Good To Great
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The document outlines the key concepts from Jim Collins' "Good to Great" framework for taking a company from good to great. It discusses having Level 5 leadership, getting the right people on the bus, confronting brutal facts, having a clear Hedgehog concept, building a culture of discipline, creating momentum like a flywheel, preserving the core values while stimulating progress, and building the organization to last beyond any single leader. The framework provides a systematic approach for companies to transform performance through disciplined people and thought.
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Good To Great
- 1. Good to Great Framework
- 2. Good to Great Disciplined People Level 5 Leadership First Who…Then What Disciplined Thought Confront the Brutal Facts The Hedgehog Concept Disciplined Action Culture of Discipline The Flywheel Building Greatness to Last Preserve the Core/Stimulate Progress Clock Building, Not Time Keeping
- 3. Good to Great Framework Disciplined People Level 5 Leadership
- 4. Good to Great Disciplined People Level 5 Leadership First Who…Then What Disciplined Thought Confront the Brutal Facts The Hedgehog Concept Disciplined Action Culture of Discipline The Flywheel Building Greatness to Last Preserve the Core/Stimulate Progress Clock Building, Not Time Keeping
- 5. Disciplined People Leaders & Workers All good-to-great companies had a “Level 5” leader at the time of their transition
- 7. Level 5 Leadership Concern for the success of an institution is more important than individual riches or prominence (successors) Leaders are still ambitious but it is directed towards their organizations and not themselves! Blend Humility & Will Both modest & determined; humble & fearless
- 8. Level 5 Training Be Modest! Lose the idea of being a larger-than-life hero No pedestal
- 10. Unwavering Resolve Determination to do whatever needs to be done
- 11. Window & Mirror
- 12. Cultivating L-5 Leadership Exists all around us…we just don’t know what to look for Start by practicing the other 4 leadership levels Self reflection, conscious personal development, mentors, a Level-5 Boss
- 13. Good to Great Framework Disciplined People First Who…Then What
- 14. Good to Great Disciplined People Level 5 Leadership First Who…Then What Disciplined Thought Confront the Brutal Facts The Hedgehog Concept Disciplined Action Culture of Discipline The Flywheel Building Greatness to Last Preserve the Core/Stimulate Progress Clock Building, Not Time Keeping
- 15. First WHO…Then What GET THE RIGHT PEOPLE ON THE BUS!
- 16. First Who…Then What If people join the bus because of where it’s going what happens when it needs to change directions? Great vision without great people is pointless Hire outstanding people when you find them, even without a specific job in mind Get the best people, build the best managers, and accept their recruitment
- 17. David Maxwell (Fannie Mae) “I don’t know where we should take this company, but I do know that if I start with the right people, ask them the right questions, and engage them in vigorous debate, we will find a way to make this company great.”
- 18. First Who Then What Focusing on “what” before “who” = L-4 Leadership 1 Genius with 1,000 workers Does not work! It’s not how you compensate your executives, it’s about which executives you have to compensate in the first place
- 19. Compensation therefore is only important in the sense that it help attract and retain the “right” people, and should not be used to get the “right” behaviors from the wrong people People are NOT the most important asset; The “right” people are
- 20. Be Rigorous not Ruthless Apply challenging standards at all times and at all levels (especially upper management) If people are not going to work on the bus they shouldn’t be kept acquisitions The way to reward people who do achieve is by not burdening them with the people who are not achieving If they’re not going to make it on the bus, don’t let them suffer (ruthless); deal with it right up front and let people move on (rigor)
- 21. How to Be Rigorous When in doubt, don’t hire but keep looking Disciplined hiring practices When you know you need to make a personnel change, act Use your best for big opportunities, not problems
- 22. The “RIGHT” Person More about character traits and innate capabilities than their specific knowledge, background, or skills
- 23. Good to Great Framework Disciplined Thought Confront the Brutal Facts
- 24. Good to Great Disciplined People Level 5 Leadership First Who…Then What Disciplined Thought Confront the Brutal Facts The Hedgehog Concept Disciplined Action Culture of Discipline The Flywheel Building Greatness to Last Preserve the Core/Stimulate Progress Clock Building, Not Time Keeping
- 25. Good to Great Companies Confront the Brutal Facts There is no worse mistake in public leadership than to hold out false hopes soon to be swept away . -Winston S. Churchill
- 26. Distinctive Decision Making Process Great Companies did not stumble upon good decisions - Disciplined thought process Entire process infused with the brutal facts of reality
- 27. Truth Seeking When you start with an honest and diligent effort to determine the truth of a situation the “right” decision often becomes self-evident.
