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Prof.Dr.Aung Tun Thet
Flywheel and Doom Loop
• Good-to-great transformations dramatic and revolutionary on
outside
• Organic, cumulative processes on inside
• No single defining action
• No grand program
• No one lucky break or miracle moment
Flywheel and Doom Loop
• Sustainable transformations follow predictable pattern of build-
up and breakthrough
• Pushing giant heavy flywheel
• Average organizations follow “doom loop” pattern
• Try to skip build-up
• Jump immediately to breakthrough
Flywheel and Doom Loop
• Disappointing results
• Lurch back and forth
• Fail to maintain consistent direction
Level 5 Executive Leadership
• Personal Humility
• Professional Will
• Workmanlike diligence – plow horse not show horse
• Ambitious for company not themselves
“First Who, Then What”
• Get right people on bus
• Wrong people off the bus
• Get right people in right seats
• Then decide where to drive
“First Who, Then What “
• Getting right people on team
• Before vision, strategy and tactics
• Put best people on biggest opportunities
• Not biggest problems
Hedgehog Concept
• Organizations should only do what they:
• Can be great at
• Can make money
• Have passion for doing
Hedgehog Concept
• Set goals and strategies based on understanding
• Iterative process
• Hedgehog companies simple - know one big thing and stick to it
Stockdale Paradox
Retain faith that you
will prevail in the end,
regardless of the
difficulties
Confront most brutal
facts of current reality,
whatever they may be
At the same time
Confront Brutal Facts (But Never Lose
Faith in Potential for Greatness)
• Impossible to make good decisions without honest
confrontation of brutal facts
• Create culture where truth heard
• Lead with questions
• Engage in dialogue not coercion
Confront Brutal Facts (But Never Lose
Faith in Potential for Greatness)
• Conduct autopsies without blame
• Charisma liability - strong personality deters people from
presenting brutal facts
• Don’t waste time trying to “motivate people”
• Right people self-motivated
• Can be de-motivated
Culture of Discipline
• Three forms
1. Disciplined people – don’t need hierarchy
2. Disciplined thought – don’t need bureaucracy
3. Disciplined action – don’t need excessive controls
• Combining with ethics of entrepreneurship results in great
performance
Bureaucratic
Organization
Hierarchal
Organization
Start-up
Organization
Great
Organization
Low
High
Low High
Ethic of Entrepreneurship
CultureofDiscipline
Culture of Discipline
• Culture of disciplined people take disciplined action within
three circles of Hedgehog Concept
• Disciplined people engage in disciplined thought and take
disciplined action
• Fanatical adherence to Hedgehog Concept
• Willingness to shun opportunities outside three circles
Culture of Discipline
• Budgeting not to decide how much each activity gets
• Decide areas best fit Hedgehog Concept
• “Stop doing” lists important than “to do” lists
Technology Accelerators
• Avoid technology fads
• Pioneers in applying carefully selected technologies
• Use technology as accelerator of momentum
• Not creator
BUILT TO
LAST
Best of The Best
• Clock Building not Time Telling
• Great idea or charismatic visionary leader - “time telling”
• Prosper far beyond presence of any single leader and through
multiple product life cycles - “clock building”
Best of The Best
• Two myths:
1. Great idea
2. Great and charismatic leader
Company Itself Ultimate Creation
• Not company as vehicle for products
• Products as vehicle for company
• Never, never, never give up company
• Kill, revise or evolve idea
Company Itself Ultimate Creation
• Transition
• From
• Designing products
• To
• Designing organization-creating environment - conducive to
creation of great products
• Critical shift in thinking
Architectural Approach: Clock Builders
• Key people
• Not “leader”
• “Architect” or “clock builder”
Architectural Approach: Clock Builders
• Valued change
• Experimentation
• Constant improvement
Most important steps
• Not action
• Shift in perspective
• Underlying processes
• Fundamental dynamics embedded organization
Most important steps
• Organizational visionary
• Building visionary company
• Shift from time telling to clock building
More Than Profits
• High ideals
• “Sony spirit”
• Do both
Profitability
• High ideals
• “Sony spirit”
• Do both
Profitability
• Necessary condition for existence
• Means not end
• Oxygen, food, water and blood
• Not life, but without them, there is no life
Profitability
• “If we provide real satisfaction to the real customers-we will be
profitable.”
• Not go after cheap end
• No opportunity for technical contribution
“Right” Ideology
• Customers
• Concern for employees
• Products/Services
• Audacious risk
• Innovation
Words or Deeds?
• Ideology pervasive
• Transcend any individual leader
• Indoctrinate employees
• Nurture and select senior management
• Consistent alignment with core ideology
Visionary Companies
• Few core values (3 to 6)
• Capture what authentically believed
• No rational or external justification
• Articulate both core values and purpose in core ideology
Preserve Core/Stimulate Progress
• “Scared cow” - basic philosophy of doing business
• Visionary company preserve and protect core ideology
• Open for change and evolution
Visionary Company
• Core ideology work hand in hand with relentless drive for
progress
• Deep, inner, compulsive drive
• Not satisfied with status quo
• Drive for progress internal
Visionary Company
• Self-confidence combined with self-criticism
• Self-criticism - self-induced change and improvement
• No ultimate finish line - never “we’ve arrived”
Big Hairy Audacious Goal (BHAG)
• Committed to huge, daunting challenge
• Big mountain to climb
• Moon mission in 1960s
Big Hairy Audacious Goal (BHAG)
• Engages people
• Reaches out
• Tangible, energizing, highly focused
• Little or no explanation
“Hubris Factor”
• Overbearing pride, confidence or arrogance
• Highly visionary companies self-confidence bordering on hubris
• “Taunting the gods”
Thank You!

