Chapter 4
Confront the brutal facts never lose faith
Presented by : Jonathan Alvarez, Chris Hill, Shawn Stults
Same type of companies:
◦ Both invested all assets into the traditional grocery
store.
◦ Both had strongholds outside the major growth
areas of the US.
◦ Both had knowledge of how the world around them
was changing.
◦ Both had different strategies to deal with the new
era of grocery stores.

Ralph Burger
◦ “What would Mr. Hartford do?”
◦ “You can’t argue with a hundred years of
success.”

The Golden Key
◦ Separate brand to experiment with new
methods/models to learn what customers wanted

Pep Rallies, radical price cutting strategies,
hiring/firing CEO’s

Started to realize the ‘Superstore’ concept
◦ Moved away from traditional store setup (100% of
their business)

Jim Herring, CEO
◦ “…learned that you had to be number one or
number two in each market, or you had to exit.”
 Concept didn’t hit the mainstream for another 10 yrs.

Decided to eliminate, change, or replace
every store and get rid of every region that
didn’t fit the new realities

Good-to-Great companies showed two forms
of disciplined thought:
1) They looked at each situation focusing on the
brutal facts of reality
 “You absolutely cannot make a series of good
decisions without first confronting the brutal facts.”
2) Developed a simply frame of reference for all
decisions (chapter 5)

Roy Ash

Didn’t show signs of a good leader
◦ CEO of Adressograph
◦ Bold vision to dominate the likes of Xerox, Kodak,
and IBM
◦ First who, then what
◦ Didn’t recognize the brutal facts of reality
◦ Too strong and charismatic
 “The moment a leader allows himself to become the
primary reality, rather than reality being the primary
reality, you have a recipe of mediocrity, or worse.”

Strong personality, bold vision
◦ BUT made sure to keep a close eye on the brutal
facts

Statistical Office
◦ Knew his personality might scare people from
giving him bad news
◦ Principal function was to feed him the most brutal
facts of reality

“Facts are better than dreams.”

How do you motivate people with brutal
facts?
You do not need to waste your time or energy
on trying to motivate people if you have the
right people on the bus they will be selfmotivated
1.Lead with questions not answers
2.Engage in dialogue and debate, not coercion
3.Conduct autopsies, without blame
4.Build “red flag” mechanisms

Leading with questions not answers
-Means having the humility to grasp the fact
that you don’t yet understand enough to have
the answers and then to ask the questions
that will lead to the best possible answers

Alan Wurtzel believed in this system after
having the right employees in place

-
-
Engage in dialogue and debate, not coercion
Generate debates where everyone is listened
to and not just heard as a formality.
There can be no predetermined decisions for
this to be an effective way of conveying the
truth

-
-
Conduct autopsies, without blame
Figure out what went wrong and where a
lesson can be learned on how to change it in
the future
Don’t point the finger at anyone unless it is
at yourself in the mirror.
-
“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”
- Joe Cullman (Phillip Morris Co.)

-
-
Build “red flag” mechanisms
The red flags allow you to get immediate
feedback, and addresses what needs to be
done NOW
Ex. Short Pay…. With short pay you have to
pay attention to the data now instead of
waiting for the customer to be too unsatisfied
without even knowing it


1960 P&G invaded the paper based industry
The industry leader, Scott paper, rolled over
without a fight



Kimberly-Clark viewed competing against
P&G not as a liberty but as an asset
In confronting brutal facts they left
themselves stronger and more resilient, not
weaker and more desperate
“We respected them so much they are bigger
and talented. They beat the hell out of all
their competitor, except one, Kimberly-Clark”

1)
2)
3)
International Committee for the Study Of
Victimization
Those who are permanently dispirited by an event
Those who got their life back to normal
Those who used the experience as a defining
event that made them stronger


Highest ranking U.S. officer in the “Hanoi
Hilton” POW camp
Tortured over twenty times during eight year
imprisonment 1965-1973


What separates people is not the presence or
absence of difficulty, but how they deal with
the inevitable difficulties of life
 Stockdale Paradox
“You must never confuse faith that you will
prevail in the end-which you must never
lose-with the discipline the most brutal facts
of your current reality”