By Jim Collins
“That’s what makes death so hard – unsatisfied curiosity.” – Beryl Markham 1
Good is the enemy of Great. 1
Larger-than-life celebrity leaders who ride in the from the outside are negatively correlated with taking a company from good great. 10
There is no systematic pattern linking specific forms of executive compensation to the process of going from good to great. Executive compensation is NOT a key driver of corporate performance. 10
Level 5 leader – an individual who blends extreme personal humility with intense professional will. They channel their ego away from themselves into the larger goal of building a company. They are very ambitious but their ambition is first and foremost for the institution, not themselves. Humility + Will = Level 5. 21
Biggest dog syndrome – they don’t mind other dogs in the kennel, as long as they remained the biggest. 26
The Window and the Mirror – great leaders often chalk up their success to “luck”. Level 5 leaders look out the window and give credit to outside factors then themselves when things go well (and if they can’t find someone else to credit they credit “luck”) but look in the mirror when things go bad and take responsibility. 35
If people join the bus primarily because of where it is going, what happens if you get ten miles down the road and you need to change directions? Great vision without great people is irrelevant. You need people on the bus because of the bus not because of the direction. 42
The top five factors that led to the transition from mediocrity to excellence is people, people, people, people, people. 55
Put your best people on your biggest opportunities, not your biggest problem. 58
When you talk about your time at the company, it should be as if it is describing a love affair. 61
There is nothing wrong with pursuing a vision for greatness, but good-to-great companies continually refine the path to greatness with the brutal facts of reality. 71
Access to information is all the same. But turning the information into information that cannot be ignored is what makes company great. 79
The Stockdale Paradox – Stoically accepted the brutal facts of reality while maintaining an unwavering faith in the end game and a commitment to prevail as a great company despite the brutal facts. 83
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. 85
How do we motivate people? If you have the right people, they will be self-motivated. 89
The Hedgehog Concept – Understand the 3 circles: 96
1. What can you be the best in the world at (and understand what you cannot be)
2. What drives your economic engine
3. What are you deeply passionate about
- A Hedgehog concept is not a goal to be the best, a strategy to be the best, and intention to be the best, a plan to be the best. It is the understanding of what you can be the best at. This distinction is absolutely critical. SELF AWARENESS 98
Just because something is your “core business” it doesn’t necessarily mean that you can be the best in the world at it. If you cannot be the best in the world at it, then your core business cannot for the basis of your Hedgehog concept. 99
Just because you make money doing something doesn’t mean that you can become the best at it. 100
Rinsing your cottage cheese – People in good to great companies become somewhat extreme in the fulfillment of their responsibilities, bordering in some cases on frustration. Rinse the cottage cheese to get the fat off. Everyone wants to be the best but most lack the discipline to figure out the egoless clarity what they CAN be the best at and then the will to do whatever it takes to turn that potential into reality. They lack the discipline to rinse their cottage cheese. HUSTLE. 128
Those who built good to great companies have as much of a “stop doing” list as a “to do” list. 138
Sometimes reliance on technology is an impediment as it is used as an easy solution without fully grasping the concepts necessary. 159
The Flywheel – tremendous power exists in the fact of continued improvement and the delivery of results. Tangible accomplishments. companies who are successful with acquisitions are the ones that took place after the Hedgehog concept was developed and after the flywheel had built significant momentum. 180
No matter how dramatic the end result, the good to great transformation never happened in one fell swoop. No miracle moment. But with persistent pushing in a consistent direction over the LONG period of time, the flywheel builds momentum and eventually hits a point of breakthrough. 186
Core values are essential for enduring greatness, but it doesn’t seem to matter what those core values are. The point is HAVING them and preserving them over time. 195
The question is not why but how? Not why greatness. But if you find something outside of your corporate life that makes you fulfilled like church or teaching then you should start doing this because it will be the first step in you becoming a level 5 leader. What work will make you feel compelled to try to create greatness? 209
In the end, it is impossible to have a great life unless it is a meaningful life. And it is very difficult to have a meaningful life without meaningful work. 210
Questions to ask: What do you see as the top five factors that contributed to or caused the upward shift in performance during the years, first 10 years to second 10 years?
How did the company manage the short-term pressures of Wall Street while making long term changes and investments in the future? 240