Good to Great Chapter 4 Confronting the Brutal Facts (Yet Never Lose Faith) Group 6 Landon Cotham Dustin Eggleston Knowl Richardson Katy Martin Amber Morris Maddie Ramsey

Confronting Brutal Truths Grocery Market People started off wanting cheap, large amounts of groceries. Switched to wanting one-stop shopping at superstores. A&P vs. Kroger A&P ignored the changing desires of the customer while Kroger accepted them and adapted new plans.

Confronting Brutal Truths Ralph Burger, CEO of A&P, wanted to keep classic ideas and maintain the family dividend distribution They experimented with this idea known as “The Golden Key” but dropped it soon after. They tried to change everything except the store model Kroger did the same experimental research, but realized that they had to change or remove almost all older stores. General Motors Commercial

Two Forms of Disciplined Thought Infused entire process with brutal facts of reality. You cannot make a series of good decisions without confronting brutal facts Developed a simple, deeply insightful, frame of reference for all decisions. “When you start with an honest and diligent effort to determine the truth of the situation, the right decisions often become self-evident.”

Manager’s Role Energy spent motivating people is a waste, if you have the right people they will already be motivated. Managers should concentrate on not de-motivating people “And one of the single most de-motivating actions you can take is to hold out false hopes, soon to be swept away by events.”

How to Create a Climate Where the Truth is Heard Lead with Questions, Not Answers Involve other employees rather than directing them “Indeed, Wurtzel stands as one of the few CEOs in a large corporation who put more questions to his board members than they put to him.” Engage in Dialogue and Debate, Not Coercion Encourage constructive arguments, keep Groupthink out of decisions “The good-to-great leaders understood this distinction, creating a culture wherein people had a tremendous opportunity to be heard and, ultimately, for the truth to be heard.”

How to Create a Climate Where the Truth is Heard Conduct Autopsies, Without Blame Analyze situations without hard feelings and accusations “If you have the right people on the bus you should almost never need to assign blame, but need only to search for understanding and learning.” Build “Red Flag” Mechanisms Analyze the information in the market and use it to understand upcoming changes and threats. “The key, then, lies not in better information, but in turning information into information that cannot be ignored.” Red Flag story

Consequences of Ineffective Managing Getting Off Track Roy Ash from Addressograph continuing to try and take over the office automation industry despite signs it was a failing cause Intimidating and Distracting Employees Ex: Bank of America “Charisma can be as much a liability as an asset, as the strength of your leadership personality can deter people from bringing you the brutal facts.” “The moment a leader allows himself to become the primary reality people worry about rather than the reality…you have a recipe for mediocrity, or worse.” Bank of America climate in which employees were more concerned with what the CEO thought rather than the comparison of their ideas with the market’s trend

Unwavering Faith Amid the Brutal Facts You cannot be willing to fold to the competition Scott Paper gave up against P&G while Kimberly-Clark rose to the challenge and took them head on Good-To-Great Companies become stronger and more resilient when facing challenges

Three Categories of People Affected by Severe Adversity Those Permanently Dispirited by the Event Those Who Got Their Life Back to Normal Those Who Used the Experience as a Defining Event that Made Them Stronger Good-To-Great companies who exhibit this quality have the “hardiness factor”

The Stockdale Paradox Duality of Accepting the Brutal Facts of Reality, but Maintaining an Unwavering Faith and Commitment to Prevail Named after Admiral Jim Stockdale who spent eight years in a Vietnamese P.O.W. camp

Summary Confront the Brutal Truth Four Basic Practices to Create a Climate Where the Truth is Heard Three Categories of People Affected by Severe Adversity The Stockdale Paradox