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opens with anecdote of how everyone thought Walgreens would be driven out of business by Internet pharmacies and made fun of them for not immediately making a pharmacy website. their stock fell a lot. they slowly reflected and made one at their own pace (with "calm equanimity and quiet deliberate steps forward" -- in a media interview an executive said they're a "crawl, walk, run" company) and they won.
"bubbles come and bubbles go. it happened with the railroads. it happened with electricity. it happened with radio. it ahppened with the personal computer. it happened with the Internet. And it will happen again with unforeseen new technologies. "
all great companies in the study had were pioneers in the development of tech, bu always tech that was clearly related to their hedgehog concept. the "Hedgehog Concept ((drove the)) use of technology, not the other way around". management didn't credit that tech for their success
cutting-edge tech is used to accelerate existing momentum "after hitting breakthrough" in great companies, not to make them great. it can't happen the other way around b/c "you cannot make good use of technology until you know which technogies are relevant... those -- and ONLY those -- that link directly to the ... Hedgehog Concept"
in tech not related to the hedgehog concept, don't try to be a pioneer; don't use it at all, or just achieve parity
don't panic and jump into new tech out of fear of being left behind. ignore hype and fear. pause and reflect on whether/how tech affects your strategy and whether it fits with your hedgehog concept.
but then why do ppl talk about tech so much in business?
"People don't know what they don't know. And they're always afraid that some new technology is going to sneak up on them from behind and knock them on the head. they don't understand technology, and many fear it. All they know for sure is that technology is an important force of change, and that they'd better pay attention to it." -- quote from the program directors of the Masters Forum
"Certainly, technology is important -- you can't remain a laggard and hope to be great. But technology by itself is never a primary cause of either greatness or decline."
nucor egalitarian culture:
"Across 84 interviews with good to great executive, fully 80% did not even mention technology as one of the top five facts in the transformation ((and of those who did, it had a median ranking of 4)). This is true even in companies famous for their pioneering application of technology such as Nucor."
"The primary factors were the consistency of the organization, and our ability to project its philosophies throughout the organization, enabled by our lack of layers and bureaucracy" -- Ken Iverson
"...when used right -- when linked to a simple, clear, and coherent concept rooted in deep understanding -- technology is an essential driver in accelerating forward momentum"
"why did the good-to-great companies maintain such a balanced perspective on technology, when most companies become reactionary, lurching and running about like Chicken Little, as we're seeing with the Internet?"
"..as Wayne Sanders summed up about the ethos that came to typify the inner workings of Kimberly-Clark: 'We're just never satisfiend. We can be delighted, but never satisfied."
"If you had the opportunity to sit down and read all 2,000+ pages of transcripts from the good-to-great interviews, you'd be struck by the utter absence of talk about "competitive strategy". Yes, they did talk about strategy, and they did talk about performance; they did talk about becoming the best, and they even talked about winning. But they never talked in reactionary terms and never defined their strategies principally in response to what others were doing. They talked in terms of what they were trying to create, and how they were trying to improve relative to an absolute standard of excellence. ... ((they)) weren't motivated by fear. They weren't driven by fear of what they didn't understand. They weren't driven by fear of looking like a chump. They weren't driven by fear of watching others hit it big while they didn't They weren't driven by the fear of being hammered by the competition. "
"...those who turn good into great are motivated by a deep CREATIVE urge and an INNER compulsion for sheer unadulteradet excellence FOR ITS OWN SAKE. Those who build and perpetuate mediocrity, in contrast, are motivated more by the fear of being left behind."
more important than tech is:
"Those that stay true to these fundamentals and maintain their balance even in times of great changes and disruption, will accumulate the momentum that creates breakthrough momentum. Those that do not, those that fall into reactionary lurching about, will spiral downward or remain mediocre."
there was "no single defining action, no grand program, no one killer innovation, no solitary lucky break, no wrenching revolution", when the great companies became great. it was the "overall accumulation of effort applied in a consistent direction". "some pushes may have been bigger than others, but any single heave -- no matter how large -- reflects a small fraction of the entire cumulative effort..."
media reports are deceiving, because media tends to only report on companies after they have become great. so you see no (or few) media reports for years and then semi-suddenly, a ton of them. this is an artifact of the media; the change was actually gradual, evolutionary rather than revolutionary, and took a few years at some companies, decades at others.
