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Good to Great:Why Some Companies Make the Leap … And Others Don t ans!ers the sear"h for enduring e#"e$$en"e% &t is not 'ust a (usiness pro($em) it s a human pro($em% *he prin"ip$es !ithin this (ook "an (e app$ied to other organi+ations, not 'ust (usiness enterprises% Good s"hoo$s "an $earn to (e"ome great s"hoo$s% Good go-ernment agen"ies "an $earn to (e great go-ernment agen"ies% *he .rame!ork *he (ui$d/up $eads to the fo$$o!ing stages of (reakthrough: Dis"ip$ined peop$e) dis"ip$ined thought) and dis"ip$ined a"tion%
Chapter 0: Le-e$ fi-e $eadership
*o a"hie-e Le-e$ 1 Leadership one must fu$$y rea$i+e and persona$$y in"orporate the fo$$o!ing fi-e professiona$ aptitudes: • A high$y "apa($e indi-idua$ that gi-es produ"ti-e "ontri(utions) • A "ontri(uting team mem(er !ho is fami$iar to group settings) • A "ompetent manager that organi+es peop$e and resour"es to!ard the effi"ient and effe"ti-e pursuit of o('e"ti-es) • An effe"ti-e $eader !ho has (reakthrough ideas that resu$t in an effe"ti-e de"isions and stimu$ate higher performan"e standards) • An e#e"uti-e !ho "an (ui$d enduring greatness through a parado#i"a$ ($end of humi$ity and professiona$ !i$$% Le-e$ 1 $eaders ha-e the "ommon goa$ of (ui$ding great "ompanies that !i$$ endure into the ne#t generation and are "omforta($e !ith the idea that most peop$e !on t e-en kno! that the roots of that su""ess "an (e tra"ed (a"k to their efforts% As one Le-e$ 1 $eader said, 2& !ant to $ook out from my por"h at one of the great "ompanies in the !or$d someday and (e a($e to say, 3& used to !ork there %4
&n "ontrast to Le-e$ 1 Leaders, "omparison $eaders are far more "on"erned !ith their o!n reputation for persona$ greatness and often fai$ to prepare the "ompany for su""ess in the ne#t generation% After a$$, !hat (etter testament to your o!n persona$ greatness than ha-ing the organi+ation fa$$ apart after you $ea-es5
Chapter 6: .irst Who, *hen What
*he main point of this "hapter is to get the right peop$e on the (us and the !rong peop$e off the (us (efore you figure out !here to dri-e it% Letting the !rong peop$e hang around is unfair to the right peop$e% *he right peop$e !i$$ do the right things and de$i-er the (est resu$ts regard$ess of the in"enti-e system% *he se"ond key point is the degree of sheer rigor needed regarding peop$e de"isions in order to take the "ompany from good to great% Good/to/great "ompanies kno! peop$e aren t your most important asset, the right peop$e are% Good/to/great "ompanies p$a"ed greater !eight on "hara"ter than edu"ation, ski$$s, or e#perien"e !hen hiring% *he reason: you "an tea"h ski$$s, (ut "hara"ter, (asi" inte$$igen"e, !ork ethi", and dedi"ation to fu$fi$$ing "ommitments are -a$ues that are ingrained in a person% Good/to/great "ompanies are rigorous, (ut not ruth$ess% 7eop$e !ho do not fit the mo$d e-entua$$y 8uit or are to$d to find opportunities e$se!here% *he most rigorous dis"ip$ine is found at the top, !here the $argest (urden of responsi(i$ity $ies%
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BGood to GreatB Chapter 6: .irst Who%%% *hen What:
*his is a great "hapter that emphasi+es the importan"e of !ho is on the team of your "ompany% *he idea is to get the !rong peop$e off the (us, and the right ones on% &tCs key to ha-e high$y ski$$ed and more important$y moti-ated peop$e on the team that ha-e the dri-e to see the -ision of the "ompany fo$$o! through% &nstead of using programs to moti-ate your emp$oyees, hire those that are a$ready moti-ated% *his !i$$ great$y in"rease
