Extract from "Good To Great"

Building up great companies passed through these stages. Initial buildup is then followed by breakthrough:

         1. Development of Level 5 leader
         2. “First Who” then “What”
         3. Confront the Brutal Facts
         4.“The Hedgehog Concept”
         5. Culture of Discipline
         6. Technology as accelerator


1. Development of Level 5 leader

The Level 5 Leaders have a combination of strong will and personal humility. The Level 5 Leader demonstrates an unwavering resolve and sets the standard for building great companies. In balance, he demonstrates a compelling modesty, relies on inspired standards and channels ambition into the company, and not into the self. The Level 5 Leader “looks in the mirror, not out the window” when focusing on responsibility and does just the opposite when apportioning credit for success of the company.

Basically Level 5 leaders will have two paradoxical qualities:


(a) Personal Humility and Humbleness
(b) Strong Professional Will

Level 5 Leaders are not charismatic, media types. They are humble, self-effacing and more concerned about the prosperity of the company than their individual success.

2. “First Who” then “What”

Priority is given to “choosing the right person into the bus (after removing the wrong person), then assigning the right person to the right seat. Following that the team will decide where to go”.  The “right” people is the most important asset.

Once we have the right people on the bus, the problem of how to motivate and manage people largely goes away. The right people don’t need to be tightly managed or fired up; they will be self-motivated by the inner drive to produce the best results and to be part of creating something great.

3. Confront the Brutal Facts

Priority is to be given to face the painful fact directly. Not to run away or trying to avoid the reality.

We have to maintain unwavering faith that we can and will prevail in the end, regardless of the difficulties that we are facing now, and at the same time we must have the discipline to confront the most brutal facts of our current reality – whatever that might be.

4. The Hedgehog Concept (Simplicity within the Three Circles)

This is a simple crystalline concept that flows from deep understanding about the intersection of the following three circles:


1. What we can be best in the world at,
2. What drives our economic engine, and
3. What we can be passionate about.

A critical point in the “hedgehog concept is not a goal to be the best; it’s a strategy to be the best, an intention to be the best, a plan to be the best. It is an understanding of what we can be the best at. The distinction is absolutely critical”.

5. Culture of Discipline

A Culture of Discipline – Having a disciplined culture is the opposite of having a controlled one. There is no need for hierarchy, bureaucracy, or excessive control. There is a blend between a culture of discipline with the ethic of entrepreneurship. This discipline, responsibility or integrity cannot come through control. It must come through agreement. There must be disciplined people who engage in disciplined thought and then take disciplined action. One of the most important disciplines is staying loyal to the hedgehog concept.

6. Technology as accelerator

Technology is used to accelerate the available growth in the right direction.