1. Good to Great Chapter 6 A Culture of Discipline
Kelsey Combest
Ryan Lacy
Katie Ficken

2. A Culture of Discipline
Few start-ups become great companies partly because they respond to growth and success in the wrong way
Greater complexity causes company to trip over success
Too many new people
New customers
New orders
New products
Lack of planning, accounting, systems, and hiring constraints
create friction

3. A Culture of Discipline
Bureaucratic cultures arise to compensate for incompetence and lack of discipline, which arise from having the wrong people on the bus in the first place.
If you get the right people on the bus, and the wrong people off, you don’t need a bureaucratic system.
Abbott Laboratories
Responsibility Accounting
Freedom within a framework

4. A Culture of Discipline
The main idea: Build a culture full of people who take disciplined action within the three circles, fanatically consistent with the Hedgehog concept
Build a culture around freedom and responsibility
Have self-disciplined people willing to fulfill their responsibilities
Don’t be a tyrannical disciplinarian
Adhere to the Hedgehog Concept, and create a “stop doing list”

5. Reminder The Hedgehog Concept Three intersecting circles
What can we be the best at in the world?
What drives our economic engine?
Where is our passion?
Gives focus and purpose and aligns everyone to a common sight of how things are and will be.

6. Freedom and Responsibility within a Framework
Good to great companies build a consistent system with clear constraints, but they also give people freedom and responsibility within the framework of that system.
Disciplined people
Disciplined thought
Disciplined action

7. Rinsing Your Cottage Cheese
Dave Scott
One more small step added to all the other small steps to create a consistent program of superdiscipline.
Much of the answer to the question of “good to great” lies in the discipline to do whatever it takes to become best within carefully selected arenas and then to seek continual improvement from there.

8. Rinsing Your Cottage Cheese
Wells Fargo – Carl Reichardt
Bank of America

9. A Culture, Not a Tyrant Discipline
“Whereas good-to-great companies had Level 5 leaders built an enduring culture of discipline, the unsustained comparisons had Level 4 leaders who personally disciplined the organization through sheer force.”

10. A Culture, Not a Tyrant Burroughs – Ray MacDonald
Rubbermaid – Stanley Gault
Chrysler – Lee Iacocca
Disciplined action without disciplined understanding of the three circles cannot produce sustained great results.

11. Fanatical Adherence to the Hedgehog Concept
Pitney Bowes holds monopoly on U.S. postage machines and falls apart when Government steps in
Fred Allen shifts circles and sticks to them
“Anything that does not fit with our Hedgehog Concept, we will not do. We will not launch unrelated businesses. We will not make unrelated acquisitions. We will not do unrelated joint ventures. If it doesn’t fit, we don’t do it. Period.”

12. Fanatical Adherence to the Hedgehog Concept
What NOT TO do
R.J. Reynolds leaves circles of tobacco industry
Went down because of it and lost 2 Billion dollars
What TO do
Phillip-Morris invested in similar non-healthy items
Stayed in their circles and succeeded

13. Fanatical Adherence to the Hedgehog Concept
Nucor Steel
Kept things simple and created a culture of equality
Passion for eliminating class distinctions
Economic denominator of profit per ton of finished steel
Could become the best in the world at harnessing culture and technology to produce low-cost steel

14. Having a “Stop Doing” List
It takes discipline to say “No, thank you” to big opportunities if they’re outside of your circles
Kimberly-Clark stopped with the titles in the office
Budgeting is not how much to spend in each activity, but “Which areas should be fully funded, and which should not be funded at all”

15. Takeaways
A culture of discipline requires people who adhere to a consistent system AND gives people freedom and responsibility within that framework.
A tyrant who disciplines is very dysfunctional, but a culture of discipline is highly functional and leads to sustained results.
To gain the results you want, it takes a strict adherence to your Hedgehog Concept and to be willing to say no to opportunities that fall outside the three circles.

16. References
Collins, Jim. Good to Great. New York, NY: HarperCollins Publishers, Inc., p