the produ"ti-ity and su""ess of a "ompany, and perhaps $ife !hen you surround yourse$f !ith others !ho are moti-ated and push you in the right dire"tions% With a team of moti-ated p$ayers !ith -ision, they !i$$ (e prepared to adapt as the "ompanyCs needs gro! and ad'ust, and they themse$-es "an assimi$ate a""ording$y, and pro-ide informati-e insight throughout the pro"ess
Chapter D: Confront the Bruta$ .a"ts E=et <e-er Lose .aithF
&n "onfronting the (ruta$ fa"ts, the good/to/great "ompanies found themse$-es stronger and more resi$ient, not !eaker and more dispirited% &n e-ery "ase, the management team responded !ith a po!erfu$ psy"ho$ogi"a$ dua$ity: they soi"a$$y a""epted the (ruta$ fa"ts of rea$ity !hi$e maintaining an un!a-ering faith and a "ommitment to pre-ai$ as a great "ompany despite the (ruta$ fa"ts% Co$$ins "a$$s this dua$ity the Sto"kda$e 7arado#% What separates great peop$e or "ompanies from the medio"re is not the a(sen"e of diffi"u$ties, (ut the !ay in !hi"h the person or "ompany dea$s !ith the ine-ita($e diffi"u$ties of $ife% 9o! to "reate a "$imate !here the truth is heard *here are -arious !ays of pro"uring or hearing the truth from your !orkfor"e% When $eaders ask 8uestions, it doesn t mean that they desire to manipu$ate or put do!n others, it is (e"ause they re8uire information in order to understand the fa"ts% *hat is !hy, in some "ases, they ho$d non/agenda forums or informa$ meetings to o(tain information% *he truth "an (e found !hen one engages in a dia$ogue or de(ate to sear"h for the (est possi($e resu$ts% Condu"ting autopsies to find out the main reason for fai$ures !ithin the "ompany o('e"ti-es is an effe"ti-e !ay to un"o-er truths% Bui$ding a 2red f$ag4 me"hanism is another !ay to as"ertain truths%
Short pay is a red f$ag de-i"e that !i$$ a$$o! the "ustomer to en"ir"$e items that they find unsatisfa"tory, and to on$y pay for the remaining items% &n this !ay, the "ompany !i$$ (e !arned (efore it $oses the "ustomer% *he key $ies not in (etter information, (ut turning information into information that "annot (e ignored%
Chapter 1: *he 9edgehog Con"ept ESimp$i"ity Within the *hree Cir"$esF
*he 9edgehog Con"ept is a simp$e, "rysta$$ine "on"ept that f$o!s from deep understanding a(out the interse"tion of the fo$$o!ing three "ir"$es: 1% What you "an (e the (est in the !or$d at and, e8ua$$y important, !hat you "annot (e the (est in the !or$d at% 0% What dri-es your e"onomi" engine / a "ompany need not (e in a great industry to (e"ome a great "ompany% 6% What you are deep$y passionate a(out / =ou "an ne-er moti-ate peop$e to fee$ passionate% *he 9edgehog Con"ept of good/to/great "ompanies took many years to "$arify (e"ause a 9edgehog Con"ept is 'ust not an e-ent, (ut a pro"ess% Bui$d a Coun"i$ A "oun"i$ is a standing (ody that e#ists as a de-i"e to gain understanding a(out the important issues fa"ing the organi+ation% *hey meet periodi"a$$y, as often as on"e a !eek% Management team mem(ers and "o/ mem(ers of the organi+ation are the key mem(ers of the "oun"i$% :a"h mem(er $istens to other s opinions, respe"ts ea"h mem(er of the "oun"i$, and possesses the a(i$ity to argue and de(ate in sear"h of understanding% :a"h has e#tensi-e kno!$edge of portions of the organi+ation and the group is "omprised so that the indi-idua$ kno!$edge (ases reasona($y o-er$ap, (ut in the !ho$e, en"ompass the entire organi+ation and its operations% *he "oun"i$ does not seek "onsensus, kno!ing that "onsensus de"isions are often at odds !ith inte$$igent de"isions% *he $eading e#e"uti-e is responsi($e for the fina$ de"ision%
