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GOOD TO GREAT
by Jim Collins
Six Key Elements of a
“Good to Great” (G2G) Company
Element 1 :
Level 5 Leadership
Element 2 :
First Who…..then What
Element 3 :
Confront the Brutal Facts
(Yet Never Lose Faith)
Element 4 :
The Hedgehog Concept
Element 5 :
A Culture of
Discipline
GOOD IS THE ENEMY OF
GREAT
THE 11 G2G cOMpANIES
wERE:
GOOD TO GREAT
cOMpANIES
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
Good To Great
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Level
Level 55 First Who… Confront the Hedgehog Culture of Technology
Leadership
Leadership Then What Brutal Facts Concept Discipline Accelerators
Disciplined People Disciplined Thought Disciplined Action
Flywheel
Level 5 Leadership
5 : Level 5 Executive
4 : Effective Leader
3 : Competent Manager
2 : Contributing Team Member
1 : Highly Capable Individual
LeveL-5 executive
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firSt who…then whAt
First who,
Ensured thethen
rightwhat
people “on the bus”
before
The anything
research else, get
indicated that the wrong did not
compensation
“…the
G2G ‘who’ questions
companies don’t come before
depend on thethe ‘what’ of
brilliance
correlate
people at
theall bus,
offperson with then
the “good
figuretoout
great” process.
any one ;a “lone genius”
questions
No particular– compensation
before vision, scheme
before appeared
strategy, to
where to drive It.
be advantageous
before tactics, before organizational structure,
before technology”
why do it thiS
wAy?
LeSSon LeArnt
• People are NOT your most important asset. …..The
RIGHT people are
Good To Great
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All good-to-great companies began the
process, finding a path to greatness by
confronting the brutal facts of their
current reality
confront the BrutAL fAct
(YET NEVER LOSE FAITH)
Mustlofty
Having
create
goalsa can
culture wherein
be good, but you can
never lose sight
people haveofanwhat the realityto
opportunity is on
the ground
hear the truth
StockdALe pArAdox
4 basic practices :
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THE HEDGEHOG CONCEPT
• Scattered
• Diffused
• Moving on many levels
• Never integrating their thinking into an overall concept
or unifying vision
• Simplifies a concept
• Reduces all challenges to simple ideas
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
THE HEDGEHOG CONCEPT
One
Big
Thing
What you can What drives
be the best in your
the world at economic
engine
Hedgehog Concept
Executive
Decisions
CHaraCTErisTiCs Of THE COuNCil
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Buildup
Flywheel
a CulTurE Of DisCiPliNE
C ul t ur e of di s c i pl i ne i s n ot j us t a bou t a c t i on .
It i s a bo ut ge t t i ng d isc ip lin e d pe o p le wh o
e n ga g e i n d isc ip lin e d t h o u gh t a nd w ho t he n
t a k e d isc ip lin e d a c t io n
In a c u l t ur e o f di s c i p l i ne , pe o pl e do n ot h a v e
j o bs “ t h e y h a v e r e s po n sib ilit ie s”
The Good To Great Matrix of Creative Discipline
High
Hierarchical Great
Organization Organization
Culture of
Discipline
Bureaucratic Start-up
Organization Organization
Low
not do
Good To Great
gh
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Buildup
Flywheel
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.
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.
Technology
AccelerATors
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Buildup
Flywheel
Flywheel
The Flywheel And The
doom loop
ThAnk you
Prepared by
Snigdha Majumder
Head of the Department Lean Six Sigma
ITC Hotels Mumbai