“Good to Great” by Jim Collins Some Highlights

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The Sample of Good to Great Companies

Start with 1,435 good companies. Examine their performance over 40 years. Then find the 11 companies that went from mediocre and became great *. The 11 good-to-great companies that Collins found averaged returns 6.9 times greater than the market’s—more than twice the performance rate of General Electric under the legendary Jack Welch. The surprising good-to-great list included many unheralded companies
     

Circuit City Fannie Mae Gillette Walgreens Philip Morris

- 18.50x market - 7.56x market - 7.39x market - 7.34x market - 7.06x market

   

Kroger Nucor Corp Wells Fargo

- 4.17x market - 5.16x market - 3.99x market - 3.98x - 3.42x

Abbott Laboratories market Kimberly-Clark Corp market

Pitney Bowes - 7.16x market

One such surprise, the Kroger Co.—a grocery chain—bumped along as a totally average performer for 80 years and then somehow broke free of its mediocrity to beat the stock market by 4.16 times over the next 15 years. And it didn't stop there. From 1973 to 1998, Kroger outperformed the market by 10 times.

* 15 years of cumulative stock returns at or below market, then a transition point followed by cumulative stock returns at least 3 times higher than the market over the next 15 years

Good vs Great

 Good  If

is the ENEMY of great

one is good there is very little need to change: “If it isn’t broken, don’t fix it” become great requires a new vision requires different leadership

 To  It

Discipline - It starts with people

To go from Good to Great requires:
  

Disciplined People Disciplined Thought Disciplined Actions

 

First who, then what. One needs disciplined people, who apply disciplined thought and take disciplined action. How does one get the right people?
  

Are the good people on the bus? Are the wrong people off the bus? And For those on the bus; are they sitting in the correct seats?

But, you need a great leader – a Level 5

The level 5 leader in all the good to great companies were all “cut form the same cloth” It is all about the type of leader One who does not lead by inspired talk but by inspired thought (discipline) It’s about humility
 

 

Constantly asking the question: “Do I measure up?” It’s not about “me”, it’s about the company, the goal.

The window or the mirror?

All these leaders, when asked how they succeeded answered: “We were lucky” But the real answer is probably more about the window or the mirror:

It’s not just about the leader it’s about the team/the people These successful leaders point out the window at the things/people who led to the success, and to luck, when things go well When things go bad, they look in the mirror asking themselves how they have failed and what they need to do to fix it.

Confronting the brutal facts

It’s about disciplined thought to confront the brutal facts The Stockdale Paradox

One requires the unwavering faith that one can prevail despite the constraints. This needs to be balanced with the discipline to face the brutal facts about one’s situation.

Those who do not make it through trying circumstances are the optimists. They die of broken hearts when things do not work out as planned.

The Hedgehog Concept
Passionate / Born to do this

Best in the world

Economics / key value drivers

Are you engaged in work that fits your own three circles:

What you are passionate about, what you are genetically encoded for? What can you be the best in the world at (and what can you not)? What can you get paid for?

Bringing it all together

To go from Good to Great requires disciplined people, with disciplined thought, to take disciplined action to stop doing that which does not fit the three circles. Once the point of intersection is determined, one needs to action a Stop Doing List! The fundamental distinguishing dynamic of enduring great companies is that they preserve a cherished core ideology while simultaneously stimulating progress and change in everything that is not part of the core ideology. Put another way, the most enduring and successful corporations distinguish their timeless core values and enduring core purpose (which should never change) from their operating practices and business strategies (which should be changing constantly in response to a changing world).
Preserve Core values Core purpose

Stimulate Change Practices Goals & Strategies

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