Book Review: Good to Great : Why some companies make the leap and others don't

2. Good to Great
Buildup
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Level 5 First Who… Confront the Hedgehog Culture of Technology
Leadership Then What Brutal Facts Concept Discipline Accelerators
Disciplined People
Disciplined Thought
Disciplined Action

3. Good to Great
Buildup
Level 5 First Who…
Level 5
Leadership
LeadershipThen What
Disciplined People
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Confront the Hedgehog Culture of Technology
Brutal Facts Concept Discipline Accelerators
Disciplined Thought
Disciplined Action

4. Level 5 Leadership
LEVEL 5
Level 5 Executive Leader
LEVEL 4
Effective Leader
LEVEL 3
Competent Manager
LEVEL 2
Contributing Team Member
LEVEL 1
Highly Capable Individual

5. Characteristics of Level 5 Leadership
 Personal Humility + Professional Will
 Set up successors for even greater success
 Compelling modesty, self-effacing, understated
 Fanatically driven to produce sustainable results
 More plow horse than show horse
 Attribute success to other than themselves
 Look in mirror and take full responsibility for poor
decisions

6. Good to Great
Buildup
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Level 5 First Who…
First Who… Confront the Hedgehog Culture of Technology
Leadership Then What Brutal Facts Concept Discipline Accelerators
Then What
Disciplined People
Disciplined Thought
Disciplined Action

7. First Who . . . Then What
 Leaders began the
transformation by first getting
the right people on the bus (and
the wrong people off the bus).
 Then figure out “What” is the
destination
Why do it this way?
• Begin with “who” instead of “what, can more easily adapt to a
changing world
• If you have the right people on the bus, problem of motivation
and people managing are diminished
• If you have the wrong people, doesn’t matter whether you have
the right direction because company will still not be great

8. First Who . . . Then What (Cont.)
 Leaders are rigorous, not ruthless in people decisions.
 Three practical disciplines for being rigorous:
1) When in doubt, don’t hire
2) When you know you need to make a people decision,
act quickly
3) Put your best people on your best opportunities, not
biggest problems
Example:
David Maxwell (CEO, Fannie Mae) made it absolutely clear that
there would only be seats for A players who were willing to put
forth an A+ effort, and if you weren’t up for it, you had better get
off the bus, and get off now.

9. Good to Great
Buildup
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Confront the
Level 5 First Who… Confront the Hedgehog Culture of Technology
Leadership Then What BrutalFacts Concept Discipline Accelerators
Brutal Facts
Disciplined People
Disciplined Thought
Disciplined Action

10. Confront the Brutal Facts
 Setting off on the path
to greatness requires
confronting the brutal
facts of current reality.
 Must create a culture
wherein people have a
tremendous opportunity
to be heard and,
ultimately, for the truth
to be heard.

11. Confront the Brutal Facts
 Four basic practices:
 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

12. Confront the Brutal Facts
 Stockdale Paradox:
Retain absolute faith
that you can and will
prevail in the end,
regardless of the
difficulties
AND at the same time
confront the most brutal
facts of your current
reality, whatever they
might be.

13. Good to Great
Buildup
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Hedgehog
Level 5 First Who… Confront the Hedgehog Culture of Technology
Leadership Then What Brutal FactsConcept Discipline Accelerators
Concept
Disciplined People
Disciplined Thought
Disciplined Action

14. Hedgehog Concept
 Hedgehogs simplify a
complex world into a
single organizing idea, a
basic principle or
concept that unifies and
guides everything.
 Hedgehogs see what is
essential, and ignore the
rest.

15. Hedgehog Concept
What you are deeply
passionate about
What you can
be the best in
the world at
Simplicity
within
the three
circles
What drives
your
economic
engine

16. Hedgehog Concept
 Getting the Hedgehog Concept takes an
average of four years.
 It is an iterative process by The Council:
 The right people
 Engaged in vigorous
dialogue and debate
 Infused with the
brutal facts
 Guided by questions
formed by the three
circles

17. Hedgehog Concept
All Guided by
the Three Circles
Autopsies
& Analysis
Ask Questions
The
Council
Executive
Decisions
An Iterative
Process
Dialogue &
Debate

18. Good to Great
Buildup
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Culture of
Level 5 First Who… Confront the Hedgehog Culture of Technology
Leadership Then What Brutal Facts Concept Discipline
Discipline Accelerators
Disciplined People
Disciplined Thought
Disciplined Action

19. Culture of Discipline
 Getting disciplined people who
engage in disciplined thought and
who then take disciplined action,
fanatically consistent with three
circles
 Not about a tyrant who disciplines
 Involves a duality.
 Requires people who adhere to a
consistent system.
 Gives people freedom and
responsibility within framework of
that system.

20. Culture of Discipline (Cont.)
 Includes willingness to shun opportunities that fall outside
the three circles.
 Budgeting is to decide which arenas fit Hedgehog Concept
and should be fully funded and which should not be
funded at all.
 “Stop doing” lists are more
important than “to do” lists.
 “Anything that does not fit with
our Hedgehog Concept, we will
not do.”

21. Good to Great
Buildup
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Technology
Level 5 First Who… Confront the Hedgehog Culture of Technology
Leadership Then What Brutal Facts Concept Discipline Accelerators
Accelerators
Disciplined People
Disciplined Thought
Disciplined Action

22. Technology Accelerators
 Good-to-greats avoid technology fads and
bandwagons.
 Yet they often become pioneers in the
application of carefully selected
technologies.
 Does it fit directly with
your Hedgehog Concept?
 Good-to-greats used
technology as an
accelerator of momentum,
not a creator of it.

23. Technology Accelerators
 Technology by itself is never a root cause of
either greatness or decline.
 “Crawl, walk, run”
can be a very
effective approach,
even during times of
rapid and radical
technological
change.

24. Good to Great
Buildup
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Level 5 First Who… Confront the Hedgehog Culture of Technology
Leadership Then What Brutal Facts Concept Discipline Accelerations
Disciplined People
Disciplined Thought
Disciplined Action
Flywheel

25. The Flywheel
 Good-to-great transformations
never happened in one fell swoop.
 There was no single defining action, no grand program,
no one killer innovation, no solitary lucky break, no
miracle moment.
 Instead they followed a predictable pattern of buildup
and breakthrough.
 Like pushing on a giant, heavy flywheel, it takes a lot of
effort to get the thing moving at all, but . . .
 With persistent pushing . . .
 In a consistent direction . . .
 Over a long period of time . . .

26. Two Popular Doom Loops to be Avoided
1) Misguided use of acquisitions—making
deals for the sake of making deals.
•
•
•
“When the going gets tough, we go
shopping!”
G2G companies did acquisitions after the
Hedgehog Concept and after the flywheel had
significant momentum.
Acquisitions are accelerators not creators of
flywheel momentum.
1) Leaders who stop the flywheel—leaders
who step in, stop an already spinning
flywheel, and throw the organization in
entirely different direction.

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