Good to Great

BOOK REVIEW GOOD-TO-GREAT

PRESENTED BY:

Syed Shahzad AliBOOK REVIEWGOOD TO GREAT

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INTRODUCTIONAuthor: James Collins

Chapters: Nine

Language: English

Publisher: William Collins

Publication date: October 16, 2001

Media type: Hardcover

Pages: 320

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HISTORY OF AUTHORJames 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.

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FlywheelLevel 5LeadershipFirst WhoThen WhatConfront theBrutal FactsHedgehogConceptCulture ofDisciplineTechnologyAcceleratorsDisciplined PeopleDisciplined ThoughtDisciplined Action

BuildupBreakthroughGood To Great Frame work

GOOD IS THE ENEMY OF GREATThe 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

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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

8Trade key will be next ...........

Research FindingsBased 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

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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.

Research Findings

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BuildupBreakthroughLevel 5LeadershipGood To Great

Brain storming !

Write what are the traits of any company a great company ?

Level 5 Leadership

5Level 5 Executive4Effective Leader3Competent Manager2Contributing Team Member1Highly 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.

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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

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BuildupBreakthroughFirst WhoThen WhatGood To Great

FIRST WHOTHEN WHAT

First who, then whatthe 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 dont 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.

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If you have the wrong people, doesnt matter whether you have the right direction b/c company will still not be great.

Why do it this way?If you have the right people on the bus, problem of motivation and people managing are diminished

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Leaders were rigorous, not ruthless in people decisions.

There are three steps on how the companies can be rigorous:

Dont hire someone unless youre %100 sure that theyre the right person. Its better to wait and get someone that you know is a good fitOnce you realize you need to fire someone, dont 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.


BuildupBreakthroughConfront theBrutal FactsGood To Great

CONFRONT THE BRUTAL FACT(YET NEVER LOSE FAITH)Must create a culture wherein people have an opportunity to be heard the truth.

Having lofty goals can be good, but you can never lose sight of what the reality is on the ground.

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accepted the brutal facts of reality while maintaining an unwavering faith in the endgamethat he would prevail despite the brutal facts.

Who didnt 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.

James Bond Stockdale (December 23, 1923 July 5, 2005)

17 years of prisonment , 22

Stockdale Paradox:

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

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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

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BuildupBreakthroughHedgehogConceptGood To Great

THE HEDGEHOG CONCEPT

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 whats essential, and ignore the rest.

It took an average of four years for the G2G companies to get a Hedgehog Concept

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

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Hedgehog Concept

What you are deeplypassionate about

What you can be the best in the world at

What drives youreconomicengineSimplicitywithinthe three circles One Big Thing

Hedgehog ConceptTheCouncilAll Guided by the Three CirclesAsk QuestionsDialogue &DebateAutopsies& AnalysisExecutiveDecisions

An IterativeProcess

Lets Unite Again.. !!!

What should be the Characteristics of The Council in Great Company ?

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

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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.

Characteristics of the Council

The Council is an informal body, not listed on any formal organization chart or in any formal documents.

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BuildupBreakthroughCulture ofDisciplineGood To Great

Universe follow the discipline.God is Great ..la tabdila la qalimatillah 32

Culture of discipline is not just about action. It is about getting disciplined people who engage in disciplined thought and who then take disciplined action

In a culture of discipline, people do not have jobs ; they have responsibilities.

A CULTURE OF DISCIPLINE

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The Good To Great Matrix of Creative Discipline

HierarchicalOrganization

Start-upOrganization

BureaucraticOrganization

GreatOrganizationHigh Culture ofDiscipline Low Low High Ethic of Entrepreneurship

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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.

Dont 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.

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BuildupBreakthroughTechnologyAcceleratorsGood To Great

Technology AcceleratorsThe 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.

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Technology AcceleratorsThe 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.

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FlywheelLevel 5LeadershipFirst WhoThen WhatConfront theBrutal FactsHedgehogConceptCulture ofDisciplineTechnologyAccelerationsDisciplined PeopleDisciplined ThoughtDisciplined Action

BuildupBreakthrough

FlywheelGood To Great

The Flywheel and the Doom Loop A flywheel is 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.

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The Flywheel EffectThe Flywheel Effect

The Doom Loop

The Doom Loop

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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

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Good To Great Summary