Good to Great

1. Good to Great Ch 9: From Good to Great to Build to Last Sterling Rose Justin Simpson Krista Wells Gwen Singleton Wayni Hebert

2. Four Conclusions • Jim Collins co-authored “Built to Last” • They compared their findings from “Built to Last” and “Good to Great” and formed 4 conclusions

3. Four Conclusions • The great companies from “built to Last” followed the good to great framework but did so as entrepreneurs in small, early stage businesses instead of CEOs of established companies • “Good to Great” is a prequel to “Built to Last” • To establish yourself as a company with iconic stature, discover your core values and purpose beyond just making money and combine with the dynamic of preserve the core/stimulate progress • The ideas from each book enrich and inform the ideas of the other. What is the difference between a good and bad BHAG

4. Good to Great in the Early Stages of Built to Last • During the formative years, great companies went through a process of buildup to breakthrough, fallowing the good to great framework • Sam Walton and Wal-Mart • Entrepreuneur building a great company instead of a CEO transforming an established company (Conclusion 1) • Hewlett-Packard • Founding concept started with who instead of what

5. Core Ideology: The Extra Dimension of Enduring Greatness • In 1950s HP adapted and operated under core values. The “HP Way”. • These values were: • Technical contribution • Respect for the individual • Responsibility to the community • Belief that profit is not the fundamental goal

6. The Extra Dimension….. • HPs “core ideology” is the key factor in transitions from good to great to built to last. • The core ideology consists of core values and core purpose. Profit?? • Great companies don’t exist for the sole purpose of profit, but to establish healthy company. • Profits and cash flows are absolute necessity but not the point of been in business.

7. The Extra Dimension….. • Merck developed and distributed a drug that cured river blindness free of charge in Amazon. Did they do it for profit? • “we try to remember that medicine is for the patient..not for profits, profit follows.” • There are no right core values for becoming lasting great company.

8. The Extra Dimension….. • There are great companies that don’t have that one great core value. • A company doesn’t need to be social responsible, passionate for its customers, respect for individual or quality advocator. • What kind core values a company follows don’t matter; having one does. • Have core values, know them, build them into the organization, preserve them overtime.

9. The Extra Dimension….. • Preserve your core ideology and stimulate progress. • Adapt to a changing world through business strategies and operating practices while preserving your core values. Ex. Walt Disney - preserve “Disney Magic”, creative imagination, attention to detail McDonalds- Quality, Service, Cleanliness and Value, honesty and integrity. • holding core ideology fixed, while changing strategies & practice over time leads to long lasting greatness.

10. Concepts in Good to Great • Level 5 leadership • First Who…Then What • Confront the Brutal Facts (Stockdale Paradox) • Hedgehog Concept • Culture of Discipline • Technology Accelerators • Flywheel, Not Doom Loop

11. Level 5 Leadership • Clock Building, Not Time Telling: Level 5 leaders build a company that can tic along without them • Genius of AND: Personal humility AND professional will • Core Ideology: Level 5 leaders have a sense of purpose beyond their own success • Preserve the Core/Stimulate Progress: Level 5 leaders are relentless in stimulating progress toward tangible results and achievement

12. First Who… Then What • Clock Building, Not Time Telling: “First who” is clock building, “First what” is time telling • Genius of AND: Right people on the bus AND the wrong people off the bus • Core Ideology: “First who” involves selecting people based on their fit with the core values • Preserve the Core/Stimulate Progress: Practicing “first who” means a bias for promoting from within

13. Confront the Brutal Facts • Clock Building, Not Time Telling: creating a climate where the facts are heard is clock building • Genius of AND: Confront brutal facts AND retain unwavering faith • Core Ideology: Confronting the brutal facts clarifies the values an organization truly holds as core versus those that it would like to • Preserve the Core/Stimulate Progress: Brutal facts clarify what must be done to stimulate progress

14. Hedgehog Concept • Clock Building, Not Time Telling: The council mechanism is consummate clock building • Genius of AND: Deep understanding AND incredible simplicity • Core Ideology: The “what you are passionate about” circle overlaps with core values and purpose • Preserve the Core/Stimulate Progress: Good BHAGs flow from understanding; bad BHAGs flow from bravado.

15. Culture of Discipline • Clock Building, Not Time Telling: Building an enduring culture of discipline is clock building • Genius of AND: Freedom AND responsibility • Core Ideology: A culture of discipline ejects those who do not share the values and standards of an organization • Preserve the Core/Stimulate Progress: When you have a culture of discipline, you can give people more freedom to experiment and find their own best path to results

16. Technology Acceleration • Clock Building, Not Time Telling: Technology accelerators are a key part of the clock • Genius of AND: Shun technology fads AND pioneer the application of technology • Core Ideology: Technology is subservient to core values • Preserve the Core/Stimulate Progress: The right technologies accelerate momentum in the flywheel

17. Flywheel, Not Doom Loop • Clock Building, Not Time Telling: The flywheel effect creates the sustained building of momentum • Genius of AND: Evolutionary, incremental process AND revolutionary, dramatic results • Core Ideology: The doom loop makes it almost impossible to instill core values and purpose • Preserve the Core/Stimulate Progress: The smooth flywheel and building of momentum create the perfect conditions for instilling core values while stimulating change and progress

18. BHAGs & the three circles of the Hedgehog Concept • BHAGs (“Big Hairy Audacious Goal”) • A huge and daunting goal that serves as a unifying focal point of effort. • Hedgehog Concept • What are you deeply passionate about? • What can you be the best in the world at? • What drives your economic engine?

19. Bad BHAGs vs. Good BHAGs • Bad BHAGs • goals set with bravado • Good BHAGs • goals set with understanding • When you combine quiet understanding of the three circles with the audacity of a BHAG, you get a powerful mix.

20. Boeing • Boeings BHAG was not random, it made sense within the context of the three circles. • To remain great over time requires…….. • staying squarely with in the three circles • being willing to change the specific manifestation of what's inside the three circles at any given moment. • Boeing never left the three circles or abandoned its core ideology. • It created an exciting new BHAG and adjusted its hedgehog concept to include commercial aircraft.

21. Creating Greatness that Lasts • Requires all the key concepts from Good to Great & Built to Last, applied consistently over time. • If you ever stop doing any one of the key ideas, your organization will inevitably slide backward toward mediocrity. • It is much easier to become great then to stay great. • Consistent application of both studies, Good to Great & Built to Last, gives the best chance for greatness that lasts.

22. Why Greatness? • Greatness doesn’t depend on size. • “…I don’t really want to build a huge company…” • Set a standard. • Ex) generate the highest profit per foot of space • It is no harder to build something great than to build something good. • “..why should I try to build a great company? What if I just want to be successful?” • Much of what we’re doing is at best a waste of energy. Don’t “add” these findings to what we are already doing to make ourselves more overworked.

23. Why Greatness? • We run best at the end • What we don’t waste time on • Leadership and Teamwork; accountability • “First, who.” – the right ‘who’. • People want to be a part of the spinning flywheel – the championship team

24. Why Greatness? • Not everyone can be above average • Meaningful work • All that matters is that you do love [what you do] and that you do care. • Perhaps your quest to be part of building something great will not fall in your business life.

25. Why Greatness? • The real question is not, “Why greatness?” but “what work makes you feel compelled to try to create greatness?” • If you have to ask, “isn’t success enough?” then you’re probably engaged in the wrong line of work. • When all these pieces come together, not only does your work move toward greatness, but so does your life. For, in the end, it is impossible to have a great life unless it is a meaningful life.