GOOD TO GREAT Takeaways… TEAM 3 Riley Drummond Brittany Fowlkes Rick Henson Ann-Marie Nanny Andrew Rich Kara Vickers James Everett

Good is the Enemy of Great Can’t be great if it’s good Satisficing = when companies only do what’s necessary to be good, and not what’s necessary to be GREAT TAKEAWAY #1 “If you practice satisficing, your company can be good but never be great” We’re using this in our company analysis of Nike -looking through data to find areas where there is satisficing

Characteristics of a Level 5 Leader Every good to great company had level 5 leadership during pivotal transition years. Level 5 leaders embody personal humility and professional will. They set up successors for even greater success in the next generation They are humble leaders. Big egos lead demise or mediocrity of company. They do whatever it takes to make the company great no matter how hard or big the decisions.

Characteristics of a Level 5 Leader They display a workman like diligence. Attribute success to other factors than themselves, and when things go poorly they blame themselves. Celebrity leaders usually damage companies. Attribute success to good luck instead of personal greatness.

Characteristics of a Level 5 Leader Philip Knight Nike’s executive leader demonstrates the characteristics of a level 5 leader. Contributes his success to celebrities like Michael Jordan and Tiger Woods who are sponsored by Nike. Knight exercises a will to power that is prerequisite to what Nietzsche calls the Superman leader. He has the qualities of humility and will which have made him a great leader.

First Who, then What? “Who” questions come before “what” decisions Right people on the bus Problems of how to motivate and manage people largely go away

Confronting the Brutal Facts (Yet Never Lose Faith) All good-to-great companies began the process of finding a path to greatness by confronting the brutal facts of their current reality. When you start with a diligent effort to determine the truth of your situation, the right decisions often become self-evident. As a manager, you must create a culture where people have an opportunity to be heard, and for the truth to be heard. Stockdale paradox: Retain absolute faith that you can and will prevail in the end, regardless of the difficulties, AND, at the same time confront the most brutal facts of your current reality.

The Hedgehog Concept A simple, crystalline concept that flows from deep understanding about the 3 following circles: Simplicity w/in 3 circles is key to this concept

The Hedgehog Concept The Hedgehog Concept is not a goal to be the best, a strategy to be the best, an intention to be the best, a plan to be the best. It is an understanding of what you can be the best at. The distinction is absolutely crucial. What you can potentially be the best at is just as important as what you cannot be the best at. The technology and production needs behind Nike running shoes is complex, but it’s Hedgehog concept is simple, be the best at making a superior gear for athletes and “Just Doing It”

Why are Great Companies More Disciplined? Discipline created by CEO vs. discipline as a culture “Whereas the good-to-great companies had level 5 leaders who built an enduring culture of discipline, the un-sustained comparisons had Level 4 leaders who personally disciplined the organization through sheer force.” Collins A Culture, Not a Tyrant

Technology Accelerators What technology is relevant to the company? Fits with the Hedgehog Concept and the three circles. Nike’s first breakthrough in running shoes, was the waffle sole made in 1974. Bowerman discovered it when he poured liquid urethane into his wife’s waffle iron, and then the Waffle Trainer shoes were invented. Gripped the new urethane track at the University of Organ better than any other running shoe.

Technology and the Fear of being left behind Fear creates a mediocre company. Good to Great companies have a creative urge to be the best, not the first. No technology: can make you a level 5, can make the right people, can confront brutal facts, can give understanding of the three circles, nor can it create a culture of discipline. Nike didn’t use technology when the company took action to ensure that the abuse of sweatshops wouldn’t occur. Or when it created the Reuse-A-Shoe program.