GOOD TO GREAT BOOK— 2

CONFRONT THE BRUTAL FACTS

In this part of the book, which started with the comparison of Kroger and A&P companies, one of the main characteristics of companies that have risen from good to great, their ability to face the harsh realities is mentioned. How did Kroger, whose market income was below average in the early 1950s, surpass A&P, one of the world’s largest retailers at the time? Research shows that while both companies are in the traditional grocery business, Kroger has been able to adapt the company model to the changing demands of customers. But even though A&P knew the trend was starting to shift to supermarkets, they refused to accept that fact. Despite trying to come to the fore with various discounts and campaigns, A&P fell far behind Kroger as it did not give up on the old-fashioned grocery system. Judging by such examples, good-to-great companies not only have a perfect vision but also accept the harsh realities of life and act accordingly on the road to excellence. Also, the leaders of these companies run the company by questions, not answers. That is, they refer their employees to research their questions and discuss with them. They want employees to tell them the harsh truth, thus creating a culture where the truth is heard.

The part that touched me the most in this part of the book was the Stockdale Paradox. This name is given to Admiral Jim Stockdale, who was captured in the Vietnam War. Stockdale never lost his belief that he will get rid of it despite the torture he has suffered, and he also accepted the bitter truth of the events he has experienced. He believes that what he’s going through will be the best experience of his life, and he doesn’t have the slightest doubt that he will succeed. But this isn’t an unfounded belief that “I’ll be out by Christmas,” according to Stockdale, as he realizes that unrealistic optimism won’t make him survive. In short, the Stockdale Paradox advises us that we should never lose our faith, but that we should also accept the realities of life. The same mindset is found in good-to-great companies, judging by the research by the author and his team.

HEDGEHOG CONCEPT

The difference between hedgehogs and foxes is that, unlike the fox, the hedgehog has only one big plan. Although the fox is fast, practical, and skillful, the hedgehog turns into a ball with each attack and pulls out its sharp spines to drive the fox away. So while the fox focuses on many things at once, the hedgehog turns all threats into simple ideas. Good-to-great companies also focus on their single big concept. For example, for Walgreens, this simple concept was to be the best supermarket with the highest profitability per customer. After deciding on this concept, they started to reach more customers by opening stores in clusters and closing the shops that did not fit their concept, even if they knew they will incur financial damage. After all, every customer in the city could find a Walgreens store within a few minutes' walk at most. Unlike Walgreens, Eckerd did not implement a good hedgehog concept, they had shops in various places but had no contact linking them. Years later, Eckerd was sold, but Walgreens is still on the rise.

So how is the Hedgehog Concept determined? First of all, you have to identify the areas where you are the best and worst in the world. This field may also be completely different from the field in which you are currently operating. Next, find out what areas will provide you with the most lasting and strong cash flow, and finally what you are deeply attached to. The intersection of these three areas will give you the Hedgehog Concept. This work can also be applied to personal life, for example, if the thing you do best in life is to draw, if you are going to make a good amount of money from it and you are deeply committed to it, you have found your own Hedgehog!

CULTURE OF DISCIPLINE

The topics of Level 5 Leadership and Who Then What we have mentioned so far covered Disciplined People. In other words, before the company’s route is determined, the right (disciplined) people are recruited to the company, and the 5th Level Leaders also have the discipline feature. It also depends on your disciplined thinking power to face the harsh realities of your life and find your own Hedgehog. In short, the whole book describes a Culture of Discipline, but the important thing here is to carry out Disciplined Action after Disciplined People and Disciplined Thinking, and what distinguishes good-to-great companies from others is that they first advance the discipline over people and thoughts and perform disciplined action later.

Disciplinary culture is built around the concepts of freedom and responsibility. The company is first filled with people who fully understand their responsibilities. Employees are then released within a certain system. The right people are already self-motivated and take their own responsibilities. Thus, a creative environment is created and there is no need for hierarchy. But while all this is being done, the company firmly adheres to its Hedgehog Concept. They said no to all projects that did not fit with this concept. Being able to say no to great opportunities is also an example of great discipline. For this, we can say that good-to-great companies have made a sort of “to stop doing” list. For example, when Darwin Smith became head of Kimberly-Clark, he saw that the titles in the company led to bureaucratic stratification and removed these titles.

TECHNOLOGY ACCELERATORS

Good-to-great companies also differ from other companies in adapting to technology changes. These companies, which always think calmly and then take steps, crawl first and run later in the face of changes in the world, started by crawling in the face of technology. Instead of using technology just because it’s trending, they used it to fit their Hedgehog Concepts and accelerate the company. That is, they adopted the technology to their concept without letting the technology rule the Hedgehog concept. That’s why good-to-great companies were able to adapt to technology and survive, instead of companies that suddenly shined as technology companies and then disappeared. The conclusion to be drawn from this is that technology is not used for the purpose of creating growth, but for accelerating the existing growth.