Good To Great By Jim Collins Summary Slides
Good To Great By Jim Collins Summary Slides
Good To Great Companies • Abbott • Circuit City • Fannie Mae • Gillette • Kimberly Clark • Kroger • Nucor • Philip Morris • Pitney Bowes • Walgreens • Wells Fargo
Where Does It All Begin: The Path To Greatness • "Good" is the enemy of "GREAT!" • To become "Great" you must have clear "intention" and focused "attention" on your "intention. " • The Good to GREAT leaders spend a lot more time on long range strategic planning than do their counterparts. • They spend equal amounts of time discovering what to "do", "not to do" and what to "stop doing". • They recruit the "right" people, for with the "right" people on the team, very little if any time is spent motivating or creating alignment among the staff. • GREATNESS is a process of conscious choice. • For transformation to take place you need three ingredients: Disciplined people, disciplined thought, and disciplined action
Characteristics of Good To Great Companies • • • Level 5 Leadership – Level 5 Leaders are not charismatic, media types. Chances are you’ve never heard of them. They are humble, self-effacing and more concerned about the prosperity of the company than their individual success. First Who…Then What – Using a bus analogy, Collins claims that great companies first get great people on the bus, then decide where to drive it. According to Collins, the right people are your most important asset. Confront the Brutal Facts (Yet Never Lose Faith) – Good-to-Great companies maintain unwavering faith that they 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 their current reality – whatever that might be. The Hedgehog Concept (Simplicity within the Three Circles) – Good-to. Great companies do what they can do best (as opposed to what they want to do best), what they are deeply passionate about, and they focus on what drives their economic engine. A Culture of Discipline – Having a disciplined culture is the opposite of having a controlled one. There is no need for hierarchy, bureaucracy, or excessive control. Technology - None of the Good To Great executives put technology as one of their top 5 drivers. None of them jumped on the. com bandwagon out of panic. All of them took a cautious approach as to how technology can already help them do what they do well even better.
Good to Great: Level Five Leadership Level 5 Executive Builds enduring greatness through a paradoxical blend of humility and professional will Level 4 Effective Leader Catalyzes commitment to and vigorous pursuit of a clear and compelling vision, stimulating higher performance standards Level 3 Competent Manager Organizes people and resources toward the effective and efficient pursuit of predetermined objectives Level 2 Contributing Team Member Contributes individual capabilities to the achievement of group objectives and works effectively with others in a group setting Level 1 Highly Capable Individual Makes productive contributions through talent, knowledge, skills and good work habits
Good to Great: First who…then what • Three simple truths: – If you begin the “who” rather than the “what, ” you can more easily adapt to a changing world. – If you have the right people on the bus, the problem of how to motivate and manage people largely goes away. – If you have the wrong people, it doesn’t matter whether you discover the right direction – you still won’t have a great company.
Good to Great: First who…then what • When in doubt, don’t hire: – No company can grow revenues consistently faster than its ability to get enough of the right people to implement that growth and still become a great company. • When you know you need to make a people change, act : – The moment you feel the need to tightly manage someone, you’ve made a hiring mistake. The best people don’t need to be managed…Guided, taught, led, yes, but not tightly managed. Letting the wrong people hang around is unfair to all the right people, who often find themselves compensating for the wrong people’s inadequacies. Get the wrong people off the bus. • Put your best people on your biggest opportunities, not your biggest problems – Many companies think that putting their best people in bad situations will help turn the bad situation around. While this sometimes works to everyone’s advantage, managers who do so fail to grasp the fact that managing your problems can only make you good. Building opportunities is the only way to become great.
Good to Great: First who…then what Elements That Help You Select The Right People for the Bus – – – The person shares the core values of the kind of company you're trying to build. You can't give someone your core values and you can't teach them. The people you want on the bus are those who resonate with your core values the moment they walk in the door. The right people don't need to be tightly managed. Guided, taught, led -- yes. But not managed. The moment you feel the need to tightly manage someone, you've probably made a hiring mistake. The individual has exceptional capability, defined as "the ability to become one of the best in the industry in their position of responsibility. " They don't currently have to be the best, but do they have that potential? The person understands the difference between holding a job and holding a responsibility. People who understand that they have a responsibility view their job in a much larger perspective than just getting paid to do what they do. They exhibit an almost neurotic concern for following through on whatever they're responsible for. Given everything you know about a current employee, would you hire them again? Just because someone is already on the bus doesn't mean they belong there. If you would not hire someone again, why allow them to remain on the bus? Source: TEC Interview
Good to Great: Confront The Brutal Facts by Letting the Truth Be Heard • Lead with questions, not answers – Have the humility to grasp the fact that you do not yet understand enough to have the answers • Engage in dialogue and debate, not coercion – Dialogue is used to engage people in the search for the best answers, not a sham to let people “have their say” • Conduct autopsies, without blame – Take an honest look at decisions made • Build red flag mechanisms that turn information into information that cannot be ignored. – Give people ample opportunities to provide unfiltered information and insight that can act as an early warning for potentially deeper problems.
