book review: good to great

Level 5Leadership

First Who…Then What

Confront theBrutal Facts

HedgehogConcept

Culture ofDiscipline

TechnologyAccelerators

Disciplined People Disciplined Thought Disciplined Action

BuildupBreakthrough

Good to Great

Level 5Leadership



HedgehogConcept




BuildupBreakthrough

Level 5Leadership

Good to Great

Level 5 Leadership

Level 5 Executive Leader

Effective Leader

Competent Manager

Contributing Team Member

Highly Capable Individual

LEVEL 4

LEVEL 5

LEVEL 3

LEVEL 2

LEVEL 1

Characteristics of Level 5 Leadership

Personal Humility + Professional WillSet up successors for even greater successCompelling modesty, self-effacing, understatedFanatically driven to produce sustainable resultsMore plow horse than show horseAttribute success to other than themselves Look in mirror and take full responsibility for poor

decisions

Personal Humility + Professional WillSet up successors for even greater successCompelling modesty, self-effacing, understatedFanatically driven to produce sustainable resultsMore plow horse than show horseAttribute success to other than themselves Look in mirror and take full responsibility for poor

decisions

Level 5Leadership



HedgehogConcept




BuildupBreakthrough


Good to Great

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

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

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 hire2) When you know you need to make a people decision,

act quickly3) Put your best people on your best opportunities, not

biggest problems

Leaders are rigorous, not ruthless in people decisions. Three practical disciplines for being rigorous:

1) When in doubt, don’t hire2) When you know you need to make a people decision,

act quickly3) Put your best people on your best opportunities, not

biggest problems

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.

Example:

Level 5Leadership



HedgehogConcept




BuildupBreakthrough


Good to Great

Confront the Brutal Facts

Must create a culture wherein people have a tremendous opportunity to be heard and, ultimately, for the truth to be heard.

Must create a culture wherein people have a tremendous opportunity to be heard and, ultimately, for the truth to be heard.

Setting off on the path to greatness requires confronting the brutal facts of current reality.

Setting off on the path to greatness requires confronting the brutal facts of current reality.


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

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

Four basic practices:Four basic practices:


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

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

Level 5Leadership



HedgehogConcept




BuildupBreakthrough

HedgehogConcept

Good to Great

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.

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.

Hedgehog Concept

What you are deeplypassionate about

What you can be the best in

the world at

What drives your

economicengine

Simplicitywithinthe three circles

Hedgehog Concept

Getting the Hedgehog Concept takes an average of four years.

Getting the Hedgehog Concept takes an average of four years.

The right peopleEngaged in vigorous

dialogue and debate Infused with the

brutal factsGuided by questions

formed by the three circles

The right peopleEngaged in vigorous

dialogue and debate Infused with the

brutal factsGuided by questions

formed by the three circles

It is an iterative process by The Council: It is an iterative process by The Council:

Hedgehog Concept

TheCouncil

All Guided by the Three Circles

Ask Questions

Dialogue &Debate

Autopsies& Analysis

ExecutiveDecisions

An IterativeProcess

Level 5Leadership



HedgehogConcept




BuildupBreakthrough


Good to Great

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.

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.

Culture of Discipline (Cont.)

Budgeting is to decide which arenas fit Hedgehog Concept and should be fully funded and which should not be funded at all.

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.”

“Stop doing” lists are more important than “to do” lists.

“Anything that does not fit with our Hedgehog Concept, we will not do.”

Includes willingness to shun opportunities that fall outside the three circles.

Includes willingness to shun opportunities that fall outside the three circles.

Level 5Leadership



HedgehogConcept




BuildupBreakthrough


Good to Great

Technology Accelerators

Yet they often become pioneers in the application of carefully selected technologies.

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.

Does it fit directly with your Hedgehog Concept?

Good-to-greats used technology as an accelerator of momentum, not a creator of it.

Good-to-greats avoid technology fads and bandwagons.

Good-to-greats avoid technology fads and bandwagons.

Technology Accelerators

Technology by itself is never a root cause of either greatness or decline.

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.

“Crawl, walk, run” can be a very effective approach, even during times of rapid and radical technological change.

Level 5Leadership



HedgehogConcept


TechnologyAccelerations


BuildupBreakthrough

Flywheel

Good to Great

The Flywheel

Good-to-great transformations never happened in one fell swoop.

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 . . .

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 . . .

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.

2) 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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book review: good to great

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