The document discusses the key principles and practices used by leaders of companies that transitioned from good to great, including developing a level 5 leadership mindset, getting the right people on the team, confronting brutal facts, establishing a clear hedgehog concept focused on passion, excellence and economic drivers, building a culture of discipline, using technology strategically as an accelerator, and driving transformation through a process like pushing a heavy flywheel to build momentum over time rather than expecting single defining actions or events.

1. Level 5
Leadership
First Who…
Then What
Confront the
Brutal Facts
Hedgehog
Concept
Culture of
Discipline
Technology
Accelerators
Disciplined People Disciplined Thought Disciplined Action
Buildup
Good to Great

2. Level 5
Leadership
First Who…
Then What
Confront the
Brutal Facts
Hedgehog
Concept
Culture of
Discipline
Technology
Accelerators
Disciplined People Disciplined Thought Disciplined Action
Buildup
Level 5
Leadership
Good to Great

3. Level 5 Leadership
5–Level 5 Executive
4–Effective Leader
3–Competent Manager
2–Contributing Team Member
1–Highly Capable Individual

4. Level 5 Leadership
 Leaders who employ a paradoxical mix of
personal humility and professional will
 Set up successors for even greater
success
 Compelling modesty, self-effacing,
understated
5–Level 5 Executive
4–Effective Leader
3–Competent Manager
2–Contributing Team Member
1–Highly Capable Individual
 Fanatically driven to
produce sustainable
results
 More plow horse than
show horse

5. Level 5 Leadership
5–Level 5 Executive
4–Effective Leader
3–Competent Manager
2–Contributing Team Member
1–Highly Capable Individual
 Look in mirror and
take full responsibility
for poor decisions
 Many people have the
potential to evolve into
Level 5
 Attribute success to
other than themselves

6. Level 5
Leadership
First Who…
Then What
Confront the
Brutal Facts
Hedgehog
Concept
Culture of
Discipline
Technology
Accelerators
Disciplined People Disciplined Thought Disciplined Action
Buildup
First Who…
Then What
Good to Great

7. First Who . . . Then What
 Leaders began the
transformation by
first getting the
right people on the
bus (and the wrong
people off the bus).
“Who” questions came before “what”
decisions - before vision, strategy,
organization structure, and tactics.

8. First Who . . . Then What
 Three practical disciplines for being
rigorous:
 When in doubt, don’t hire
 When you know you need to make a
people decision, act
 Put your best people
on your best
opportunities, not
biggest problems
 Leaders were rigorous, not ruthless in
people decisions.

9. First Who . . . Then What
 Management teams debate vigorously to
find best answers, yet unify behind
decisions.
“Right” person has
more to do with
character traits and
innate capabilities
than with knowledge,
background, or skills.

10. Level 5
Leadership
First Who…
Then What
Confront the
Brutal Facts
Hedgehog
Concept
Culture of
Discipline
Technology
Accelerators
Disciplined People Disciplined Thought Disciplined Action
Buildup
Confront the
Brutal Facts
Good to Great

11. Confront the Brutal Facts
 Must create a culture
wherein people have a
tremendous opportunity
to be heard and,
ultimately, for the truth
to be heard.
 Setting off on the path to
greatness requires
confronting the brutal
facts of current reality.

12. Confront the Brutal Facts
 Lead with questions, not
answers
 Engage in dialogue and
debate, not coercion
 Conduct autopsies,
without blame
 Build red flag
mechanisms where
information cannot be
ignored
 Four basic practices:

13. Confront the Brutal Facts
 Stockdale Paradox:
Retain absolute faith
that you can and will
prevail in the end,
AND at the same time
confront the most
brutal facts of your
current reality,
whatever they might
be.

14. Level 5
Leadership
First Who…
Then What
Confront the
Brutal Facts
Hedgehog
Concept
Culture of
Discipline
Technology
Accelerators
Disciplined People Disciplined Thought Disciplined Action
Buildup
Hedgehog
Concept
Good to Great

15. Hedgehog Concept
 Hedgehogs simplify a
complex world into a
single organizing idea,
a basic principle or
concept that unifies and
guides everything.
 Hedgehogs see what is
essential, and ignore
the rest.

