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Book Review Good2Great
- 1. BOOK REVIEW GOOD TOGREAT by Jim Collins
- 2. Six Key Elementsof a “Good to Great” (G2G) Company
- 3. Element 1 : Level5 Leadership
- 4. Element 2 : FirstWho…..then What
- 5. Element 3 : Confrontthe Brutal Facts (Yet Never Lose Faith)
- 6. Element 4 : TheHedgehog Concept
- 7. Element 5 : ACulture of Discipline
- 8. GOOD IS THEENEMY OF GREAT
- 9. THE 11 G2GcOMpANIES wERE:
- 10.
- 11. RESEARcH FINDINGS Larger-than-life,celebrity leaders who ride in from the outside are negatively correlated with taking a company from good to great The structure of executive compensation is not a key driver in corporate performance Strategy per se did not separate the good-to-great companies from the comparison companies Good-to-great companies paid attention to what not to do and what to stop doing Technology can accelerate a transformation, but it cannot cause a transformation M&A plays virtually no role in igniting a transformation from good to great Good-to-great companies paid scant attend to managing change, motivating people, or creating alignment Good-to-great companies had no name, tag line, launch event, or program to signify their transformations Good-to-great companies were not, by and large, in great industries, and some were in terrible industries
- 12. Flywheel Level 5 Leadership First Who… ThenWhat Confront the Brutal Facts Hedgehog Concept Culture of Discipline Technology Accelerators Disciplined People Disciplined Thought Disciplined Action Buildup Breakthrough Level 5 Leadership Good To Great
- 13. Level 5 Leadership 5: Level 5 Executive 4 : Effective Leader 3 : Competent Manager 2 : Contributing Team Member 1 : Highly Capable Individual
- 14. LeveL-5 executive Veryhumble on a personal level Possesses a great deal of drive and desire to succeed, where “success” is not personal AVOID : Ego and Credit Level 5 leaders look outside the window to accredit Thank others and luck Level 5 leaders infected with an incurable need to produce sustainable results Rather talk about the company than themselves Level 5 leaders set up successors for success
- 15. the window &the mirror effect Level 5 leaders look out the window to apportion credit to factors outside themselves when things go well At the same time, they look in the mirror to apportion responsibility, never blaming bad luck when things go poorly Everyone outside the window points inside directly at Level 5 leader saying “He was the Key; without his guidance and leadership, we would not have become a great company” Level 5 leader points right back out the window and says “Look at all the great people and good fortune that made this possible; I am a lucky guy”
- 16. Flywheel Level 5 Leadership First Who… ThenWhat Confront the Brutal Facts Hedgehog Concept Culture of Discipline Technology Accelerators Disciplined People Disciplined Thought Disciplined Action Buildup Breakthrough First Who… Then What Good To Great
- 17. f i rS t w h o … t h e n w h A t First who, then what “…the ‘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 don’t 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
- 18. If you havethe wrong people, doesn’t matter whether you have the right direction why do it thiS wAy? If you have the right people on the bus, problem of motivation and people managing are diminished
- 19. LeAderS were rigorouS,not ruthLeSS in peopLe deciSionS There are three steps on how the companies can be rigorous: • Don’t hire someone unless you’re 100% sure that they’re the right person. It’s better to wait and get someone that you know is a good fit • Once you realize you need to fire someone, don’t 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
- 20. Flywheel Level 5 Leadership First Who… ThenWhat Confront the Brutal Facts Hedgehog Concept Culture of Discipline Technology Accelerators Disciplined People Disciplined Thought Disciplined Action Buildup Breakthrough Confront the Brutal Facts Good To Great
- 21. All good-to-great companiesbegan the process, finding a path to greatness by confronting the brutal facts of their current reality
- 22. confront the BrutALfAct (YET NEVER LOSE FAITH) Must create a culture wherein people have an opportunity to hear the truth Having lofty goals can be good, but you can never lose sight of what the reality is on the ground
- 23. StockdALe pArAdox AND atthe 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
- 24. Let the truthBe heArd 4 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
