Good To Great Summary

Book Summary Chapter 1: Good is the enemy of great Good to Great:Why Some Companies Make the Leap … And Others Don’t answers the search for enduring excellence. It is not just a business problem; it’s a human problem. The principles within this book can be applied to other organizations, not just business enterprises. Good schools can learn to become great schools. Good government agencies can learn to be great government agencies. The Framework The build-up leads to the following stages of breakthrough: Disciplined people; disciplined thought; and disciplined action.

Chapter 2: Level five leadership To achieve Level 5 Leadership one must fully realize and personally incorporate the following five professional aptitudes: • A highly capable individual that gives productive contributions; • A contributing team member who is familiar to group settings; • A competent manager that organizes people and resources toward the efficient and effective pursuit of objectives; • An effective leader who has breakthrough ideas that result in an effective decisions and stimulate higher performance standards; • An executive who can build enduring greatness through a paradoxical blend of humility and professional will. Level 5 leaders have the common goal of building great companies that will endure into the next generation and are comfortable with the idea that most people won’t even know that the roots of that success can be traced back to their efforts. As one Level 5 leader said, “I want to look out from my porch at one of the great companies in the world someday and be able to say, ‘I used to work there’.”

In contrast to Level 5 Leaders, comparison leaders are far more concerned with their own reputation for personal greatness and often fail to prepare the company for success in the next generation. After all, what better testament to your own personal greatness than having the organization fall apart after you leaves?

Chapter 3: First Who, Then What The main point of this chapter is to get the right people on the bus and the wrong people off the bus before you figure out where to drive it. Letting the wrong people hang around is unfair to the right people. The right people will do the right things and deliver the best results regardless of the incentive system. The second key point is the degree of sheer rigor needed regarding people decisions in order to take the company from good to great. Good-to-great companies know people aren’t your most important asset, the right people are. Good-to-great companies placed greater weight on character than education, skills, or experience when hiring. The reason: you can teach skills, but character, basic intelligence, work ethic, and dedication to fulfilling commitments are values that are ingrained in a person. Good-to-great companies are rigorous, but not ruthless. People who do not fit the mold eventually quit or are told to find opportunities elsewhere. The most rigorous discipline is found at the top, where the largest burden of responsibility lies.

CHAPTER 3 WEDNESDAY, FEBRUARY 27, 2008

"Good to Great" Chapter 3: First Who... Then What: This is a great chapter that emphasizes the importance of who is on the team of your company. The idea is to get the wrong people off the bus, and the right ones on. It's key to have highly skilled and more importantly motivated people on the team that have the drive to see the vision of the company follow through. Instead of using programs to motivate your employees, hire those that are already motivated. This will greatly increase

the productivity and success of a company, and perhaps life when you surround yourself with others who are motivated and push you in the right directions. With a team of motivated players with vision, they will be prepared to adapt as the company's needs grow and adjust, and they themselves can assimilate accordingly, and provide informative insight throughout the process

Chapter 4: Confront the Brutal Facts (Yet Never Lose Faith) In confronting the brutal facts, the good-to-great companies found themselves stronger and more resilient, not weaker and more dispirited. In every case, the management team responded with a powerful psychological duality: they soically accepted the brutal facts of reality while maintaining an unwavering faith and a commitment to prevail as a great company despite the brutal facts. Collins calls this duality the Stockdale Paradox. What separates great people or companies from the mediocre is not the absence of difficulties, but the way in which the person or company deals with the inevitable difficulties of life. How to create a climate where the truth is heard There are various ways of procuring or hearing the truth from your workforce. When leaders ask questions, it doesn’t mean that they desire to manipulate or put down others, it is because they require information in order to understand the facts. That is why, in some cases, they hold non-agenda forums or informal meetings to obtain information. The truth can be found when one engages in a dialogue or debate to search for the best possible results. Conducting autopsies to find out the main reason for failures within the company objectives is an effective way to uncover truths. Building a “red flag” mechanism is another way to ascertain truths.

Short pay is a red flag device that will allow the customer to encircle items that they find unsatisfactory, and to only pay for the remaining items. In this way, the company will be warned before it loses the customer. The key lies not in better information, but turning information into information that cannot be ignored.

Chapter 5: The Hedgehog Concept (Simplicity Within the Three Circles) The Hedgehog Concept is a simple, crystalline concept that flows from deep understanding about the intersection of the following three circles: 1. What you can be the best in the world at and, equally important, what you cannot be the best in the world at. 2. What drives your economic engine - a company need not be in a great industry to become a great company. 3. What you are deeply passionate about - You can never motivate people to feel passionate. The Hedgehog Concept of good-to-great companies took many years to clarify because a Hedgehog Concept is just not an event, but a process. Build a Council A council is a standing body that exists as a device to gain understanding about the important issues facing the organization. They meet periodically, as often as once a week. Management team members and co- members of the organization are the key members of the council. Each member listens to other’s opinions, respects each member of the council, and possesses the ability to argue and debate in search of understanding. Each has extensive knowledge of portions of the organization and the group is comprised so that the individual knowledge bases reasonably overlap, but in the whole, encompass the entire organization and its operations. The council does not seek consensus, knowing that consensus decisions are often at odds with intelligent decisions. The leading executive is responsible for the final decision.