"we kept thinking that we'd find 'the one big thing', the miracle moment that defined breakthrough. we even pushed for it in our interviews. but the good-to-great executives simply could not pinpoint a single key event or moment in time that exemplified the transition. Frequently, they chafed against the whole idea of allocating points and prioritizing factors. In every good-to-great company, at least one of the interviewees gave an unprompted admonishment, saying somthing along the lines of, "Look, you can't dissectthins thing into a series of nice little boxes and factors, or identify the moment of 'Aha!' or the 'one big thing'. It was a whole bunch of interlocking pieces that built one upon another."
they asked (other) execs who visited the lab while they were doing this project what they would want to know from the research. One CEO asked, "What did they call what they were doing? Did they have a name for it? How did they talk about it at the time?". The astounding answer: __They didn't call it anything__.
The good-to-great companies had no name for their transformation. There was no launch event, no tag line, no programmatic feel whatsoever. Some executives said that they weren't even aware that amajor transformation was under way until they were well into it. It was often more obvious to them after the fact than at the time."
Many of the great companies faced dire problems at the time of their transformation -- deregulation, looming bankruptsy, potential takeover threats, million-dollar-a-day losses. They did it anyway. And, being public companies, they also faced the usual short-term pressures from shareholders.
Abbott Laboratories had a mechanism called Blu Plans. They kept a "rank-ordered list of proposed entrepreneurial projects that had not yet been funded -- the Blue Plans." Each year, they would publically announce an earnings goal. Internally, they had a much higher target growth rate. Toward the end of the year, Abbott would pick a number in between these two numbers, and channel the rest of the funds (generated by the diff between the chosen number and the actual growth rate) into the Blue Plans.
underpromise and overdeliver
"point to tangible accomplishments -- however incremental at first -- and show how these steps fit into the context of an overall concept that will work. When you do this in such a way that people see and __feel__ the buildup of momentum, they will line up with entusiasm. We came to call this the flywheel effect, and it applies not only to outside investors but also to internal constituent groups."
the execs interviews thought that the question about commitment, alignment, and how they managed change was stupid. "nearly every ((other)) executive who'd visited the labortory had asked this question in one form or another. 'How do we get the boat turned?' 'How do we get people committed to the new vision?' 'How do we motivate people to line up?' 'How do we get people to embrace change?' To my great suprprise, we did not find the question of aligtnment to ke a key challenge faced by the good-to-great leaders.
..((they)) did get incredible commitment and alignment -- they artfully managed change -- but they never really spent much time thinking about it. It was utterly transparent to them. We learned that under the right conditions, the problems of commitment, alignment, motivation, and change just melt away."
"how do you get a company of over 50,000 people.... to embrace a radical new strategy that will eventually change virtually every aspect of ((the company's product))..? The answer is that __you don't__. Not in one big event of program, anyway.
'We presented what we were doing in such a way that people saw our accomplishments,' said Herring. "We tried to bring our plans to successful conclusion step by step, so that the mass of people would gain confidence from the successes, not just the words'"
"when you let the flywheel do the talking, you don't need to fervently communicate your goals. People can just extrapolate from the momentum of the flywheel for themselves.... the goal almost sets itself"
"what do the right people want more than almost anything else? They want to be part of a winning team. They want to contribute to producing visible, tangible results. They want to feel the excitement ofbeing involved in something __that just fluat-out works__."
"When the right people see a simple plan born of confronting the brutal facts -- a plan developed from understanding, not bravado -- they are likely to say, "That'l work. Count me in.". When they see the monolithic unity of the executive team behind the simple plan and the selfless, dedicated qualities of Level 5 leadership, they'll dorp their cynicism. When people egin to feel the magic of momentum -- when they begin to see tangible results, when they can __feel__ the flyheel beginning to build speed -- __that's__ when the bulk of people line up to throw their shoulders against the wheel and push."
at page 178
HP values:
some values (and companies that didn't have them):
disney values:
