Good To Great

Chapter 9 Review
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Recap Of Previous Chapters

Good is the
enemy of great.

Level 5
leadership

Dont be mediocre. NOT a one man

show
Thriving not
surviving.
Its for the greater
good.

First Who. . .
. . . Then What
Doesnt matter
where you are
going as long as
you are in good
company.

Confront the
Brutal Facts
Get your head out
of the sand.
Adapt.
Have faith.

The big picture.

You will probably

end up somewhere
great.

Recap Of Previous Chapters

Hedgehog
Concept
Being the best(or
not) in the world.
What drives your
economic engine?
What are you most
passionate about?

A Culture of
Discipline

Technology
Accelerators

Bureaucracy the
Dont be followers
death of the
be innovators.
entrepreneur spirit.
Dont adapt to the
Consistency to the technology, adapt
hedgehog concept. the technology to
you.
Freedom and
responsibility
within the frame
work.

The Flywheel
and the Doom
Loop
No such thing s an
instant success.
Slow and steady.
Discipline and
Determination.

Built To Last Project

Six year research project conducted at Stanford business school
What does it take to start and build an enduring great company
from the ground up.
Eight enduring companies like P&G, American Express, J&J etc.
Youngest companies studied were Wal-Mart and Sony.
Discussion about what will be the role of Build to Last in Good to
great study
No one agreed to continue the idea of build to last and they started
Good to Great as if BTL never existed.

Conclusion After Publication

NOW WHEN THE BOOK IS PUBLISHED, THESE ARE THE CONCLUSIONS

1. In BTL leaders followed good to great framework but they were

entrepreneurs of small enterprises rather than the CEOs trying
to transform good companies t0 great companies.
2. Apply finding from GTG to create sustained great results and
then apply findings in BTL to go from great results to great
company
3. Apply core concept of BTL: Discover core values and purpose
beyond just making money.
4. Both studies have resonance.

Good to great in the early stages of BTL

Enduring great companies when through the process of buildup

to breakthrough following good to great framework.

Wal-Mart example

HP example

Core Ideology: Extra Dimension of Enduring

Greatness

Interviewee: Bill Hewlett

Question: What are you most proud of in your long career?
Answer: Having helped create a company which is impactful by
virtue of its values, practices and success

Core Ideology: Extra Dimension of Enduring

Greatness
MERCK AND RIVER BLINDNESS

People of tribal areas with no money

Disease
Merck is not a charity organization
GREAT COMPANIES!

Preserve and change at the same time

Preserve what and change what?
Core ideology Vs. operating practices and business strategies

4 Key Ideas

Clock building, not time telling

Genius and AND
Core Ideology
Preserve the Core/Stimulate Progress

Example Disney

From Good To Great To Built To LastConceptual

Links
Good To GreatLevel 5 leadership
Bu
ilt
To
La
st

Co
nc
ep
tu
al
Li
nk
s

Clock Building,
Not Time Telling

Level 5 leaders
build a company
that can tick along
without them,
rather than feeding
their egos by
becoming
indispensable.

Genius of AND

Personal humility
AND professional
will.

Core Ideology

Preserve the
Core / Stimulate
Progress

Level 5 leaders are

ambitious for the
company and what
it stands for ; they
have a sense of
purpose beyond
their own success.

Level 5 leaders are

relentless in
stimulating
progress toward
tangible results and
achievement,
even if it means
firing their brothers.

From Good To Great To Built To LastConceptual

Links
Good To GreatFirst Who. . .Then What
Bu
ilt
To
La
st

Co
nc
ep
tu
al
Li
nk
s

Clock Building,
Not Time Telling

Practicing "first
who is clock
building
Practicing "first
what (setting
strategy first) is
time telling

Genius of AND

Core Ideology

Get the right people

on the bus AND the
wrong people off
the bus.

Practicing "first
who" means
selecting people
more on their fit
with the core values
and purpose than
on their skills and
knowledge.

Preserve the
Core / Stimulate
Progress
Practicing "first
who means a bias
for promoting from
within, which
reinforces the core
values.

From Good To Great To Built To LastConceptual

Links
Good To GreatConfront the Brutal Facts (Stockdale Paradox)
Bu
ilt
To
La
st

Co
nc
ep
tu
al
Li
nk
s

Clock Building,
Not Time Telling

Genius of AND

Core Ideology

Preserve the
Core / Stimulate
Progress

Creating a climate
where the truth is
heard is clock
building, especially
if you create red
flag mechanisms.

Confront the brutal

facts of your
current reality AND
retain unwavering
faith that you will
prevail in the endthe Stockdale
Paradox

Confronting the
brutal facts clarifies
the values an
organization truly
holds as core
versus those that it
would like to hold
as core.

Brutal facts clarify

what must be done
to stimulate
progress.

From Good To Great To Built To LastConceptual

Links
Good To GreatHedgehog Concept (The Three Circles)
Bu
ilt
To
La
st

Co
nc
ep
tu
al
Li
nk
s

Clock Building,
Not Time Telling

The Council
mechanism is
consummate clock
building.

