My Fav list of readings : GOOD TO GREAT : A peak into moving from SMART goals to BHAG ...
Moving from SMART goals to
BHAG is like going from good to great..Today especially in the market place it
is not enough to be the good..one has to be the best..An organization must play
to win and not play to play.
Chapter 1: Good is the Enemy of GreatThe first chapter of the book lays out the criteria that Collins
and his research team used in selecting the companies that served as the basis
of the meta-analysis that provided the findings set forth in the book. The most
important factor in the selection process was a period of growth and sustained
success that far outpaced the market or industry average. Based on the stated
criteria, the companies that were selected for inclusion were Abbott, Fannie
Mae, Circuit City, Gillette, Kimberly-Clark, Kroger, Nucor, Philip Morris,
Pitney Bowes,Walgreens, and Wells Fargo.Collins also offers a few of the most significant findings gleaned
from the study. Of particular note are the many indications that factors such
as CEO compensation, technology, mergers and acquisitions, and change
management initiatives played relatively minor roles in fostering the Good to Great process. Instead, Collins found that successes in three main
areas, which he terms disciplined people, disciplined thought, and disciplined
action, were likely the most significant factors in determining a company’s
ability to achieve greatness.
Chapter 2: Level 5 LeadershipIn this chapter, Collins begins the process of identifying and
further explicating the unique factors and variables that differentiate good
and great companies. One of the most significant differences, he asserts, is
the quality and nature of leadership in the firm. Collins goes on to identify
"Level 5 leadership" as a common characteristic of the great
companies assessed in the study. This type of leadership forms the top level of
a 5-level hierarchy that ranges from merely competent supervision to strategic
executive decision-making.By further studying the behaviors and attitudes of so-called Level
5 leaders, Collins found that many of those classified in this group displayed
an unusual mix of intense determination and profound humility. These leaders
often have a long-term personal sense of investment in the company and its
success, often cultivated through a career-spanning climb up the company’s
ranks. The personal ego and individual financial gain are not as important as
the long-term benefit of the team and the company to true Level 5 leaders. As
such, Collins asserts that the much-touted trend of bringing in a celebrity CEO
to turn around a flailing firm is usually not conducive to fostering the
transition from Good to Great.
Chapter 3: First Who, Then WhatThe next factor that Collins identifies as part of the Good to Great process is the nature of the leadership team. Specifically,
Collins advances the concept that the process of securing high-quality,
high-talent individuals with Level 5 leadership abilities must be undertaken
before an overarching strategy can be developed. With the right people in the
right positions, Collins contends that many of the management problems that
plague companies and sap valuable resources will automatically dissipate. As
such, he argues, firms seeking to make the Good to Great transition may find it
worthwhile to expend extra energy and time on personnel searches and
decision-making.
Collins also underscores the importance of maintaining
rigorousness in all personnel decisions. He recommends moving potentially
failing employees and managers to new positions, but not hesitating to remove
personnel who are not actively contributing. He also recommends that hiring
should be delayed until an absolutely suitable candidate has been identified.
Hewing to both of these guidelines, Collins claims, will likely save time,
effort, and resources in the long-term. Chapter 4: Confront the Brutal Facts (Yet Never Lose Faith)Another key element of some companies’ unique ability to make the
transition from Good to Great is the willingness to identify and assess
defining facts in the company and in the larger business environment. In
today’s market, trends in consumer preferences are constantly changing, and the
inability to keep apace with these changes often results in company failure.
Using the example of an extended comparative analysis of Kroger and A & P,
Collins observes that Kroger recognized the trend towards modernization in the
grocery industry and adjusted its business model accordingly, although doing so
required a complete transformation of the company and its stores. A & P, on
the other hand, resisted large-scale change, and thus guaranteed its own
demise.
Collins outlines a four-step process to promote awareness of
emerging trends and potential problems: 1) Lead with questions, not answers; 2)
Engage in dialogue and debate, not coercion; 3) Conduct autopsies without
blame; and 4) Build red flag mechanisms that turn information into information
that cannot be ignored.Chapter 5: The Hedgehog Concept (Simplicity Within the Three
Circles)In this chapter, Collins uses the metaphor of the hedgehog to illustrate
the seemingly contradictory principle that simplicity can sometimes lead to
greatness. When confronted by predators, the hedgehog’s simple but surprisingly
effective response is to roll up into a ball. While other predators, such as
the fox, may be impressively clever, few can devise a strategy that is
effective enough to overcome the hedgehog’s simple, repetitive response.Similarly, Collins asserts, the way to make the transformation
from Good to Great is often not doing many things well, but instead, doing one thing
better than anyone else in the world. It may take time to identify the single
function that will be a particular firm’s "hedgehog concept," but
those who do successfully identify it are often rewarded with singular success.
