a small struggling company

What Makes an organization Go From smartTo Great?

What makes one company mediocre or just'good' and another company *great*? A team of commercialresearchers decided to conduct a readto peer in the event that they couldlocateconsistent characteristics in really wonderfulcompanies. if this is the case Tiffany Accessories, any company who knew those characteristics maystrive to develop them so as to become an perfectcompany.

this newsletter is truly more of a 'cliff notes' on a bokentitled 'smartto Great', written by a business controlconsultant 'Jim Collins' and published by HarperCollins Publishers Inc., in 2001. Jim Collins is a sorter collegemember on the Stanford University Graduate School of commercialand now runs his own business research laboratory in Boulder Colorado.

Before writing 'smartto Great', Jim assembled a research team to review companies that quickly went from smart(and even mediocre) to wonderfuland compare them with competitors who were only 'good' companies. The readlasted five years and the team studied 28 companies in all. the standards for determining an perfectcompany was thon the greatcompanies generated cumulative stock returns that were no less than 7 times upperthan the overall stock market average, over a period of onefiveyears.

the companiesstudied that went from smartto wonderfulwere: Abbott; Circuit City; Fannie Mae; Gillette; Kimberly-Clark; Kroger; Nucor; Philip Morris; Pitney Bowes; Walgreens and Wells Fargo.

for eachof those companies the team compared them to rigorously chose'good' competitors. Those companies, so as, were: Upjonhn, Silo, wonderfulWestern, Warner-Lambert, Scott Paper, A&P, Bethlehem Steel, R.J. Reynolds, Addressograph, Eckerd and Bank of America.

Other companies were studied to boot but those were the basiccompanies that were compared. The team didn't concentrate such a lot on whon the greatcompanies had in common with one another but on whon that they had in common thon they did *not* have in common with the 'medependgood' companies. The team was looking outin particularfor the realityors that prominentthe greatcompanies from the medependsmartcompanies.

So what did they learn? What makes a mediocre company become great?

Jim points out thon they were as surprised as much by whon they expected and did *not* discover as whon they did not expect and did find.
? topprofile executives (like celebritys) didn't assistancecompanies go from smartto great. nineof the ten CEOs were hired from inside the corporate and were largely quiet, low profile leaders.
? topexecutive repaymentwas not a skinnyk about caemployingan organizatidirectly to head from smartto great.
? No expressStrategies or structures showed any significant impact at the expansion of those wonderfulcompanies.
? Mergers and Acquisitions showed no significant effect at the amendmentfrom smartto great.
? Technology at most efficientaccelerated expansionbut didn't cause it.
? the greatto wonderfulcompanies didn't spfinishwonderfulattempton motivating their workersto do better work.
? No significant event occurred caemployinga 'natural' expansionspurt, this type ofs an induscheck outboom.
? the greatcompanies didn't suddenly become wonderfulbut gradually grew over a span of about 10 to twofiveyears.

So what did make the adaptation? Jim's team came up with 7 fundamentalconcepts that were clearly seen in all the greatcompanies but by no means clearly (not up to three0%) within the ir competitive companies. the next concept names were copied from pages 12-14 of the bok'smartto Great'.

Level fiveLeadership: as opposed to a 'take the bull by the horns', General Patton type leader, the extent fiveleaders that led their companies to greatness were humble and mildmannered, to the purpose of being somewhat insecure within the ir position. This characteristic was consistently coupled with a huge will or drive to do the most productive job possible. They worked hard to seem closely on their industries and make ambitiousmoves to switch their companies' positions. Jim Collins points out that Darwin E. Smith Tiffany Rings, CEO for Kimberly-Clark was asked after he retired, what he attributed his superb success to. He justreplied 'I never stopped looking to become qualified for the job.'(pg 20 w/ footnote 14)

First Who . . . Then What: the chief teams for the greatcompanies didn't fearthemselves with an in intensitymarketing strategy after which attempt to get the most efficientpeople to fill the placements. They concentrated first on getting the most efficientpeople on board, within the most efficientpositions and eliminating all of the inproperpeople. So who were the 'right' people. sometimesthey appeared for those who were naturally driven, who had a keenness for the professionalduct(s) and/or service(s) the corporate offered and who had alot of organicintelligence and ability. very occasionallythey hired individuals without even knowing what job they were going to do. they only knew thon the personhad talent, intelligence Cheap Tiffany Necklace, a favorable attitude Tiffany Heart Pendants, drive and a keenness for whon they were doing generally.

