
Element 2 :
First Who…..then What
Element 3 :
Confront the Brutal Facts
(Yet Never Lose Faith)
Element 4 :
The Hedgehog Concept
Element 5 :
A Culture of
Discipline
GOOD IS THE ENEMY OF
GREAT
THE 11 G2G cOMpANIES
wERE:
GOOD TO GREAT
cOMpANIES
RESEARcH FINDINGS
 Larger-than-life, celebrity leaders who ride in from the outside are negatively
correlated with taking...
Flywheel
Level 5
Leadership
First Who…
Then What
Confront the
Brutal Facts
Hedgehog
Concept
Culture of
Discipline
Technolo...
Level 5 Leadership
5 : Level 5 Executive
4 : Effective Leader
3 : Competent Manager
2 : Contributing Team Member
1 : Highl...
LeveL-5 executive
 Very humble on a personal level
 Possesses a great deal of drive and desire to succeed, where
“succes...
the window & the mirror
effect
Level 5 leaders look out
the window to apportion
credit to factors outside
themselves when ...
Flywheel
Level 5
Leadership
First Who…
Then What
Confront the
Brutal Facts
Hedgehog
Concept
Culture of
Discipline
Technolo...
f i r S t w h o … t h e n w h A t
First who, then what
“…the ‘who’ questions come before the ‘what’
questions – before vis...
If you have the wrong people,
doesn’t matter whether you
have the right direction
why do it thiS
wAy?
If you have the righ...
LeAderS were rigorouS, not
ruthLeSS in peopLe
deciSionS
There are three steps on how the companies can be rigorous:
• Don’...
Flywheel
Level 5
Leadership
First Who…
Then What
Confront the
Brutal Facts
Hedgehog
Concept
Culture of
Discipline
Technolo...
All good-to-great companies began the
process, finding a path to greatness by
confronting the brutal facts of their
curren...
confront the BrutAL fAct
(YET NEVER LOSE FAITH)
Must create a culture wherein
people have an opportunity to
hear the trut...
StockdALe pArAdox
AND at the same time confront
the most brutal facts of your
current reality, whatever they
might be with...
Let the truth Be
heArd
4 basic practices :
 Lead with questions, not answers
 Engage in dialogue and debate, not coercio...
Flywheel
Level 5
Leadership
First Who…
Then What
Confront the
Brutal Facts
Hedgehog
Concept
Culture of
Discipline
Technolo...
THE HEDGEHOG CONCEPT
An ancient Greek parable:
• The fox knows many things
• The hedgehog knows one big thing
and stick to...
The good-to-great companies are more like
hedgehogs — simple, dowdy creatures that know
"one big thing" and stick to it. T...
THE HEDGEHOG CONCEPT
 The Hedgehog concept is not a goal or strategy to be the best at
something, it is an understanding ...
Hedgehog Concept
What you are deeply
passionate about
What you can
be the best in
the world at
What drives
your
economic
e...
Hedgehog Concept
The
Council
All Guided by
the Three Circles
Ask Questions
Dialogue &
Debate
Autopsies
& Analysis
Executiv...
 The Council is usually consists of five to twelve people , to discuss and
gain insights into the organization
 It shoul...
Flywheel
Level 5
Leadership
First Who…
Then What
Confront the
Brutal Facts
Hedgehog
Concept
Culture of
Discipline
Technolo...
Culture of discipline is not just about action.
It is about getting disciplined people who
engage in disciplined thought a...
The Good To Great Matrix of Creative Discipline
Hierarchical
Organization
Start-up
Organization
Bureaucratic
Organization
...
The good-to-great companies
appear boring and pedestrian
looking in from the outside, but
upon closer inspection, they're
...
A culture of discipline is not
just about action. It is
about getting disciplined
people who engage in
disciplined thought...
A culture of discipline involves
a duality. On the one hand, it
requires people who adhere
to a consistent system; yet,
on...
 To create a culture of discipline, you must:
 Build a culture around the idea of freedom and responsibility,
within a f...
Flywheel
Level 5
Leadership
First Who…
Then What
Confront the
Brutal Facts
Hedgehog
Concept
Culture of
Discipline
Technolo...
The key question about any technology is: does
the technology fit directly with your Hedgehog
Concept? If yes, then you ne...
The good-to-great companies used
technology as an accelerator of
momentum, not a creator of it. None
of the good-to-great ...
Technology
AccelerATors
The key question about any technology is:
Does the technology fit directly with your Hedgehog
Conc...
T e c h n o l o g y A c c e l e r A T o r s
 The ideal approach to technology with the
following cycle:
"Pause -- Think -...
Flywheel
Level 5
Leadership
First Who…
Then What
Confront the
Brutal Facts
Hedgehog
Concept
Culture of
Discipline
Technolo...
