GOOD TO GREAT
CHAPTER 3
FIRST WHO…
THEN WHAT
Milos Kustudija – Matt Zaney – Dustin Pace
3 Simple Truths
 GOOD-TO-GREAT LEADERS UNDERSTOOD (INITIALLY)
THESE
3 SIMPLE TRUTHS
Begin with ‘Who’ in mind rather than ‘What’ in
order to better adapt to changing environment
2. If you have the right people lined up you can worry
less about motivation/personnel mgmt
1.

The right ppl don’t need to be tightly managed; they’re self motivated and stay
true to the task at hand
If you have the wrong people involved it won’t matter
whether you’ve got the right direction or not – your
company will still fail.
3.

Great vision without great people is ultimately irrelevant
3 Simple Truths Contrast Example
 WELLS FARGO
 1970s CEO Cooley began
building one of most talented
mgmt teams in the industry
 Instead of attempting to
forecast and strategize future
changes that he had no clue
about, Cooley went after
endless stream of talent
 W Fargo hired outstanding
people whenever/wherever
they found them
 Subsequently, at a time when
industry down 59%, Fargo
outperformed market threeto-one
 BANK OF AMERICA
 “Weak Generals, Strong
Lieutenants”
 Claimed if you kept upper
mgmt mildly weak senior
mgmt not likely to feel
threatened
 Rather than having proactive
engagements, BofA generals sat
idly waiting on final decisions to
come from above
 After losing over $1 billion in the
1980s Bof A switched recruiting to
more closely resemble Fargo
First Who. Then What
 Main point of this chapter is not about assembling the
right team
 It is about finding all the right people to bring in, and then
sorting all of the wrong people out
 Second key point is degree of sheer rigor needed in
people decisions in order to take a company from good
to great
 Once the ‘Who’ questions handled then look towards
the ‘What’ questions – vision, strategy, tactics, org
structure, technology etc
Not a “Genius with a Thousand Helpers”
 This is a contrasting model to that employed by
Good-to-Greats
 This model employs that one true genius at the top
of the hill, that one individual responsible for the
company’s success.
 This genius is basically the only true great asset –
once they leave the company falls
Level 5 +
Management Team
A “Genius with a
Thousand Helpers”
Level 5
Leader
Level 4
Leader
First
‘Who’
First
‘What’
Then
‘What’
Then
‘Who’
It’s Who You Pay – Not How You Pay Them
 No specific evidence linking exec pay to process of
going from good to great
 Idea that higher exec compensation results in greater
returns is false
 Purpose of compensation should not be to get the
right behaviors from the wrong people, but to
initially attract the right people and later to keep
them
Rigorous. Not Ruthless
 Rigorous: constant application of exacting
standards at all times and levels, especially in
upper management
 Ruthless: hacking and cutting, especially in
difficult times, or simply firing people without
thoughtful consideration
 GOOD-TO-GREAT COMPANIES SOUND LIKE TOUGH PLACES
TO WORK – AND THEY MOST CERTAINLY ARE. IF YOU
DON’T HAVE WHAT IT TAKES YOU PROBABLY WON’T LAST
LONG, BUT THEY ’RE NOT RUTHLESS, JUST RIGOROUS
How to be Rigorous
 When in doubt, don’t hire – keep looking
“You don’t compromise. We find another way to get through until we
find the right people” – Alan Wurtzel, then CEO Circuit City
 When you know you need to make a people change, ACT
 Moment you feel need to tightly manage someone you’ve made
hiring mistake – the best people don’t need to be managed, just
simply guided, taught, and led
 Put your best people on the biggest opportunities, NOT the
biggest problems
First ‘Who’ Explored via Fannie Mae Scenario
 David Maxwell, CEO Fannie Mae
 Became CEO during darkest times, facing lots of pressure from
board to produce immediate results
 Maxwell held off from implementing/developing strategy
until he had ALL the right people in place
 Everyday Maxwell waited, Fannie Mae lost $1M, in addition to
being up against $56B in underwater loans
“I DON’T KNOW WHERE WE SHOULD TAKE THIS COMPANY, BUT I
DO KNOW THAT IF I START WITH THE RIGHT PEOPLE, ASK THEM
THE RIGHT QUESTIONS AND ENGAGE THEM IN VIGOROUS
DEBATE, WE WILL FIND A WAY TO MAKE THIS COMPANY GREAT.”
– DAVID MAXWELL
First Who, Great Companies, and a Great Life
 Is it possible to build a great company and also build a great
life?
 Yes – same principles applied in both scenarios
 Start with great people, members of good-to-great teams tend to
remain close friends for life
 The experiences go beyond just mutual respect to lasting
comradeship
 Ultimately, adherence to the idea of First ‘Who’ might be
the closest link between great companies and great lives
“For no matter what we achieve, if we don’t spend vast majority of
time with people we love and respect we cannot possibly have a
great life. However, should we choose to spend majority of time
with loved ones – people we really enjoy being along side of –
then we’ll almost certainly always have a great life, regardless
which way industry takes us”
Key Points
 Exercise patience during start-up, specifically
concerning staffing. The right people and you win, the
wrong people and both you and the company lose.
 Forget abut patience related to staffing post start-up,
once you’re up and running the idea is to keep
running. Never hesitate to cut slack and dump
unworthy personnel. Doesn’t take long for one weed
bush to overtake the entire flower garden
 Good-to-Great management teams consist of people
who debate vigorously in search of best answers, yet
who unify behind decisions, regardless of politicallegal interests