GOOD TO GREAT
J I M C O L L I N S

CHAPTER 1
GOOD IS THE ENEMY OF GREAT
• Phase 1: Establish Team: The teams consist of four to six people teams have to identify the
company with good to great pattern in at least 15 years.
• Phase 2: Comparison: Most important step in the entire research effort: Contrasting the good-
to-great companies to a carefully selected set of "comparison companies."

CHAPTER 1
GOOD IS THE ENEMY OF GREAT
• Phase 3:The Blackbox of Collected Data
1) Larger-than-life, celebrity leaders who ride in from the outside are negatively correlated
with taking a company from good to great.
2) No systematic pattern linking specific forms of executive compensation.
3) Strategy per se did not separate the good-to-great companies from the comparison
companies.
4) Focused equally on what not to do and what to stop doing.
5) Technology can accelerate a transformation, but technology cannot cause a
transformation.
6) Greatness is not a function of circumstance. Greatness, it turns out, is largely a matter of
conscious choice.

CHAPTER 1
GOOD IS THE ENEMY OF GREAT
• Phase 4: Chaos to Concept:
“Every primary concept in the final framework showed
up as a change variable in 100 percent of the good-to-
great companies and in less than 30 percent of the
comparison companies during the pivotal years.”

CHAPTER 2
LEVEL 5 LEADERSHIP”YOU CAN ACCOMPLISH ANYTHING IN LIFE, PROVIDED THAT YOU DO NOT M IND WHO GETS THE
CREDIT”
Level 5 Leaders
• Dawren Smith of Kimberly Clark
• Colman Mockler of Gillette
• David Maxwell of Fannie Mae
Biggest Dog Syndrome
• Al Dunlap of Scott Paper
• Lee Laccoca of Chrysler
Jist of the Story
• Brave, because sometimes it requires
abnormal decisions, such cases of George
Cain of Abbott Laboratory to remove all
nepotism.
• Level 5 leaders always put the organization as
the number one priority and always think
about the growth of the company.
• They are developed at the time of transition
and organization should be open to gulp the
powerful ideas.

CHAPTER 2
LEVEL 5 LEADERSHIP”YOU CAN ACCOMPLISH ANYTHING IN LIFE, PROVIDED THAT YOU DO NOT M IND WHO GETS THE
CREDIT”
The window and the Mirror
• Comparison of Bethlehem Steel V.S. Nucor
- Import of Steel
• Comparison of Regular leader and Level 5 Leader
- Pointing Fingers

• First who..Then what?
• Dick Cooley ofWells Fargo
• Wells FargoVS Bank of America
• David Maxwell of Fannie Mae
CHAPTER 3
FIRST WHO… THEN WHAT

CHAPTER 3
FIRST WHO… THEN WHAT
A Counter Analysis of A “Genius with a thousand soldiers”
Case Study of
Henry Singleton
of Teledyne
There is no linking
between executive
compensation
Rigorous
When in Doubt
Don’t Hire
Need to change
people? Do it
Best people on
Opportunities.
Not Problems

C H A P T E R 3
F I R S T W H O …
T H E N W H AT

• A&PV.S. KROGER
CHAPTER 4
CONFRONT THE BRUTAL FACTS
YET NEVER LOSE FAITH
Facts are better than dreams
• Good to great companies did not have a perfect track record.
• But on the whole, they made many more good decisions than the comparison companies.
• Even more important on the really big choices such as Kroger’s decision to thrown all its
resources into the task of converting its entire system to the superstore concept, they were
remarkably on target.

CHAPTER 4
CONFRONT THE BRUTAL FACTS
YET NEVER LOSE FAITH
Let theTruth be Heard
To accomplish this, 4 basic practices must
engaged:
1. Lead with question, not answer
2. Engage in dialogue and debate, not coercion
3. Conduct autopsies, without blame
4. Build red flag mechanisms that turn information
into information that cannot be ignored.

THE STOCKDALE PARADOX
• Admiral Jim Stockdale
• This is a very important lesson.You must never confuse faith that you will prevail in the end—
which you can never afford to lose—with the discipline to confront the most brutal facts of
your current reality, whatever they might be.“ – Jim Stockdale

• HedgehogVS Fox
• Walgreens (9 stores/mile) V.S. Eckerd
CHAPTER 5
THE HEDGEHOG CONCEPT

CHAPTER 5
THE HEDGEHOG CONCEPT
Three Circles of Simplicity

CHAPTER 5
THE HEDGEHOG CONCEPT
Three Circles of Simplicity:
1) At what you can best In the world
• Possess Core competence?You might not be the best.
• You might be best at something you don’t even know it yet.
Hedgehog Concept:An understanding of what you
can do and what you cannot the best!
Not a goal or a business Strategy

CHAPTER 5
THE HEDGEHOG CONCEPT
Three Circles of Simplicity:
2) What drives your economic engine?
• Determination of the ‘X’ factor in your PROFIT x ‘X’ statement
• This denominator can be subtle and can be unobvious sometimes.
Hedgehog Concept: It is an extensive inherently
iterative process, not an event.
Not a goal or a business Strategy

CHAPTER 5
THE HEDGEHOG CONCEPT
Three Circles of Simplicity:
3) What are you passionate about?
• Good-to-great companies only did what they are passionate about. Eg. Pitney
Brows
• No need to motivate people on board
Hedgehog Concept: Discover what ignites your
passion
Not a goal or a business Strategy

• Mechanism/Guide to Hedgehog Concept
CHAPTER 5
THE HEDGEHOG CONCEPT
THE
COUNCIL
Dialogue and debate,
Guided by the three circles
Executive Decisions
Autopsies and analysis
Guided by the three circles
Ask Question,
Guided by the three circles

Hierarchical
Organization
Start-up
Organization
Bureaucratic
Organization
Great
Organization
High
Culture of
Discipline
Low
Low HighEthic of
Entrepreneurship
CHAPTER 6
A CULTURE OF DISCIPLINE
The Good to Great Matrix of Creative Discipline

CHAPTER 6
A CULTURE OF DISCIPLINE
1. Build a culture around the idea of freedom and responsibility, within a
framework.
2. Fill that culture with self-disciplined people who are willing to go to
extreme lengths to fulfill their responsibilities.They will "rinse their
cottage cheese”.
3. Don't confuse a culture of discipline with a tyrannical disciplinarian.
4. Adhere with great consistency to the Hedgehog Concept, exercising
an almost religious focus on the intersection of the three circles. Equally
important, create a "stop doing list" and systematically unplug anything.

• PioneeringTechnology? Be in the hedgehog concept
• RelevantTechnology = Fanatical and Creative (Gillette)
CHAPTER 7
TECHNOLOGY ACCELERATORS
TECHNOLOGY CANNOT..
⚫ Make a company great
⚫ Create sustained results
⚫ Technology without a clear Hedgehog Concept, and without the discipline
to stay within the three circles, cannot make a company great.”
⚫ Eg. Chrysler and computer-aided design, Harris and printing electronics,
Rubbermaid and manufacturing
DrugStore.comVS Walgreens

CHAPTER 7
TECHNOLOGY ACCELERATORS
⚫ Good-to-great companies think differently about
technology
⚫ Good-to-great companies only use a technology
if it fits within their Hedgehog Concept and then
become a pioneer in the application of that
technology
⚫ Technology is only an accelerator of momentum,
not a creator of momentum

CHAPTER 8
THE FLYWHEEL EFFECT
A huge flywheel 30m in radius, 2m thick and 5000 pounds in weight