- 28. Create a climate of truth Lead with questions, not answers . Socratic- Why? Argyris and Schon- double-loop learning
- 29. 2. Engage in dialogue and debate, not coercion Encourage raging, passionate discussion aimed at finding the best answer.. NOT just letting people “have their say” in a predetermined decision.
- 30. 3. Conduct Autopsies, without blame Dive into the situation, find out what went wrong, take responsibility, learn from the mistakes, and move on.
- 31. Build “red flag” mechanisms Real time information that can not be ignored.
- 32. The Stockdale Paradox Retain faith that you will prevail in the end, regardless of the difficulties. Confront the most brutal facts of your current reality whatever they might be. AND
- 33. Great Companies “ N ever confuse faith that you will prevail with the discipline to confront the brutal facts of your current reality.” Admiral Stockdale
- 34. Good to Great Framework Disciplined Thought The Hedgehog Concept
- 35. Good to Great Disciplined People Level 5 Leadership First Who…Then What Disciplined Thought Confront the Brutal Facts The Hedgehog Concept Disciplined Action Culture of Discipline The Flywheel Building Greatness to Last Preserve the Core/Stimulate Progress Clock Building, Not Time Keeping
- 36. The Hedgehog & The Fox Isaiah Berlin – “The Fox is cunning and good at many different things. The Hedgehog is a simple dowdy creature that knows one big thing.”
- 37. The Three Intersecting Circles
- 38. Key Points Understand what your organization can be or is the best at If you cannot be the best at your core business, then your core business cannot be the center of your Hedgehog Concept You may be competent in one area but not the best in the world at it-the converse may also be true To understand what drives your economic engine, search for the one denominator that has the single greatest impact
- 39. The Council
- 40. Key Points A process to help understand important issues concerning the organization The Council is put together by the leading executive and usually consists of 5 to 12 people Encourages debate & respect for all members and their points of view Members come from all parts of the organization Each member has an in depth knowledge of some aspect of the organization and/or the environment it operates in The Council is a standing body-not an ad hoc committee assembled for a particular project or task Meets periodically
- 41. “ A Hedgehog Concept is not a goal to be the best, a strategy to be the best, an intention to be the best, a plan to be the best. It is an understanding of what you can be the best at. The distinction is absolutely crucial” Jim Collins, Good to Great
- 42. Good to Great Framework Disciplined Action Culture of Discipline
- 43. Good to Great Disciplined People Level 5 Leadership First Who…Then What Disciplined Thought Confront the Brutal Facts The Hedgehog Concept Disciplined Action Culture of Discipline The Flywheel Building Greatness to Last Preserve the Core/Stimulate Progress Clock Building, Not Time Keeping
- 44. Culture of Discipline Focus on your Hedgehog Build a System of Freedom and Responsibility within a Framework Manage the System, Not the People Practice Extreme Commitment
- 45. Culture of Discipline Focus on your Hedgehog Have the discipline to say “NO” Do not lurch after growth, grow consistently within your hedgehog Willingness to jettison competencies/business if you cannot be the best Make excellent use of “stop doing” lists
- 46. Culture of Discipline Build a System of Freedom and Responsibility within a Framework People do not have jobs, they have responsibilities and grasp the distinction Cultural duality, the “genius of the and” E.g. freedom and responsibility, discipline and entrepreneurship, rigor and creativity, focused hedgehog and adaptable.
