good to great - summary

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A summary of the book 'Good To Great' by Jim Collins


  • 1.Khaleel Rahman

2. The main premise of Good to Great is that any company can become a great company by systematically implementing key principles outlined in the book by Jim Collins Each of the good-to-great companies showed a clear transition point, after which they showed steady growth that outpaced the market and their industry 3. Disciplined Action Culture of Discipline The Flywheel Disciplined Thought Confront The Brutal Facts Hedgehog Concept Disciplined People Level 5 Leadership First Who.Then What 4. Level 5 Leadership has two primary components: 1) Put Level 5 leaders in the most powerful seats. Are ambitious first and foremost for the cause, the organization, the worknot themselvesand they have an iron will to do whatever it takes to make good on that ambition. Practice the window and the mirror. A Level 5 leader displays a paradoxical blend of personal humility and professional will. 2) Create a Level 5 leadership culture. Which values substance over style, integrity over personality, and results over intentions. Cultivate leaders who have all five levels in the Level 5 hierarchy 5. 5 Level 5 Leadership Builds enduring greatness through a paradoxical blend of personal humility and professional will 4 Effective Leader Catalyzes commitment to and vigorous pursuit of a clear and compelling vision, stimulating a higher performance standards 3 Competent Manager Organizes people and resources toward the effective and efficient pursuit of predetermined objectives 2 Contributing Team Member Contributes individual capabilities to the achievement of group objectives and works effectively with others in a group setting 1 Highly Capable Individual Makes productive contributions through talent, knowledge, skills and good work habits 6. First Who has four primary components: 1) Get the right people on the bus. Rigorous in our selection process for getting new people on the bus. Invest substantial time in evaluating each candidate, making systematic use of at least three evaluation devices, e.g., interviews, references, tests. 2) Get the right people in the right seats. Have 100% of the key seats on the bus filled with the right people. This doesnt mean 100% of ALL seats have the right people, but 100% of the key seats Whenever possible, give a person the chance to prove himself or herself in a different seat, before we draw the conclusion that he or she is a wrong person on the bus. 7. 3) Get the wrong people off the bus. When we know we need to make a people changeafter we have given the individual full opportunity to demonstrate that he or she might be the right personwe deal with the issue. We autopsy our hiring mistakes, applying the lessons systematically to future hiring decisions. 4) Put who before what. A significant portion of our time is spent in one form or another with people decisions: getting the right people on the bus, getting the right people in the right seats, getting the wrong people off the bus, developing people into bigger seats, planning for succession, etc. 8. If you have the right people on the bus, the problem of how to motivate and manage people largely goes away. The right people dont need to be tightly managed or fired up; they will be self motivated by the inner drive to produce the best results and to be part of creating something great. If you have the right executives on the bus, they will do everything within their power to build a great company, not because of what they will get for it, but because they cannot imagine settling for anything less. Their moral code requires building excellence for its own sake. Compensation and incentives are important, but for very different reasons in good-to-great companies. The purpose of a compensation system should not be to get the right behaviours from the wrong people, but to get the right people on the bus in the first place, and to keep them there. 9. Discipline #1 When in doubt, dont hire. Keep looking A company should limit its growth based on its ability to hire the best people. Discipline #2 When you know you need to make a people change, act The moment you feel the need to tightly manage someone, youve made a hiring mistake. The best people dont need to be managed. Guided, taught, led yes, but not tightly managed Letting the wrong people hang around is unfair to the right people, as they inevitably find themselves compensating for the inadequacies of the wrong people Conversely, waiting too long is equally unfair to the wrong people. For every minute you allow a person to continue, knowing they will not make it in the end, youre stealing time that they could spend finding a better place where they would flourish. Before moving people (especially if they are talented) out of the organisation, its worth trying them in two or three other positions in the company where they might blossom. Make sure you dont simply have the right person, but in the wrong seat. Discipline # 3 Put your best people on the biggest opportunities, not the biggest problems. 10. Confront the Brutal Facts has three primary components: 1) Create a climate where the truth is heard. When things go wrong, we conduct autopsies without blamewe seek to understand underlying root causes, rather than pin the blame on an individual. 2) Get the data. We make particularly good use of trend lines (to see where we are declining) and comparative statistics (to see where we are falling behind others) to discover and highlight brutal facts. 3) Embrace the Stockdale Paradox. Retain unwavering faith that you can and will prevail in the end, regardless of the difficulties, AND AT THE SAME TIME have the discipline to confront the most brutal facts of your current reality, whatever they might be. 11. The Hedgehog Concept has three primary components: 1) Keep it simplebe a hedgehog, not a fox. If forced to choose between describing us as foxes (crafty creatures that know many things) or hedgehogs (simpler creatures that know one big thing), we would weigh in with the hedgehogs. We keep it simple. We have a simple, coherent strategic concept that we pursue with relentless consistency. If we have multiple options for how to accomplish an objective, we almost always pick the simplest option that will work. In other words, at each fork of the road, we tend toward the path of simplicity, rather than complexity. 12. 2) Get your three circles right. Our Hedgehog Concept reflects deep understanding of the three circles: 1) what we can be passionate about, 2) what we can be the best in world at, and 3) what best drives our economic or resource engine. 3) Act with understanding, not bravado. Believe that great results come about by a series of good decisionsactions taken with understanding, not bravado accumulated one on top of another, in line with our Hedgehog Concept. 13. What are you deeply passionate about? What are you the best in the world at? What drives your economic engine? 14. A Culture of Discipline has four primary components: 1) Focus on your Hedgehog. We have the discipline to say No thank you to big opportunities that do not fit within our Hedgehog Concept. A once-in-a- lifetime opportunity is irrelevant if it is the wrong opportunity. We make excellent use of Stop Doing lists. 2) Build a system of freedom and responsibility within a framework. So long as people stay within the wide bounds of the framework, they have an immense amount of freedom to innovate, achieve and contribute. 15. 3) Manage the system, not the people. We do not spend a lot of time motivating our people; we recruit self-motivated people, and provide an environment that does not de-motivate them. We do not spend a lot of time disciplining our people; we recruit self-disciplined people, and then manage the system, not the people. 4) Practice extreme commitment. In our culture, people go to extremes to fulfil their commitments and deliver results, bordering at times on fanaticism. We are equally disciplined in good times as in bad times. We never allow prosperity to make us complacent. 16. The Flywheel has four primary components: 1) Build cumulative momentum. We build greatness by a cumulative processstep by step, action by action, day by day, week by week, year by year turn by turn of the flywheel. 2) Be relentlessly consistent over time. When examining our behaviour, one word that comes to mind is consistencyconsistency of purpose, consistency of values, consistency of Hedgehog, consistency of high standards, consistency of people 17. 3) Create alignment by results, not hoopla. We understand that when people begin to feel the magic of momentumwhen they feel the flywheel increase speedis when most people line up to throw their shoulders against the wheel and push. 4) Avoid the Doom Loop. We do not succumb to the lazy, undisciplined search for a single silver bullet solutionbe it a new program, a motivational event, a sexy technology, a big acquisition, or a savior CEO. If a new technology advances our Hedgehog, we become a pioneer in its application; if a new technology does not fit, we dont worry too much about it 18. Thank You