Team II Josh Pavlik, Jennifer Rogas, Logan Reynolds, Corbin Ray, Marlee Armstrong, Amy Drake

 Good to Great ◦ Prequel to “Built to Last”  Good is the Enemy of Great  4 Phases  Level 5 Leadership  Timeless Physics

 Good-to-great pattern: ◦ 15-year returns at or below market ◦ Transition point ◦ 15-year returns at least three times market  Other criteria: ◦ Pattern independent of company’s industry  Should additional criteria be used with stock returns?

 Cut 1- 1,435 companies ◦ Fortune 500,  Cut companies ◦ Used data from University of Chicago Center for Research in Security Prices ◦ Selected companies that had above-average returns preceded by average or below-average returns  Cut companies ◦ Eliminated companies that did not follow exact good-to-great pattern

 Cut companies ◦ Eliminated companies that did not show transition relative to industry

Abbott Circuit City Fannie Mae Gillette Kimberly-Clark Kroger Nucor Philip Morris Pitney Bowles Walgreens Wells Fargo

 Good-to-Great VS Comparison Companies ◦ Distinguishing Factors  Direct Comparison Companies ◦ Same Industry/Opportunities ◦ Similar Resources at Transition ◦ No Leap from Good to Great  Unsustained Comparison Companies ◦ Short Term shift Good-to-Great ◦ Failed to Sustain

Good-To-Great CompaniesDirect Comparison Companies Abbott Circuit City Fannie Mae Gillette Kimberly-Clark Kroger Nucor Philip Morris Pitney Bowes Walgreens Wells Fargo Upjohn Silo Great Western Warner-Lambert Scott Paper A&P Bethlehem Steel R.J. Reynolds Addressograph Eckerd Bank of America Unsustained Comparison Companies Burroughs Chrysler Harris Hasbro Rubbermaid Teledyne

 The research compared good companies to great companies  Research was gathered through evidence of key data  Material was coded into categories  Research included interviews of executives during transformation  Extensive analysis

 The research included extensive analysis of ◦ Acquisitions and mergers ◦ Executive compensation ◦ Business strategy ◦ Corporate culture ◦ Layoffs ◦ Leadership and management styles ◦ Financial ratios

 10 to 11 great companies, CEO’s came from within the company  Executive compensation is a key component of transformation  Long range strategic planning has no direct correlation  Focus on what not to do and what to stop doing

 Technology advances transformation, it does not create it  Two mediocre companies cannot equal one great one  Commitment, leadership, and motivation flourish under the right circumstances  Most great transformations are made unaware  Greatness is a matter of choice, not circumstance

 Interactive Process of looping back and forth ◦ Developing Ideas ◦ Testing them against the data ◦ Revising the ideas ◦ Building framework ◦ Watching it break under the weight of evidence ◦ Rebuilding it yet again

 Process is repeated continually  Reach coherent framework of concepts  Every primary concept showed up as a change variable in 100% of the good to great companies.  Transformation Process: Disciplined People, Disciplined Thoughts, Disciplined Action

 Transformation Process Stages: ◦ Disciplined People  Leadership, First Who…Then What ◦ Disciplined Thoughts  Confront Brutal Facts, Hedgehog Concept ◦ Disciplined Action  Culture of Discipline, Technology Accelerators

 What type of leaders take a good company to great?  Do not share the characteristics of high profile leaders  They are self-effacing, quiet, reserved, and even shy  A blend of personal humility and professional will

 How do good-to-great leaders begin the process to greatness?  Got the right people on the bus  Took the wrong people off the bus  Got the right people in the right seats  Then figured out where to drive the bus

 Good-to-great companies embrace the Stockdale Paradox ◦ 1. Maintain faith you will prevail ◦ 2. Confront the brutal facts of reality

 Good-to-great companies rise above the curse of competence  Because something is your core business, does not mean you can be the best at it  If you can’t be the best at it, then it cannot be the basis of a great company

 Good-to-great companies create a culture of discipline  If you have disciplined people, hierarchy is not needed  If you have disciplined thought, bureaucracy is not needed  If you have disciplined action, excessive controls are not needed

 Good-to-great companies think differently about the role of technology  Use technology to ignite transformation  Technology is not used as a primary cause of greatness  Pioneers in “carefully selected technologies”

 Jim Collins states that we should continually search for timeless principles that will remain true and relevant no matter how the world changes around us  Example: Wells Fargo

 It does not matter what kind of economy we are in to apply these timeless principles  Example: Apple and Steve Jobs

 Good being the enemy great is a human problem  Any type of organization can be transformed using timeless principles