The Flywheel And The
doom loop
A flywheel is a heavy wheel that takes a lot of energy to
set in motion - to do so usually ...
The Doom Loop
The Flywheel Effect
 Conversely, the “doom loop” is the vicious circle that
unsuccessful companies fall into
 First rushing in one direction...
leTs mAke IT hAppen
ThAnk you
Prepared by
Snigdha Majumder
Head of the Department Lean Six Sigma
ITC Hotels Mumbai
Present...
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Book Review Good2Great

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Good to Great by Jim Collins
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  • Book Review Good2Great

    1. 1. BOOK REVIEW GOOD TO GREAT by Jim Collins
    2. 2. Six Key Elements of a “Good to Great” (G2G) Company
    3. 3. Element 1 : Level 5 Leadership
    4. 4. Element 2 : First Who…..then What
    5. 5. Element 3 : Confront the Brutal Facts (Yet Never Lose Faith)
    6. 6. Element 4 : The Hedgehog Concept
    7. 7. Element 5 : A Culture of Discipline
    8. 8. GOOD IS THE ENEMY OF GREAT
    9. 9. THE 11 G2G cOMpANIES wERE:
    10. 10. GOOD TO GREAT cOMpANIES
    11. 11. RESEARcH FINDINGS  Larger-than-life, celebrity leaders who ride in from the outside are negatively correlated with taking a company from good to great  The structure of executive compensation is not a key driver in corporate performance  Strategy per se did not separate the good-to-great companies from the comparison companies  Good-to-great companies paid attention to what not to do and what to stop doing  Technology can accelerate a transformation, but it cannot cause a transformation  M&A plays virtually no role in igniting a transformation from good to great  Good-to-great companies paid scant attend to managing change, motivating people, or creating alignment  Good-to-great companies had no name, tag line, launch event, or program to signify their transformations  Good-to-great companies were not, by and large, in great industries, and some were in terrible industries
    12. 12. Flywheel 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 Breakthrough Level 5 Leadership Good To Great
    13. 13. Level 5 Leadership 5 : Level 5 Executive 4 : Effective Leader 3 : Competent Manager 2 : Contributing Team Member 1 : Highly Capable Individual
    14. 14. LeveL-5 executive  Very humble on a personal level  Possesses a great deal of drive and desire to succeed, where “success” is not personal  AVOID : Ego and Credit  Level 5 leaders look outside the window to accredit  Thank others and luck  Level 5 leaders infected with an incurable need to produce sustainable results  Rather talk about the company than themselves  Level 5 leaders set up successors for success
    15. 15. the window & the mirror effect Level 5 leaders look out the window to apportion credit to factors outside themselves when things go well At the same time, they look in the mirror to apportion responsibility, never blaming bad luck when things go poorly Everyone outside the window points inside directly at Level 5 leader saying “He was the Key; without his guidance and leadership, we would not have become a great company” Level 5 leader points right back out the window and says “Look at all the great people and good fortune that made this possible; I am a lucky guy”
    16. 16. Flywheel 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 Breakthrough First Who… Then What Good To Great
    17. 17. f i r S t w h o … t h e n w h A t First who, then what “…the ‘who’ questions come before the ‘what’ questions – before vision, before strategy, before tactics, before organizational structure, before technology” Ensured the right people “on the bus” before anything else, get the wrong people off the bus, then figure out where to drive It. G2G companies don’t depend on the brilliance of any one person ;a “lone genius” The research indicated that compensation did not correlate at all with the “good to great” process. No particular compensation scheme appeared to be advantageous
    18. 18. If you have the wrong people, doesn’t matter whether you have the right direction why do it thiS wAy? If you have the right people on the bus, problem of motivation and people managing are diminished
    19. 19. LeAderS were rigorouS, not ruthLeSS in peopLe deciSionS There are three steps on how the companies can be rigorous: • Don’t hire someone unless you’re 100% sure that they’re the right person. It’s better to wait and get someone that you know is a good fit • Once you realize you need to fire someone, don’t put it off. Do it quickly and fairly • Put the best people on the biggest opportunity not the problems LeSSon LeArnt • People are NOT your most important asset. …..The RIGHT people are
    20. 20. Flywheel 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 Breakthrough Confront the Brutal Facts Good To Great
    21. 21. All good-to-great companies began the process, finding a path to greatness by confronting the brutal facts of their current reality
    22. 22. confront the BrutAL fAct (YET NEVER LOSE FAITH) Must create a culture wherein people have an opportunity to hear the truth  Having lofty goals can be good, but you can never lose sight of what the reality is on the ground
    23. 23. StockdALe pArAdox AND at the same time confront the most brutal facts of your current reality, whatever they might be with discipline Retain absolute faith that “you can” and “will prevail” in the end
    24. 24. Let the truth Be heArd 4 basic practices :  Lead with questions, not answers  Engage in dialogue and debate, not coercion  Conduct autopsies, without blame  Build red flag mechanisms where information cannot be ignored
