GOOD TO GREAT SUMMARY

TSAVO COUNCIL WORKBOOK

‘Good is the enemy of Great’. This is how the author sets off An enthralling journey explaining
the findings from his and his team’s half a decade of research in the conquest of how to make
good companies great. Essentially, ‘Good to Great’ happens very rarely and it is because it is
damn difficult. In his research, Jim Collins (the author), has found out systematic phases through
which any great company goes through and lays out a framework as shown below:

The framework has got three main components:

1. Process: From setting up yourselves towards greatness (aka Build Up) to achieving an
inflection point that takes you to greatness (aka Breakthrough)
2. Phases: There are three different phases in the ‘Good to Great’ journey.

Disciplined People: Involves getting the right leader and the right team.

Disciplined Thought: Involves understanding of brutal facts and creating a set of core values.
Disciplined Action: Creating a robust culture where the right people will work within the defined
core values with the appropriate freedom.

3. Flywheel: A quiet and deliberate process of figuring out what needs to be done for best future
results and taking those step one by one, pushing the flywheel in a consistent direction until it
achieves a breakthrough point.

Lets delve into each of these components into a little detail.

1. Level 5 Leadership (Process stage: Buildup; Phase: Disciplined People)

Research has shown that leaders who have brought the ‘Good to Great’ transformation are not the
one’s who are charismatic or big personalities but are rather quiet, shy, deliberate. They are the
one’s who have the combination of humility and professional will. Organisations that strive to
become great need to have a Level 5 leader.

Author explains leadership in terms of 5 different levels, with Level 5 being the highest level in
the hierarchy. Following are the traits of a Level 5 leader:

 They first and foremost think about the success of their organisation and then
personal riches
 These are the leaders who are shy but show extreme fierceness in getting the job done
 These people think about the future of their companies without them and plan about
their succession
 They are modest and rarely like to talk about themselves or their [Link]
prefer to share the credit with others as opposed to other “good” company leaders
who are self obsessed and egalitarians
 Level 5 leaders always apportioned the credit of success to others and if there were no
one to credit they credited towards ‘Luck’
 In times of failures they took the responsibility. This was exactly the opposite in case
of leaders of ‘good’ or failed organisations

SELF-HELP CORNER QUESTIONS

LEVEL 5 LEADERSHIP

 Which is harder to cultivate within yourself: humility or will?

 If Level 5 is about ambition first and foremost about the cause, the company, the work—
not yourself—combined with the will to make good on that ambition, then how can each
of us as individuals learn to take actions consistent with being Level 5?
 Think of a Level 5 you have known. How did he or she become Level 5? What can we
learn from that person?
 Why do so few Level 5s get chosen for top spots in our organizations? What can be done
to change this?

2. First who ..then what (Process stage: Buildup; Phase: Disciplined People)
It is a known fact that the right team is needed to achieve the success but what is even more
important is to build the right team even before you know what and which path to take towards
greatness and hence it is ‘first who..then what’. It is important to assemble a team of great people
first and then decide on the strategy or vision for the company to make it great. The main reason
is that when people join you for the strategy or the direction of the company then there is no
guarantee that they will stick around or be equally motivated when the company changes its path.
But those who are on the team because of someone else on the team will always be there to make
the company great regardless of its direction. The author uses a phrase ‘getting right people on the
bus AND getting wrong people off the bus’ and it is the ‘wrong people off the bus’ that is equally
important. The only way to deliver to the people who are achieving is not to burden them with
people who are not achieving. Many companies adopt a ‘genius with thousand helpers’ model:
where there is a genius & visionary leader who sets the strategy for the company and hires people
to help achieve that vision/strategy. Author suggests this model most likely fails when that
visionary departs and hence is not a sustainable one for making a company great. It is also
important to be rigorous in the people decisions. There are 3 practical ways:

 When in doubt, do not hire

 When you know you need to make a people change, act !
 Put your best people on biggest opportunities, not on biggest problems

SELF-HELP CORNER QUESTIONS:

FIRST WHO THEN WHAT

 How might you tell if someone is the right person on the bus?
 How might you tell if someone is simply in the wrong seat as distinct from being the
wrong person on the bus entirely?
 Think of a case where you had doubts, but TSAVO hired anyway. What was the
outcome? Why did the organization hire anyway, and what do you learn from the
situation?
 If compensation is not the primary driver for the right people on the bus, then what are
the primary elements in getting and keeping the right people on the bus? What role does
compensation play?

