In the study, companies with strong, charismatic leaders tend to become the force of the company, overwhelming employees who worried about what the CEO would think, instead of doing what was best for the company.
Leadership is about vision, but it is also equally about creating a climate where the truth is heard and the brutal facts confronted.
There’s a difference between “having your say” and the opportunity to be heard. Good to Great leaders provide the latter.
Better to build a strong team (Level 5 Leadership) than to have one genius with a thousand helpers (Level 4)
Examples of companies that did well under a ‘genius’ CEO, then floundered when he left
Eckerd Corporation. CEO Jack Eckerd’s genius was picking the right stores to buy, whereas Walgreen’s CEO Cork Walgreen had a genius for picking the right people to hire.
Eckerd did not pick a successor, whereas Walgreen shortlisted many good candidates, and set up his successor for even greater success.
Embrace the Stockdale Paradox: Maintain unwavering faith that you can and will prevail in the end, regardless of the difficulties, AND at the same time have the discipline to confront the most brutal facts of your current reality, whatever they may be.
The Hedgehog Concept: 3 circles Big, Hairy, Audacious Goal (BHAG): Your company should be here Disciplined Thought Relook your company’s denominators to gain understanding of your economic model. E.g. shift from profit per store to profit per customer Gain an understanding of what your company can be the best at. Relook your core business if it’s something you can only be ‘good’ at, not ‘great’. Only do things you are passionate about. You will be at your best when you have a deep and genuine feeling for what you do.
Understand what you can & cannot be the best at
Put aside egos
Put aside corporate traditions & legacies
Focus on the few things (or single thing) that you can do better than anyone else
Don’t just focus on milking existing cash cows
This Hedgehog Concept requires a ‘severe standard of excellence’
Consider forming a Council – a workgroup of the right people who debate, over time, about vital issues and decisions facing the organization.
Create a culture of discipline The Good-to-Great Matrix of Creative Discipline High Culture of Discipline Low Low High Ethic of Entrepreneurship Disciplined Action
The authors only looked at publicly traded corporations in the US , so as to compare apples with apples .
No high-tech companies were featured as most had not been around for 15 years, which is the time span of the study. Intel, which is old enough, has always been ‘Great’, so ironically, it could not be a case study.
Thus, readers must translate the learning points to their own environment, e.g. public sector or nonprofit in an Asian country, in a very different/new industry. Most of the time this shouldn’t be a problem, but there are exceptions:
e.g. Firing bad employees is harder in certain cultures or organisations, e.g. Japan, Government, academic institutions.
The author notes that this can be addressed partly, e.g. by relegating such employees to the back room
See follow-up book, Good to Great and the Social Sectors
Personally and professionally, I object to a tobacco company being viewed as one of the 11 ‘Great’ companies based on market performance, because its activities are harmful to society, regardless of any CSR efforts and legal damages paid.
However, I understand such views may be subjective and moralistic, and recognize that the authors have duly stuck to their quantitative methodology which has helped to identify tangible qualities we can learn from, regardless of the industry each company is in.