This document summarizes key elements from Jim Collins' book "Good to Great". It discusses six elements that characterize "Good to Great" companies: 1) Level 5 Leadership, 2) First Who...Then What, 3) Confront the Brutal Facts, 4) The Hedgehog Concept, 5) A Culture of Discipline, and 6) Technology as an Accelerator. It also describes the concept of the "flywheel effect" whereby transformations occur gradually through constant, steady effort rather than sudden changes, in contrast to the "doom loop" faced by unsuccessful companies.

1. BOOK REVIEW
GOOD TO GREAT
by Jim Collins

2. Six Key Elements of a
“Good to Great” (G2G) Company

3. Element 1 :
Level 5 Leadership

4. Element 2 :
First Who…..then What

5. Element 3 :
Confront the Brutal Facts
(Yet Never Lose Faith)

6. Element 4 :
The Hedgehog Concept

7. Element 5 :
A Culture of
Discipline

8. GOOD IS THE ENEMY OF
GREAT

9. THE 11 G2G cOMpANIES
wERE:

10. GOOD TO GREAT
cOMpANIES

11. RESEARcH FINDINGS
 Larger-than-life, celebrity leaders who ride in from the outside are negatively
correlated with taking a company from good to great
 The structure of executive compensation is not a key driver in corporate
performance
 Strategy per se did not separate the good-to-great companies from the
comparison companies
 Good-to-great companies paid attention to what not to do and what to stop
doing
 Technology can accelerate a transformation, but it cannot cause a
transformation
 M&A plays virtually no role in igniting a transformation from good to great
 Good-to-great companies paid scant attend to managing change, motivating
people, or creating alignment
 Good-to-great companies had no name, tag line, launch event, or program to
signify their transformations
 Good-to-great companies were not, by and large, in great industries, and
some were in terrible industries

12. Flywheel
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
Breakthrough
Level 5
Leadership
Good To Great

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

14. LeveL-5 executive
 Very humble on a personal level
 Possesses a great deal of drive and desire to succeed, where
“success” is not personal
 AVOID : Ego and Credit
 Level 5 leaders look outside the window to accredit
 Thank others and luck
 Level 5 leaders infected with an incurable need to produce
sustainable results
 Rather talk about the company than themselves
 Level 5 leaders set up successors for success

15. the window & the mirror
effect
Level 5 leaders look out
the window to apportion
credit to factors outside
themselves when things
go well
At the same time, they
look in the mirror to
apportion responsibility,
never blaming bad luck
when things go poorly
Everyone outside the
window points inside
directly at Level 5 leader
saying “He was the Key;
without his guidance and
leadership, we would not
have become a great
company”
Level 5 leader points right
back out the window and
says “Look at all the great
people and good fortune
that made this possible; I am
a lucky guy”

16. Flywheel
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
Breakthrough
First Who…
Then What
Good To Great

17. f i r S t w h o … t h e n w h A t
First who, then what
“…the ‘who’ questions come before the ‘what’
questions – before vision, before strategy,
before tactics, before organizational structure,
before technology”
Ensured the right people “on the bus”
before anything else, get the wrong
people off the bus, then figure out
where to drive It.
G2G companies don’t depend on the brilliance of
any one person ;a “lone genius”
The research indicated that compensation did not
correlate at all with the “good to great” process.
No particular compensation scheme appeared to
be advantageous

18. If you have the wrong people,
doesn’t matter whether you
have the right direction
why do it thiS
wAy?
If you have the right people on the
bus, problem of motivation and
people managing are diminished

19. LeAderS were rigorouS, not
ruthLeSS in peopLe
deciSionS
There are three steps on how the companies can be rigorous:
• Don’t hire someone unless you’re 100% sure that they’re
the right person. It’s better to wait and get someone that
you know is a good fit
• Once you realize you need to fire someone, don’t put it
off. Do it quickly and fairly
• Put the best people on the biggest opportunity not the
problems
LeSSon LeArnt
• People are NOT your most important asset. …..The
RIGHT people are

20. Flywheel
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
Breakthrough
Confront the
Brutal Facts
Good To Great

21. All good-to-great companies began the
process, finding a path to greatness by
confronting the brutal facts of their
current reality

22. confront the BrutAL fAct
(YET NEVER LOSE FAITH)
Must create a culture wherein
people have an opportunity to
hear the truth
 Having lofty goals can be good, but you can
never lose sight of what the reality is on
the ground

23. StockdALe pArAdox
AND at the same time confront
the most brutal facts of your
current reality, whatever they
might be with discipline
Retain absolute faith that
“you can” and “will prevail”
in the end