3. Confront the brutal facts (Process Stage: Buildup; Phase: Disciplined Thought)
One of the important recipes towards becoming a great company is to make a series of good
decisions and good decisions cannot be made unless you confront with brutal facts first.

Companies need to create a climate where the truth is heard. There is a difference between
‘having your say’ and ‘being heard of’. It is the ‘being heard of’ culture that enables companies to
confront the brutal facts from their own people and then take appropriate right decisions.

Creating a climate where truth is heard:

 Lead with questions, not answers. Constantly probe until you have a clear picture.
 Engage in dialog and debate, not coercion. It is important to get involved in intense
discussions because they have the capability to evolve into a successful conclusion
rather than just being amicable to maintain relationships
 Conduct autopsies, without blame. The climate of truth prospers when you analyze
the debacles without blaming anyone for it. Consider these debacles as learnings and
move on to build robust systems to avoid similar debacles in the future.

SELF-HELP CORNER QUESTIONS:

CONFRONT THE BRUTAL FACTS

 Which side of the Stockdale Paradox is harder for you: unwavering faith or confront the
brutal facts? Why?
 Think of two environments that you have been in. The first being an environment that did
not confront the brutal facts and where people (and the truth) were not heard. The second
being an environment that did confront the brutal facts and where people had a
tremendous opportunity to be heard. What accounts for the difference between the two
environments? What does the contrast teach about how to construct an environment
where the truth is heard?
 Do you have any red-flag mechanisms in your life or organization? What ideas do you
have for new ones?
 In leading a team, what is your questions to statements ratio?

4. The Hedgehog Concept (Process Stage: Buildup; Phase: Disciplined Thought)

‘The Hedgehog Concept’ essentially is the strategic difference between Good and Great
companies. Great companies have a deep understanding across three major dimensions and they
use this understanding to create a clear and concise concept called ‘The Hedgehog Concept’
which they imparted in every aspect of their decision making.

The three key dimensions (or three circles) which enable great companies to have deep
understanding about themselves are:

What can you be the best in the world at ?

What drives your economic engine ?

What you are deeply passionate about ?

It is important that an organisation not only knows what they can be best in the world at but also
know what they cannot be best in the world at. You need to be the best in your core business. The
idea is to find the competency at which you can truly be best in the world and then discard any
other competencies (even if that competency is currently your core competency). Just because
something is core to your business and you have been doing it for years does not always mean
that you can be best at it. Hence only those things in which you can truly be best at makes it into
the hedgehog concept.
To understand the driver of your economic engine, it is important to know the ‘economic
denominator’. It is the single most important ratio that has the single biggest impact to the
company. Ask the question, if you were to pick only one ratio that would have the greatest
impact, then what would that be ? This leads to great insight about the economics of the
organisation and hence better decisions.

The last part of the three circles is having a deep understanding of what you are passionate about.
Only when the companies indulge on things that they are really passionate about, they can
produce results that exceed expectations. It is not always necessarily a passion about what you do
as business but it can equally be about what you stand for as a business.

SELF-HELP CORNER QUESTIONS:

HEDGEHOG CONCEPT (THE THREE CIRCLES)

 How long, on average, did it take the good-to-great companies to clarify their hedgehog
concepts? What implications does this have about finding your own hedgehog concept?
 Are you engaged in work that fits your own three circles: what you are passionate about,
what you are genetically encoded for, what you can get paid for? Do you need to change?
Which circle is hardest to get right? Why?
 Which is more important for an organization: the goal to be the best at something, or
realistic understanding of what you can (and cannot) be the best at?
 Can each department and each person have a hedgehog concept?
 How is the hedgehog concept different for a nonprofit organization?

