Good To Great

Chapter 9Jonathan Alvarez, Chris Hill, Shawn Stults

When we compare these two books there are four basic conclusions.

1) Looking at built to last companies. Early leaders followed the good to great framework. Only they did so in small, early stage enterprises

From Good To Great To Built To Last

2) The second is you use good to great to get results, as a start-up or an established organization, and then apply the findings in Built to Last to make them long term.

From Good To Great To Built To Last

Sustained Great Results

Enduring Great

Company

3) To create an iconic stature company us must apply the central concept from Built to Last: Discovery your purpose beyond making money and combine this with stimulant progress.

From Good To Great To Built To Last

4) A tremendous resonance exists between the two studies; the ideas from each enrich and inform the ideas in the other.

From Good To Great To Built To Last

Bill Hewlett and David Packard’s entire founding concept for HP was not what, but who

They made anything as long as it made a technical contribution and would enable them to build a company with like minded people.

Good to Great in the Early Years

Bill Hewlett , was ask what he was most proud of from his career.

◦ He said “ I am most proud of creating a company that by virtue of its values, practices, and success has had a impact on the way companies are managed”

The values: Technical contribution, respect for all and responsibility to the community, and a deeply held belief that profit is not the fundamental goal of the company

Core Ideology

Core values are essential for enduring greatness, but it doesn't seem to matter what those values are.

“Core Ideology”= core value + core purpose

Enduring great companies preserve their core values and purpose while the business strategies and operation practices adapt to the changing world.

Core Ideology

Ex. Walt Disney

Preserved Core-Purpose- to bring happiness to millions,

especially children- Values- creativity, attention to detail, preserving

the Disney “Magic”

Stimulate Progress- Started with just a home video recorder and

then moved to amusement parks and beyond.

Preserve the Core, Stimulate Progress

1. Clock Building, Not Time Telling- Build an organization that can endure and adapt through multiple generations of leaders and multiple product life cycles.

2. Genius of AND- Embrace both extremes on a number of dimensions at the same time. Don’t choose A or B figure out how to have both A and B.

4 Built to Last Concepts

3. Core Ideology- Instill Core values and core purpose (reason for being other than just making money)

4. Preserve the Core/Stimulate Progress- preserve the core ideology as an anchor point while stimulating change, improvement, and innovation.

Build to Last Concepts Cont.

Good to Great into Built to LastLevel 5 Leadership

Clock Building, Not telling time- 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- Level 5 leaders are ambitious for the company and what it stands for; they have a sense of purpose beyond their own success

Preserve and Stimulate- Level 5 leaders are relentless in stimulating progress toward tangible results; even if it means firing their own brother

Good to Great into Built to LastFirst Who then What

Clock Building, Not telling time- Practicing first who is clock building; practicing first what is time telling

Genius of AND- Get the right people on the bus AND the wrong people off the bus

Core Ideology- practicing first who means selecting people more on their fit with the core values and purpose; then on their skills and knowledge

Preserve and Stimulate- Practicing first who means a bias for promoting from within which reinforces the core values

Good to Great into Built to LastConfront the Brutal Facts

Clock Building, Not telling time- Creating a climate where the truth is heard is clock building, especially if you create red

flag mechanisms Genius of AND- Confront

the brutal facts of your current reality AND retain unwavering faith that you will prevail in the end.

Core Ideology- confronting the brutal facts clarifies the values an organization truly holds as core vs. those that it would like to hold as core

Preserve and Stimulate- Brutal facts clarify what must be done to stimulate progress.

Good to Great into Built to LastHedgehog Concept

Clock Building, Not telling time- The council mechanism is consummate clock building

Genius of AND- Deep understanding AND incredible simplicity

Core Ideology- The “what you are passionate about” circle overlaps with core values and purpose. Only those values about which you are passionate that you would “NEVER” give them up qualify as truly core.

Preserve and Stimulate- Good BHAG’s flow from understanding; bad BHAG’s flow from bravado. Great BHAG’s sit right smack in the middle of the three circles

Hedgehog Concept

Good to Great into Built to LastCulture of Discipline

Clock Building, Not telling time- Operating through sheer force if personality as a disciplinarian is time telling; building an enduring culture of discipline is clock building.

Genius of AND- Freedom AND responsibility

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

Preserve and Stimulate- When you have a culture of discipline, you can give people more freedom to experiment and find their own best path to results

Good to Great into Built to LastTechnology Accelerators

Clock Building, Not telling time- Technology accelerators are a key part of the clock

Genius of AND- Shun technology fads AND pioneer the application of technology

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

Preserve and Stimulate- The right technologies accelerate momentum in the flywheel, toward the achievement of BHAG’s

Good to Great into Built to LastFlywheel, Not Doom Loop

Clock Building, Not telling time- The flywheel effect creates the sustained building of momentum, and does not depend on the presence of a charismatic visionary to motivate people

Genius of AND- Evolutionary incremental process AND revolutionary dramatic results

Core Ideology- The doom loop makes it almost impossible to instill core values and purpose, as people chronically wonder “who are we and what do we stand for?”

Preserve and Stimulate- 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

Boeing Up to the 1950’s only built huge planes for

the military –> B-17, B-29 etc. Dream was to be part of the commerical

airline business – but had no presence in the market at the time◦ “You make great bombers up there in Seattle.

Why don’t you just stick to that..” Bill Allen, CEO

◦ Realized that while they couldn’t be in the airline business in the ’40s, they had gained the knowledge and experience to try and ‘make such a dream possible’ in the ’50s

Boeing cont’d 1952 – decided to spend a ¼ of the

company’s entire net worth to build a prototype jet for commercial aviation – the Boeing 707.

1990’s – Boeing stood as the absolute, unquestioned greatest company in the commercial airplane industry.

Boeing and the Three Circles

Boeing’s executives understood three things:

1) That the company could become the best in the world in commercial aviation

-Even though it had no presence in the market

2) The shift would significantly improve Boeing’s economic standpoint

3) Boeing people were passionate about the idea.

Why Greatness?

Size doesn’t matter◦ It’s not the size of your company that matters, it

is the value that it brings to its customers.

What if I just want to be successful (good)?

Two answers

Being great is just as hard as being good

High school cross-country running team

Hedgehog concept was to run great at the end

Example: They would place a coach at the 2-mile mark of a 3.1 mile race◦ Wouldn’t record each runner’s time – but what

place they were in.◦ Then got “head bones” for the people they

passed by the end of the race

Don’t waste energy First who, then what: Cross-country coach said she was burdened

to try and make racing fun for the runners◦ Quickly put a stop to it and said “If you’re not

passionate about we do here, then go find something else to do”- Number of kids in the program tripled

Wasn’t the coaches setting the goal for a state championship – it was the runners◦ No need for motivation

The search for meaningful work

Be passionate about what you do.

Level 5 leaders had a tough time answering “Why Greatness?” because it was just an intrinsic value that each of them held.

Never too late to change