Katy Lovett, Matt Snowden, and CJ Baker. How do companies go from go to great? What methods were...
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Transcript of Katy Lovett, Matt Snowden, and CJ Baker. How do companies go from go to great? What methods were...
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Chapter One: Good is the
Enemy of GreatKaty Lovett, Matt
Snowden, and CJ Baker
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How do companies go from go to great?
What methods were used in research?
What concepts exemplified good-to-great companies?
Chapter Overview
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Phase 1: The Search Find companies that showed the good-to-
great pattern
Companies that had cumulative returns over 15 years
Companies whose growth was independent of the industry
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Good to Great CasesCompany Results from
Transition Point to 15 Years later
Transitional Period
Abbot 3.98 times the market
1974-1989
Circuit City 18.5 times the market
1982-1997
Fannie Mae 7.56 times the market
1984-1999
Gillette 7.39 times the market
1980-1995
Kimberly-Clark 3.42 times the market
1972-1987
Kroger 4.17 times the market
1973-1988
Nucor 5.16 times the market
1975-1990
Philip Morris 7.06 times the market
1964-1979
Pitney Bowes 7.16 times the market
1973-1988
Walgreens 7.34 times the market
1975-1990
Wells Fargo 3.99 times the market
1983-1998
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Phase 2: Compared to What? Contrasted the good-to-great companies to
a selected set of “comparison companies”
Distinguishing factor
“Direct comparisons” and “unsustained comparisons”
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Comparison Companies Good-to-Great Companies
Direct Companies Unsustained Comparisons
Abbot Upjohn Burroughs
Circuit City Silo Chrysler
Fannie Mae Great Western Harris
Gillette Warner-Lambert Hasbro
Kimberly-Clark Scott Paper Rubbermaid
Kroger A&P Teledyne
Nucor Bethlehem Steel
Philip Morris R.J. Reynolds
Pitney Bowes Addressograph
Walgreens Eckerd
Wells Fargo Bank of America
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Researchers stepped into a “black-box” to shed light on inner workings
Debated results to come to conclusions
Phase 3: Inside the Black Box
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Surprising results: CEO Ego-maniacs Executive compensation Strategy Focusing on what to do Technology Mergers/Starting Events Managing people Industry
Phase 3: Inside the Black Box
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“Iterative process of looping back and forth…”
Concepts are based on fact, not opinion
Phase 4: Chaos to Concept
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Great Traits Level 5 Leadership First Who…. Then What Confront the Brutal Facts, Yet Never Lose
Faith The Hedgehog Concept A Culture of Discipline Technology Accelerators The Flywheel and the Doom Loop.
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Level 5 Leadership Level 5 Leaders are not we expect to see! Level 5 Leaders are often shy and reserved,
unlike their charismatic counterparts. Level 5 Leaders almost always are
promoted from within the company. Level 5 Leaders care more about building
something great, than being someone great.
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First Who…. Then What Your team is more important than your plan. The right people must be selected before a
great strategy can be devised. This may seem obvious but note the
nuance.
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Confront the Brutal Facts Pretending that obstacles are not there WILL
NOT make them go away. Believing that you can overcome obstacles
WILL help you to succeed.
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The Hedgehog Concept Simplicity within the three circles.
◦ What are you passionate about?◦ What can you be the BEST at?◦ What drives your economic engine?
“It’s not about being great at everything, it’s about being the best in the world at something.”
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A Culture of Discipline A culture of discipline is highly elusive. Having discipline eliminates the need to
spend energy on micromanagement. For a culture of discipline, you need:
◦ Disciplined People◦ Disciplined Thought◦ Disciplined Action
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Technology Accelerators Technology can never be the driver of
change. Powerful technologies must be used as
powerful tools.
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The Flywheel and the Doom Loop
Greatness is achieved through persistence, not sweeping change.
Persistent effort has a cumulative effect on the companies’ “momentum.”
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Concepts apply not to new economy, or old economy, but both
What makes enduring organizations of any type?
Take the data as evidence and make your own conclusions
In Summary