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Leadership Excellence Good to Great

Leadership Excellence Good to Great. Damon Burton University of Idaho. Good to Great Premise. 5 Year Study – Fortune 500 companies Team Leader Jim Collins, Former Dean Stanford Business College

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Leadership Excellence Good to Great

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  1. Leadership Excellence Good to Great Damon Burton University of Idaho

  2. Good to Great Premise • 5 Year Study – Fortune 500 companies • Team Leader Jim Collins, Former Dean Stanford Business College • Identified companies who went from “good” to “great” and maintained gains for at least 15 years • Compared “great” companies to comparison companies that started at a similar level but didn’t make the leap, or if they did, failed to maintain it.

  3. Good to Great Premise - 2 • Great Companies were defined as having stock returns 3 times greater than the market average. • 11 “great” companies actually showed returns 6.9 times the market average. • 11 comparison companies made little progress during the 1985 to 2000 study period. • The 10 best corporations in the world only beat market averages by 2.8 times the market average.

  4. Greatest Company Walgreens • $1 invested in Walgreens beat Intel 2:1, General Electric 5:1, Coca Cola 8:1 and the general stock market 15:1. • How did they go from a solid but average company to a GREAT one? • Comparison companies that failed to make the leap allowed Collins’ team to identify differences that led to greatness.

  5. 7 Characteristics of Great Companies • Level 5 Leadership, • First Who . . . Then What, • Confront the Brutal Facts, • The Hedgehog Concept, • A Culture of Discipline, • Technology Accelerators, • The Flywheel and the Doom Loop

  6. Level 5 Leaders • Level 5 leaders are self-effacing, quiet, reserved even shy, • Level 5’s are a blend of personal humility and professional will. • They are more like Lincoln and Socrates than Patton and Caesar. • Level 5’s share many characteristics with “servant leaders.”

  7. First Who ... Then What • Before Level 5 leaders create a new vision, they get the “right people on the bus,” “the wrong people off the bus,” and the “right people in the right seats.” • Once the right people are on board, then they figure out where to go. • The “right” people are the key to great companies. • These people are given autonomy to determine how best to do their jobs.

  8. Confront the Brutal Facts but Never Lose Faith • Based on the story of prisoner-of-war James Stockdale, great companies confront an interesting paradox. • You must maintain unwavering faith that you can and will ultimately be successful. • At the same time, you must have the discipline to confront the brutal facts of your current reality. • If you don’t accept “how bad it really is,” you can’t develop a plan to make things better.

  9. The Hedgehog Concept • Just because something is your core business and just because you’re been doing it for a long time, it does not mean you can be really good at it—even the best. • You must be really good at something if that core product is going to make your company “GREAT!” • The hedgehog has a simple, but highly effective, success strategy.

  10. The 3 Intersecting Circles • Circle 1 – What are you deeply passionate about? • Circle 2 – What can you be really good at, even the best? • Circle 3 – What drives your on-going success as an organization? • The Intersection of those 3 circles represents your “Hedgehog Principle.” • Your “hedgehog principle” must be based on facts NOT emotion, history or wishful thinking.

  11. A Culture of Discipline • When you have disciplined thought, you don’t need hierarchy. • When you have disciplined thought, you don’t need bureaucracy. • When you have disciplined action, you don’t need excessive controls or rules. • When you combine a culture of discipline with an ethic of positive change, great organizations are formed.

  12. Technology Accelerators • Great organizations think differently about technology. • They never use technology as the primary means for creating change. • Instead, they are pioneers in the application of “carefully selected technologies.” • Technology is a great tool, BUT never the “magic bullet” that creates success.

  13. The Flywheel and the Doom Loop • Dramatic change programs seldom create the leap from good to great. • Great never occurs based on a single move or choice, a grand program, an epic innovation, a lucky break, or a magic moment. • The process resembles relentlessly pushing a giant heavy flywheel, turn upon turn, building momentum slowly until a point of breakthrough success. • The “doom loop” is expecting dramatic change with a major idea, event or program.

  14. The End The End

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