Chapter 6: The Culture of Discipline

Rinsing your cottage cheese Give more effort and push your self a little bit harder for a better performance. Everyone wants to be at the top, but some organizations lack the discipline to find out, with egoless clarity, what they can do to be the best or to exert all of their energies, whatever the consequences, to shape the potentials into realities. The key to success is discipline. ‘Rinsing your cottage cheese’ comes from the example of a dieting man who wanted every advantage he could grasp to help him achieve his goal. So, in order to cut even more calories, he rinsed his cottage cheese.

Chapter 7: Technology Accelerators “The good –to-great are motivated by a deep creative urge and inner compulsion for sheer excellence for its own sake. Those who build and perpetuate mediocrity are motivated more by fear of being left behind.” If you ever find yourself thinking that technology alone holds the key to success, then think of the United States-Vietnam war. The Americans lost to the Vietnamese despite superior technology.

Chapter 8: The Flywheel and the Doom Loop The Flywheel When pushing a massive flywheel laid horizontally on its axle, the first pushes require the greatest exertion and effort to obtain a rotation. As the wheel gains momentum, it requires less energy to maintain the rotation. If the same first push energy is continually applied, however, the wheel will go faster and faster, gaining momentum until, with the accumulated effort of pushing consistantly in one direction, it will over the course of time, carry its speed into a breakthough momentum. This is how the good-to-great process of company transformation is best described. Successful transformation comes from an overall accumulation of consistent effort over time. The Doom Loop

The Doom Loop occurs when a company, while in the process of gaining momentum, is confronted with the implementation of a new direction, usually accompanied by the appointment of a new leader, a merger, or acquisition. The flywheel comes to a screeching, grinding halt. The company, in changing direction, must now put the wheel back into motion by pushing in the opposite direction. The results are disappointing, which leads to reaction without understanding what went wrong. This leads to more disappointing results, followed by new fads, leaders, or events to try and save the company, which cannot progress because the wheel, in having to constantly change direction, can never regain its original momentum.

Chapter 9: From Good-to-Great to Built to Last Collins states that this book is not a sequel, but a prequel to his first book, Built to Last. The findings in Good to Great create sustainable great results for a start-up or an established organization. The findings in Built to Last take a company from great results to being an enduring great company. Good to Great answers the fundamental question that was not answered in Built to Last - the difference between the good BHAG (big hairy audacious goal) and a bad BHAG. The deliverance of returns to share holders isn’t the primary reason for existance in the enduring great companies. Rather, its profits and cash will flow like blood and water through a healthy body which, while essential for life, is not the point of life. Some concepts such as Level 5 Leadership, First Who, Then What, and the Stockdale Paradox are very much related to the other concepts introduced in Built to Last. If you are doing something you care deeply about and if you believe in it, then there’s no reason why you can’t try to make it great. If you had to ask yourself why you should make it great, then you are going in the wrong direction. Doing something that you are impassioned about and doing something to make make that passion great is the pathway to

greatness and satisfaction will follow - both personally and professionally.

SUMMARY 2

LDRS 399—Internships in Leadership Discussion Questions for Good to Great Chapter 1: Good is the Enemy of Great 1. What criteria did Collins use to find eleven good to great examples? What results did they focus on? Why? 2. Was the crucial comparison question: “What did the good-to-great companies share in common? What was the question? Why? Chapter 2: Level 5 Leadership 3. What is a “level 5 leader?” What are the two main contradictory characteristics of level 5 leaders? 4. Here is a question Collins does not ask: Why do you suppose a level 5 leaders are effective? (Hint: why do you suppose people follow and respond positively to them? Does this have anything to do with Lencioni’s concepts of vulnerability and trust?) Chapter 3: First Who…Then What 5. Who are the right people to get on the bus? 6. What does it mean for the right people to be rigorous? 7. Are the right people motivated by high salaries? Explain. 8. How does one find out who the right people are? 9. Are layoffs more likely in good-to-great companies or mediocre companies? Why? 10. What does it mean to be rigorous? Chapter 4: Confront the Brutal Facts 11. Why is uncovering the truth important? 12. How does on create a culture where the truth is heard? Chapter 5: The Hedgehog Concept 13. Summarize the essay of the hedgehog and the fox? What does this metaphorical story mean? 14. What are the “three circles” of the Hedgehog Concept? 15. Is the Hedgehog Concept the goal to be the best or the understanding of what one can be the best at? What is the difference? 16. What is your economic denominator?

17. Should you get passionate about what you do or should you do what you are passionate about? What is the difference? 18. What is the Council and what is the Council’s role? Chapter 6: The Culture of Discipline 19. What is the purpose of bureaucracy? Why should bureaucracy be avoided? How does one avoid bureaucracy? 20. Who are the right people to get on the bus? Chapter 7: Technology Accelerators 21. If technology is responsible for 20% of the success of a company, what is responsible for the other 80%? Chapter 9: The Flywheel and the Doom Loop 22. Why is it important to know that it took John Wooden 13 years of laboring in obscurity before he won an NCAA championship? 23. Explain the power of continuous improvement and incremental results? 24. What behaviors lead to the “doom loop?” Chapter 9: From Good to Great to Built to Last 25. Why is it so important to preserve a company’s core ideology? 26. What is a BHAG and how does it stimulate progress? 27. What is Collins’ reason for going for greatness? What is your reason? What is a servant leader’s reason from a Christian perspective?