[PPT]Good to Great Chapter 4: Confront the Brutal Facts (But ...kimboal.ba.ttu.edu/MGT 4380 SM...
Transcript of [PPT]Good to Great Chapter 4: Confront the Brutal Facts (But ...kimboal.ba.ttu.edu/MGT 4380 SM...
TEAM 6
WILL KERLICK MOLLY MURDOCK REECE MACDONALD BRYAN FETTERMAN JOHN FLETCHER
Good to GreatChapter 4: Confront the Brutal Facts (But Never
Lose Faith)
“There is no worse mistake in public leadership than to hold out false hopes soon to be swept away” -Winston Churchill
Confront the Brutal Facts
BUILD UP
BREAKTHROUGH
FLYWHEEL
Level 5 First Who Confront the HedgeHog Culture of TechnologyLeadership Then What Brutal Facts Concept Discipline AccelerationsDisciplined People
Disciplined Thought
Disciplined Action
Confront the Brutal Facts
Facts are better then dreams
A climate where truth is heard
Unwavering faith amid the brutal facts
The Stockdale paradox
Facts Are Better Than
Dreams
Disciplined Thought
Good to Great companies showed to have two distinct forms of disciplined thought
Companies infused the entire process with the brutal facts of reality Basis of this chapter
Next, they developed a simple, yet deeply insightful, frame of reference for all decisions Covered in later chapters
Good Decisions
All Good to Great companies made multiple good decisions, diligently executed that accumulated one on top of the other. The process to success was constantly refined.
Before a company can make a series of good decisions, it must face the brutal facts.
Once the brutal facts were faced, the right decisions often became self-evident.
Facing Brutal Facts….
Old-model grocery stores were becoming extinct Kroger’s CEO Lyle Everingham said, “The super combination stores were
the way of the future…once we looked at the facts, there was really no question what we had to do.” Kroger transformed all of their stores therefore reconstructing traditional market
boundaries to break from the competition and create a Blue Ocean.
A&P opened The Golden Key in order to experiment with the new trends in the market A&P didn’t like the facts they faced and shut down the new successful store in
order to preserve the traditional store, which soon failed.
Store Type Number of StoresCombination Food & Drug Stores 2,183
Multi-Department Stores 123Marketplace Stores 35
Price Impact Warehouse Stores 145Convenience Stores 782
Jewelry Stores 394
A Second Example
Mr. Ash of Addressograph had a vision to emerge above IBM, Xerox, and Kodak in office automation Addressograph had previously only dominated the envelope-
address-duplication business Ash refused to face evidence that his plan was doomed to fail After Ash was thrown out of office and the company had filed for
bankruptcy, he still refused to confront reality, saying: “We lost some battles, but we were winning the war,”
There is nothing wrong with pursuing a vision for greatness, but Good to Great companies continually refined the path to greatness with brutal facts of reality.
Leaders
Strong charismatic leaders can become the de facto reality driving the company You don’t want celebrity leaders
Fear of the leader causes employees to be more afraid of what the leader would say or think then what external forces could do to the company. Employees don’t give honest opinions but instead say
what they think the CEO would like to hear
Pitney Bowes Example
There is no fear of executives at Pitney Bowes. Instead they hold sales meetings where the entire management team opens themselves up for searing questions and challenges from the sales people who deal directly with customers.
Instead of bragging, Pitney Bowes executives think that their accomplishments, no matter how great, are never good enough to sustain the company. Pushes them from good to great
A Climate Where the
Truth is Heard
Four Basic Practices for Creating the Right Climate
Lead with questions, not answers
Engage in dialogue and debate, not coercion
Conduct autopsies, without blame
Build red flag mechanisms
Lead with Questions, Not Answers
Questions are used to gain a better understanding
They are not a form of manipulation or used to blame others or put people down
Ask questions that will lead to the best possible insights
Many Good to Great companies conducted informal meetings with no agenda where current realities tended to bubble to the surface after asking conversational questions So, What’s on your mind? Can you tell me about that? What should we be worried about? Can you help me understand?
Engage in Dialogue and Debate, NOT Coercion
Intense dialogues, arguments, and debates often allow companies to iron out issues.
Ken Iverson of Nucor acted simply as a mediator for debates that turned Nucor from a nuclear business to a steel producer.
The process is more like a heated scientific debate, with people engaged in a search for the best answers.
Conduct Autopsies, without Blame
Phillip Morris’s acquisition of 7UP was a complete failure, but executives aren’t ashamed of the downfall. Instead they talk about it and analyze the situation.
Dissect mistakes and learn from them as Phillip Morris did.
Do not place blame for failure, only search for understanding and learning
Build Red Flag Mechanisms
All companies in any given industry have the same access to information. The key, then, lies in turning information into information that CAN NOT be ignored
Red flags cause immediate attention to important information.
Unwavering Faith Amid the
Brutal Facts
Persistence is Key
When P&G entered the market, Scott Paper immediately threw in the towel and accepted defeat. With P&G as number 1, Scott Paper only sought to
keep afloat in their industry.
Kimberly-Clark, however, decided to fight back. Kimberly-Clark is about the only company that P&G
didn’t trump. They were exhilarated by the idea of going up against
the best, seeing it as an opportunity to make Kimberly-Clark better and stronger
Unwavering Faith
Good to Great companies face competition and leave themselves stronger and more resilient rather than weak and more dispirited. They use difficult experiences as defining events
Never entertain the possibility that you might fail, but instead have confidence that you will prevail in the end.
The Stockdale Paradox
Stockdale Paradox
Stockdale paradox is the duality of stoically accepting the brutal facts and maintaining an unwavering faith.
It’s not the presence or absence of difficulty, but how you deal with the inevitable difficulties in life.
In adopting this duality you will dramatically increase your odds of making a series of good decisions and ultimately discovering a simple, yet deeply insightful concept for making really big choices.
Stockdale Paradox
Retain faith that you will prevail in
the end, regardless of the
difficulties.
AND at the same time
Confront the most brutal facts of your current reality,Whatever they might be.
“Once you have that simple, unifying concept, you will be very close to make a sustained transition to breakthrough results.” -Jim Collins