Leadership Excellence Good to Great

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Leadership Excellence Good to Great

• Damon Burton University of Idaho

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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
  didnt make the leap, or if they did, failed to
  maintain it.

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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.

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Greatest Company Walgreens

• 1 invested in Walgreens beat Intel 21, General
  Electric 51, Coca Cola 81 and the general stock
  market 151.
• 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.

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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

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Level 5 Leaders

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

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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.

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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 dont accept how bad it really is, you
  cant develop a plan to make things better.

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The Hedgehog Concept

• Just because something is your core business and
  just because youre been doing it for a long
  time, it does not mean you can be really good at
  iteven 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.

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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.

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A Culture of Discipline

• When you have disciplined thought, you dont need
  hierarchy.
• When you have disciplined thought, you dont need
  bureaucracy.
• When you have disciplined action, you dont need
  excessive controls or rules.
• When you combine a culture of discipline with an
  ethic of positive change, great organizations are
  formed.

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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.

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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.

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The End
The End