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Good to Great Chapter 9: From Good to Great to Built to Last Team 6 Andrew Etlinger Ashley Harris Blake Green David Styers Carolynn Schnaubelt
Chapter Overview • Good to Great to Early stages of Built to Last • Core Ideology: The Extra Dimension of Enduring Greatness • From Good to Great to Built to Last • BHAGs & the 3 Circles • Examples • Takeaway Concepts
Good to Great to Built to Last • Companies that have proven to “stand the test of time” have adapted Good to Great qualities also incorporated a built to last state of mind. • Jim Collins and co author Jerry I. Porras examined a number of companies that have verified the art of being Good to Great over the years • We have found that Coca-Cola established in 1886 has withstood being a Great company for over a century by expanding, diversifying, and satisfying people from all over the world
Good to Great to Built to Last • Some key conclusions that were discovered when developing this book are • Some of the companies founders and leaders pursued good to great concepts as small unheard of entrepreneurs • Establish a good to great state of mind during the early stages of the company then incorporate built to last to take a good company to a great lasting company • Established Company + Good to great concepts = Sustained great results + Built to last concepts = Enduring great company • Define the core ideology or values further than making your company money and combine it with the idea of preserving a core/stimulate progression • What makes a company go from a “bad” BHAG (Big Hairy Audacious Goal) to a “good” BHAG
Good to Great to Built to Last • San Walton of Wal-Mart started out as a small entrepreneur and used the Hedgehog Concept to build his company • Took him a little over 20 years to get the company going • Bill Hewlett and David Packard in 1937 had strong visions to build a company to sell electrical engineered products • But what to sell was the question • They hired many great governmental lab workers after WWII and started to gain revenue • The first step of gaining revenue is to have a good base of the right people working for you and your company • Hewlett and Packard demonstrated their Level 5 leadership by successfully analyzing the keys to success, focusing on simple fundamentals then using that to go from a Good company to a Great company.
Core Ideology: The Extra Dimension of Enduring Greatness • Bill Hewlett said the “HP Way” was a deeply held set of core values that defined the company more than its products. • Profit is not the fundamental goal of a company. • In a truly great company, profits and cash flow become like blood and water to a healthy body: they are absolutely essential for life but they are not the very point of life.
Core Ideology: The Extra Dimension of Enduring Greatness • Enduring great companies preserve their core values and purpose while their business strategies and operating practices endlessly adapt to a changing world. This is the magical combination of “preserve the core and stimulate progress.” • Walt Disney
From Good to Great to Built to Last • Good-to-Great ideas appear to lay the groundwork for the ultimate success of Jim Collins’ previous book Built to Last. • Each of the Good-to-Great findings enable all 4 of the key ideas from Built to Last • Clock Building, Not Time Telling • Genius of AND. • Core Ideology • Preserve the Core/Stimulate Progress • Table on pg. 198 shows more details
Connection between BHAGs & the 3 Circles • BHAG (“Big Hairy Audacious Goal”)- is a huge and daunting goal • 3 Circles of the Hedgehog Concept • What you are deeply passionate about • What you can be the best in the world at • What drives your economic engine • When these are combined together it is very powerful
Boeing • In the 1950s, Boeing focused on planes for the military, but was interested in taking on the commercial aircraft market, however no airlines showed interest in buying their aircraft. • They did not give up and used the BHAG/3 Circle concept and wound up being the greatest in their industry. • Boeing’s executives believed they could become the best in the world at commercial manufacturing. • The shift would improve Boeing’s economics by increasing profit per aircraft model. • The Boeing people were very passionate about the idea.
Why Greatness • One of Jim Collins best students asked him if it was wrong to not want to build a huge business. • He replied that “Greatness does not depend on size.” • Then, the student asked “what if I don’t want to build a great company and just want to be successful.” • Basically, he was asking why even try hard to build something that is great and lasts?
Why Greatness • These questions got Collins thinking about what you needed to do in order to be great. • First, he said it was not any harder to be great than it was to be good. • It was all about increasing your effectiveness, the more effective you work the more simple and easy your work becomes. • Secondly he said that it was easier be great when you do something that is meaningful to you. • In order to be great at something you must want to be great at it.
Examples of Being Great • There was a cross-country team that won back-to-back state championships, that had previously performed poorly • Someone asked the coach why they thought they had become so great and the coach thought about it and finally answered it was because we finish best. • The way the cross-country team finished their races the best. • Finishing string was their Hedgehog Strategy.
Examples of Being Great • Now to tie into the cross-country story again, the coach of that team actually had an MBA in Economics. • So she tied into one of Collins answers of what makes people and organizations great because she was doing something that had a lot of meaning to her.
Takeaway Concepts • Good to Great to Built to Last • Established Company + Good to great concepts = Sustained great results + Built to last concepts = Enduring great company • Level 5 Leadership • Core Ideology • Preserve the core and stimulate progress • Connection between BHAGs & the 3 Circles • Combined these two concepts are extremely useful to a company