Hedgehog Concept is a simple, crystalline concept that flows from a deep understanding of the intersection of the following three circles:<ol><li>What you can be the best in the world at (and, equally important, what you cannot be the best in the world at).</li><li>What drives your economic engine.</li><li>What you are deeply passionate about.</li></ol>

The Hedgehog Concept

Level 5 leaders channel their ego needs away from themselves and into the larger goal of building a great company. It’s not that Level 5 leaders have no ego or self-interest. Indeed, they are incredibly ambitious— but their ambition is first and foremost for the institution, not themselves.
Level 5 leadership is not just about humility and modesty. It is equally about ferocious resolve, an almost stoic determination to do whatever needs to be done to make the company great.

Level 5 Leadership

<ul><li>Lead with questions, not answers. Don’t assume you know what’s best.</li><li>Engage in dialogue and debate, with no coercion.</li><li>Conduct autopsies and without blame</li><li>Build “red flag” mechanisms: If you raise your hand with your red flag, the meeting room will stop for you.</li></ul>

Leading With Truth

<ul><li>The good-to-great companies built a consistent system with clear constraints, but they also gave people freedom and responsibility within the framework of that system.</li><li>They hired self-disciplined people who didn’t need to be managed, and then managed the system, not the people.</li><li>When you have disciplined people, you don’t need hierarchy.</li><li>When you have disciplined thought, you don’t need bureaucracy.</li><li>When you have disciplined action, you don’t need excessive controls.</li><li>When you combine a culture of discipline with an ethic of entrepreneurship, you get the magical alchemy of greatness.</li></ul>

Good To Great: The Takeaways

The moment a leader allows himself to become the primary reality people worry about, rather than reality being the primary reality, you have a recipe for mediocrity, or worse. This is one of the key reasons why less charismatic leaders often produce better long-term results than their more charismatic counterparts.

Confront The Facts But Don’t Lose Faith

Spending time and energy trying to “motivate” people is a waste of effort. The real question is not, “How do we motivate our people?” If you have the right people, they will be self-motivated. The key is to not de-motivate them. One of the primary ways to de-motivate people is to ignore the brutal facts of reality.

Motivating People Is Useless

The Key To Greatness: Start with the right people, ask them the right questions, and engage them in vigorous debate.<ul><li>To be ruthless means hacking and cutting, especially in difficult times, or wantonly firing people without any thoughtful consideration.</li><li>To be rigorous means consistently applying exacting standards at all times and at all levels, especially in upper management.</li></ul>To be rigorous, not ruthless, means that the best people need not worry about their positions and can concentrate fully on their work.

Being Ruthless Or Rigorous

The Challenge Built to Last, the defining management study of the nineties, showed how great companies triumph over time and how long-term sustained performance can be engineered into the DNA of an enterprise from the verybeginning. But what about the company that is not born with great DNA? How can good companies, mediocre companies, even bad companies achieve enduring greatness? The Study For years, this question preyed on the mind of Jim Collins. Are there companies that defy gravity and convert long-term mediocrity or worse into long-term superiority? And if so, what are the universal distinguishing characteristics that cause a company to go from good to great? The Standards Using tough benchmarks, Collins and his research team identified a set of elite companies that made the leap to great results and sustained those results for at least fifteen years. How great? After the leap, the good-to-great companies generated cumulative stock returns that beat the general stock market by an average of seven times in fifteen years, better than twice the results delivered by a composite index of the world's greatest companies, including Coca-Cola, Intel, General Electric, and Merck. The Comparisons The research team contrasted the good-to-great companies with a carefully selected set of comparison companies that failed to make the leap from good to great. What was different? Why did one set of companies become truly great performers while the other set remained only good? Over five years, the team analyzed the histories of all twenty-eight companies in the study. After sifting through mountains of data and thousands of pages of interviews, Collins and his crew discovered the key determinants of greatness -- why some companies make the leap and others don't. The Findings The findings of the Good to Great study will surprise many readers and shed light on virtually every area of management strategy and practice. The findings include: Level 5 Leaders: The research team was shocked to discover the type of leadership required to achieve greatness. The Hedgehog Concept (Simplicity within the Three Circles): To go from good to great requires transcending the curse of competence. A Culture of Discipline: When you combine a culture of discipline with an ethic of entrepreneurship, you get the magical alchemy of great results. Technology Accelerators: Good-to-great companies think differently about the role of technology. The Flywheel and the Doom Loop: Those who launch radical change programs and wrenching restructurings will almost certainly fail to make the leap. “Some of the key concepts discerned in the study,” comments Jim Collins, "fly in the face of our modern business culture and will, quite frankly, upset some people.” Perhaps, but who can afford to ignore these findings?

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The Challenge Built to Last, the defining management study of the nineties, showed how great companies triumph over time and how long-term sustained performance can be engineered into the DNA of an enterprise from the verybeginning. But what about the company that is not born with great DNA? How can good companies, mediocre companies, even bad companies achieve enduring greatness? The Study For years, this question preyed on the mind of Jim Collins. Are there companies that defy gravity and convert long-term mediocrity or worse into long-term superiority? And if so, what are the universal distinguishing characteristics that cause a company to go from good to great? The Standards Using tough benchmarks, Collins and his research team identified a set of elite companies that made the leap to great results and sustained those results for at least fifteen years. How great? After the leap, the good-to-great companies generated cumulative stock returns that beat the general stock market by an average of seven times in fifteen years, better than twice the results delivered by a composite index of the world's greatest companies, including Coca-Cola, Intel, General Electric, and Merck.The Comparisons The research team contrasted the good-to-great companies with a carefully selected set of comparison companies that failed to make the leap from good to great. What was different? Why did one set of companies become truly great performers while the other set remained only good? Over five years, the team analyzed the histories of all twenty-eight companies in the study. After sifting through mountains of data and thousands of pages of interviews, Collins and his crew discovered the key determinants of greatness -- why some companies make the leap and others don't. The Findings The findings of the Good to Great study will surprise many readers and shed light on virtually every area of management strategy and practice. The findings include:<ul><li>Level 5 Leaders: The research team was shocked to discover the type of leadership required to achieve greatness. </li><li>The Hedgehog Concept (Simplicity within the Three Circles): To go from good to great requires transcending the curse of competence. </li><li>A Culture of Discipline: When you combine a culture of discipline with an ethic of entrepreneurship, you get the magical alchemy of great results. Technology Accelerators: Good-to-great companies think differently about the role of technology. </li><li>The Flywheel and the Doom Loop: Those who launch radical change programs and wrenching restructurings will almost certainly fail to make the leap.</li></ul>“Some of the key concepts discerned in the study,” comments Jim Collins, "fly in the face of our modern business culture and will, quite frankly, upset some people.” Perhaps, but who can afford to ignore these findings?

Jim Collins is an accomplished writer whose work has resonated with readers around the world. Jim Collins has published several books that explore a range of topics, from fiction to nonfiction, and has received critical acclaim for the ability to weave compelling narratives. Jim Collins's writing style is known for its depth and authenticity, and has earned quite a loyal following of readers.

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