“Good to Great”
by Jim Collins
Some Highlights
E-mail:
Website:
info@scythian.biz
www.scythian.biz
The Sample of Good to Great Companies




Start with 1,435 good companies. Examine their performance over 40
years. Then find the 11 companies that went from mediocre and became
great *.
The 11 good-to-great companies that Collins found averaged returns 6.9
times greater than the market’s—more than twice the performance rate of
General Electric under the legendary Jack Welch.
The surprising
good-to-great
list included
many
unheralded
companies

Circuit City
- 18.50x market

Kroger
- 4.17x market

Fannie Mae
- 7.56x market

Nucor Corp
- 5.16x market

Gillette
- 7.39x market

Wells Fargo
- 3.99x market

Walgreens
- 7.34x market

Abbott Laboratories
- 3.98x market

Philip Morris
- 7.06x market

Kimberly-Clark Corp
- 3.42x market

Pitney Bowes
- 7.16x market
One such surprise, the Kroger Co.—a grocery chain—bumped along as a
totally average performer for 80 years and then somehow broke free of its
mediocrity to beat the stock market by 4.16 times over the next 15 years.
And it didn't stop there. From 1973 to 1998, Kroger outperformed the
market by 10 times.
* 15 years of cumulative stock returns at or below market, then a transition point followed
by cumulative stock returns at least 3 times higher than the market over the next 15 years
Good vs Great

Good is the ENEMY of great

If one is good there is very little need to
change: “If it isn’t broken, don’t fix it”

To become great requires a new vision

It requires different leadership
Discipline - It starts with people

To go from Good to Great requires:

Disciplined People

Disciplined Thought

Disciplined Actions

First who, then what.

One needs disciplined people, who apply disciplined thought and
take disciplined action.

How does one get the right people?

Are the good people on the bus?

Are the wrong people off the bus? And

For those on the bus; are they sitting in the correct seats?
But, you need a great leader – a Level 5


The level 5 leader in all the good to great companies were all “cut
form the same cloth”
It is all about the type of leader

One who does not lead by inspired talk but by inspired thought
(discipline)

It’s about humility

Constantly asking the question: “Do I measure up?”

It’s not about “me”, it’s about the company, the goal.
The window or the mirror?

All these leaders, when asked how they
succeeded answered: “We were lucky”

But the real answer is probably more about
the window or the mirror:



It’s not just about the leader it’s about the
team/the people
These successful leaders point out the window
at the things/people who led to the success,
and to luck, when things go well
When things go bad, they look in the mirror
asking themselves how they have failed and
what they need to do to fix it.
Confronting the brutal facts

It’s about disciplined thought to confront the brutal facts

The Stockdale Paradox



One requires the unwavering faith that one can prevail despite
the constraints.
This needs to be balanced with the discipline to face the brutal
facts about one’s situation.
Those who do not make it through trying circumstances
are the optimists. They die of broken hearts when
things do not work out as planned.
The Hedgehog Concept
Passionate /
Born to do this
Best in the world

Economics /
key value drivers
Are you engaged in work that fits your own three circles:

What you are passionate about, what you are genetically encoded for?

What can you be the best in the world at (and what can you not)?

What can you get paid for?
Bringing it all together

To go from Good to Great requires disciplined
people, with disciplined thought, to take disciplined
action to stop doing that which does not fit the
three circles.

Once the point of intersection is determined, one
needs to action a Stop Doing List!


The fundamental distinguishing dynamic of
enduring great companies is that they preserve a
cherished core ideology while simultaneously
stimulating progress and change in everything that
is not part of the core ideology.
Put another way, the most enduring and successful
corporations distinguish their timeless core values
and enduring core purpose (which should never
change) from their operating practices and business
strategies (which should be changing constantly in
response to a changing world).
Preserve
Core values
Core purpose
Stimulate Change
Practices
Goals & Strategies