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Copy of ADL 705 Leadership Platform: Good to Great

A presentation of Jim Collins' work Good to Great: Why some companies never become great
by

Charnita Shipp

on 23 November 2013

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Transcript of Copy of ADL 705 Leadership Platform: Good to Great

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ADL 705 Theories of Leadership
Leadership Platform:
Good to Great
Charnita Shipp
Good is the enemy of great!


Why are some companies "great"?
Good to Great

Collins and researchers conducted a five year
study to uncover if a "good" company can become
a "great" company...
Phase 1- The Search
Good to Great

Abbott
Circuit City
Fannie Mae
Gillette
Kimberly-Clark
Kroger
Nucor
Philip Morris
Pitney Bowes
Walgreens
Wells Fargo
Phase 2: Compared to What?
Direct and Unsustained Comparison
Groups
Direct Comparison Group

Upjohn
Silo
Great Western
Warner-Lambert
Scott Paper
A&P
Bethlehem Steel
R.J.Reynolds
Addressograph
Eckerd
Bank of America
Unsustained Comparison Group

Burroughs
Chrysler
Harris
Hasbro
Rubbermaid
Teledyne
Phase 3: Inside the Black Box

Published articles were reviewed
Executives were interviewed
Qualitative and quantitative analyses were conducted
Inside the Black Box

No celebrity or larger then life CEO in the good to great companies

Executive compensation was not a factor in good to great companies

Strategy did not separate the good to great companies from the comparison groups

The good to great companies focused on what not to do and what to stop doing
Inside the Black Box

Technology had nothing to do with igniting a transformation from good to great

Mergers and acquisitions were not important

The good to great companies paid attention to managing change, motivating people, and creating alignment

Good to great compnies had no launch party to signify their transformation

Good to great compaies were not in a great industry
Phase 4: Chaos to Concept

The transformation was a process of buildup
followed by breakthrough, broken into three stages:

Disciplined people
Disciplined thought
Disciplined action
Level 5 Leadership

Self effacing
Quiet
Reserved
Shy
Modest
Willful
Humble
Fearless

**Level 5 leaders channel their ego needs away from themselves and into the larger goal of building a great company**
Level 5 Hierarchy

Level 5: Executive builds enduring greatness through a paradoxical blend of personal humility and professional will.

Level 4: Effective Leader catalyzes commitment to and vigourous pursuit of a clear and compelling vision, stimulating higher performance standard.

Level 3: Competent Manager organizes people and resources toward the effective and efficient pursuit of predetermined objectives.

Level 2: Contributing Team Member contributes individual capabilities to the achievement of group objectives and works effectively with others in a group setting.

Level 1: Highly Capable Individual makes productive contributions through talent, knowledge, skills, and good work habits.
The Window and the Mirror

What do you look through as a leader?

Good to great leaders look through the window

Comparison company leaders look through a mirror
The Two Sides of Level 5 Leadership
Professional Will

Creates superb results

Demonstrates an unwavering resolve to do whatever must be done to produce the best long-term results

Sets the standard of building an enduring great company

Looks in the mirror, not out the window
Personal Humility

Demonstrates a compelling modesty, never boastful

Acts with quiet, calm determination; relies principally on inspired standards, not inspiring charsma, to motivate

Channels ambition into the company, not the self

Looks out the window, not in the mirror
First Who...Then What
Not on the bus...

Comparison companies

"weak general, strong lieutenants" model
"one genius, a thousand helpers" model
Level 5 + Management Team

Level 5 Leader

First Who...

Get the right people on the bus.
Build a superior executive team.

Then What...

Once you have the right people in place, figure out the best path to greatness.
A"Genius with a Thousand Helpers"

Level 4 Leader

First What...

Set vision for where to drive the bus. Develop a road map for driving the bus.

Then Who...

Enlist a crew of highly capable "helper" to make the vision happen.
Cash is not "King"

There is no systematic pattern linking executive compensation to the process of going from good to great.

The purpose of a compensation system should not be to get the right behaviors from the wrong people, but get the right people on the bus in the first place, and to keep them there.
How to be Rigorous

Practice Discipline #1- When in doubt, don't hire, keep looking.

Practice Discipline #2- When you know you need to make a people change, act..

Practice Discipline #3- Put your best people on your biggest opportunities, not your biggest problems
Confront the Brutal Facts
(yet never lose faith)

There is no worse mistake in public leadership than to hold out false hopes soon to be swept away.

-Winston S. Churchill

Let the truth be told...

Lead with questions, not answers
Engage in dialogue and debate, not coercion
Conduct autopsies, without blame
Build "red flag" mechanisms

Are you a Hedgehog or a Fox?

-All the good to great companies attained a very simple concept that they used as a frame of reference for all their decisions...
The Hedgehog Concept

What your are deeply passionate about

What drives your economic engine

What you can be the best in the world at

The best at...

Abbott- product portfolios that lowers the cost of health care
Circuit City- the best at implementing the "4-s" model applied to big ticket consumer sales
Fannie Mae- the best capital markets players in anything that pertains to mortgages
Gillette- the best at building global brands of daily necessities
Kimberly-Clark- the best in the world at paper based consumer products
Kroger- the best at innovation super-combo stores
Nucor- the best at producing low-cost steel
Philip Morris- the best in the world at building brand loyality in cigarettes
Pitney Bowes- the best at messaging that requires sophisticated back-office equipment
Walgreens- the best at convenient drug strores
Wells Fargo- the best at running a bank like a business
The economic engine..


The good to great companies picked one "economic denomintor"...

Abbott- per employee
Circuit City- per geographic region
Fannie Mae- per mortgage risk level
Gillette- per customer
Kimberly-Clark- per consumer brand
Kroger- per local population
Nucor- per ton of finished steel
Philip Morris- per global brand category
Pitney Bowes- per customer
Walgreens- per customer visit
Wells Fargo- per employee
The comparison companies

Failed to become "great" because they did not ask the right questions and their goals and strategies were more bravado than from understanding...

Getting the Hedgehog Concept

The Council

Ask questions
Dialogue and Debate
Autopsies and Analysis
Executive Decisions
Full transcript