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Book Summary: Good To Great
Find out what the transformation of a company depends on
from mediocre to excellent. Based on solid evidence and volumes of
data, the author of the book (Jim Collins) and his team discover
timeless principles of how good and big companies like it
Abbott, Circuit City, Fannie Mae, Gillette, Kimberly-Clark,
Kroger, Nucor, Philip Morris, Pitney Bowes, Walgreens e
Wells Fargo has delivered great sustained and achieved results
lasting greatness, evolving into companies that really were
‘Built to last’.
The Collins team selected 2 sets of comparison companies:
a. Direct Comparisons – Same-Industry Companies with Same Resources and Opportunity as Good to Great Group but No Performance Improvements i.e. Upjohn, Silo, Great Western, Warner-Lambert, Scott Paper, A&P, Bethlehem Steel, RJ Reynolds, Addressograph , Eckerd and Bank of America.
b. Unsustainable Comparisons – Companies that made a short-term transition from good to great but failed to maintain trajectory, ie: Burroughs, Chrysler, Harris, Hasbro, Rubbermaid, and Teledyne
Wisdom in a nutshell:
a. Ten out of eleven good to very good leaders or CEOs of companies were from within. They weren’t outsiders hired to “save” the company. They were people who worked for many years in the company or were members of the family that owned the company.
b. The strategy by itself did not separate good companies from peer groups.
c. Good to great companies focus on what not to do and what they should stop doing.
d. Technology has nothing to do with the transformation from good to great. It can help speed it up but it is not the cause.
And. Mergers and acquisitions do not result in a transformation from good to great.
f. Good to great companies paid little attention to managing change or motivating people. Under the right conditions, these problems naturally disappear.
g. The good to great transformations didn’t need any new names, taglines, or launch schedules. The leap was in performance results, not a revolutionary process.
h. Greatness is not a function of circumstances; it is clearly a matter of conscious choice.
I. Every good to great company had “Level 5” leadership during the crucial transition years, where Level 1 is a highly capable individual, Level 2 is a contributing team member, Level 3 is the competent manager , Level 4 is an effective leader and Level 5 is the Executive who builds lasting greatness through a paradoxical blend of personal humility and professional will.
j. Level 5 leaders display an irresistible modesty, are self-effacing and unobtrusive. In contrast, two-thirds of the comparison companies had leaders with gargantuan personal egos that contributed to the company’s demise or continued mediocrity.
K. Level 5 leaders are fanatically driven, infected with an incurable need to produce lasting results. They are determined to do whatever it takes to make the company great, no matter how big or difficult the decisions.
L. One of the most damaging trends in recent history is the tendency (especially of boards of directors) to screen dazzling and famous leaders and to de-screen potential Level 5 leaders.
m. Potential Level 5 leaders exist all around us, we just need to know what to look for.
no. The research team wasn’t looking for Level 5 leadership, but the data was overwhelming and compelling. The discovery of Level 5 is an empirical discovery, not an ideological one.
or. Before answering the “what” questions of vision and strategy, first ask “who” the right people are for the team.
p. Comparison companies used layoffs far more than good to big companies. Though rigorous, good to great companies have never been ruthless and have not relied on layoffs or restructurings to improve performance.
q. Good to great management teams are made up of people who argue vigorously in search of the best answers, but who unite behind the decisions, regardless of provincial interests.
r. There is no link between executive pay and going from good to great. The purpose of compensation is not to “motivate” the right behaviors from the wrong people, but to get and keep the right people in the first place.
S. The old adage “People are your greatest asset” is wrong. People are not your most important asset. The right people are.
t. Whether someone is the right person has more to do with character and innate abilities than with specific knowledge, skills, or experience.
you. The concept of the hedgehog is a concept that arises from the deep understanding of the intersection of the following three circles:
1. What you can be the best in the world at, realistically, and what you can’t be the best in the world at
2. What drives your economic engine
3. What are you deeply passionate about
v. Discover your core values and your purpose beyond just making money and combine this with the dynamic of preserving core values - spurring progress, as shown for example by Disney. They’ve evolved from making animated shorts, to feature films, to theme parks, to cruises, but their core values of delivering happiness to young and old and not succumbing to cynicism remain strong.
w. Large enduring companies don’t exist just to deliver returns to shareholders. In a really big company, profits and cash flow are absolutely essential to life, but they’re not the real point of life.
“IF YOU ARE DOING SOMETHING YOU DEEPLY INTEREST IN AND BELIEVE IN IT, IT’S IMPOSSIBLE TO IMAGINE NOT TRYING TO MAKE IT BIG.”
By: Regine P. Azurin and Yvette Pantilla
“Lots of great books….Too little time to read”
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