Good To Great Key Takeaways Flashcards
Collins learned that factors such as CEO compensation, technology, mergers and acquisitions, and change management initiatives played relatively minor roles in moving from Good to Great. Instead, Collins found that successes resulted from three main factors:
disciplined people
disciplined thought
disciplined action
Disciplined People: Level 5 Leadership: Collins found a common characteristic of the great companies was great leadership. Specifically, Collins defined “Level 5 Leadership” as a key to moving from good to great.
Level 5 leaders achieve better results than the “strategic and effective” Level 4 leaders. Level 5 leaders also have an intense determination and profound humility. They remain humble learners while having a steadfast resolve. Level 5 leaders establish a set of core values focused on a higher purpose than mere profit generation. Collins found these leaders were committed to the long-term success of their organizations, and many rose to a leadership role from within the company.
Get the right people on the bus:
People assume that new business leaders immediately begin by announcing where they’re going—by setting a new direction or by articulating a fresh corporate vision. In fact, the leaders of companies that went from good to great started not with “where” but with “who.” Start by getting the right people on the bus, the wrong people off the bus, and the right people in the right seats. Then review the core values and establish a vision.
Disciplined Thought: Confront the Brutal Facts: Companies transitioning from Good to Great must be willing to identify and assess defining facts in the company and in the larger business environment. Collins outlines a four-step process to promote awareness of emerging trends and potential problems:
1) Lead with questions, not answers.
2) Engage in dialogue and debate, not coercion.
3) Conduct autopsies without blame.
4) Build red flag mechanisms that turn information into information that cannot be ignored.
Disciplined Thought: The Hedgehog Concept: Simplicity leads to greatness. When confronted by predators, the hedgehog’s instinct is to curl up into a protective ball. This single response is simple and works as a response to any attack. To transition from Good to Great, companies should focus on doing one thing better than anyone else in the world. This single function will become the organizations “Hedgehog Concept.”
Collins suggests the following steps to help expedite this process:
Determine what you can be best in the world at and what you cannot be best in the world at
Determine what drives your economic engine
Determine what you are deeply passionate about
Disciplined Action: A Culture of Discipline: Sustained great results depend upon an overarching organizational culture of discipline. The single most important discipline is fanatical adherence to the Hedgehog Concept by shunning opportunities that do not meet your singular “better than anyone else” criteria.
Disciplined thought followed by disciplined action is required. Do not assume this requires a tyrant leader who disciplines – this leads to highly dysfunctional organizations. Every team member is rather afforded the degree of personal empowerment and latitude that is necessary to bring the firm’s envisioned objectives into existence.
Disciplined Action: Technology Accelerators: Good to Great organizations think differently about technology. They avoid fads, instead focusing on where technology can be an accelerator of momentum within the firm’s Hedgehog Concept. None of the Good to Great companies Collins studied began their transformations with pioneering technology, yet they all became pioneers in the application of technology once they fit it within their Hedgehog Concept.
Collins characterizes the ideal approach to technology with the following cycle: “Pause — Think — Crawl — Walk — Run.”
The Good to Great Process
The flywheel effect: A Good to Great transformation looks dramatic to customers and the market, but the beginnings may be unnoticed inside the company. The process is akin to pushing a large, heavy flywheel. It takes a lot of effort to get started and build energy, but with persistent pushing in a consistent direction over a long period, the flywheel builds momentum and eventually can’t be stopped – achieving breakthrough results.
Making decisions and taking actions that reinforce and affirm the company’s Hedgehog competencies initiate positive momentum. This results in the accumulation of tangible positive outcomes and serves to energize and earn the loyalty of the staff.
In contrast to the flywheel effect, the doom loop is characterized by reactive decision-making, an overextension into too many diverse areas of concentration, following short-lived trends, frequent changes in leadership and personnel, loss of morale, and disappointing results.
The Good to Great process: The seven lessons from the book result in a basic process, as shown below.
Ensure you have a humble, determined Level 5 leaders
Get the right people on the bus in the right seats
Examine emerging market trends and where you can create customer value
Identify one strength area where you can create value better than anyone else
Focus all your resources toward that strength
Carefully apply technologies that accelerate your key strengths
Make steady, consistent progress in that area, avoiding distractions
