Intro to The Hedgehog Concept “The Hedgehog and the Fox” by Isaiah Berlin. The book includes a useful model which brings all the theory together in a meaningful and memorable way. Filed for bankruptcy in November 2008 due in large part (but not only) to the 2008 financial crisis, Was taken over by the U.S. Government in September 2008 due to a critical lack of capital, (This division is based on the parable of the fox and the hedgehog: whereas the clever fox is forever coming up with new ways to attack the hedgehog, the hedgehog always defends itself the same effective way: by curling up into an untouchable ball of spikes.). Good-to-great leaders, however, don’t shy away from looking mistakes in face; in fact, they conduct detailed autopsies, without ascribing... (Shortform note: The following chapter inaugurates the “Breakthrough” phase of a good-to-great company’s timeline, when a good company takes its first definitive step toward becoming great. McMullen was raised on a farm in Kentucky, was the first in his family to go to college, and began his career at Kroger as a part-time stock clerk. For example, Darwin E. Smith, CEO of Kimberly-Clark from the 70s through the 90s, was no darling of reporters: He wore unfashionable suits, was uncomfortable in interviews, and preferred the company of manual laborers to that of fellow executives. Getting the right people takes precedence over strategy, over vision, over almost everything. It made sporadic deals to acquire stores in discrete areas, and even tried getting into the home-video industry by purchasing American Home Video Corporation (a move that resulted in a $31 million loss). Things can and will go wrong. Using a similar methodology to Good to Great, the authors compared the lastingly great companies with competitor companies. Hedgehog Concepts don’t strike like lightning bolts, but rather develop through an iterative process of debate, decision, and analysis. One of the more surprising discoveries Collins and his coauthor made in Built to Last was that, while a core ideology is essential, a specific kind of core ideology isn’t. Many people and companies settle for good because it’s easier. Rigorous adherence to a Hedgehog Concept saves companies from panic acquisitions or misguided projects. Discipline does not mean a tyranny presided over by the executive. Rather than look to the outside to see where you stand on your trajectory, set your own agenda and time benchmarks. Up until the 1960s, Pitney Bowes held a monopoly on postage-meter machines in the United States. They avoid the limelight and tend to credit exterior forces or colleagues for their companies’ successes. Great companies don’t tell their employees what to be passionate about. Instead of “looking in the mirror” to give credit for their company’s success, good-to-great leaders will “look out the window,” apportioning credit to external factors (e.g., luck) or their colleagues. Good-to-great leaders like Wells Fargo’s Carl Reichardt create disciplined cultures that permeate the whole organization. The good-to-great executives concentrated on people first for three reasons: When good people come on board before a new direction is unveiled, they’re coming on board because of who else is on board. The absolute key thing to remember in this flywheel analogy is that each push on the flywheel builds on all the previous thousands of pushes and moves you one step closer to going from good to great.eval(ez_write_tag([[300,250],'expertprogrammanagement_com-netboard-1','ezslot_17',670,'0','0'])); The key takeaway from Good to Great is discipline. Pushing it, and pushing it, and pushing it. Good-to-great teams boast a comradeship that lasts well beyond their tenure with the company. That is, its demise was hastened by a technological deficit, not caused by it. They will invest in new technology only if it serves their Hedgehog Concept. Once the strategy is in place and chugging along, however, don’t be afraid to step on the gas. In fact, now its really difficult to stop! Bethlehem was hampered by poor management, a situation epitomized by tense labor relations that went back decades. There’s a lot to cover in this summary, so let’s jump in at look at the first of our 6 concepts. To start a heavy flywheel spinning takes an immense amount of hard effort, but once momentum kicks in, it looks unstoppable. Of passion. Great results can only be achieved when you making lots of good decisions and then execute well. “Level 5” refers to a five-level hierarchy of executive capabilities, with Level 5 at the top. Intro to The Hedgehog Concept “The Hedgehog and the Fox” by Isaiah Berlin. Flywheels vs. Doom Loops: Abbott Laboratories, To mitigate the pressures of the stock market, Abbott would offer middle-of-the-road growth projections to Wall Street, then set internal goals for much higher growth. This Good To Great summary shows you how great companies are like hedgehogs, why they hate new technology (mostly) & how they deal with problems. This is part of their disciplined approached to excelling at their Hedgehog Concept. They did so reactively and impulsively, without deliberately understanding the key market fundamentals that would increase the likelihood of success. We at Shortform won’t be entering into the debate about whether these examples undermine Collins’s findings. It’s equally useful to define what you cannot be the best in the world at, and to avoid that sector. High-profile, celebrity CEOs brought in from the outside to whip a company into shape actually hurt a company’s ability to transition from good to great. For example, a common-sense economic denominator for a pharmacy—or any retail company—is profit per store. Hedgehog principle given analysts’ and traders’ affinity for the top companies within industries! 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