Explore what the transformation of a business entails from
mediocre to excellent. Based on solid evidence and volumes of
data, the book’s author (Jim Collins) and his team discover
timeless principles of how good companies like greats
Abbott, Circuit City, Fannie Mae, Gillette, Kimberly-Clark,
Kroger, Nucor, Philip Morris, Pitney Bowes, Walgreens and
Wells Fargo produced great sustained results and achieved
enduring greatness, evolving into companies that were in fact
‘Built to last’.
Collins’ team selected 2 sets of comparison companies:
For. Direct comparisons: companies in the same industry with the same resources and opportunities as the good to excellent group, but did not show a jump in performance, which were: Upjohn, Silo, Great Western, Warner-Lambert, Scott Paper, A&P, Bethlehem Steel, RJ Reynolds, Addressograph, Eckerd, and Bank of America.
B. Unsustained Comparisons: Companies that made a short-term change from good to excellent, but failed to stay on track, namely: Burroughs, Chrysler, Harris, Hasbro, Rubbermaid, and Teledyne.
Wisdom in a nutshell:
For. Ten of the eleven good to excellent company leaders or CEOs came from within. They weren’t outsiders hired to ‘save’ the company. They were people who worked for many years in the company or were members of the family that owned the company.
B. The strategy per se did not separate the good companies from the comparison groups.
vs. Good to great companies focus on what they shouldn’t and shouldn’t do.
D. Technology has nothing to do with transforming from good to great. It can help speed it up, but it is not the cause.
me. Mergers and acquisitions do not cause a transformation from good to great.
F. Good to great companies paid little attention to change management or motivating people. In the right conditions, these problems go away naturally.
gram. Good-to-great transformations didn’t need a new name, tagline, or launch schedule. The jump was in the results of the performance, not in a revolutionary process.
h. Greatness does not depend on circumstances; it is clearly a matter of conscious choice.
I. Every good to excellent company had “Level 5” leadership during the critical transition years, where Level 1 is a highly skilled individual, Level 2 is a contributing team member, Level 3 is the competent manager , Level 4 is an effective leader and Level 5 is the executive who builds lasting greatness through a paradoxical combination of personal humility and professional will.
j. Level 5 leaders display compelling modesty, they are modest and discreet. In contrast, two-thirds of the comparison companies had leaders with gigantic personal egos that contributed to the demise or continued mediocrity of the company.
k. Level 5 leaders are driven by fanatics, infected with an incurable need to produce sustained results. They are determined to do whatever it takes to make the company great, no matter how big or difficult the decisions are.
the. One of the most damaging trends in recent history is the tendency (especially for boards of directors) to select dazzling and famous leaders and deselect potential Level 5 leaders.
Mister. Potential Level 5 leaders exist all around us, we just have to know what to look for.
no. The research team was not looking for Level 5 leadership, but the data was overwhelming and compelling. The Level 5 discovery is an empirical finding, not an ideological one.
or. Before answering the “what” vision and strategy questions, first ask “who” are the right people for the team.
P. Comparison companies used layoffs much more than good to excellent companies. Although rigorous, good to big companies were never ruthless and did not rely on layoffs or restructuring to improve performance.
q. Good-to-great management teams are made up of people who vigorously debate for the best answers, but rally behind decisions, regardless of parish interests.
r. There is no link between executive compensation and going from good to great. The purpose of compensation is not to “motivate” the right behaviors from the wrong people, but to get and keep the right people in the first place.
s. The old adage “People are your most important asset” is wrong. People are not your most important asset. The right people are.
t. Whether someone is the right person has more to do with character and innate abilities than with specific knowledge, skills, or experience.
or. The Hedgehog concept is a concept that arises from the deep understanding about the intersection of the following three circles:
What can you be the best in the world at, realistically, and what can’t you be the best in the world?
2. What drives your economic engine?
3 what you are deeply passionate about
v. Discover your core values and purpose beyond just making money and combine them with the dynamics of preserving core values - spurring progress, as shown, for example, by Disney. They have gone from making animated shorts to feature films, theme parks and cruises, but their core values of bringing happiness to young and old and not succumbing to cynicism remain strong.
w. Large durable companies do not exist simply to provide shareholder benefits. In a truly great company, earnings and cash flow are absolutely essential to life, but they are not the goal of life.
“IF YOU ARE DOING SOMETHING THAT MATTERS TO YOU DEEPLY AND IF YOU BELIEVE IN IT, IT IS IMPOSSIBLE TO IMAGINE NOT TRYING TO MAKE IT BIG.”
By: Regine P. Azurin and Yvette Pantilla
“Lots of great books … Very little time to read”
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