Good to Great

BOOK REVIEWGOOD TO GREAT
PRESENTED BY:
Syed Shahzad Ali

INTRODUCTION
Author: James Collins
Chapters: Nine
Language: English
Publisher: William Collins
Publication date: October 16, 2001
Media type: Hardcover
Pages: 320

HISTORYOF AUTHOR
James C. "Jim" Collins, III (born 1958, Boulder, Colorado) is an American business consultant, author, and lecturer on the subject of company sustainability and growth.
Jim Collins frequently contributes to Harvard Business Review, Business Week, Fortune and other magazines, journals, etc.

Breakthrough
Buildup
Flywheel
Good To Great Frame work
Level 5
Leadership
First Who…Then What
Confront theBrutal Facts
HedgehogConcept
Culture ofDiscipline
TechnologyAccelerators
Disciplined People
Disciplined Thought
Disciplined Action

GOOD IS THE ENEMY OF GREAT
The study started with 1,435 good companies
companies from 1965 to 1995, looking for those that, for 15 years, either tracked or underperformed the stock market.
Followed by a transition, and subsequently returning at least 3 times the stock market for at least 15 years.
Further filtering was performed in order to ensure that companies also outperformed their industries.
Eleven companies were located that matched these criteria, and were studied in depth, and compared to competitors in their fields

Brain storming !
Write at least ten points which lead any company a great company ?

The 11 G2G companies were:
We are the Tradekey
We are the Best
We have beaten all
Number one is the Next

Research Findings
Based on the study, the research team found that ;
Larger than life: Most of the inner celebrity shows the positive correlation with taking good to good. Its proved whereby 10 out of 11 good to great ‘s leader are from inside.
There is no linking between executive compensation and the process of going good to great
Both good to great and comparison companies has their range of strategic planning
Most of the good to great company focus on what they “should stop” instead of what they “should do”
Technology were not cause the transformation in the good to great company

Research Findings
Mergers and acquisition has no impact on the movement of good to great company.
There also unaware of official launch event for the transformation.
It is not necessary the good to great company shall be at large and in great industry , since they are company in the terrible industry has move from good to greats.

Breakthrough
Buildup
Flywheel
Good To Great
Level 5
Leadership
Level 5
Leadership
HedgehogConcept
Disciplined People
Disciplined Thought
Disciplined Action

Brain storming !
Write what are the traits of any company a great company ?

Level 5 Leadership
5–Level 5 Executive
4–Effective Leader
3–Competent Manager
2–Contributing Team Member
1–Highly Capable Individual

Level-5 Executive
Very humble on a personal level, but who possesses a great deal of drive and desire to succeed, where “success” is not personal.
AVOID – got an ego and wants credit
Level 5 leaders look outside the window to accredit
Thanked others and luck
Also never blamed bad luck when things when poorly, took credit for mistakes (unlike other leaders)
Level 5 leaders infected with an incurable need to produce sustained results.

Rather talk about the company than themselves.
Good to great leaders never wanted to be larger-than life.
Level 5 leaders set up successors for success
Lesson Learnt
The transformation requires the brave decision, such as Abbot Laboratory to remove all nepotism.
Nowadays, the organization should take serious action on the talent management practices since it were proven the leadership is came from the inner organization.
Absence of Level 5 leaders was the consistent factor that hindered greatness

Breakthrough
Buildup
Flywheel
Good To Great
First Who…
Then What
Level 5
Leadership
HedgehogConcept
Disciplined People
Disciplined Thought
Disciplined Action

FIRST WHO…THEN WHAT
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.

Why do it this way?
If you have the right people on the bus, problem of motivation and people managing are diminished
If you have the wrong people, doesn’t matter whether you have the right direction b/c company will still not be great.

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.

Breakthrough
Buildup
Flywheel
Good To Great
Confront the
Brutal Facts
Level 5
Leadership
HedgehogConcept
Disciplined People
Disciplined Thought
Disciplined Action

CONFRONT THE BRUTAL FACT
(YET NEVER LOSE FAITH)
Having lofty goals can be good, but you can never lose sight of what the reality is on the ground.
Must create a culture wherein people have an opportunity to be heard the truth.

James Bond Stockdale
(December 23, 1923 – July 5, 2005)
accepted the brutal facts of reality while maintaining an unwavering faith in the endgame—that he would prevail despite the brutal facts.
Who didn’t make it out? The optimists.
Those who think it will all be a quick fix and everyone will be out by Christmas are the ones that lose heart and fail.

Stockdale Paradox:
Retain absolute faith that you can and will prevail in the end.
AND at the same time confront the most brutal facts of your current reality, whatever they might be with discipline.

Let the Truth be Heard
To accomplish this, 4 basic practices must engaged:
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

Breakthrough
Buildup
Flywheel
Good To Great
Hedgehog
Concept
Level 5
Leadership
HedgehogConcept
Disciplined People
Disciplined Thought
Disciplined Action

THE HEDGEHOG CONCEPT
An ancient Greek parable:
The fox knows many things.
The hedgehog knows one big thing and stick to it.
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

What you are deeplypassionate about
What drives youreconomicengine
What you can be the best in the world at
Hedgehog Concept
Simplicitywithinthe three circles
One
Big
Thing

Hedgehog Concept
All Guided by the Three Circles
An IterativeProcess
Ask Questions
TheCouncil
Dialogue &Debate
Autopsies& Analysis
ExecutiveDecisions

Lets Unite Again….. !!!
What should be the Characteristics of The Council in Great Company ?

Characteristics of the Council
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.
They need to freedom to speak their minds, and always have the respect of the other Council members.
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, not reach a consensus.

Characteristics of the Council
The Council is an informal body, not listed on any formal organization chart or in any formal documents.
7. The Council can have a range of possible names, usually quite mild. In the good to great companies, they had gentle names like Long-Range Profit Improvement Committee, Corporate Products Committee, Strategic Thinking Group and Executive Council.

Breakthrough
Buildup
Flywheel
Good To Great
Culture of
Discipline
Level 5
Leadership
HedgehogConcept
Disciplined People
Disciplined Thought
Disciplined Action

A CULTURE OF DISCIPLINE
Culture of discipline is not just about action. It is about getting disciplined people who engage in disciplined thought and who then take disciplined actionIn a culture of discipline, people do not have jobs ; “they have responsibilities”.

The Good To Great Matrix of Creative Discipline
Hierarchical
Organization
Great
Organization
High
Culture of
Start-up
Organization
Bureaucratic
Organization
Discipline
Low
Low
High
Ethic of
Entrepreneurship

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.

Breakthrough
Buildup
Flywheel
Good To Great
Technology
Accelerators
Level 5
Leadership
HedgehogConcept
Disciplined People
Disciplined Thought
Disciplined Action

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.

Technology Accelerators
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.

Breakthrough
Buildup
Flywheel
Good To Great
Level 5
Leadership
HedgehogConcept
TechnologyAccelerations
Disciplined People
Disciplined Thought
Disciplined Action
Flywheel

The Flywheel and the Doom Loop
Aflywheelis 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.

The Flywheel Effect
The Flywheel Effect
The Doom Loop
The Doom Loop

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

Good To Great – Summary

Good to Great

by Syed Shahzad Ali

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