by Jim Collins
1. Great Companies have wise, mature, gifted leaders. (Level Five)
1.1 They have personal humility, a strong sense of call, and a strong will.
1.2 They tend to focus on company success, not personal success.
1.3 Lincoln and Socrates, not Patton and Caesar.
1.4 They have an incurable need to produce results.
1.5 These leaders tend to credit outside factors when things go well, and blame themselves when things go poorly.
1.6 These individuals don’t think about what they get. They think about what they build.
1.7 They set up their successors for even greater success than they experienced.
1.8 Top leaders tend to be plow horses, not show horses.
1.9 They seldom have flashy personalities.
1.10 They do not have a salary tied to performance.
2. Great companies first determine who, then decide what.
2.1 First, get the right people on board, the wrong people off board, and the right people in the right seats. Then decide what it is you are going to do.
2.2 In hiring, when in doubt, don’t. Keep looking.
2.3 When you know you need to make a people change, act.
2.4 As soon as you realize you’ve got to tightly manage a person, you know you have the wrong individual.
2.5 Great companies tend to have two kinds of people – those who have been there a long time – and those who leave quickly.
2.6 Two important questions to ask when deciding whether you should consider letting someone go: Would you hire this person again? Would you mind if this person left on his or her own?
2.7 Put your best people on your biggest opportunities, not on the biggest problems.
2.8 You need people who are willing to debate vigorously, but then get behind the final decision.
2.9 The right “who” is not the “genius with a thousand helpers.” That person may lead the company well, but only while he is in the saddle. His or her successors will likely not do so well.
2.10 The right person has more to do with character and giftedness than with specific industry knowledge, background, or skills.
3. Great companies are brutally honest about present realities, while maintaining faith they will prevail in the end.
3.1 Create a climate that encourages the truth, no matter what.
3.2 Engage in dialogue and debate, not coercion.
3.3 Ask a lot of questions. Don’t find answers prematurely.
3.4 Find out why programs didn’t work, without blaming individuals.
3.5 Leaders who are too charismatic can shortcut the truth-seeking debate.
4. Great companies find the one thing they can do better than anyone, that they can make money at, and that they feel passionate about. This is their “hedgehog” concept.
4.1 The hedgehog does one thing well – roll into a ball and protect himself with porcupine-like spikes. The fox is moving in many different directions and pursuing many possibilities at once.
4.2 Great leaders tend to focus on one thing: Freud/Unconscious; Einstein/Relativity; Marx/Class Struggle; Darwin/Natural Selection; Jesus/Reconciliation
4.3 A “hedgehog” company asks three questions.
4.3.1 What can we be the best in the world at?
4.3.2 What drives our economic engine? Can we make money at it?
4.3.3 What are we deeply passionate about?
4.4 An individual looking at his/her own “hedgehog” concept asks three questions:
4.4.1 What was I born to do? You have to be able to be the best at it.
4.4.2 And I can get paid for this! Wow! You have to be able to make money.
4.4.3 What work do I enjoy for its own sake? You have to love it.
4.5 A “hedgehog” creation council can help you find your “hedgehog” concept. The council is not a formal body.
4.5.1 It exists to gain understanding out the important issues facing the organization.
4.5.2 It’s assembled and used by the leading executive and consists of 5 to 12 people.
4.5.3 Each member can argue and debate in search of understanding, not from ego need to win or protect parochial interest.
4.5.4 Every member respects every other member, without exception.
4.5.5 Each council member has a deep knowledge of at least one aspect of the organization or its environment.
4.5.6 It includes key members of the management team, but is not limited to the management team, nor does it include all management team members.
4.5.7 It is a standing body, not an ad hoc committee.
4.5.8 It meets periodically, from once a week to once a quarter.
5. The effective organization has a culture of disciplined people, disciplined thought, and disciplined actions.
5.1 Discipline is focused on purpose(hedgehog)/profitability/passion.
5.2 A culture of discipline with an ethic of entrepreneurship brings together freedom and responsibility.
5.3 With a strong frame of reference (purpose/profitability/passion,) you get order for free.
5.4 A culture of discipline does not mean a tyrannical disciplinarian.
5.5 A culture of discipline creates a “stop doing list” to unplug anything extraneous.
6. The great corporation uses technology wisely, to accelerate the business.
6.1 Technology is not used as a primary means of igniting transformation, although it will be utilized in a carefully selected way.
6.2 The company will avoid technology fads.
6.3 The only technologies integrated into the company will be those consistent with the hedgehog concept.
6.4 Great companies do not fear being left behind when new technologies emerge. They carefully integrate only those that will accelerate the business.
6.5 Of top company executives, 80% did not even mention technology as one of the top five factors in achieving transformation.
7. Great companies don’t emerge overnight. They turn the heavy flywheel, turn after difficult turn, until they finally create the momentum that brings breakthrough.
7.1 John Wooden was at UCLA for fifteen years before their first national championship.
7.2 People often don’t pay attention to companies until they “hatch,” never realizing all the work that went on during the “egg” stage. Sam Walton started his first store in 1945, and his second in 1952. It took 25 years to grow a chain of 38 stores. Then, from 1970 to 2000, Wal-Mart exploded to over 3,000 stores.
7.3 Acquisitions should not occur until after the hedgehog concept has been identified, and breakthrough has occurred. Acquisitions before that time often fail – “When the going gets tough, we go shopping.” They go for acquisitions instead of hard work.
7.4 The “doom loop” is companies that start one direction, then stop and go another direction, then stop and go the first direction again, and never pick up momentum.
7.5 Great companies achieve greatness by an accumulation of steps. Other companies are always looking for the miracle moment or new savior.
7.6 Great companies look hard at the truth, the brutal facts. Others embrace fads.
7.7 Great companies spend little time trying to motivate or align people. The hedgehog concept and movement of the flywheel is enough to motivate and align. Other companies spend inordinate amounts of time trying to align and motivate people around constantly changing visions.
7.8 Great companies attain consistency through purpose/profit/passion. Others demonstrate chronic inconsistency, jumping from one thing to another.
7.9 Great companies let results do most of the talking. Others sell the future to compensate for lack of results.
7.10“Built to last” companies are those that keep the flywheel turning over the long haul. (This book is a “prequel” to the first.)
( I have read this book- very interesting!!!, I recommend it - NL).