    25. 25. Flywheel 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 Breakthrough Hedgehog Concept Good To Great
    26. 26. THE HEDGEHOG CONCEPT An ancient Greek parable: • The fox knows many things • The hedgehog knows one big thing and stick to it Foxes pursue many ends at the same time and see all the world in its complexity • Scattered • Diffused • Moving on many levels • Never integrating their thinking into an overall concept or unifying vision Hedgehogs simplify a complex world into a single organizing idea, a basic principle or concept that unifies and guides everything • Simplifies a concept • Reduces all challenges to simple ideas
    27. 27. The good-to-great companies are more like hedgehogs — simple, dowdy creatures that know "one big thing" and stick to it. The comparison companies are more like foxes — crafty, cunning creatures that know many things yet lack consistency
    28. 28. THE HEDGEHOG CONCEPT  The Hedgehog concept is not a goal or strategy to be the best at something, it is an understanding of what you can be the best at  Hedgehogs simplify the world into a basic principle, see what’s essential, and ignore the rest  It took an average of four years for the G2G companies to get a Hedgehog Concept
    29. 29. Hedgehog Concept What you are deeply passionate about What you can be the best in the world at What drives your economic engine Simplicity within the three circles One Big Thing
    30. 30. Hedgehog Concept The Council All Guided by the Three Circles Ask Questions Dialogue & Debate Autopsies & Analysis Executive Decisions An Iterative Process
    31. 31.  The Council is usually consists of five to twelve people , to discuss and gain insights into the organization  It should meet regularly, not a one-time group  Council member come from a range of perspectives but each member has deep knowledge about some aspect of the organization and/or the environment in which it operates  The Council exists to help the chief executive CHaraCTErisTiCs Of THE COuNCil
    32. 32. Flywheel 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 Breakthrough Culture of Discipline Good To Great
    33. 33. Culture of discipline is not just about action. It is about getting disciplined people who engage in disciplined thought and who then take disciplined action In a culture of discipline, people do not have jobs “they have responsibilities” a CulTurE Of DisCiPliNE
    34. 34. The Good To Great Matrix of Creative Discipline Hierarchical Organization Start-up Organization Bureaucratic Organization Great Organization High Culture of Discipline Low Low HighEthic of Entrepreneurship
    35. 35. The good-to-great companies appear boring and pedestrian looking in from the outside, but upon closer inspection, they're full of people who display extreme diligence and a stunning intensity
    36. 36. A culture of discipline is not just about action. It is about getting disciplined people who engage in disciplined thought and who then take disciplined action.
    37. 37. A culture of discipline involves a duality. On the one hand, it requires people who adhere to a consistent system; yet, on the other hand, it gives people freedom and responsibility within the framework of that system.
    38. 38.  To create a culture of discipline, you must:  Build a culture around the idea of freedom and responsibility, within a framework  Fill your culture with self-disciplined people who are willing to go to extreme lengths to fulfill their responsibilities  Don’t confuse a culture of discipline with a dictatorial disciplinarian  “Stop doing” lists are more important than “to do” lists  Anything that does not fit with our Hedgehog Concept, will not do
    39. 39. Flywheel 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 Breakthrough Technology Accelerators Good To Great
    40. 40. The key question about any technology is: does the technology 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.
    41. 41. The good-to-great companies used technology as an accelerator of momentum, not a creator of it. None of the good-to-great companies began their transformations with pioneering technology, yet they all became pioneers in the application of technology once they grasped how it fit with their strategies.
    42. 42. Technology AccelerATors The key question about any technology is: Does the technology 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 Technology by itself is never a root cause of either greatness or decline
    43. 43. T e c h n o l o g y A c c e l e r A T o r s  The ideal approach to technology with the following cycle: "Pause -- Think -- Crawl -- Walk – Run”  Do not rush into a new technology revolution before having an understanding that it can be used to support your business.
    44. 44. Flywheel Level 5 Leadership First Who… Then What Confront the Brutal Facts Hedgehog Concept Culture of Discipline Technology Accelerations Disciplined People Disciplined Thought Disciplined Action Buildup Breakthrough Flywheel Good To Great
    45. 45. The Flywheel And The doom loop A flywheel is a heavy wheel that takes a lot of energy to set in motion - to do so usually requires constant, steady work, rather than a quick acceleration. Great companies’ transformations were like this as well
    46. 46. The Doom Loop The Flywheel Effect
    47. 47.  Conversely, the “doom loop” is the vicious circle that unsuccessful companies fall into  First rushing 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
    48. 48. leTs mAke IT hAppen ThAnk you Prepared by Snigdha Majumder Head of the Department Lean Six Sigma ITC Hotels Mumbai Presented on : 24th Jan 2012
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