16. Hedgehog Concept
 The Hedgehog Concept is a deep
understanding of three intersecting
circles translated into a simple, crystalline
concept:
 What you are deeply
passionate about
 What you can be
best in the world at
 What drives your
economic engine

17. Hedgehog Concept
What you are deeply
passionate about
What you can
be the best in
the world at
What drives
your
economic
engine
Simplicity
within
the three
circles

18. Hedgehog Concept
 Getting the Hedgehog Concept takes an
average of four years.
 The right people
 Engaged in vigorous
dialogue and debate
 Infused with the
brutal facts
 Guided by questions
formed by the three
circles
 It is an iterative process by The Council:

19. Hedgehog Concept
The
Council
All Guided by
the Three Circles
Ask Questions
Dialogue &
Debate
Autopsies
& Analysis
Executive
Decisions
An Iterative
Process

20. Level 5
Leadership
First Who…
Then What
Confront the
Brutal Facts
Hedgehog
Concept
Culture of
Discipline
Technology
Accelerators
Disciplined People Disciplined Thought Disciplined Action
Buildup
Culture of
Discipline
Good to Great

21. Culture of Discipline
 People who “rinse their
cottage cheese”
 Not about a tyrant who
disciplines
 Getting disciplined people
who engage in disciplined
thought and who then take
disciplined action,
fanatically consistent with
three circles

22. Culture of Discipline
 Requires people who
adhere to a consistent
system.
 Gives people freedom and
responsibility within
framework of that system.
 Involves a duality.

23. Culture of Discipline
 Budgeting is to decide which arenas fit
Hedgehog Concept and should be fully funded
and which should not be funded at all.
 “Stop doing” lists are
more important than “to
do” lists.
 “Anything that does not
fit with our Hedgehog
Concept, we will not do.”
 Includes willingness to shun opportunities that
fall outside the three circles.

24. Level 5
Leadership
First Who…
Then What
Confront the
Brutal Facts
Hedgehog
Concept
Culture of
Discipline
Technology
Accelerators
Disciplined People Disciplined Thought Disciplined Action
Buildup
Technology
Accelerators
Good to Great

25. Technology Accelerators
 Yet they often become pioneers in the
application of carefully selected
technologies.
 Does it fit directly with
your Hedgehog Concept?
 Good-to-greats used
technology as an
accelerator of momentum,
not a creator of it.
 Good-to-greats avoid technology fads and
bandwagons.

26. Technology Accelerators
 Technology by itself is never a root cause of
either greatness or decline.
 “Crawl, walk, run”
can be a very
effective approach,
even during times of
rapid and radical
technological
change.

27. Level 5
Leadership
First Who…
Then What
Confront the
Brutal Facts
Hedgehog
Concept
Culture of
Discipline
Technology
Accelerations
Disciplined People Disciplined Thought Disciplined Action
Buildup
Flywheel
Good to Great

28. The Flywheel
 Good-to-great
transformations never
happened in one fell swoop.
 There was no single defining action, no grand
program, no one killer innovation, no solitary
lucky break, no miracle moment.
 Instead they followed a predictable pattern of
buildup and breakthrough.
 Like pushing on a giant, heavy flywheel, it
takes a lot of effort to get the thing moving at
all, but . . .

29. The Flywheel
 With persistent pushing . . .
 In a consistent direction . . .
 Over a long period of time . . .
 In good-to-great companies problems of
commitment, alignment, motivation, and
change largely take care of themselves.
 Alignment follows from results and
momentum, not the other way around.
 The flywheel builds momentum . . .
 Eventually hitting a point of breakthrough.

30. Level 5
Leadership
First Who…
Then What
Confront the
Brutal Facts
Hedgehog
Concept
Culture of
Discipline
Technology
Accelerators
Disciplined People Disciplined Thought Disciplined Action
Buildup
Good to Great