Book Summary: Good To Great

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Book Summary: Good To Great

Explore what goes into transforming a company

from mediocre to excellent. Based on hard evidence and volumes of

data, the author of the book (Jim Collins) and his team discover

timeless principles on how to please good to great companies

Abbott, Circuit City, Fannie Mae, Gillette, Kimberly-Clark,

Kroger, Nucor, Philip Morris, Pitney Bowes, Walgreens, and

Wells Fargo has produced great results sustained and achieved

enduring greatness, evolving into companies that were really

“Built to last.”

The Collins team chose 2 groups of comparison companies:

a. Direct comparisons – Companies in the same industry with the same resources and opportunities as the good to great group, but did not show a jump in performance, which were: 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 shift from good to great but failed to maintain the trajectory, namely: Burroughs, Chrysler, Harris, Hasbro, Rubbermaid and Teledyne

Wisdom in a nutshell:

a. Ten of the eleven company leaders or CEOs from good to great came from within. They were not outsiders hired to “save” the company. They were people who had worked for many years in the company or were members of the family that owned the company.

b. The strategy itself did not separate the good at the large companies from the comparison 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 of it.

e. Mergers and acquisitions do not cause a transformation from good to great.

f. Small to large companies pay little attention to managing change or motivating people. Under the right conditions, these problems will naturally disappear.

g. Good to great transformations didn’t require a new name, tagline or launch program. The leap was in performance results, not a revolutionary process.

h. Greatness is not a function of circumstance; it is clearly a matter of conscious choice.

i. Every good to great company has had “Level 5” leadership during the pivotal 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 compelling modesty, are self-effacing and understated. In contrast, two-thirds of the comparison companies had leaders with gargantuan personal egos that contributed to the death or continued mediocrity of the company.

k. Level 5 leaders are fanatically driven, infected with an incurable need to produce sustained results. They are determined to do whatever it takes to make the company great, no matter how big or tough the decisions.

l. One of the most damaging trends in recent history is the tendency (especially of boards of directors) to select dazzling celebrity leaders and deselect potential Level 5 leaders.

m. Potential Level 5 leaders exist all around us, we just have to know what we’re looking for.

n. The research team was not looking for Level 5 leadership, but the data was overwhelming and compelling. Level 5 discovery is an empirical discovery, not an ideological one.

o. Before answering the “what” questions of vision and strategy, first ask “who” are the right people for the team.

p. The comparison firms used layoffs much more than the good-to-large firms. Although rigorous, good to great companies have never been ruthless and do not rely on layoffs or restructuring to improve performance.

Q. Good to great management teams consist of people who debate vigorously in search of the best answers, but who unify behind decisions, regardless of parochial interests.

R. There is no link between executive compensation and change from good to great. The goal 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 most important 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 specific knowledge, skills or experience.

u. The Hedgehog concept 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, realistically, and what you can’t be the best in the world.

2.What drives your economic engine

3.What you are very passionate about

v. Discover your core values ​​and purpose beyond just making money and combine this with the dynamics of preserving core values ​​- stimulating progress, as shown for example by Disney. They have evolved from making short animated films, to long films, to theme parks, to cruises, but their core values ​​of providing happiness to young and old, and not succumbing to cynicism remains strong.

w. Great resilient businesses don’t just exist to deliver returns to shareholders. In a really big company, profits and cash flow are absolutely essential to life, but they are not the point of life.

“IF YOU DO THAT THING THAT MATTERS TO YOU DEEPLY AND IF YOU BELIEVE IN IT, IT IS IMPOSSIBLE TO IMAGINE NOT FINDING A BIG FAIL.”

By: Regine P. Azurin and Yvette Pantilla

http://www.bizsum.com

“Too many great books….Too little time to read”

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