5. Culture of Discipline (Process stage: Breakthrough; Phase: Disciplined Action)

Now that you have a Level 5 leader, the right people on the bus, confronted brutal facts about you
and business and gained deep understanding of your hedgehog concept, it is now time to create a
culture that is self-disciplined to take actions within the desired framework of your hedgehog. A
culture of discipline requires people to strongly adhere to the defined hedgehog concepts but at
the same time provides much needed freedom to take disciplined actions within that framework.
Other thing that involved within culture of discipline is saying NO to all the opportunities that do
not fit the hedgehog concept. There needs to be a fanatical adherence to hedgehog concept that
requires companies to only focus on things that they have determined they can be best at.

SELF-HELP CORNER QUESTIONS:

CULTURE OF DISCIPLINE

 If "rinsing your cottage cheese" is important, how do you tell *which* cottage cheese is
worth rinsing? In other words, if diligent attention to detail is essential, how do we decide
which details are important, and which are trivial?
 Think of two people: One being someone who only sees his or her job as a "job" and the
other who understands that he or she has a responsibility. How does this difference play
itself out in their work? What should we look for in locating such people?
 If class distinctions are deeply divisive, then why do organizations persist in creating an
executive class that separates itself from those who do the real work? If you ran the
whole show, what would you remove to reduce these class distinctions?
 Do you have a "stop doing" list? What do you put on your "stop doing" list?

6. Technology Accelerators (Process stage: Breakthrough; Phase: Disciplined Action)

Technology is certainly important in the growth of future businesses but what is more important is
not to blindly follow the new technologies but rather being diligent of knowing what technology
can accelerate the existing momentum. The great companies do not start with what technology to
use but start what technology fits best to our defined hedgehog concept. They are not attracted to
the fads of new technologies but rather give deep thought on the application of the right
technology that will propel them to another level.

The transformation from good to great does not happen with a pioneering technology but by
realising the right technology and becoming a pioneer in the application of that technology. Good
to great companies are motivated by inner compulsion of excellence for its own sake. They are
not motivated by he fear of being left behind due to the technological changes because they know
that after mindful thought and adherence to their core concepts will lead them to eventual success
in technological transformation.
In conclusion, the research showed that all the Good to Great transformation happened with the
consistent application of all the mentioned phases. It showed that great companies did not
emerge due to a dramatic or a revolutionary event but rather years or decades of adhering to their
core tenets, building up in the process, gaining momentum slowly as turn-by-turn of the flywheel
and ultimately reaching an inflection point of breakthrough.

SELF-HELP CORNER QUESTIONS

TECHNOLOGY ACCELERATORS

 If technology cannot make or break a company's level of greatness, but only serves as an
accelerator of greatness or demise already in progress, then why did everyone fall in love
with technology for technology's sake during the 1990s?
 Why is there so much hype and fear about new technologies, and what can you do to
view new technologies with objective equanimity?

Flywheel

A quiet and deliberate process of figuring out what needs to be done for best future results and
taking those step one by one, pushing the flywheel in a consistent direction until it achieves a
breakthrough point. In building greatness, there is no single defining action, no grand program, no one
killer innovation, no solitary lucky break, no miracle moment. Rather, the process resembles relentlessly
pushing a giant heavy flywheel in one direction, turn upon turn, building momentum until a point of
breakthrough, and beyond.

SELFHELP CORNER QUESTIONS:

FLYWHEEL

 Think of two organizations you've observed: one that followed the flywheel principle,
and the other that fell into the Doom Loop. What caused the difference between the two?
What does your contrast teach about why so many organizations fall into the Doom
Loop, rather than building momentum over the long term in the flywheel?
 How do you know when it is time to change the direction of the flywheel?
 If big change programs with lots of tag lines, launch events, motivational meetings—and
so forth—do not lead to greatness, then why are such programs so common? What should
be done instead of these programs?
 How can the flywheel concept apply to your own life and career?
CRITIC THE BUSINESS ( DISCUSSION WITHIN THE COUNCIL)
PRESERVE THE CORE/STIMULATE PROGRESS

 What are your core values?

 What is your core purpose, beyond just making money?
 What is your BHAG—Big Hairy Audacious Goal?
 What is your first five-year base camp on the way to achieving the BHAG?
 What practices and strategies does your organization have that are dysfunctional and
should be open for change?