Good to Great Ch. 3 First Who, Then What. By:Cesar, Nathan, Merikal, Kendrick

First who, then what. The researchers from the good to great team expected to find that taking a company from good to great would start by setting a new direction, a new vision, and strategy for the company, and then to get people aligned behind that new direction. But instead, they found something quite different. First, the executives from good to great companies got the right people on the bus (and the wrong people off the bus) and then figured out where to drive it.

First who, then what. If you have the right people on the bus, the problem of how to motivate and manage people largely goes away. If you have the wrong people, it doesn’t matter whether you discover the right direction; you still won’t have a great company.

First who, then what examples. At Wells Fargo fourteen of twenty six executives left the company, replaced by some of the best, smartest, and hardest-working executives in the entire world of finance. Wells Fargo had come to the conclusion that “who” questions come before “what” questions-before vision, before strategy , before tactics, before organizational structure, before technology.

First who, then what continued The good to great companies have figured out that if they start with the right people and get rid of the wrong people, the company will become great. With the right people the company will have sustained success as long as they have the right people.

Not a Genius with a thousand helpers Many comparison (unsustained) companies followed “Genius with a thousand helpers” model. In this model, the company is a platform for the talents of an extraordinary individual. In these cases, the primary driving force of the company, the genius, is a great asset-as long as the genius sticks around Geniuses rarely build great management teams because they don't need one.

Not a Genius with a thousand helpers continued Geniuses often recruit helpers who can help implement great ideas. However, when the genius leaves the helpers are often lost or try to mimic their predecessor with bold visionary moves that prove unsuccessful. Good to great companies follows first who, then what, while a genius with helpers follows first what then who, which can cause them to have un sustained success.

It's who you pay, not how you pay them. Researchers from Good to Great expected to find that changes in incentives systems, especially with executive incentives would be highly correlated with making the leap from good to great. The researchers found they were dead wrong in their expectations They found that there was no systematic pattern linking executive compensation to the process of going from good to great.

It's who you pay, not how you pay them. In fact, the only significant differences researches found was that good to great executives received slightly less total cash compensation ten years after the transition than their counterparts at still mediocre comparison companies. However, executive compensation is not irrelevant, executives should be paid reasonably. Good to great companies understood that the right people will deliver the best results regardless of the incentive system.

It's who you pay, not how you pay them examples A great example of who you pay is what a steel company called Nucor did. Nucor built its system on the Idea that you can teach Farmers to make steel, but you can't teach people to have a farmer's work ethic. Nucor created an environment where hard workers would thrive. Good to great companies like Nucor found that people are not your most important asset, but the right people are.

Rigorous, not Ruthless. Ruthless is different from rigorous. Ruthless is “hacking and cutting” where as rigorous is “consistently applying exacting standards at all times and at all levels. “If they aren’t going to make it on the bus in the long term, why let them suffer in the short term.” “Six of the eleven good-to-great companies reported zero layoffs from ten years before the breakthrough date all the way through 1998, and four others reported only one or two layoffs.”

How to be Rigorous There are three practical disciplines for being rigorous instead of ruthless: When in doubt, don’t hire - keep looking. When you know you need to make a person change, act. Put your best people on your biggest opportunities not your biggest problems.

First who, great companies, and a great life. It is possible to build a great company and also have a great life. Being good at assembling the right people and putting the right people in the right spots will make everybody's job easier. Members of good to great teams tend to become and remain friends for life.

First who, great companies, and a great life. Adherence to the idea of “First who” links having a great company and a great life. In conclusion people from good to great companies loved what they did, largely because of who they did it with.