Chapter 1 Good Is the Enemy of Great.ppt

Chapter 1Good Is the Enemy of Great Team 2 Shawn Buck Ashley Burnett Whitney Horton Kelly Riester Mickea Smith Sam Snelling Jennifer Shotts Introduction The reason we do not have many GREAT things in our society is because we settle for simply GOOD things. Bill Meehan of Mckinsey Company challenged Jim Collins by calling his previous book “useless.” Introduction Collins began by identifying companies who made the leap from good to great and sustained those results for 15 years. The good to great examples average cumulative stock returns 6.9 times the general market following their transition points. If you invested $1 in a mutual fund of a good to great company in 1969, by Jan. 1, 2000 it would have multiplied 471 times, compared to the 56 in the general market. Phase 1 21 people in teams of 4-6. First, the company had to demonstrate the good to great pattern independent of its industry. Finding companies that went from good to great. 15 year cumulative stock returns at or below the genre stack market, punctuated y a transition point, then cumulative returns at least three times the market over the next 15 yrs. Such companies as: Boeing, Coca-Cola, GE, Hewlett-Packard, Intel, Johnson Johnson, Motorola, Pepsi, Procter Gamble, Wal-Mart, Walt Disney Companies beat the market by only 2.5 times over the yrs. 1985-2000. Fannie Mae beat GE and Coco-Cola, Walgreens beat Intel. It is possible to turn good into great in the most unlikely of Phase 1 Company Results from transition point to 15 yrs. Beyond Transition Point Year - Year Abbott 3.98 times the market 1974-1989 Circuit City 18.50 times the market 1982-1997 Fannie Mae 7.56 times the market 1984-1999 Gillette 7.39 times the market 1980-1995 Kimberly-Clark 3.42 times the market 1972-1987 Kroger 4.17 times the market 1973-1988 Nucor 5.16 times the market 1975-1990 Philip Morris 7.06 times the market 1964-1979 Pitney Bowes 7.16 times the market 1973-1988 Walgreens 7.34 t