In order to help expedite this process, Collins suggests using the following
three criteria: 1) Determine what you can be best in the world at and what you
cannot be best in the world at; 2) Determine what drives your economic engine;
and 3) Determine what you are deeply passionate about.
Chapter 6: A Culture of DisciplineAnother defining characteristic of the companies that Collins
defined as great in his study was an overarching organizational culture of
discipline. He is quick to point out that a culture of discipline is not to be
confused with a strict authoritarian environment; instead, Collins is referring
to an organization in which each manager and staff member is driven by an
unrelenting inner sense of determination. In this type of organization, each individual
functions as an entrepreneur, with a deeply rooted personal investment in both
their own work and the company’s success.Although this discipline will manifest itself in a high standard
of quality in the work that is produced by managers and employees alike, its
most significant outcome will be an almost fanatical devotion to the objectives
outlined in the "hedgehog concept" exercises. Disciplined workers
will be better equipped to hew to these goals with a single-minded intensity
that, according to Collins, will foster the transformation from merely Good to Great. In addition, the author asserts, it is important that within
this overarching culture of discipline, every team member is afforded the
degree of personal empowerment and latitude that is necessary to ensure that
they will be able to go to unheard-of extremes to bring the firm’s envisioned
objectives into existence.
Chapter 7: Technology AcceleratorsToday, many businesses have come to depend upon technology to
increase efficiency, reduce overhead, and maximize competitive advantage.
However, Collins cautions that technology should not be regarded as a potential
panacea for all that ails a company. The folly of this kind of thinking was
revealed in the aftermath of the crash of the tech bubble in the early 2000s.
The market correction threw into sharp relief the differences between
sustainable uses of the Internet to extend established businesses and
ill-planned, unviable online start-ups.Collins contends that the good-to-great companies approach the
prospect of new and emerging technologies with the same prudence and careful
deliberation that characterizes all of their other business decisions. Further,
these companies tend to apply technology in a manner that is reflective of
their "hedgehog concepts" -- typically by selecting and focusing
solely upon the development of a few technologies that are fundamentally
compatible with their established strengths and objectives. Collins
characterizes the ideal approach to technology with the following cycle:
"Pause -- Think -- Crawl -- Walk -- Run." Chapter 8: The Flywheel and the Doom LoopIn this chapter, Collins describes two cycles that demonstrate the
way that business decisions tend to accumulate incrementally in either an
advantageous or a disadvantageous manner. Both, the author emphasizes, accrue
over time. Despite the popular misperception that business success or failure
often occurs suddenly, Collins asserts that it more typically occurs over the
course of years, and that both only transpire after sufficient positive or
negative momentum has been accrued.Collins describes the advantageous business cycle that, in some
cases, can foster the transition from Good to Great as "the flywheel
effect." By making decisions and taking actions that reinforce and affirm
the company’s "hedgehog" competencies, executives initiate positive
momentum. This, in turn, results in the accumulation of tangible positive
outcomes, which serve to energize and earn the investment and loyalty of the
staff. This revitalization of the team serves to further build momentum. If the
cycle continues to repeat in this manner, the transition from Good to Great is likely to transpire. In contrast, the doom loop is
characterized by reactive decision-making, an overextension into too many
diverse areas of concentration, following short-lived trends, frequent changes
in leadership and personnel, loss of morale, and disappointing results.
Chapter 9: From Good to Great to Built to
LastIn the concluding chapter of Good to Great,
Collins makes a connection between this book and his previous work, Built to Last, which represented the findings of a six-year study into the
factors that determined whether a new company would survive in the long-term.
First and foremost, Collins contends that companies need a set of core values
in order to achieve the kind of long-term, sustainable success that may lead to
greatness. Companies need to exist for a higher purpose than mere profit
generation in order to transcend the category of merely good. According to
Collins, this purpose does not have to be specific -- even if the shared values
that compel the company toward success are as open-ended as being the best at
what they do and achieving excellence consistently, that may be sufficient as
long as the team members are equally dedicated to the same set of values.
Although many of the conclusions of both of the books overlap,
Collins notes that Good to Great should not be seen as the follow-up to Built to Last, which focuses on sustaining success in the long-term. Instead, Good to Great actually functions as the prequel to Built to Last.
First, a company should focus on developing the foundation that is necessary to
work toward greatness. Then, they can begin to apply the principles of
longevity that are set forth in Built to Last.
Source : http://www.wikisummaries.org/
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