Genius of AND

Core Ideology

Preserve the
Core / Stimulate
Progress

Deep
understanding AND
incredible simplicity

The "what you are

passionate about
"circle overlaps
nicely with core
values and
purpose. Only those
values about which
you are so
passionate that you
would never, under
any conditions, give
them up qualify as
truly core.

Good BHAGs flow

from
understanding; bad
BHAGs flow from
bravado. Great
BHAGs sit right
smack in the
middle of the three
circles.

From Good To Great To Built To LastConceptual

Links
Good To GreatCulture of Discipline
Bu
ilt
To
La
st

Co
nc
ep
tu
al
Li
nk
s

Clock Building,
Not Time Telling

Operating through
sheer force of
personality as a
disciplinarian is
time telling.
Building an
enduring culture of
discipline is clock
building.

Genius of AND

Freedom AND
responsibility.

Core Ideology

Preserve the
Core / Stimulate
Progress

A culture of
discipline ejects
those who do not
share the values
and standards of an
organization.

When you have a

culture of discipline,
you can give people
more freedom to
experiment and
find their own best
path to results.

From Good To Great To Built To LastConceptual

Links
Good To GreatTechnology Accelerators
Bu
ilt
To
La
st

Co
nc
ep
tu
al
Li
nk
s

Clock Building,
Not Time Telling

Technology
accelerators are a
key part of the
clock.

Genius of AND

Shun technology
fads AND pioneer
the application of
technology.

Core Ideology

Preserve the
Core / Stimulate
Progress

In a great company,
technology is
subservient to core
values, not the
other way around

The right
technologies
accelerate
momentum in the
flywheel, toward
the achievement of
BHAGs.

From Good To Great To Built To LastConceptual

Links
Good To GreatFlywheel, Not Doom Loop
Bu
ilt
To
La
st

Co
nc
ep
tu
al
Li
nk
s

Clock Building,
Not Time Telling

Genius of AND

Core Ideology

Preserve the
Core / Stimulate
Progress

The flywheel effect

creates the
sustained building
of momentum, and
does not depend on
the presence of a
charismatic
visionary to
motivate people

Evolutionary,
incremental process
AND revolutionary,
dramatic results

The doom loop

makes it almost
impossible to instill
core values and
purpose, as people
chronically wonder,
"Who are we? What
do we stand for?"

The smooth
consistency of the
flywheel and the
cumulative building
of momentum to a
point of
breakthrough
create the perfect
conditions for
instilling core
values while
stimulating change
and progress.

BHAG"Big Hairy Audacious Goal"

BHAG PRONOUNCED BEE-HAG IS

A key way to stimulate progress while preserving the core.

A BHAG is a huge and daunting goal-like a big mountain to climb.
It is clear, compelling, and people "get it" right away.
It serves as a unifying focal point of effort, galvanizing people
and creating team spirit as people strive toward a finish line

Difference between a bad BHAG and a good

BHAG?

ExampleBoeing
Boeing core business was building huge flying machines for
military (B-17, B-29 and other jet bomber Stratofortress)
Boeing had virtually no presence in commercial market.
In the early 1950s, Boeing saw an opportunity to leapfrog
McDonell Douglas by marrying its experience craft to its
understanding of jet engines.
They also came to see that economies of commercial market is
vastly superior than the military market.

ExampleBoeing

They decided to spend the quarter of the companys net worth to

build a prototype jet that could be used for commercial aviation.
They built the 707 and launched Boeing on a bid to become the
leading commercial aviation company in the world.
Three decades later, after producing five of the most successful
commercial jets in history, Boeing stood as the absolute,
unquestioned greatest company in the commercial air plane
industry.

Key points
It was goal that made sense within the context of the three circles.
Boeing executives understood with calm, equanimity that
i.

The company could become the best in the world at commercial jet
manufacturing even though it had no presence in the market.

ii. The shift would significantly improve Boeings economics by increasing

profits.
iii.

The Boeing people were very passionate about the idea.

Boeing acted with understanding not bravery, at this pivotal moment in its
history, and that is one of the key reason why it endured as a great
company.

"I don't get it? Why are we

so successful? We don't
work any harder than other
teams. And what we do is
just so simple. Why does it
work?"

The Hedgehog Concept

Understan
ding Your
Passions
Understan
ding Your
Economic
Engine

Understan
ding What
you can be
Best at

Winning
state
champions
hips
Dedication
and
Practice

We run
best in the
end

The Spinning Flywheel

The team
got faster
and won
more
champions
hip

Which in return
attracted more
people that
resulted in even
faster team and so
forth

Takeaway from the chapter

The enduring great companies from Built to Last followed the
goodtogreat framework. There was a buildupbreakthrough
flywheel process for many.
Good to Great is not a sequel to Built to Last but a prequel.
To make the shift form a company with sustained great results to
an enduring great company of iconic stature, apply the central
concept from Built to Last.
Why Greatness???