Summary of Good to Great by Jim Collins

1. Summary ofGood to GreatbyJim Collins “You can accomplish anything in life, provided that you do not mind who gets the credit.” -Harry S. Truman “Good is the enemy to great!”

2. Good to Great Model • Level 5 leadership • First who . . . then what • Confront the brutal facts • The hedgehog concept • A culture of discipline • Technology accelerators • The flywheel and the doom loop

3. Basis of Good to Great • Involved a study of 1435 ‘good’ companies and their performance over 40 years • Identified a set of ‘great’ companies—those that outpaced the rest of the industry • Exceeded the stock market by at least 3X over 15 years • Independent of industry • Is it really leaders?

6. Level 5 Leaders

7. Professional Will Demonstrates an unwavering resolve to do whatever must be done to produce the best long-term results, no matter how difficult. Sets the standard of building an enduring great company; will settle for nothing less. Looks in the mirror, not out the window, to apportion responsibility for poor results, never blaming other people, external factors, or bad luck. Personal Humility Demonstrates a compelling modesty, shunning public adulation; never boastful. Acts with quiet, calm determination; relies principally on inspired standards, not inspiring charisma, to motivate. Channels ambition into the company, not the self; sets up successors for even greater success in the next generation. Looks out the window, not in the mirror, to apportion credit for the success of the company—to other people, external factors, and good luck. The 2 Sides of Level 5 Leadership Greatness is a choice

8. First who . . . then what • Get the right people on the bus, the right people in the right seats and the wrong people off the bus

9. First who . . . then what • Alan Wurtzel of Circuit City in reply to the question, “At what point do I compromise?” Without hesitation said, “You don’t compromise. We find another way to get through until we find the right person.”

10. First who . . . then what • The old adage “People are your most important asset” is wrong. People are not your most important asset. The right people are. • Whether someone is the “right person” has more to do with character traits and innate capabilities than with specific knowledge background, or skills. • The key point … is not just the idea of getting the right people on the team. The key point is that “who” questions come before “what” decisions–before vision, before strategy, before organization structure, before tactics. • Forget trying to motivate people

11. Confront the Brutal Facts (Yet never lose faith) • Yes, leadership is about vision. But leadership is equally about creating a climate where the truth is heard and the brutal facts confronted. There’s a huge difference between the opportunity to ‘have your say’ and the opportunity to be heard.

12. Confront the Brutal Facts (Yet never lose faith) • There is a sense of exhilaration that comes in facing head-on the hard truths and saying, ‘We will never give up. We will never capitulate. It might take a long time, but we will find a way to prevail.’

13. Confront the brutal facts • It is impossible to make good decisions without infusing the entire process with an honest confrontation of the brutal facts. • Creating a climate where the truth is heard involves four basic practices: • Lead with questions, not answers. • Engage in dialogue and debate, not coercion. • Conduct autopsies, without blame. • Build red flag mechanisms that turn information into information that cannot be ignored.

14. The Hedgehog Concept • The hedgehog concept …flows from deep understanding about the intersection of the three circles.

15. The Three Circles How would you apply this concept to you personally?

16. The Hedgehog Concept • Which is more important: establish a goal to be the best at something, or gain a realistic understanding of what you can (and cannot) be the best at?

17. A culture of discipline You focus on what you’ve accomplished relative to exactly what you said you were going to accomplish – no matter how tough the measure. Leaders determine the culture of the organization

18. A culture of discipline • A culture of discipline 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. • A culture of discipline is not just about action. It is about getting disciplined people who engage in discipline thought and who then take disciplined action. • “Stop doing” lists are more important than “to do” lists.

19. Technology accelerators • The good-to-great companies used 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 three circles and after they hit breakthrough. • Across eighty-four interviews with good-to-great executives, fully 80 percent didn’t even mention technology as one of the top five factors in the transformation.

20. The Doom Loop The flywheel and the doom loop

21. The flywheel and the doom loop The Flywheel Effect

22. The flywheel and the doom loop Tremendous power exists in the fact of continued improvement and the delivery of results. Point to tangible accomplishments … people see and feel the buildup of momentum, they will line up with enthusiasm.

23. The flywheel and the doom loop Building Vision • What is your vision? • Do you know what is core and what is not? • Do you have a good BHAG (Big Harry Audacious Goal)?

24. Why don’t we see more Level 5 leaders? • The personal ambition that often drives people to positions of power stands at odds with the humility required for Level 5 leadership. (D&C 121) • Combine that with the fact that boards of directors frequently operate under the false belief that they need to hire a larger-than-life egocentric leader. • The problem is not with the availability of Level 5 leaders. The problem is recognizing that what they have is important.

25. Can You Learn to Become Level 5? • What would it take? • What specifically needs to be on your list? • Can level 5 be learned?

26. Can You Learn to Become Level 5? • Self-reflection • Conscious personal development • A mentor • A significant life experience • Disciplined thought • Disciplined action What would it take? (from Collins) Maybe even a Board of Directors