- 47. Culture of Discipline Manage the System, Not the People Recruit self-motivated and self-disciplined people Provide an environment that does not de-motivate Avoid bureaucracy and unnecessary rules
- 48. Culture of Discipline Practice Extreme Commitment Willingness to go to extremes to fulfill commitments and deliver results Equally disciplined in good-times as in bad
- 49. Good to Great Framework Disciplined Action The Flywheel
- 50. Good to Great Disciplined People Level 5 Leadership First Who…Then What Disciplined Thought Confront the Brutal Facts The Hedgehog Concept Disciplined Action Culture of Discipline The Flywheel Building Greatness to Last Preserve the Core/Stimulate Progress Clock Building, Not Time Keeping
- 51. The Flywheel Build cumulative momentum Be relentlessly consistent over time Create alignment by results, not hoopla Avoid the doom loop
- 52. The Flywheel Build cumulative momentum greatness a cumulative process, step-by-step, day-by-day, week-by-week not accomplished by any single action, innovation, acquisition, technology, or “white horse”
- 53. The Flywheel Be relentlessly consistent over time exhibit consistency of purpose, values, hedgehog, high standards, people, etc. interlocking pieces, consistently applied, reinforce one another flexibility and adaptability within the context of coherent hedgehog
- 54. The Flywheel Create alignment by results, not hoopla undersell and over-deliver do not “sell” the future people jump on board as momentum builds
- 55. The Flywheel Avoid the doom loop do not succumb to silver bullet solutions do not lurch pioneer technology only if it advances our hedgehog
- 56. Good to Great Framework Building Greatness to Last Preserve the Core
- 57. Good to Great Disciplined People Level 5 Leadership First Who…Then What Disciplined Thought Confront the Brutal Facts The Hedgehog Concept Disciplined Action Culture of Discipline The Flywheel Building Greatness to Last Preserve the Core/Stimulate Progress Clock Building, Not Time Keeping
- 58. Preserve the Core Articulate a Core Philosophy/Values Change and Improve Everything Except Core Values Create a Passionate Culture that Preserves Core and Stimulates Progress Achieve BHAGs, Big Hairy Audacious Goals
- 59. Preserve the Core Articulate a core philosophy/values Core values are inviolate, regardless how the world or people change Held even if they become competitive disadvantage Reflect an enduring passion or mission beyond making money
- 60. Preserve the Core Change and Improve Everything Except Core Values Clear on difference between core values and practices, norms, strategies and tactics Stimulate change, improvement, innovation and renewal surrounding core Core should be limited to no more than six values
- 61. Preserve the Core Create a passionate culture that preserves core and stimulates progress Culture consistently reinforces core Promote leaders who live core Core values evidenced everywhere Productively “neurotic,” obsessive focus on shortcomings
- 62. Preserve the Core Achieve BHAGs, big hairy audacious goals Rarely fall short of extreme standards of performance Multi-year BHAGs with intermediate objectives Set with understanding not bravado and in alignment with hedgehog
- 63. Preserve the Core Achieve BHAGs, big hairy audacious goals Rarely fall short of extreme standards of performance Multi-year BHAGs with intermediate objectives Set with understanding not bravado and in alignment with hedgehog
- 64. Good to Great Framework Building Greatness to Last Clock Building, Not Time Keeping
- 65. Good to Great Disciplined People Level 5 Leadership First Who…Then What Disciplined Thought Confront the Brutal Facts The Hedgehog Concept Disciplined Action Culture of Discipline The Flywheel Building Greatness to Last Preserve the Core/Stimulate Progress Clock Building, Not Time Keeping
- 66. Clock Building, Not Time Keeping System independence, great beyond a single leader or idea Create catalytic mechanisms Manage for the quarter century
- 67. Clock Building, Not Time Keeping System independence, great beyond a single leader or idea build a team of strong individuals build a culture of discipline hold leaders accountable for success of successors
- 68. Clock Building, Not Time Keeping Create catalytic mechanisms “red flag” mechanisms in place mechanisms to force continuous improvement mechanisms cannot easily be subverted a “council” plays a key role in decision-making
- 69. Clock Building, Not Time Keeping Manage for the quarter century build for long-term greatness, ignore short-term pressure leaders measure success by successors performance as much as their own
- 70. Good to Great Framework In Conclusion…
- 71. Good to Great Disciplined People Level 5 Leadership First Who…Then What Disciplined Thought Confront the Brutal Facts The Hedgehog Concept Disciplined Action Culture of Discipline The Flywheel Building Greatness to Last Preserve the Core/Stimulate Progress Clock Building, Not Time Keeping