Good to GreatGood to GreatArticle by Jim CollinsArticle by Jim CollinsOctober 2001October 2001

Presenters:Presenters:Samantha Bell, Brodie Pattenden, Samantha Bell, Brodie Pattenden,

JJ Machalski, Tea Taing, JJ Machalski, Tea Taing, Kristine WiddifieldKristine Widdifield

AgendaAgenda How change doesn’t happenHow change doesn’t happen How change does happenHow change does happen Disciplined peopleDisciplined people Disciplined thoughtDisciplined thought Disciplined actionDisciplined action

How change doesn't How change doesn't happenhappen

The Chicken and the EggThe Chicken and the Egg

No ‘miracle moment’No ‘miracle moment’

Chicken in the egg was: Chicken in the egg was: EvolvingEvolving GrowingGrowing DevelopingDeveloping ChangingChanging

How change doesn't How change doesn't happenhappen

WalgreensWalgreens Average company for over 40 Average company for over 40

yearsyears 1975 it began to climb, and climb 1975 it began to climb, and climb

and climband climb Beat the general stock market by Beat the general stock market by

15 times15 times How do we pinpoint Walgreens’ How do we pinpoint Walgreens’

‘good-to-great’ transformation?‘good-to-great’ transformation?

How does change How does change happen?happen?

The Flywheel EffectThe Flywheel Effect

How does change How does change happen?happen?

Right now, your flywheel is at a Right now, your flywheel is at a standstillstandstill

Put your shoulder into it…. And Put your shoulder into it…. And push!push!

Eventually get some forward Eventually get some forward movement…. movement….

How does change How does change happen?happen?

No longer pushing aloneNo longer pushing alone

The faster you go, the more The faster you go, the more people you have joining youpeople you have joining you

How does change How does change happen?happen? Momentum starts working in your Momentum starts working in your

favorfavor

Aren’t pushing any harder, but Aren’t pushing any harder, but wheel keeps acceleratingwheel keeps accelerating

That’s how companies make the That’s how companies make the transition from good to greattransition from good to great

How does change How does change happen?happen? What happens when companies What happens when companies

don’t commit to the quiet discipline don’t commit to the quiet discipline of slow, progressive change?of slow, progressive change?

They fall into…..They fall into…..

The DOOM LOOP!The DOOM LOOP!

How does change How does change happen?happen?

Companies that fall into the Doom Companies that fall into the Doom Loop want change over nightLoop want change over night

They bring in a new leader, who They bring in a new leader, who takes them in a new directiontakes them in a new direction

See the pattern?See the pattern?

1979 – Started as consumer products1979 – Started as consumer products 1980 – Healthcare1980 – Healthcare 1981 – Return to consumer products1981 – Return to consumer products 1987 – Global pharmaceuticals1987 – Global pharmaceuticals 1990’s – Return to consumer 1990’s – Return to consumer

productsproducts 2000 – Swallowed by Pfizer2000 – Swallowed by Pfizer

Walter-Lambert Co.Walter-Lambert Co.

How does change How does change happen?happen?

Real people want to contribute to Real people want to contribute to produce real resultsproduce real results

Feel the magic of momentumFeel the magic of momentum

That’s how change really That’s how change really happens….happens….

Filling the BusFilling the Bus

Disciplined PeopleDisciplined People

Mediocre people equal mediocre Mediocre people equal mediocre resultsresults

If you have the wrong people, If you have the wrong people, nothing else mattersnothing else matters

Disciplined PeopleDisciplined People

Fannie MaeFannie Mae 14 of 26 executives “got off the 14 of 26 executives “got off the

bus” before good to great bus” before good to great changes occurred, no questions changes occurred, no questions askedasked

Disciplined ThoughtDisciplined ThoughtFox and the HedgehogFox and the Hedgehog

Disciplined ThoughtDisciplined Thought A Greek Parable explains thatA Greek Parable explains that

Foxes know many small thingsFoxes know many small things

Hedgehogs know one big thingHedgehogs know one big thing

Disciplined ThoughtDisciplined Thought All good to great leaders are All good to great leaders are

hedgehogshedgehogs

But why?But why?

They ask three piercing questions They ask three piercing questions

Disciplined ThoughtDisciplined Thought What can we be the best in the What can we be the best in the

world at?world at?

What is the economic What is the economic denominator that drives cashflow?denominator that drives cashflow?

What are our core people What are our core people passionate about?passionate about?

Wells FargoWells Fargo Initially in global bank, was mediocreInitially in global bank, was mediocre

Switched company philosophy and Switched company philosophy and industryindustry

New mantra and drive for employeesNew mantra and drive for employees

Led to successLed to success

Disciplined ActionDisciplined Action

The Stop Doing ListThe Stop Doing List

Good to Great leaders distinguish Good to Great leaders distinguish themselvesthemselves

Decide what not to doDecide what not to do

If it doesn’t fit tightly within your If it doesn’t fit tightly within your Hedgehog Concept, don’t do itHedgehog Concept, don’t do it

Disciplined ActionDisciplined Action

Started in the paper mill industryStarted in the paper mill industry

Decided to change focusDecided to change focus

The consumer business was best The consumer business was best for the companyfor the company

Kimberly-ClarkKimberly-Clark

One magazine wroteOne magazine wrote ““Kimberly-Clark making the switch Kimberly-Clark making the switch

was a dumb idea”was a dumb idea” 21 years later that same magazine 21 years later that same magazine

wrote “as it turns out it was a smart wrote “as it turns out it was a smart one”one”

Disciplined ActionDisciplined Action

ConclusionConclusion The Chicken and the EggThe Chicken and the Egg The Flywheel EffectThe Flywheel Effect Disciplined PeopleDisciplined People

Filling the BusFilling the Bus Disciplined ThoughtDisciplined Thought

Fox and the HedgehogFox and the Hedgehog Disciplined ActionDisciplined Action

The “Stop Doing” listThe “Stop Doing” list

Thanks for listening!Thanks for listening!

QUESTIONS???QUESTIONS???