Good To Great: The Hedgehog Concept Picture two animals: a fox and a hedgehog. Which are you? An ancient Greek parable distinguishes between foxes, which know many small things, and hedgehogs, which know one big thing. All good-to-great leaders, it turns out, are hedgehogs. They know how to simplify a complex world into a single, organizing idea -- the kind of basic principle that unifies, organizes, and guides all decisions. That's not to say hedgehogs are simplistic. Like great thinkers, who take complexities and boil them down into simple, yet profound, ideas ( Adam Smith and the invisible hand, Darwin and evolution ), leaders of good-to-great companies develop a Hedgehog Concept that is simple but that reflects penetrating insight and deep understanding.
Good to Great: The Hedgehog Concept A simple concept that flows from deep understanding about these three dimensions… What are you deeply Passionate About What you can be the best in the world at What drives your economic engine
Good to Great: A Culture of Discipline • 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 tyrannical disciplinarian – Adhere with great consistency to the Hedgehog Concept, exercising an almost religious focus on the intersection of the three circles
Good to Great: Technology Acceleration • Find the right technologies – Avoid the bandwagons and become pioneers in carefully selected technologies. • Don’t overreact to new technology – Act in terms of what they want to create and how to improve their companies, relative to an absolute standard of excellence – Those organizations that stay true to their fundamentals and maintain their balance will accumulate the momentum required to break through.
Good to Great: The Flywheel and The Doom Loop You’re on the Flywheel if: • Follow a pattern of buildup, leading to breakthrough • Confront the brutal facts to see what steps must be taken to build momentum • Attain consistency with a clear Hedgehog Concept, staying within the three circles • Follow the pattern of disciplined people, thought and action • Harness appropriate technologies to your Hedgehog Concept, to accelerate momentum • Spend little energy trying to motivate or align people; the momentum of the flywheel is infectious
Good to Great: The Flywheel and The Doom Loop You’re in the Doom Loop if: • Skip buildup and jump start right into breakthrough • Implement big programs, radical change efforts, dramatic revolutions and chronic restructuring • Embrace fads and engage in management hoopla, rather than confront the brutal facts • Demonstrate chronic inconsistency, lurching back and forth and straying outside three circles • Jump right into action, without disciplined thought, or first getting the right people on the bus • Spend a lot of energy trying to align and motivate people, rallying them around new visions • Sell the future to compensate for lack of results in the present
Good to Great: Summary Comments • Celebrity executives almost never lead good companies to greatness. Good-to-Great leaders embody a paradoxical mix of personal humility and professional will. • You can’t achieve great things without great people. Many companies create strategy, then try to rally people around it; good-togreat companies start with great people and build great results from their efforts. • Simplicity rules. To go from good to great requires leaders to know what their organizations are passionate about, what drives their economic engine, and at what they can (and cannot) be the best in the world. • Enterprise-wide discipline is essential. When you combine a culture of discipline with an ethic of entrepreneurship, you are more likely to achieve great results. • Technology is an accelerator. Good-to-great companies do not jump on technological bandwagons or chase after fads. They determine what technology makes the most sense for them, then pioneer its application.
Good to Great: Sustaining Greatness (Enduring Principles From Built To Last) • Preserve: Core Ideology and Core Values • Change: Cultural and Operating Practices and Specific Goals and Strategies • BHAG's Big Hairy Audacious Goals (Good and BAD) • Clock Building, not Time Telling (never build around a single leader, build an organization that can endure) • Genius of AND, embrace a number of dimensions AND profit, continuity AND change, freedom AND responsibility, etc.
Questions?
Ed Robinson President & Founder Capacity Building Solutions Inc. 301/624 -5686 robin_ed@capacity-building. com
- Slides: 19