Good to GreatCh 9: From Good to Great to Build to Last

Sterling RoseJustin SimpsonKrista WellsGwen SingletonWayni Hebert

Four Conclusions

• Jim Collins co-authored “Built to Last”

• They compared their findings from “Built to Last” and “Good to Great” and formed 4 conclusions

Four Conclusions

• The great companies from “built to Last” followed the good to great framework but did so as entrepreneurs in small, early stage businesses instead of CEOs of established companies

• “Good to Great” is a prequel to “Built to Last”

• To establish yourself as a company with iconic stature, discover your core values and purpose beyond just making money and combine with the dynamic of preserve the core/stimulate progress

• The ideas from each book enrich and inform the ideas of the other. What is the difference between a good and bad BHAG

Good to Great in the Early Stages of Built to Last

• During the formative years, great companies went through a process of buildup to breakthrough, fallowing the good to great framework

• Sam Walton and Wal-Mart• Entrepreuneur building a great company

instead of a CEO transforming an established company (Conclusion 1)

• Hewlett-Packard• Founding concept started with who instead of

what

Core Ideology: The Extra Dimension of Enduring

Greatness

• In 1950s HP adapted and operated under core values. The “HP Way”.

• These values were:

• Technical contribution

• Respect for the individual

• Responsibility to the community

• Belief that profit is not the fundamental goal

The Extra Dimension…..

• HPs “core ideology” is the key factor in transitions from good to great to built to last.

• The core ideology consists of core values and core purpose. Profit??

• Great companies don’t exist for the sole purpose of profit, but to establish healthy company.

• Profits and cash flows are absolute necessity but not the point of been in business.

The Extra Dimension…..

• Merck developed and distributed a drug that cured river blindness free of charge in Amazon. Did they do it for profit?

• “we try to remember that medicine is for the patient..not for profits, profit follows.”

• There are no right core values for becoming lasting great company.

The Extra Dimension…..

• There are great companies that don’t have that one great core value.

• A company doesn’t need to be social responsible, passionate for its customers, respect for individual or quality advocator.

• What kind core values a company follows don’t matter; having one does.

• Have core values, know them, build them into the organization, preserve them overtime.

The Extra Dimension…..

• Preserve your core ideology and stimulate progress.

• Adapt to a changing world through business strategies and operating practices while preserving your core values.

Ex. Walt Disney - preserve “Disney Magic”, creative imagination, attention to detail

McDonalds- Quality, Service, Cleanliness and Value, honesty and integrity.

• holding core ideology fixed, while changing strategies & practice over time leads to long lasting greatness.

Concepts in Good to Great

• Level 5 leadership

• First Who…Then What

• Confront the Brutal Facts (Stockdale Paradox)

• Hedgehog Concept

• Culture of Discipline

• Technology Accelerators

• Flywheel, Not Doom Loop

Level 5 Leadership

• Clock Building, Not Time Telling: Level 5 leaders build a company that can tic along without them

• Genius of AND: Personal humility AND professional will

• Core Ideology: Level 5 leaders have a sense of purpose beyond their own success

• Preserve the Core/Stimulate Progress: Level 5 leaders are relentless in stimulating progress toward tangible results and achievement

First Who… Then What

• Clock Building, Not Time Telling: “First who” is clock building, “First what” is time telling

• Genius of AND: Right people on the bus AND the wrong people off the bus

• Core Ideology: “First who” involves selecting people based on their fit with the core values

• Preserve the Core/Stimulate Progress: Practicing “first who” means a bias for promoting from within

Confront the Brutal Facts

• Clock Building, Not Time Telling: creating a climate where the facts are heard is clock building

• Genius of AND: Confront brutal facts AND retain unwavering faith

• Core Ideology: Confronting the brutal facts clarifies the values an organization truly holds as core versus those that it would like to

• Preserve the Core/Stimulate Progress: Brutal facts clarify what must be done to stimulate progress

Hedgehog Concept

• Clock Building, Not Time Telling: The council mechanism is consummate clock building

• Genius of AND: Deep understanding AND incredible simplicity

• Core Ideology: The “what you are passionate about” circle overlaps with core values and purpose

• Preserve the Core/Stimulate Progress: Good BHAGs flow from understanding; bad BHAGs flow from bravado.

Culture of Discipline

• Clock Building, Not Time Telling: Building an enduring culture of discipline is clock building

• Genius of AND: Freedom AND responsibility

• Core Ideology: A culture of discipline ejects those who do not share the values and standards of an organization

• Preserve the Core/Stimulate Progress: When you have a culture of discipline, you can give people more freedom to experiment and find their own best path to results

Technology Acceleration

• Clock Building, Not Time Telling: Technology accelerators are a key part of the clock

• Genius of AND: Shun technology fads AND pioneer the application of technology

• Core Ideology: Technology is subservient to core values

• Preserve the Core/Stimulate Progress: The right technologies accelerate momentum in the flywheel

Flywheel, Not Doom Loop

• Clock Building, Not Time Telling: The flywheel effect creates the sustained building of momentum

• Genius of AND: Evolutionary, incremental process AND revolutionary, dramatic results

• Core Ideology: The doom loop makes it almost impossible to instill core values and purpose

• Preserve the Core/Stimulate Progress: The smooth flywheel and building of momentum create the perfect conditions for instilling core values while stimulating change and progress

BHAGs & the three circles of the Hedgehog Concept

• BHAGs (“Big Hairy Audacious Goal”)• A huge and daunting goal that serves as a

unifying focal point of effort.

• Hedgehog Concept• What are you deeply passionate about? • What can you be the best in the world at?• What drives your economic engine?

Bad BHAGs vs. Good BHAGs

• Bad BHAGs• goals set with bravado

• Good BHAGs• goals set with understanding

• When you combine quiet understanding of the three circles with the audacity of a BHAG, you get a powerful mix.

Boeing

• Boeings BHAG was not random, it made sense within the context of the three circles.

• To remain great over time requires……..1. staying squarely with in the three circles

2. being willing to change the specific manifestation of what's inside the three circles at any given moment.

• Boeing never left the three circles or abandoned its core ideology.

• It created an exciting new BHAG and adjusted its hedgehog concept to include commercial aircraft.

Creating Greatness that Lasts

• Requires all the key concepts from Good to Great & Built to Last, applied consistently over time.

• If you ever stop doing any one of the key ideas, your organization will inevitably slide backward toward mediocrity.

• It is much easier to become great then to stay great.

• Consistent application of both studies, Good to Great & Built to Last, gives the best chance for greatness that lasts.

Why Greatness?

• Greatness doesn’t depend on size.• “…I don’t really want to build a huge company…”• Set a standard.• Ex) generate the highest profit per foot of space

• It is no harder to build something great than to build something good.• “..why should I try to build a great company? What if

I just want to be successful?”• Much of what we’re doing is at best a waste of

energy. Don’t “add” these findings to what we are already doing to make ourselves more overworked.

Why Greatness?

• We run best at the end

• What we don’t waste time on

• Leadership and Teamwork; accountability

• “First, who.” – the right ‘who’.

• People want to be a part of the spinning flywheel – the championship team

Why Greatness?

• Not everyone can be above average

• Meaningful work• All that matters is that you do love [what you

do] and that you do care.

• Perhaps your quest to be part of building something great will not fall in your business life.

Why Greatness?

• The real question is not, “Why greatness?” but “what work makes you feel compelled to try to create greatness?”

• If you have to ask, “isn’t success enough?” then you’re probably engaged in the wrong line of work.

• When all these pieces come together, not only does your work move toward greatness, but so does your life. For, in the end, it is impossible to have a great life unless it is a meaningful life.