This book must be read for a few important reasons
- Its based on extensive five year research and on thousands of interviews with company executives
- The book is based on this research doesn’t talk about the great companies. The likes of GE, Intel etc. These companies have always been great and there are thousands of books and B-school case studies analyzing them
- There are companies that have been doing just good in the industry for more than 15 years. (just keeping pace with the general stock market). But then something happened to them. For the next 15 years they generated stock returns at 6.9 times the general market. This book analyzes what has changed.
I liked the book for another reason. I haven’t found any strategy jargon and those frameworks that dot every business book. This is simple and straight forward.
The author and the research team come up with 5 reasons for the extra ordinary change in the performance of these 11 companies ; Kimberly Clark, Circuit City, Abbott, Fannie Mae, Gillette, Kroger, Nucor, Philip Moris, Pitney Bowes, Walgreens and Wells Fargo. The chances are we would not have heard many. None of them are from the Tech and new economy age. But there are lessons for every one.
Level 5 leadership: The authors say many boards do a mistake by recruiting charismatic CEOs from out side. The characteristics of Level 5 leaders in each of the companies are different from what we usually hear; Personal humility, professional will and driven fanatically to produce results.
First Who then What: Message is simple. Get the right people on the bus and wrong people off the bus. Seats can be decided later. A strong level 5 leader and a competent management team is better than a genius with a 1000 helpers.
Confront the Brutal facts: Constant problem in most companies. We never see the reality right before our eyes, that the competitors are better than us, that the customers and the industry are changing.. You must know where you stand and let every one in the company know. Market doesn’t matter. Yet never loss faith.
Hedgehog concept: Go through hours of debate and arguments. But come up with a unwavering concept. What the company is passionate about doing. What is it best in the world at. What drives the economic engine of the company?
Culture of Discipline: Never loss focus from the hedgehog concept. Disciplined people, disciplined thought followed by disciplined action. A tyrant and Charismatic CEO can bring the discipline. But the company will loose focus once the CEO departs.
Tech Accelerators: Well this has to come up. The authors prove all the good to great companies have first become great companies. Build the back-end. Technology will be enabler in the process.
Fly Wheel: Keep the momentum on. The circle is complete and the greatness breeds more greatness.
In my personal experience, we must be discreet in choosing the books we read. There are too many around and one gets confused in no time in the ocean of jargon, frameworks and quick tips. This books stays all above it and should be read by every one concerned with business.