This document summarizes a presentation about Jim Collins' book "Good to Great". The presentation discusses Collins' research analyzing what separated good companies that became great, sustained great results, and compared them to good companies that did not become great. Key findings included the importance of Level 5 Leadership, focusing on the right people and opportunities rather than problems, confronting brutal facts rather than hiding from them, and developing a simple "Hedgehog Concept" to guide strategy. The presentation provides examples of companies that demonstrated these principles and became great performers.

1. A Book Discussion
I am developing this as a possible
presentation at the MIT Sloan
Alumni Club of Boston. While it is
not complete it is comprehensive
enough to demonstrate my
presentation style.
Lindsey Anderson

2. Selection Process
1,435 Companies
Selected from the Fortune 500
1965 1970 1975 1980 1985 1990 1995
126 Companies
Selected into full CRSP data
pattern analysis
19 Companies
Selected into industry analysis
11 Companies
Good to
Great
1
2
3
4

3. Good to Great Companies
Company T Year+15 Beat the Market
Abbot 1974-1989 3.98
Curcuit City 1982-1997 18.5
Fannie Mae 1984-1999 7.56
Gillette 1980-1995 7.39
Kimberly-Clark 1972-1987 3.42
Kroger 1973-1988 4.17
Nucor 1975-1990 5.16
Phillip Morris 1964-1979 7.06
Pitney Bowes 1973-1988 7.16
Walgreens 1975-1990 7.34
Wells Fargo 1983-1998 3.99

4. Direct Comparisons
Good to Great Direct Comparisons
Abbot Upjoin
Curcuit City Silo
Fannie Mae Great Western
Gillette Warner-Lambert
Kimberly-Clark Scott Paper
Kroger A&P
Nucor Bethleham Steel
Phillip Morris R.J. Reynolds
Pitney Bowes Addressograph
Walgreens Eckard
Wells Fargo Bank of America

5. Unsustained Comparisons
Burroughs
Chrysler
Harris
Hasbro
Rubbermaid
Teledyne

6. Focus of Research
What's
inside the
Black Box?
Good Results
Great Results!

7. Overview

8. Level 5 Leader

9. Level 5 Leadership
Level 5 Executive
Effective Leader
Competent Manager
Level 5
Level 3
Level 4
Level 2
Level 1
Organizes people and resources toward the effective
and efficient pursuit of predetermined objectives.
Contributing Team Member
Highly Capable Individual
Makes productive contributions through talent,
knowledge, skills, and good work habits.
Contributes individual capabilities to the achievements of group
objectives and works effectively with others in a group setting.
Catalyzes commitment to and pursuit of a clear and compelling
vision, stimulating higher performance standards.
Builds enduing greatness through a paradoxical
blend of personal humility and professional will.
Level 5
Leadership

10. Humility + Will
Level 5
Leadership

11. Level 5 Leaders
 Set up successors for success
 In over 75% of Unsustained Comparison
Companies executives set up their successors
for failure or picked a weak successor
 Insiders: 10 out of 11 Good to Great
CEOs came from within the company, 3
from family inheritance
 High profile, shake-things-up outsiders
negatively correlated with Good to Great
Level 5
Leadership

12. Is Level 5 Learnable?
 2 Kinds of people: those who have
the seed and those who don’t
 Seed may develop under the right
circumstances—self reflection,
conscious personal development, a
mentor, a great teacher, loving
parents, level 5 boss, personal crisis
Level 5
Leadership

13. Why aren’t there more
level 5 leaders?
 There are plenty of
Level 5 leaders,
but Board of
Directors have a
tendency to select
dazzling, celebrity
leaders rather than
Level 5
Level 5
Leadership

14. Symbiotic Relationship
 Level 5 traits enable you to
implement the other findings, while
practicing the other traits helps you
become a Level 5 leader
 We’ve talked about what Level 5
leaders are, the rest of the talk will
be on what they do
Level 5
Leadership

15. First Who…Then What

16. Who or What’s on First
First Who…
Then What

17. Advantages of a Strong
Executive Team
 Continuity and Longevity
 Agility
 Through debate and passion come
up with the best vision of the
company—many heads better than
one
 Debate then Unify
First Who…
Then What

