Good to Great: Why Some Companies Make the Leap...And Others Don't

by Jim Collins

Engage in dialogue and debate, not coercion.

all the good-to-great companies had a penchant for intense dialogue.

They didn’t use discussion as a sham process to let people “have their say” so that they could “buy in” to a predetermined decision. The process was more like a heated scientific debate, with people engaged in a search for the best answers.

Conduct autopsies, without blame.

In an era when leaders go to great lengths to preserve the image of their own track record—stepping forth to claim credit about how they were visionary when their colleagues were not, but finding others to blame when their decisions go awry—it

will take responsibility for this bad decision. But we will all take responsibility for extracting the maximum learning from the tuition we’ve paid.”

When you conduct autopsies without blame, you go a long way toward creating a climate where the truth is heard.

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” me...

The key, then, lies not in better information, but in turning information into

information that cannot be ignored.

There will be no penalty whatsoever for any use of a red flag. Your red flag can be used only once during the quarter.

You are leading too much with your questions and stifling our independent thinking.

You often don’t know that a customer is upset until you lose that customer entirely.

Short pay acts as an early warning system that forces us to adjust quickly, long before we would lose that customer.”

But if you are not yet a Level 5 leader, or if you suffer the liability of charisma, red flag mechanisms give you a practical and useful tool for turning information into information that cannot be ignored and for creating a climate where the truth is heard.

In confronting the brutal facts, the good-to-great companies left themselves stronger and more resilient, not weaker and more dispirited.

they never had the goal to merely survive but to prevail in the end as a great company.

In every case, the management team responded with a powerful psychological duality. On the one hand, they stoically accepted the brutal facts of reality. On the other hand, they maintained an

unwavering faith in the endgame, and a commitment to prevail as a great company despite the brutal facts. We came to call this duality the Stockdale Paradox.

“This is a very important lesson. You must never confuse faith that you will prevail in

the end—which you can never afford to lose—with the discipline to confront the most brutal facts of your current reality, whatever they might be.”

What separates people, Stockdale taught me, is not the presence or absence of difficulty, but how they deal with the inevitable difficulties of life. In wrestling with life’s challenges, the Stockdale Paradox (you

must retain faith that you will prevail in the end and you must also confront the most brutal facts of your current reality) has proved powerful for coming back from difficulties not weakened, but stronger—not just for me, but for all those who’ve learned the lesson and tried to apply it.

The Stockdale Paradox Retain faith that you will prevail in the end, regardless of the difficulties. AND at the same time Confront the most brutal facts of your current reality, whatever they might be.

The Stockdale Paradox is a signature of all those who

create greatness, be it in leading their own lives or in leading others.

It didn’t matter how bleak the situation or how stultifying their mediocrity, they all maintained unwavering faith that they would not just survive, but prevail as a great company. And yet, at the same time, they became relentlessly disciplined at confronting the most brutal facts of their current reality.

The good-to-great leaders were able to strip away so much noise and clutter and just focus on the few things that would have the greatest impact. They were able to do so in large part because they operated from both sides of the Stockdale Paradox, never letting one side overshadow the other.

If you are able to adopt this dual pattern, you will dramatically increase the odds of making a series of good decisions and ultimately discovering a simple, yet deeply

insightful, concept for making the reall...

confronting the brutal facts of their current reality.

When you start with an honest and diligent effort to determine the truth of your situation, the right decisions often become self-evident. It is impossible to make good decisions without infusing the entire process with an honest confrontation of the brutal facts.

Decisoon journa thinking: make decisioms with a clear understanding of all the complexities and variables at play

create a culture wherein people have a tremendous opportunity to be heard and, ultimately, for the truth to be heard.

Lead with questions, not answers.

Engage in dialogue and debate, not coercion.

Conduct autopsies, with...

Build red flag mechanisms that turn information into information th...

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, whatever they might be.

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.

Leadership does not begin just with vision. It begins with getting people to confront the brutal facts and to act on the implications.

Spending time and energy trying to “motivate” people is a waste of effort. The real question is not, “How do we motivate our people?” If you have the right people, they will be self-motivated. The key is to not de-motivate them. One of the primary w...

Berlin extrapolated from this little parable to divide people into two basic groups: foxes and hedgehogs. Foxes pursue many ends at the same time and see the world in all its complexity. They are “scattered or diffused, moving on many levels,” says Berlin, never

integrating their thinking into one overall concept or unifying vision. Hedgehogs, on the other hand, simplify a complex world into a single organizing idea, a basic principle or concept that unifies and guides everything. It doesn’t matter how complex the world, a hedgehog reduces all challenges and dilemmas to simple— indeed almost simplistic—hedgehog ideas. For a hedgehog, anything that does not somehow relate to the hedgehog idea holds no relevance.

They took a complex world and simplified it.

Identify the singular truth of what Evolve is

They understand that the essence of profound insight is simplicity.

No, the hedgehogs aren’t simpletons; they have a piercing insight that allows them to see through complexity and discern underlying patterns. Hedgehogs see what is essential, and ignore the rest.

In classic hedgehog style, Walgreens took this simple concept and implemented it with fanatical consistency. It embarked on a systematic program to replace all inconvenient locations with more convenient ones,

While Walgreens executives understood that profitable growth would come by pruning away all that did not fit with the Hedgehog Concept, Eckerd executives lurched after growth for growth’s sake.

all the good-to-great companies attained a very simple concept that they used as a frame of reference for all their decisions, and this understanding coincided with breakthrough results.