Confront the Brutal Facts (Yet Never Lose Faith): the folk of the greatcompanies had an unwavering religionthat regardless of methodshard it was, it doesn't matter what problems they encountered, in spite of everything they mayprevail. they could become a 'great' company. on the similar time Tiffany Cufflinks, they never looked clear of the cold hard facts in regards to their industries. Jim Collins calls this 'the stockdale paradox'(pg 83). as an example: getting intoto the 70's, both A&P and Kroger were long standing supermarkets. A&P was far and away the dominant company. The economy was changing. Americans had extra money to spfinishand wish more convenience. they would like much more variety within the ir stores and wish to shop for greater than justgroceries. they would likeed big, blank*super* markets that had everything under the sun, even banks and pharmacies. the adaptation between Kroger (a small struggling company) and A&P was that Kroger looked the modifies within the face and began to methodically restructure their stores to spacethe brand new customer demand, at the same time asA&P remained within the ir comfort zone, refemployingto recognize the change. Between 198fiveand 1998 Kroger's stock soared to well over 10 times the overall stock market average at the same time asA&P's stock fell underthe typical.

The Hedgehog Concept (Simplitowninside the 3 Circles): The leaders who caused the greatcompanies to become wonderfulasked and answered 3 fundamentalquestions: 1. What are we deeply hooked in to? 2. What drives our economic engine? 3. What are we able to be the most productive on the earth at?(pg. 118) They threw away any preconcieved notions of whon their company was intendedto offer. They weren't compelended in continue doing whon the corporate was originally formed to do and even what it was currently doing. They strived to seek out anythingthat would honestly be the solutidirectly to all three questions after which they went out and did it.

A Culture of Discipline: maximumcompanies of any size have a hierarchy of authority from the CEO through upper controlright down to lower controlto foremen and line leaders, etc. Each advancedbeing liable for lording it over their subordinates. But what do you (as a lording over superior) do with an personwho's so naturally disciplined that you justnever get an opportunity to reprimand them? if truth be told do not need to practiceor supervise them in any respect? What if all of your team of subordinates was like that? As mentioned within the above concept 'First Who . . . Then What' Jim mentioned thon the leaders of the greatcompanies tokwonderfulcare when selecting people to work for them. such a lot in order thon they mayrentpeople also before knowing how they were going to slot in. By doing this that they were establishing a *culture* of discipline. on their companies, being disciplined for your job wbecause the order of the day. individuals who weren't naturally diciplined didn't slot in and didn't finally end up staying with the corporate long. Superiors (also naturally disciplined) were free to do their very own jobs and were free to pershapealot more themselves as opposed to only supervising others.

Technology Accelerators: The leaders of the greatcompanies didn't see technology as an finishbut rather as potential tools to pershapetheir goals. They weren't susceptibleto seek out how you am i able toncorporate eachnew technology into their work processes. Instead they focussed on finding one of the most efficienthow you can accomplish their goals. If a undeniable technology helped them do a greater job they used it. If not they simplydidn't use it.

The Flywheel and the Doom Loop: None of the maximumwonderfulcompanies became wonderfulbecause of 1 dramatic revolutionary amendmentand event. No grand program was invented to revolutionize the corporate. In eachcase it was a steady relentless heavy *push* toward greatness. Jim Collins likened it to a gaggle of individuals pushing a huge heavy steel flywheel. in the beginning they may be able to't move it. With relentless dogged determinatiat they eventually get it to only budge. By proceedingto push without letting up they slowly get it to start out turning. On and at they push the enormous flywheel, day by day. on a daily basis it turns just a bit faster until after years the enormous flywheel is spinning along at a topspeed. Note t this point the team would have only as much hasslestopping it because the y did getting it to spin.

So there you've it: an inventory of 8 characteristics that you simply could have thought would contribute to an perfectcompany but don't and seven fundamentalcharacteristics or concepts that do make up an perfectcompany.

you'll be able to shop for the bok'smartTo Great', written by Jim Collins and published by HarperCollins Publishers, Inc. - 2001 on Amazon.com or in maximummajor bokstores.

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