24. Let the truth Be
heArd
4 basic practices :
 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

25. Flywheel
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
Breakthrough
Hedgehog
Concept
Good To Great

26. THE HEDGEHOG CONCEPT
An ancient Greek parable:
• The fox knows many things
• The hedgehog knows one big thing
and stick to it
Foxes pursue many ends at the same time and see all the
world in its complexity
• Scattered
• Diffused
• Moving on many levels
• Never integrating their thinking into an overall concept
or unifying vision
Hedgehogs simplify a complex world into a single
organizing idea, a basic principle or concept that unifies
and guides everything
• Simplifies a concept
• Reduces all challenges to simple ideas

27. The good-to-great companies are more like
hedgehogs — simple, dowdy creatures that know
"one big thing" and stick to it. The comparison
companies are more like foxes — crafty, cunning
creatures that know many things yet lack consistency

28. THE HEDGEHOG CONCEPT
 The Hedgehog concept is not a goal or strategy to be the best at
something, it is an understanding of what you can be the best at
 Hedgehogs simplify the world into a basic principle, see what’s
essential, and ignore the rest
 It took an average of four years for the G2G companies to get a
Hedgehog Concept

29. 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
One
Big
Thing

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

31.  The Council is usually consists of five to twelve people , to discuss and
gain insights into the organization
 It should meet regularly, not a one-time group
 Council member come from a range of perspectives but each member
has deep knowledge about some aspect of the organization and/or
the environment in which it operates
 The Council exists to help the chief executive
CHaraCTErisTiCs Of THE COuNCil

32. Flywheel
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
Breakthrough
Culture of
Discipline
Good To Great

33. Culture of discipline is not just about action.
It is about getting disciplined people who
engage in disciplined thought and who then
take disciplined action
In a culture of discipline, people do not have
jobs “they have responsibilities”
a CulTurE Of DisCiPliNE

34. The Good To Great Matrix of Creative Discipline
Hierarchical
Organization
Start-up
Organization
Bureaucratic
Organization
Great
Organization
High
Culture of
Discipline
Low
Low HighEthic of
Entrepreneurship

35. The good-to-great companies
appear boring and pedestrian
looking in from the outside, but
upon closer inspection, they're
full of people who display
extreme diligence and a
stunning intensity

36. A culture of discipline is not
just about action. It is
about getting disciplined
people who engage in
disciplined thought and
who then take disciplined
action.

37. A culture of discipline involves
a duality. On the one hand, it
requires people who adhere
to a consistent system; yet,
on the other hand, it gives
people freedom and
responsibility within the
framework of that system.

38.  To create a culture of discipline, you must:
 Build a culture around the idea of freedom and responsibility,
within a framework
 Fill your culture with self-disciplined people who are willing
to go to extreme lengths to fulfill their responsibilities
 Don’t confuse a culture of discipline with a dictatorial
disciplinarian
 “Stop doing” lists are more important than “to do” lists
 Anything that does not fit with our Hedgehog Concept, will
not do

39. Flywheel
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
Breakthrough
Technology
Accelerators
Good To Great

40. The key question about any technology is: does
the technology fit directly with your Hedgehog
Concept? If yes, then you need to become a
pioneer in the application of that technology.
If no, then you can settle for parity or ignore it
entirely.

41. The good-to-great companies used
technology as an accelerator of
momentum, not a creator of it. None
of the good-to-great companies began
their transformations with pioneering
technology, yet they all became
pioneers in the application of
technology once they grasped how it
fit with their strategies.

42. Technology
AccelerATors
The key question about any technology is:
Does the technology fit directly with your Hedgehog
Concept? If yes, then you need to become a pioneer
in the application of that technology. If no, then you
can settle for parity or ignore it entirely
Technology by itself is never a root cause of either
greatness or decline

43. T e c h n o l o g y A c c e l e r A T o r s
 The ideal approach to technology with the
following cycle:
"Pause -- Think -- Crawl -- Walk – Run”
 Do not rush into a new technology revolution
before having an understanding that it can be
used to support your business.

44. Flywheel
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
Breakthrough
Flywheel
Good To Great

45. The Flywheel And The
doom loop
A flywheel is a heavy wheel that takes a lot of energy to
set in motion - to do so usually requires constant, steady
work, rather than a quick acceleration. Great companies’
transformations were like this as well

46. The Doom Loop
The Flywheel Effect

47.  Conversely, the “doom loop” is the vicious circle that
unsuccessful companies fall into
 First rushing in one direction, then another, in the hope of
creating a sudden, sharp break with the past that will
propel them to success
 Some attempt to do this through acquisitions, others
through bringing in a new leader who decides to change
direction completely, in a direction incompatible with the
company
 The results are never good

48. leTs mAke IT hAppen
ThAnk you
Prepared by
Snigdha Majumder
Head of the Department Lean Six Sigma
ITC Hotels Mumbai
Presented on : 24th Jan 2012