18. The Right People
 People aren’t your most important
asset, the right people are
 Self motivated—don’t need to be
tightly managed or fired up
 Will do the right things and deliver
the best results regardless of the
incentive system
 Negative correlation: Good to Great
executives got slightly less compensation than
their mediocre counterparts First Who…
Then What

19. Rigor
 Tremendous rigor needed in people
decisions to take a company from
good to great
 Greater weight on character
attributes than on a specific
educational background, practical
skills, work experience
First Who…
Then What

20. Rigorous, not Ruthless
 Best people don’t need to worry
about their jobs and can concentrate
on their work
 6 out of 11 Good to Great had no
layoffs and 4 just had 1
 Comparison companies used layoffs 5
times more frequently than Good to
Great companies
 Lead a Great Life
First Who…
Then What

21. How to be Rigorous
 When in doubt, don’t hire—keep
looking
 Act when you know you need to
make a change
 Unfair to everyone to let the wrong
people hang around
 Off the Bus or move to another
seat?
First Who…
Then What

22. Focus on Opportunities
 Put your best people on your biggest
opportunities, not your biggest
problems
 Managing your problems can only
make you good, building your
opportunities can make you great
 When you decide to sell off your
problems don’t sell of your best
people
First Who…
Then What

23. Confront the Brutal Facts

24. Don‘t De-Motivate
 Expending energy on motivating
people is largely a waste of time
 The key is not to de-motivate people
 Nothing more demoralizing than
ignoring the brutal facts of reality
Confront the
Brutal Facts

25. Don‘t De-Motivate
“There is no worse
mistake in Public
Leadership than to
hold out false hopes
soon to be swept way”
Winston S. Churchill
Confront the
Brutal Facts

26. Creating a culture where
the truth can be heard
 Lead with Questions not Answers
 Understanding and not manipulation or put downs
 Engage in dialog and debate—not coercion
 Search for the best answers
 Conduct Autopsies without Blame
 “I will take responsibility for this bad decision. But we
will all take responsibility for extracting the maximum
learning from the tuition we’ve paid” Joe Cullman,
Phillip Morris
 Build a red flag mechanisms that turn
information into information that can’t be
ignored
Confront the
Brutal Facts

27. Level 5 Leadership
 The strength of a leader’s personality doesn’t
deter people from bringing him or her the brutal
facts
 Leadership isn’t just vision, it’s getting people to
confront the brutal facts and act on the
implications
Confront the
Brutal Facts

28. Stockdale Paradox
Retain faith
that you will
prevail in the
end, regardless
of the difficulty
Confront the
most brutal facts
of your current
reality, whatever
they may be
AND at
the same
time

29. Hardiness
 By hitting the realities of their
situation head-on Good-to-Great
emerged from adversity even
stronger
Confront the
Brutal Facts

30. Hedgehog Concept

31. UnconsciousNatural Selection Relativity
Hedgehog Concept
 Simply a complex world into a single organizing
idea
 Essence of profound insight is simplicity E=MC2
 Good to Great took a simple concept and
implemented it with fanatical consistency

32. The Three Circles
What are you deeply
Passionate About
What
you can
be the Best
in the World
at
What
drives your
Economic
Engine
Hedgehog
Concept

33. Being the Best
 Not a goal to be the best
 Not a strategy to be the best
 Not an intention to be the best
 Not a plan to be the best
 Understanding of what you can be the
best at
 Just because you have been doing
something for years your core business
does not necessaryily mean you can be
the best at it
 Curse of competency “Just because your
good at it--just because we’re making

34. A Culture of Discipline
Technology
Accelerators
Culture of
Discipline
Hedgehog
Concept
Confront the
Brutal Facts
First Who…
Then What
Level 5
Leadership
Disciplined People Disciplined Thought Disciplined Action

35. Matrix of Creative Discipline
Heirarchical
Organization
Great
Organization
Bureaucratic
Organization
Start-up
Organization
High
High
Low
Low Ethic of
Entrepreneurship
Culture of
Discipline
Culture of
Discipline

36. Disappointing
Results
Reaction, without
Understanding
New Direction,
Program, Leader,
Event, Fad, or
Acquisition
No Buildup; No
Accumulated
Momentem