Chapter G: *he Cu$ture of Dis"ip$ine
;insing your "ottage "heese Gi-e more effort and push your se$f a $itt$e (it harder for a (etter performan"e% :-eryone !ants to (e at the top, (ut some organi+ations $a"k the dis"ip$ine to find out, !ith ego$ess "$arity, !hat they "an do to (e the (est or to e#ert a$$ of their energies, !hate-er the "onse8uen"es, to shape the potentia$s into rea$ities% *he key to su""ess is dis"ip$ine% 3;insing your "ottage "heese "omes from the e#amp$e of a dieting man !ho !anted e-ery ad-antage he "ou$d grasp to he$p him a"hie-e his goa$% So, in order to "ut e-en more "a$ories, he rinsed his "ottage "heese%
Chapter ?: *e"hno$ogy A""e$erators
2*he good Hto/great are moti-ated (y a deep "reati-e urge and inner "ompu$sion for sheer e#"e$$en"e for its o!n sake% *hose !ho (ui$d and perpetuate medio"rity are moti-ated more (y fear of (eing $eft (ehind%4 &f you e-er find yourse$f thinking that te"hno$ogy a$one ho$ds the key to su""ess, then think of the >nited States/Iietnam !ar% *he Ameri"ans $ost to the Iietnamese despite superior te"hno$ogy%
Chapter A: *he .$y!hee$ and the Doom Loop
*he .$y!hee$ When pushing a massi-e f$y!hee$ $aid hori+onta$$y on its a#$e, the first pushes re8uire the greatest e#ertion and effort to o(tain a rotation% As the !hee$ gains momentum, it re8uires $ess energy to maintain the rotation% &f the same first push energy is "ontinua$$y app$ied, ho!e-er, the !hee$ !i$$ go faster and faster, gaining momentum unti$, !ith the a""umu$ated effort of pushing "onsistant$y in one dire"tion, it !i$$ o-er the "ourse of time, "arry its speed into a (reakthough momentum% *his is ho! the good/to/great pro"ess of "ompany transformation is (est des"ri(ed% Su""essfu$ transformation "omes from an o-era$$ a""umu$ation of "onsistent effort o-er time% *he Doom Loop
*he Doom Loop o""urs !hen a "ompany, !hi$e in the pro"ess of gaining momentum, is "onfronted !ith the imp$ementation of a ne! dire"tion, usua$$y a""ompanied (y the appointment of a ne! $eader, a merger, or a"8uisition% *he f$y!hee$ "omes to a s"ree"hing, grinding ha$t% *he "ompany, in "hanging dire"tion, must no! put the !hee$ (a"k into motion (y pushing in the opposite dire"tion% *he resu$ts are disappointing, !hi"h $eads to rea"tion !ithout understanding !hat !ent !rong% *his $eads to more disappointing resu$ts, fo$$o!ed (y ne! fads, $eaders, or e-ents to try and sa-e the "ompany, !hi"h "annot progress (e"ause the !hee$, in ha-ing to "onstant$y "hange dire"tion, "an ne-er regain its origina$ momentum%
Chapter J: .rom Good/to/Great to Bui$t to Last
Co$$ins states that this (ook is not a se8ue$, (ut a pre8ue$ to his first (ook, Built to Last% *he findings in Good to Great "reate sustaina($e great resu$ts for a start/up or an esta($ished organi+ation% *he findings in Built to Last take a "ompany from great resu$ts to (eing an enduring great "ompany% Good to Great ans!ers the fundamenta$ 8uestion that !as not ans!ered in Built to Last / the differen"e (et!een the good B9AG E(ig hairy auda"ious goa$F and a (ad B9AG% *he de$i-eran"e of returns to share ho$ders isn t the primary reason for e#istan"e in the enduring great "ompanies% ;ather, its profits and "ash !i$$ f$o! $ike ($ood and !ater through a hea$thy (ody !hi"h, !hi$e essentia$ for $ife, is not the point of $ife% Some "on"epts su"h as Le-e$ 1 Leadership, .irst Who, *hen What, and the Sto"kda$e 7arado# are -ery mu"h re$ated to the other "on"epts introdu"ed in Bui$t to Last% &f you are doing something you "are deep$y a(out and if you (e$ie-e in it, then there s no reason !hy you "an t try to make it great% &f you had to ask yourse$f !hy you shou$d make it great, then you are going in the !rong dire"tion% Doing something that you are impassioned a(out and doing something to make make that passion great is the path!ay to
greatness and satisfa"tion !i$$ fo$$o! / (oth persona$$y and professiona$$y%
LD;S 6JJK&nternships in Leadership Dis"ussion Luestions for Good to Great Chapter 1: Good is the :nemy of Great 1% What "riteria did Co$$ins use to find e$e-en good to great e#amp$es5 What resu$ts did they fo"us on5 Why5 0% Was the "ru"ia$ "omparison 8uestion: 2What did the good/to/great "ompanies share in "ommon5 What !as the 8uestion5 Why5 Chapter 0: Le-e$ 1 Leadership 6% What is a 2$e-e$ 1 $eader54 What are the t!o main "ontradi"tory "hara"teristi"s of $e-e$ 1 $eaders5 D% 9ere is a 8uestion Co$$ins does not ask: Why do you suppose a $e-e$ 1 $eaders are effe"ti-e5 E9int: !hy do you suppose peop$e fo$$o! and respond positi-e$y to them5 Does this ha-e anything to do !ith Len"ioni s "on"epts of -u$nera(i$ity and trust5F Chapter 6: .irst Who…*hen What 1% Who are the right peop$e to get on the (us5 G% What does it mean for the right peop$e to (e rigorous5 ?% Are the right peop$e moti-ated (y high sa$aries5 :#p$ain% A% 9o! does one find out !ho the right peop$e are5 J% Are $ayoffs more $ike$y in good/to/great "ompanies or medio"re "ompanies5 Why5 1@% What does it mean to (e rigorous5 Chapter D: Confront the Bruta$ .a"ts 11% Why is un"o-ering the truth important5 10% 9o! does on "reate a "u$ture !here the truth is heard5 Chapter 1: *he 9edgehog Con"ept 16% Summari+e the essay of the hedgehog and the fo#5 What does this metaphori"a$ story mean5 1D% What are the 2three "ir"$es4 of the 9edgehog Con"ept5 11% &s the 9edgehog Con"ept the goa$ to (e the (est or the understanding of !hat one "an (e the (est at5 What is the differen"e5 1G% What is your e"onomi" denominator5
1?% Shou$d you get passionate a(out !hat you do or shou$d you do !hat you are passionate a(out5 What is the differen"e5 1A% What is the Coun"i$ and !hat is the Coun"i$ s ro$e5 Chapter G: *he Cu$ture of Dis"ip$ine 1J% What is the purpose of (ureau"ra"y5 Why shou$d (ureau"ra"y (e a-oided5 9o! does one a-oid (ureau"ra"y5 0@% Who are the right peop$e to get on the (us5 Chapter ?: *e"hno$ogy A""e$erators 01% &f te"hno$ogy is responsi($e for 0@M of the su""ess of a "ompany, !hat is responsi($e for the other A@M5 Chapter J: *he .$y!hee$ and the Doom Loop 00% Why is it important to kno! that it took Nohn Wooden 16 years of $a(oring in o(s"urity (efore he !on an <CAA "hampionship5 06% :#p$ain the po!er of "ontinuous impro-ement and in"rementa$ resu$ts5 0D% What (eha-iors $ead to the 2doom $oop54 Chapter J: .rom Good to Great to Bui$t to Last 01% Why is it so important to preser-e a "ompany s "ore ideo$ogy5 0G% What is a B9AG and ho! does it stimu$ate progress5 0?% What is Co$$ins reason for going for greatness5 What is your reason5 What is a ser-ant $eader s reason from a Christian perspe"ti-e5
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