Good to Great Chapter 9: *From Good to Great to Built to Last*

Good to Great Chapter 9:
“From Good to Great to Built to Last”
Team 6
Christina Higgins
Chris Nelson
Matt Lohr
Shelby Bentley
Jimmie Minchew
Holt Martin
Brock Breedlove
Emily Applebaum
From Good to Great to Built to Last
 As we all know by now, the author of Good to Great, Jim
Collins, was also a co-author in writing another bestseller
Built to Last which was published well before Good to Great.
Chapter 9 is the concluding chapter of this book where Jim
Collins basically tells his story of how he took the ideology
from his previous work and applied it to come up with the
ideas to write in Good to Great.
Built to Last leads to Good to Great
 When Jim Collins started to brainstorm for this book, he
faced the dilemma of how to make a connection between this
book and Built to Last. Built to Last was based on a six-year
research project which determined how to build a company
from the ground up and whether the company would survive
in the long-term.
Linkages Between the Books
 Looking back at the two books, Collins comes up with the
following conclusions.
 All of the leaders in Built to Last actually followed the good-to-great
 Good to Great should ironically actually be viewed as a prequel to Built
to Last (a company uses the start-up tools from Good to Great and
applies them to make a company Built to Last)
 A company needs a set of core values in order to achieve the kind of
long-term, sustainable success that may lead to greatness. Companies
need to exist for a higher purpose than simply profit generation in
order to overcome the category of merely good.
 Good to Great answers the question: what is the difference between a
“good” BHAG and a “bad” BHAG? Built to Last does not look to answer
this question.
From Good to Great to Built to Last
 First, a company should focus on start-up principles from
Good to Great & developing the foundation that is necessary to
work toward greatness. Then, they can begin to apply the
principles of longevity that are set forth in Built to Last.
Early Stages of Good to Great
 Great companies often do not start out great
 It took Sam Walton 25 years to grow Wal-Mart from 1 to 38
 1970-2000 over 3000 stores and $150 billion in revenues
Growth of Home Depot
 Incorporated in 1978 and went public in 1981
 Opened 100th store by 1989
 Growth mainly attributed to Bowater Home Centers for
$40,000,000 and store acquisitions
 Entered Canada in 1994, Mexico in 2001 and China in 2006
 Now 2,244 stores, 300,000 employees and 25th on Fortune
500 for 2009
Sustainable Growth
 Great companies take time to grow
 Good managers look for growth opportunities but do not get in
over their head
 Values are important for companies to grow on
 help to maintain original vision and not lose focus of core
Core Ideology: The Extra Dimension of
Enduring Greatness
• There is an “extra dimension” for making the transition from
good to great to built to last—a “core ideology” that consists of
core values and a core purpose (beyond just making money)
HP- founder , Bill Hewlett, “proud that he helped create a company that by
virtue of its values, practices, and success has had a tremendous impact on the
way companies are managed around the world” (the “HP Way”)
 HP’s core values—technical contribution, respect for individuals, and
belief that profit is not the fundamental goal of the company
Core Ideology: The Extra Dimension of
Enduring Greatness
 Orange-Blooded: The Home Depot’s Core Values
The Home Depot’s values guide the beliefs and actions of all associates on a
daily basis. Our values are the fabric of the Company’s unique culture and are
central to our success. In fact, they are our competitive advantage in the
marketplace. Associate pride and our “orangeblooded” entrepreneurial spirit
are distinctive hallmarks of our culture.
Core Ideology: The Extra Dimension of
Enduring Greatness
 Enduring great companies don’t exist merely to delivery returns to
 Of course, profits and cash flow become like blood and water to a healthy
body: They are absolutely essential for life, but they are not the point of life.
 Core values are essential for enduing greatness, but it doesn’t seem
to matter what those core values are
 Doesn’t have to:
Have passion for its customers (Sony didn’t)
Respect for the individual (Disney didn’t)
Have quality (Walmart didn’t)
Core Ideology: The Extra Dimension of
Enduring Greatness
Enduring great companies preserve their core values and purpose while their business
strategies and operating practices adapt to a changing world
• Ex. Disney
Core Ideology: The Extra Dimension of
Enduring Greatness
 Change:
 1981: HD goes public on
1983: Computerized
checkout systems installed
1987: Day-in/Day-out
pricing policy established
1991: first EXPO Design
Center opens
1995: launches Home
Improvement 1-2-3 Books
2000: launches
Key Ideas: Built to Last
Clock Building, Not Time Telling
Genius of AND
Core Ideology
Preserve the Core/Stimulate
Conceptual Links
Good to Great
Built to Last
 Level 5 Leadership
 Clock Building, Not Time
 First Who… Then What
 Genius of AND
 Core Ideology
 Preserve the
Core/Stimulate Progress
 Confront the Brutal Facts
 Hedgehog Concept
 Culture of Discipline
 Technology Accelerators
 Flywheel, Not Doom Loop
Difference between Good BHAGs and
Bad BHAGs?
 Good BHAGs: set with understanding
 Bad BHAGs: set with bravado
What you are
deeply passionate
What you can be the
best in the world at
What drives your
economic engine
Boeing and its BHAG
 Prior focus was military aircraft
 Stayed away from commercial sphere
 Applied level 5 leadership and vast experience in jet
engines and big planes
 Became leading commercial aviation company in the
Home Depot’s Goal
 “Help consumers create the home of their dreams whether
they want to do it themselves or have it done for them.”
 Home Depot’s current BHAG:
 Revamping their supply chain
 Replace warehouse-distribution centers
 $30 Million dollars per new center
Staying Great
 Adhere to core ideology in the three circles
 Be willing to change what’s inside the circles though
 Much easier to become great than to remain great
Building Greatness
 Good VS Great
 Greatness involves less suffering
 Add more findings
 Results in being overworked
 Waste of energy
Cross Country
Why Greatness?
 Doing what you love
 Not WHY, but HOW?
 Becoming a Level 5 Leader
Home Depot
Applying Leadership
 -Get involved in something you care about
 -Practice leadership principles at every chance
“It is impossible to have a great life unless it is a meaningful life.
And it is very difficult to have a meaningful life without
meaningful work.”
• How good to great companies began
• Enduring greatness
• B-hags
“You might even gain that deepest of al satisfactions: knowing
that your short time here on earth has been well spent, and
that it mattered.”