Good to Great Chapters 1-3 Flashcards

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Questions and Answers

How did Collins try to answer the question, 'Can a good company become great, and if so, how?'

They identified companies that made the leap from good results to great results and sustained those results for at least 15 years and compared them to a control group.

What is Collins' definition of 'great'?

They are companies that made the leap from good results to great results and sustained those results for at least 15 years.

What criteria did Collins use in selecting 11 great companies?

They had to have a 15-year cumulative stock return at or below the general stock market, then cumulative returns at least three times the market over the next 15 years.

Why did Collins include 'comparison companies' in his study?

To find out what the good-to-great companies share in common that distinguishes them from the comparison companies. Signup and view all the answers

Why did Collins examine the data from a 30-year period while looking for great companies?

To transcend one-hit wonders and lucky breaks and exceed the performance of most widely acknowledged great companies. Signup and view all the answers

Besides building a great company, how else can one achieve greatness?

By being a positive role model and influence in a community. Signup and view all the answers

Is level 5 leadership different or the same as the usual picture of what great management and leadership is about?

It is different; level 5 leaders embody a mix of personal humility and professional will. Signup and view all the answers

What characteristics did Collins' research find different about level 5 leaders when compared to the comparison leaders?

They channel their egos toward the company’s goals, are ambitious for the company, and display humility. Signup and view all the answers

What is meant by the 'window and the mirror'?

Level 5 leaders credit external factors for success and take personal responsibility for failures. Signup and view all the answers

Why do so few level 5 leaders get chosen for top spots in organizations?

There is a tendency to select dazzling, celebrity leaders instead of humble, potential level 5 leaders. Signup and view all the answers

What is harder to cultivate within yourself: humility or will?

Will is harder to instill than humility because humans are naturally inclined to be selfish. Signup and view all the answers

What did Collins and his research mean by 'Who...then what'?

They suggested that getting the right people on the team is crucial before deciding on a direction. Signup and view all the answers

How would the concept of 'Who...then what' apply to pharmacy management?

Walgreens focused on hiring the right people, enabling them to adapt and grow during changes. Signup and view all the answers

Can you summarize the three important disciplines according to Collins?

Discipline 1: When in doubt, don't hire; Discipline 2: Act when a people change is needed; Discipline 3: Focus on opportunities, not problems. Signup and view all the answers

What point was Collins making by his discussion of Coleman Mockler?

Coleman Mockler focused on ensuring his management team was the best before making changes. Signup and view all the answers

How can you tell if someone might be the right person on the bus?

They will give A+ efforts and are self-motivated without needing tight management. Signup and view all the answers

How might you tell if someone is just in the wrong seat rather than the wrong person on the bus?

Try to move them to other positions where they might excel instead of firing them. Signup and view all the answers

If compensation is not the primary driver for the right people on the bus, what are the primary elements in getting and keeping them?

The right people are motivated by the work itself and their role in creating something great. Signup and view all the answers

Study Notes

Good to Great Overview

Collins aimed to explore if companies can transform from good to great, focusing on those that sustained high performance over 15 years.
The study identified 11 "good-to-great" companies and compared them to control companies that either did not make the leap or could not sustain it.

Definition of Great

"Great" companies are defined as those that achieved and maintained superior results compared to the market for at least 15 years.

Criteria for Selecting Companies

Companies must have had cumulative stock returns equal to or below the market for 15 years, followed by at least triple the market returns over the next 15 years, independent of their industry.

Role of Comparison Companies

These companies were included to identify shared characteristics that differentiate good-to-great companies from those that failed.

Study Duration Justification

A 30-year data range was used to ensure the findings account for various market fluctuations and avoid biases from short-term success.

Path to Greatness

Achievement of greatness includes positive influence in communities, not solely dependent on financial success.

Level 5 Leadership

Level 5 leaders combine personal humility with professional will, prioritizing company success over personal recognition.
Characteristics of Level 5 leaders include modesty, ambition for the company, and a blend of humility and determination.

Level Descriptions

Level 1: Highly capable individuals; contribute talent and skills.
Level 2: Contributing team members; effective collaboration.
Level 3: Competent managers; organize resources and people efficiently.
Level 4: Effective leaders; inspire pursuit of a shared vision.
Level 5: Executive; foster enduring greatness through a mix of humility and will.

Characteristics of Level 5 Leaders

They focus on building a great company rather than personal accolades.
Leaders' egos are channeled towards collective goals, showing both modesty and fearlessness.

"Window and the Mirror" Concept

Level 5 leaders give credit to external factors when successful but take full responsibility for failures, demonstrating accountability.

Selection Bias Against Level 5 Leaders

Level 5 leaders often overlooked in favor of more flamboyant, "celebrity" leaders; their quiet nature can be misinterpreted as a lack of leadership potential.

Cultivating Humility vs. Will

Instilling will is often perceived as harder than cultivating humility due to inherent human tendencies toward selfishness.

"Who...then what" Philosophy

Successful organizations prioritize the right team members before determining direction, facilitating adaptability to change.

Pharmacy Management Implications

Example of Walgreens emphasizes hiring the right people to withstand organizational changes, highlighting the significance of talent management.

Three Important Disciplines

Discipline 1: Hire carefully; the right people are key for growth.
Discipline 2: Act when a people change is necessary; prioritize effective churn.
Discipline 3: Focus top talent on major opportunities rather than just problems.

Coleman Mockler's Approach

Mockler of Gillette spent the initial years strengthening his management team instead of rushing into changes, underlining the importance of assembling the right team.

Identifying the Right Team Members

Ideal candidates exhibit self-motivation and a commitment to excellence, not needing constant micromanagement.

Assessing Team Fit vs. Misplacement

Instead of dismissing underperformers, consider repositioning them within the organization to maximize potential.

Compensation's Role

Fair compensation is not a primary motivator for the right candidates; instead, it should focus on attracting and retaining suitable talent rather than incentivizing inappropriate behavior.

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Description

Dive into the key concepts of Collins' 'Good to Great' through flashcards covering Chapters 1 to 3. Learn how certain companies went from being good to achieving greatness and sustained it over the long term. Perfect for mastering essential principles discussed in the book.