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An Introduction. Jim Collins Concepts behind ‘Built to Last’, prequel to ‘Good to Great’ 1,435 Companies researched from Fortune 500, 11 good-to-great, 28 comparison companies GOOD IS THE ENEMY OF GREAT. I- DISCIPLINED PEOPLE. 1. Level 5 Leadership

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an introduction
An Introduction
  • Jim Collins
  • Concepts behind ‘Built to Last’, prequel to ‘Good to Great’
  • 1,435 Companies researched from Fortune 500, 11 good-to-great, 28 comparison companies
  • GOOD IS THE ENEMY OF GREAT
i disciplined people
I-DISCIPLINED PEOPLE

1. Level 5 Leadership

“You can accomplish anything in life, provided you do not mind who gets the credit.”

Harry S. Truman

components of l5l
Components of L5L
  • Personal Humility
  • Professional Will

Extreme (Humility + Will) = Level 5 Leadership

personal humility
Personal Humility
  • Story of Darwin E. Smith, CEO of Kimberly-Clark (An old paper company)
  • They never aspired to be put on a pedestal or become unreachable icons. They were seemingly ordinary people quietly producing extra-ordinary results
  • 20 yrs. Before Transformation, stocks fell 36% behind Stock Market
  • 20 yrs. After Transformation, Stock Returns were 4.1 times Stock Market, out-performing P&G, Coca-Cola, HP, 3M, & GE
professional will
Professional Will
  • It is equally about ferocious resolve – infected with an incurable need to produce results. Humble and fearless… incredibly ambitious
  • Ambitious for Company rather than themselves
  • Usually from within the company
  • Smith was diagnosed with cancer. However, his ferociousness never receded
  • Dramatic decision: Sell the Mills, change core business
window mirror approach
Window & Mirror Approach
  • Good Results = Look out the Window
  • Poor Results = Look in the Mirror
i disciplined people1
I- DISCIPLINED PEOPLE

2. First Who … Then What

importance of the right people
Importance of the Right People
  • Researchers expectations: Vision, strategy, direction precedes people commitment and alignment
  • Research findings: Evidence for the case being the opposite
  • “If you have the wrong people, it doesn’t matter whether you discover the right direction; you still won’t have a great company. Great vision without great people is irrelevant.”
case of wells fargo
Case of Wells Fargo
  • Bank CEO Wells Fargo assembled the best management team in the 1970’s, anticipating massive changes. Hiring continued, often without specific jobs in mind
  • Banking Deregulation in 1980
  • Only Wells Fargo managed to perform well, out-performing the market by 3 times
key principles regarding people
Key Principles Regarding People
  • When in doubt don’t hire, keep looking.

2. When you know you need to make a people change, act.

3. Put your best people on your biggest opportunities, not on your biggest problems.

ii disciplined people
II- DISCIPLINED PEOPLE

1. Confront the Brutal Facts (Yet never lose faith)

confront brutal facts upfront
Confront Brutal Facts Upfront
  • A&P v/s Kroger Case Study
  • Both had 100% traditional grocery stores
  • Both conducted researches to test ‘Superstore Concepts’
  • Research found that traditional stores were headed for extinction
  • A&P closed the experiment, while Kroger faced the reality head-on
kroger s success
Kroger’s Success
  • Kroger decided to eliminate, change, or replace every single store and depart every region that did not fit the new realities. The whole system would be turned inside out, store by store, block by block, city by city, state by state
  • The change lead to Kroger attaining the number 1 position in the Grocery Market by 1999
  • Principle: You absolutely cannot make a series of good decisions without first confronting the brutal facts
a climate where the truth is heard
A Climate Where The Truth Is Heard
  • "Facts are better than dreams.“
    • Lead with questions, not answers.

2. Engage in dialogue and debate, not coercion.

3. Conduct autopsies, without blame.

4. Build “red flag” mechanisms.

remember the stockdale paradox
Remember The 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
unexpected findings
Unexpected Findings
  • Charisma can be as much a liability as an asset
  • Trying to motivate the people is a waste of effort. The right people are self-motivated. The challenge is to not to de-motivate them
ii disciplined people1
II- DISCIPLINED PEOPLE

2. The Hedgehog Concept

Simplicity within the 3 Circles

the hedgehog concept
The Hedgehog Concept
  • “The Hedgehog & the Fox” by Isaiah Berlin
  • Foxes pursue many ends, at he same time and see the complexity. They are "scattered or diffused, moving on many levels," says Berlin, never integrating their thinking into one overall concept or unifying vision.
  • Hedgehogs, on the other hand, simplify a complex world into a single organizing idea, basic principles, or a concept that unifies and guides everything. No matter how complex the world is, a hedgehog reduces all challenges and dilemmas to simple, indeed almost simplistic-hedgehog ideas. For a hedgehog, anything that does not somehow relate to the hedgehog idea holds no relevance.
iii disciplined action
III- DISCIPLINED ACTION
  • A Culture of Discipline
key principles
Key Principles
  • Build a culture around the idea of freedom and responsibility, within a framework.

2. Fill that culture with self-disciplined people who are willing to go to extreme lengths to fulfill their responsibilities.

3. Don't confuse a culture of discipline with a tyrannical disciplinarian.

4. Adhere with great consistency to the Hedgehog Concept, exercising an almost religious focus on the intersection of the three circles. Equally important, create a "stop doing list" and systematically unplug anything extraneous.

slide28

Disciplined People

Disciplined Thought

Disciplined Action

iii disciplined action1
III- DISCIPLINED ACTION

2. Technology Accelerators

technology accelerators
TECHNOLOGY ACCELERATORS
  • Good-to-great organizations think differently about technology change than mediocre ones.
  • Drugstore.com v/s Walgreen
  • Crawl, Walk, Run Approach
  • Does the technology fit directly with your Hedgehog Concept?
  • The good-to-great companies used technology as an accelerator of momentum, not a creator of it.
slide32

How a company reacts to technological change is a good indicator of its inner drive for greatness versus mediocrity.

  • Technology, by itself is never a primary root cause of either greatness or decline.
  • Across 84 interviews with good-to-great executives, 80% did not even mention technology as one of the top five factors in the transformation.
flywheel doomloop
FLYWHEEL & DOOMLOOP
  • Good-to-great transformations often look like dramatic, revolutionary events to those observing from the outside.
  • However, they feel like organic, cumulative processes to people on the inside.
  • There was no single defining action, no grand program, no one killer innovation, so solitary lucky break, no specific tagline, no launch event.
slide35

Sustainable transformations follow a predictable pattern of buildup and breakthrough similar to pushing a giant, heavy flywheel.

  • The comparison companies followed the pattern of doom loop, trying to skip buildup and jump immediately to breakthrough.
  • The comparison companies tried to create a breakthrough with large, misguided acquisitions. Conversely, good-to-great companies used acquisitions after breakthroughs to accelerate momentum.
  • Alignment followed results and momentum.
from good to great to built to last
FROM GOOD TO GREAT TO BUILT TO LAST
  • Collins makes a connection between this book and his previous work, Built to LastAttribution.
  • Good-to-Great in the early stages of Built to Last
slide39

BHAGs (pronounced bee-hag, short for "Big Hairy Audacious Goals") are huge and daunting goals - like big mountains.

  • BHAGs can be good as well as bad.
  • The Boeing Case
thank you
THANK YOU

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