- 25. Flywheel Level 5 Leadership First Who… ThenWhat Confront the Brutal Facts Hedgehog Concept Culture of Discipline Technology Accelerators Disciplined People Disciplined Thought Disciplined Action Buildup Breakthrough Hedgehog Concept Good To Great
- 26. THE HEDGEHOG CONCEPT Anancient Greek parable: • The fox knows many things • The hedgehog knows one big thing and stick to it Foxes pursue many ends at the same time and see all the world in its complexity • Scattered • Diffused • Moving on many levels • Never integrating their thinking into an overall concept or unifying vision Hedgehogs simplify a complex world into a single organizing idea, a basic principle or concept that unifies and guides everything • Simplifies a concept • Reduces all challenges to simple ideas
- 27. The good-to-great companiesare more like hedgehogs — simple, dowdy creatures that know "one big thing" and stick to it. The comparison companies are more like foxes — crafty, cunning creatures that know many things yet lack consistency
- 28. 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 what’s essential, and ignore the rest It took an average of four years for the G2G companies to get a Hedgehog Concept
- 29. Hedgehog Concept What youare deeply passionate about What you can be the best in the world at What drives your economic engine Simplicity within the three circles One Big Thing
- 30. Hedgehog Concept The Council All Guidedby the Three Circles Ask Questions Dialogue & Debate Autopsies & Analysis Executive Decisions An Iterative Process
- 31. The Councilis usually consists of five to twelve people , to discuss and gain insights into the organization It should meet regularly, not a one-time group 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 CHaraCTErisTiCs Of THE COuNCil
- 32. Flywheel Level 5 Leadership First Who… ThenWhat Confront the Brutal Facts Hedgehog Concept Culture of Discipline Technology Accelerators Disciplined People Disciplined Thought Disciplined Action Buildup Breakthrough Culture of Discipline Good To Great
- 33. Culture of disciplineis 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
- 34. The Good ToGreat Matrix of Creative Discipline Hierarchical Organization Start-up Organization Bureaucratic Organization Great Organization High Culture of Discipline Low Low HighEthic of Entrepreneurship
- 35. The good-to-great companies appearboring and pedestrian looking in from the outside, but upon closer inspection, they're full of people who display extreme diligence and a stunning intensity
- 36. A culture ofdiscipline is not just about action. It is about getting disciplined people who engage in disciplined thought and who then take disciplined action.
- 37. A culture ofdiscipline involves a duality. On the one hand, it requires people who adhere to a consistent system; yet, on the other hand, it gives people freedom and responsibility within the framework of that system.
- 38. To createa 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 dictatorial disciplinarian “Stop doing” lists are more important than “to do” lists Anything that does not fit with our Hedgehog Concept, will not do
- 39. Flywheel Level 5 Leadership First Who… ThenWhat Confront the Brutal Facts Hedgehog Concept Culture of Discipline Technology Accelerators Disciplined People Disciplined Thought Disciplined Action Buildup Breakthrough Technology Accelerators Good To Great
- 40. The key questionabout 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.
- 41. The good-to-great companiesused technology as an accelerator of momentum, not a creator of it. None of the good-to-great companies began their transformations with pioneering technology, yet they all became pioneers in the application of technology once they grasped how it fit with their strategies.
- 42. Technology AccelerATors The key questionabout 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
- 43. T e ch n o l o g y A c c e l e r A T o r s The 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.
- 44. Flywheel Level 5 Leadership First Who… ThenWhat Confront the Brutal Facts Hedgehog Concept Culture of Discipline Technology Accelerations Disciplined People Disciplined Thought Disciplined Action Buildup Breakthrough Flywheel Good To Great
- 45. The Flywheel AndThe 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
- 46. The Doom Loop TheFlywheel Effect
- 47. 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
- 48. leTs mAke IThAppen ThAnk you Prepared by Snigdha Majumder Head of the Department Lean Six Sigma ITC Hotels Mumbai Presented on : 24th Jan 2012
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