Good to Great
Book Notes
People and companies don’t become great because it’s easy to settle for being good but Good to Great DOES happen.
- Great companies have Level 5 Leaders
- “I never stopped trying to become qualified for the job” - Kimberley Clark CEO - Darwin Smith
- Level 5 leaders - the signature of this level is humility and will.
- Level 5 Leadership plays a huge role in the leap from good to great.
- Companies do well after level 5 leaders leave because they build a sustainable legacy. Level 4 leaders choose bad successors or set them up for failure.
- Great companies get the right people (and rid of the wrong people) first, then decide the direction.
- not the opposite, figure out where to go then hire the right people.
- No evidence of a relationship between high compensation and results.
- The right people will do the right things because of who they are, not what they are paid.
- Character attributes like intelligence, work ethic & values are more vital than skills. Skills can be taught.
- Great Companies confront the brutal facts
- Disciplined people with disciplined thought.
- Have a vision but consistently update it with the reality around you.
- If you confront the truth of your situation the right decisions are often self evident.
- Every great company endured some adversity - the stockdale paradox
- Optimism is dangerous if it blinds you to the brutal facts.
- Create a Culture by:
- Lead with questions,
- engage in debate not manipulation,
- conduct autopsy’s without blame,
- build red flag mechanisms that turn information into information that can’t be ignored.
- Great companies first develop and then focus on a simple concept
- Take a complex world and simplify it into a unifying concept. (Hedgehog concept)
- they Base the concept on understanding the 3 circles
- What you can be the best in the world at
- What drives your economic engine
- What you are deeply passionate about
- they Base the concept on understanding the 3 circles
- Good companies were foxes, scattered, diffused and inefficient.
- Every great company understood the single denominator relevant to them such as profit per customer, profit per classic brand etc
- Great companies create a culture of discipline
- Freedom and responsibility within a framework.
- Fill the culture with self disciplined people who will go to extreme lengths to fulfil their responsibility.
- Culture of Discipline is not equivalent to being ruled by a tyrannical disciplinarian.
- Adhere tightly to the hedgehog concept.
- Great companies used technology to accelerate breakthroughs in their hedgehog concept.
- The hedgehog concept drives use of technology, not the other way around.
- they used their concept of the world and looked for new technology to make that model more efficient.
- Technology was used as an accelerator, not to begin of the transition.
- Disciplined people using disciplined thought to apply technology
- Technology wasn’t as important as other factors like people
- Great companies used the flywheel
- Companies transformed by slowly building up the momentum of a flywheel by strong, focused and consistent effort in one direction. No one big effort or moment was crucial.
- The pattern is generally build up (slow or fast), then a breakthrough.
- Acquisitions were used as an accelerant, not to create a transition. You can buy growth but not greatness.
- The opposite is the Doom Loop and is characterised by changes in priorities, new programmes & initiatives.
