innovation reading club - good to great
DESCRIPTION
TRANSCRIPT
THE BOOK• WHAT IS THIS ABOUT?
– HAVE YOU EVER THOUGHT WHAT MAKES THE DIFFERENCE BETWEEN A GOOD COMPANY AND A GREAT ONE?
– HOW DO COMPANIES BECOME MAGNIFICENT?
– WORKING IN A PROFITABLE FIELD? SPECIFIC TYPE OF BUSINESS? PRESSURED WORKERS? CRUSHING THEIR RIVALS?
– JIM COLLINS AND THEIR COLLEAGUES LOOKED FOR COMMON PATTERNS IN COMPANIES THAT MADE A TRANSITION BETWEEN BEING AVERAGE COMPANIES AND GREAT COMPANIES
STUDYING THE MARKET• WHAT DID THEY LOOK FOR?– Companies that appeared in Fortune List (1965-1995):• Biggest American companies• Belonging to the stock market: public and accessible
data– Average companies: financial performance not higher than
1.5 times the average market during 15 years– Great companies: financial performance 3 times better
than the average market for the next 15 years since a transition
STUDYING THE MARKET• COMPANIES THAT HAD A TRANSITION!
• WHY NO HIGH-TECH COMPANIES?:– Many of them too young (Google)– Some of them have always been great (Intel)
TRANSITION
STUDYING THE MARKET• SELECTED COMPANIES:
• HOW MANY OF THEN ARE WELL KNOWN??
Abbot Laboratories Circuit City
Fannie Mae Gillette
Kimberly-Clark Kroger
Nucor Philip Morris
Pitney Bowes Walgreens
Wells Fargo
WHY DID THEY SUCCEED AND THEIR RIVALS (COMPARISON COMPANIES) DID NOT?
COMMON PATTERNS• SET OF COMMON PATTERNS SHARED AMONG THE
GREAT COMPANIES, NOT PRESENT IN COMPARISON COMPANIES
• Great leader (special)• People: First Who, then What• They way of confronting reality (good desitions)• Finding your concept (main idea)• Establishing a culture of discipline• Sensible use technology (not only for its newness)
– CHAPTERS OF THE BOOK BASED ON THESE POINTS
COMMON PATTERNS• LEVEL 5 LEADER– Surprisingly found in every company! Comparison
companies had other type, called level 4.
10 OUT OF 11 GREAT LEADERS CAME FROM INSIDE THE COMPANY
COMPARISON COMPANIES TRIED WITH EXTERNAL
MANAGERS THAT BEHAVE LIKE ‘ROCK STARS’
LEVEL 4 LEADER•Egocentrics.•Whatever is needed for personal success.•Blame external factors when failing, take the credit for succeeding to themselves.
LEVEL 5 LEADER•Mixture: humility and professional willing.•Whatever is needed for the company’s sake.•Blame themselves when failing, take the credit for succeeding to the workers.
COMMON PATTERNS• LEVEL 5 LEADER
COULD YOU BECOME A LEVEL 5 LEADER?ARE THEY SO DIFFICULT TO FIND?
COULD YOU BE STRONG ENOUGH TO MAKE THE RIGHT DECISIONS?
COMMON PATTERNS• FIRST WHO, THEN WHAT
– Key Concept: finding the right people!– Get this right people and then give them something to do! (madness?)
– Right people has to do more with innate capabilities than with knowledge or specific abilities.
GET THE RIGHT PEOPLE IN THE BUS
GET THE WRONG PEOPLE OUT OF THE BUS
AFTER FILLING THE BUS WITH GREAT PEOPLE, DECIDE WHERE
TO GO
COMMON PATTERNS• FIRST WHO, THEN WHAT
HOW TO KNOW IF WE SELECTED THE RIGHT PEOPLE?
WHAT IF WE DISCOVER IN THE MIDDLE OF THE TRIP THAT WE WERE WRONG?
COMMON PATTERNS• CONFRONT THE FACTS
– Being too much charismatic might discourage your people (they will not show you the cruel truth)
– Leading with Questions and not with Answers
– Very important to talk, debate, discuss to make a final decision. In great companies, long and heated debates are very usual! (mentioned by all the leaders)
ALWAYS KEEPING THE FAITH NO MATTER THE
DIFFICULTIES
CONFRONTING THE ADVERSITIES IN AN
HONEST WAY
BUT
COMMON PATTERNS• THE HEDGEHOG CONCEPT
– The main concept that will move your company.
– Take into account, some years could pass before finding the MAIN CONCEPT.
GOOD COMPANIES: FOX. CLEVER, INGENIOUS, KNOW MANY THINGS
GREAT COMPANIES: HEDGEHOG. SIMPLE, KNOW ONLY ONE IMPORTANT THING
THREE CIRCLES INTERSECTION IS THE
KEY
COMMON PATTERNS• THE HEDGEHOG CONCEPT
WILL WE BE PATIENT ENOUGH FOR FINDING THE MAIN CONCEPT?
CAN A COMPANY AFFORD AND SURVIVE FOR SEVERAL YEARS BEFORE FINDING THIS CONCEPT?
COMMON PATTERNS• CULTURE OF DISCIPLINE– Culture full of disciplined people which make disciplined
decisions inside the three circles
– Many times, it is more important to make a list of things that you must NOT do, than things that you must do
DO NOT CONFUSE DISCIPLINE WITH
TYRANNY!
BUROCRATIC CULTURE EXISTS BECAUSE A LACK OF RIGHT PEOPLE IN THE BUS
WITH DISCIPLINED AND RIGHT PEOPLE, HIERARCHY IS NOT A PROBLEM (YOU CAN MANAGE YOUR
COMPANY WITH MUCH LESS LEVELS OF HIERARCHY)
COMMON PATTERNS• CULTURE OF DISCIPLINE
HOW LONG CAN A PERSON BE DISCIPLINED IN HIS WORK?
HOW TO KEEP THIS DISCIPLINED CULTURE?
COMMON PATTERNS• TECHNOLOGY ACCELERATORS– WHAT GREAT LEADERS THINK ABOUT IT?
– Comparison companies simply use technology because of the fear of falling behind, because of its newness
THEY ARE PIONEER IN APPLYING SELECTED
TECHNOLOGIES CAREFULLY
IT IS SEEN AS AN ACCELERATOR OF THE
SUCCESS, NOT A CREATOR OF SUCCES
BUT
80% OF GREAT COMPANIES LEADERS DO NOT INCLUDE TECHNOLOGY AMONG 5 MAIN
REASON OF THEIR SUCCESS!!
QUESTIONS TO THINK ABOUT• PEOPLE INSIDE A COMPANY IS NOT CONSCIOUS ABOUT THE TRANSITION. THERE IS
NO NAME, NO KEY EVENT THAT SUDDENLY CHANGES THE COURSE OF A COMPANY. HOW TO KNOW IF WE ARE IN THE RIGHT PATH?
• VERY COMMENTED IN THE BOOK. PEOPLE IS NOT THE MOST VALUABLE ACTIVE. RIGHT PEOPLE IS.
• COULD YOU BECOME A LEVEL 5 LEADER? COULD YOU BE STRONG ENOUGH TO MAKE THE RIGHT DECISIONS?
• WHERE DO I START FROM? WHAT IF A HAVE A VERY SMALL COMPANY? CAN I APPLY THIS IDEAS?
• CAN I APPLY THIS IDEAS TO ANOTHER FIELD? DO I NEED TO BE A BUSSINESS MAN TO READ THIS BOOK?
THANK YOU FOR YOUR ATTENTION