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BFBM(8-2016) Good to Great

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  • 10.
  • 11. Flywheel and Doom Loop • Good-to-great transformations dramatic and revolutionary on outside • Organic, cumulative processes on inside • No single defining action • No grand program • No one lucky break or miracle moment
  • 12. Flywheel and Doom Loop • Sustainable transformations follow predictable pattern of build- up and breakthrough • Pushing giant heavy flywheel • Average organizations follow “doom loop” pattern • Try to skip build-up • Jump immediately to breakthrough
  • 13. Flywheel and Doom Loop • Disappointing results • Lurch back and forth • Fail to maintain consistent direction
  • 14.
  • 15. Level 5 Executive Leadership • Personal Humility • Professional Will • Workmanlike diligence – plow horse not show horse • Ambitious for company not themselves
  • 16. “First Who, Then What” • Get right people on bus • Wrong people off the bus • Get right people in right seats • Then decide where to drive
  • 17. “First Who, Then What “ • Getting right people on team • Before vision, strategy and tactics • Put best people on biggest opportunities • Not biggest problems
  • 18.
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  • 20.
  • 21.
  • 22.
  • 23. Hedgehog Concept • Organizations should only do what they: • Can be great at • Can make money • Have passion for doing
  • 24. Hedgehog Concept • Set goals and strategies based on understanding • Iterative process • Hedgehog companies simple - know one big thing and stick to it
  • 25. Stockdale Paradox Retain faith that you will prevail in the end, regardless of the difficulties Confront most brutal facts of current reality, whatever they may be At the same time
  • 26. Confront Brutal Facts (But Never Lose Faith in Potential for Greatness) • Impossible to make good decisions without honest confrontation of brutal facts • Create culture where truth heard • Lead with questions • Engage in dialogue not coercion
  • 27. Confront Brutal Facts (But Never Lose Faith in Potential for Greatness) • Conduct autopsies without blame • Charisma liability - strong personality deters people from presenting brutal facts • Don’t waste time trying to “motivate people” • Right people self-motivated • Can be de-motivated
  • 28. Culture of Discipline • Three forms 1. Disciplined people – don’t need hierarchy 2. Disciplined thought – don’t need bureaucracy 3. Disciplined action – don’t need excessive controls • Combining with ethics of entrepreneurship results in great performance
  • 30. Culture of Discipline • Culture of disciplined people take disciplined action within three circles of Hedgehog Concept • Disciplined people engage in disciplined thought and take disciplined action • Fanatical adherence to Hedgehog Concept • Willingness to shun opportunities outside three circles
  • 31. Culture of Discipline • Budgeting not to decide how much each activity gets • Decide areas best fit Hedgehog Concept • “Stop doing” lists important than “to do” lists
  • 32.
  • 33. Technology Accelerators • Avoid technology fads • Pioneers in applying carefully selected technologies • Use technology as accelerator of momentum • Not creator
  • 35.
  • 36. Best of The Best • Clock Building not Time Telling • Great idea or charismatic visionary leader - “time telling” • Prosper far beyond presence of any single leader and through multiple product life cycles - “clock building”
  • 37. Best of The Best • Two myths: 1. Great idea 2. Great and charismatic leader
  • 38. Company Itself Ultimate Creation • Not company as vehicle for products • Products as vehicle for company • Never, never, never give up company • Kill, revise or evolve idea
  • 39. Company Itself Ultimate Creation • Transition • From • Designing products • To • Designing organization-creating environment - conducive to creation of great products • Critical shift in thinking
  • 40. Architectural Approach: Clock Builders • Key people • Not “leader” • “Architect” or “clock builder”
  • 41. Architectural Approach: Clock Builders • Valued change • Experimentation • Constant improvement
  • 42. Most important steps • Not action • Shift in perspective • Underlying processes • Fundamental dynamics embedded organization
  • 43. Most important steps • Organizational visionary • Building visionary company • Shift from time telling to clock building
  • 44. More Than Profits • High ideals • “Sony spirit” • Do both
  • 45. Profitability • High ideals • “Sony spirit” • Do both
  • 46. Profitability • Necessary condition for existence • Means not end • Oxygen, food, water and blood • Not life, but without them, there is no life
  • 47. Profitability • “If we provide real satisfaction to the real customers-we will be profitable.” • Not go after cheap end • No opportunity for technical contribution
  • 48. “Right” Ideology • Customers • Concern for employees • Products/Services • Audacious risk • Innovation
  • 49. Words or Deeds? • Ideology pervasive • Transcend any individual leader • Indoctrinate employees • Nurture and select senior management • Consistent alignment with core ideology
  • 50. Visionary Companies • Few core values (3 to 6) • Capture what authentically believed • No rational or external justification • Articulate both core values and purpose in core ideology
  • 51. Preserve Core/Stimulate Progress • “Scared cow” - basic philosophy of doing business • Visionary company preserve and protect core ideology • Open for change and evolution
  • 52. Visionary Company • Core ideology work hand in hand with relentless drive for progress • Deep, inner, compulsive drive • Not satisfied with status quo • Drive for progress internal
  • 53. Visionary Company • Self-confidence combined with self-criticism • Self-criticism - self-induced change and improvement • No ultimate finish line - never “we’ve arrived”
  • 54. Big Hairy Audacious Goal (BHAG) • Committed to huge, daunting challenge • Big mountain to climb • Moon mission in 1960s
  • 55. Big Hairy Audacious Goal (BHAG) • Engages people • Reaches out • Tangible, energizing, highly focused • Little or no explanation
  • 56. “Hubris Factor” • Overbearing pride, confidence or arrogance • Highly visionary companies self-confidence bordering on hubris • “Taunting the gods”
  • 57.