BOOK REVIEW GOOD-TO-GREAT

BOOK REVIEWGOOD TO GREAT

by Jim Collins

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The 11 G2G companies were:

2Trade key will be next ...........

Six Key Elements of a Good to Great (G2G) Company

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Element 1 :Level 5 Leadership

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Element 2 :First Who..then What

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Element 3 :Confront the Brutal Facts (Yet Never Lose Faith)

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Element 4 :The Hedgehog Concept

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Element 5 :A Culture of Discipline

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GOOD IS THE ENEMY OF GREAT

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Research FindingsLarger-than-life, celebrity leaders who ride in from the outside are negatively correlated with taking a company from good to greatThe structure of executive compensation is not a key driver in corporate performance Strategy per se did not separate the good-to-great companies from the comparison companiesGood-to-great companies paid attention to what not to do and what to stop doing Technology can accelerate a transformation, but it cannot cause a transformation M&A plays virtually no role in igniting a transformation from good to great Good-to-great companies paid scant attend to managing change, motivating people, or creating alignmentGood-to-great companies had no name, tag line, launch event, or program to signify their transformationsGood-to-great companies were not, by and large, in great industries, and some were in terrible industries

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Level 5 Leadership

5 : Level 5 Executive 4 : Effective Leader3 : Competent Manager 2: Contributing Team Member1: Highly Capable Individual

Level-5 Executive

Very humble on a personal levelPossesses a great deal of drive and desire to succeed, where success is not personalAVOID : Ego and CreditLevel 5 leaders look outside the window to accredit Thank others and luckLevel 5 leaders infected with an incurable need to produce sustainable resultsRather talk about the company than themselvesLevel 5 leaders set up successors for success

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The window & the mirror effectLevel 5 leaders look out the window to apportion credit to factors outside themselves when things go wellAt the same time, they look in the mirror to apportion responsibility, never blaming bad luck when things go poorly Everyone outside the window points inside directly at Level 5 leader saying He was the Key; without his guidance and leadership, we would not have become a great companyLevel 5 leader points right back out the window and says Look at all the great people and good fortune that made this possible; I am a lucky guy

FIRST WHOTHEN WHATFirst who, then whatthe who questions come before the what questions before vision, before strategy, before tactics, before organizational structure, before technology

Ensured the right people on the bus before anything else, get the wrong people off the bus, then figure out where to drive It.

G2G companies dont depend on the brilliance of any one person ;a lone geniusThe research indicated that compensation did not correlate at all with the good to great process. No particular compensation scheme appeared to be advantageous

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If you have the wrong people, doesnt matter whether you have the right direction

Why do it this way?If you have the right people on the bus, problem of motivation and people managing are diminished

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Leaders were rigorous, not ruthless in people decisions

There are three steps on how the companies can be rigorous:

Dont hire someone unless youre 100% sure that theyre the right person. Its better to wait and get someone that you know is a good fitOnce you realize you need to fire someone, dont put it off. Do it quickly and fairlyPut the best people on the biggest opportunity not the problems

Lesson Learnt

People are NOT your most important asset. ..The RIGHT people are

All good-to-great companies began the process, finding a path to greatness by confronting the brutal facts of their current reality

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CONFRONT THE BRUTAL FACT(YET NEVER LOSE FAITH)Must create a culture wherein people have an opportunity to hear the truth

Having lofty goals can be good, but you can never lose sight of what the reality is on the ground

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THE HEDGEHOG CONCEPT

The Hedgehog concept is not a goal or strategy to be the best at something, it is an understanding of what you can be the best atHedgehogs simplify the world into a basic principle, see whats essential, and ignore the restIt took an average of four years for the G2G companies to get a Hedgehog Concept

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Hedgehog Concept

What you can be the best in the world at

What you are deeplypassionate about

What drives youreconomicengine One Big Thing

Culture of discipline is not just about action. It is about getting disciplined people who engage in disciplined thought and who then take disciplined action

In a culture of discipline, people do not have jobs they have responsibilities

A CULTURE OF DISCIPLINE

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Technology Accelerators

The ideal approach to technology with the following cycle: "Pause -- Think -- Crawl -- Walk Run

Do not rush into a new technology revolution before having an understanding that it can be used to support your business.

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The Flywheel and the Doom LoopThe flywheel conceptThe doom loop concept

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Lets Make It Happen

Thank YOuPrepared by :Kunal Gupta