Group 6
Brock Breedlove
Christina Higgins
Holt Martin
Matt Lohr
Jimmie Minchew
Emily Applebaum
Chris Nelson
Shelby Bentley
Introduction
 All
Good-to-Great Companies find
the path to greatness by first
confronting the brutal facts of their
reality.
 A&P vs Kroger
 1950s
 1960s
 1973 and beyond
Decisions
Good decisions
 Kroger’s good decision
 Being good at making right decisions

Pitney Bowes versus
Addressograph
Squiggly Things
Confront the brutal facts
 Confront problems
 Pitney’s confrontation style

“My job is to turn over rocks and
look at the squiggly things,’ even if
what you see can scare the hell out
of you.” – Fred Purdue
Pitney Bowes Executive
The Danger of Charisma
Roy Ash= failure
 Winston Churchill= success
 Managing charisma

Enron
Over charismatic leaders
 Cult formation
 Belief that fraud is “okay”

• “Facts are better than dreams.”
• Vision is important, but the truth is essential
• Having the right people on board
- Surround yourself with talent
• Creating a climate for success
- “Being heard!”
First Step for the Truth

Destination “I don’t know”
 Alan Wurtzel and Circuit City

Lead with questions, not answers
 Gain understanding

Good to great transition
• Attracting Talent
• Keeping Employees Involved
• Build on Ideas, Not a Vision
Nuclear Corporation of America

Nucor: A Good-to-Great Company
In 30 years, went from being in complete
shambles to being the 4th largest steel
manufacturer in the world.
Engage in dialogue and debate, not coercion
Got the right people on the bus and
followed this strategy
 Socratic Method: Key to Nucor’s
success

Engage in dialogue and debate, not coercion
 All good-to-great companies have an inclination for
intense dialogue.
○ “loud debate” “heated discussions” “healthy conflict”
Conduct Autopsies, Without Blame
 Philip
Morris acquired Seven-Up Company,
only to sell it after 8 years at a loss
 During interviews with executives, rought up the
problem on their own and discussed it openly
Conduct Autopsies, Without Blame
 In his book, I’m a Lucky Guy, Joe Cullman
dedicates five page analyzing the mistake
○ Doesn’t hold back the embarrassing truth
 Joe blames himself and took full responsibility for
its failure, instead of pointing fingers
○ “I will take responsibility for this bad decision. But we will all
take responsibility for extracting the maximum learning from the
tuition we’ve paid.”
Conduct Autopsies, Without Blame

When you conduct autopsies without blame,
you go a long way toward creating a climate
where the truth is heard

With the right people on the bus, you should
never need to assign blame but need only to
search for understanding and learning
-Something to immediately halt activity if it is creating
failure.
-Creates a climate where truth must be confronted
-With information available constantly, companies must
remain flexible with their plans
Using Red Flags- an experiment

Author gave students “red flags” to raise
when he was teaching one semester.

Students could raise their red flag and the
classroom would stop for them they wanted
to voice their opinion, share an experience,
disagree with the professor, make a
suggestion, or whatever.
What happened?

One student used her red flag and said
“Professor Collins, I think you are doing
a particularly ineffective job of running
class today. You are leading too much
with your questions and stifling our
independent thinking. Let us think for
ourselves.”

Saved time in class and confronted
Collins with brutal facts.
Graniterock & Short Pay
Bruce Woolpert from Graniterock company
gave Collins the idea for red flag
mechanisms.
 Bruce instituted “short pay” which gave
customers the power to decide how much to
pay for services rendered by Graniterock.
 Customers evaluated their satisfaction and
paid accordingly.
 Gave immediate feedback on how company
“Short pay acts as an early
performed

warning system that forces
us to adjust quickly, long
before we cold lost that
Power of Information

There is no evidence that good to great
companies had better information, rather
is was how they used the information
available.

If you collect information that cannot be
ignored a company can find truth and
confront it head on.
Unwavering Faith Amid Brutal Facts
 What
good-to-great companies
do when met with adversity:

Confront strong competition head on

Recognize the brutal facts that won’t disappear

Conscious of the necessary actions to rise to the
top
Competitive Competition

Scott Paper v. P&G

Kimberly-Clark v. P&G

Conceded to P&G

Viewed competition with P&G as an
asset

Content with falling into a “B”
category company

Saw an opportunity to make the
company stronger

Stimulated competitive juices of all
employees

Never feared P&G, but respected them

Management gave up
The “Hardiness Factor”

Not only survive but prevail as a great
company

Never consider failure, but manage risks

Use setbacks to restructure the
company’s business model to create
something much stronger and valuable
Ben & Jerry’s ice cream

Originally started out wanting to deliver bagels and
newspapers to people’s homes

Eventually realized a switch to selling ice cream
would be much more profitable

Pillsbury owned Haagen-Dazs, wanted to force
competition out of industry by attempting to make
Haagen-Dazs the only ice cream available for
distribution

Ben & Jerry’s resisted, eventually sold company
for $325 million to Unilever.
The Stockdale Paradox

Refers to Jim Stockdale
 Highest ranking officer during Vietnam war
○ POW for 8 years
○ Created set of code for POW’s to
communicate while captive
○ 1st man in the navy to be awarded the Medal
of Honor
 His attitude reflected those of great
companies
○ Maintain faith and deal with life as POW
The Stockdale Paradox
 “Retain
faith
that you will
prevail in the
in end,
regardless of
difficulties”
AND at
the same
time
 “Confront
the
most brutal
facts of your
reality,
whatever they
might be”
What does this mean?

Its not the presence or absence of
liberty, but how you deal with the
inevitable difficulties of life
 EVERYONE is presented with troubling
situations
 What can you make out of your situation?
How to be Great
Great leaders focus on the few things
that would have the greatest impact
 Great companies face adversity and
competition just like every one else. The
difference is great companies maintain
unwavering faith in the endgame, and
are committed to prevail despite the
brutal facts

“Every good-to-great company
faced diversity along the way to
greatness…”
• Nucor – import competition
• Pitney Bowes – losing monopoly
• Wells Fargo – deregulation
• Abbott Labs – massive product recall
• Kroger – replace nearly 100 stores
What we’ve covered:
The idea that facts are better than
dreams
 A climate where the truth is heard
 Engage in dialogue and debate, not
coercion
 Conduct autopsies, without blame
 Build “red flag” mechanisms
 Unwavering facts amid the brutal truth
 The Stockdale Paradox
