Group 6: Wayni Hebert, Sterling Rose, Justin Simpson, Gwen Singleton, Krista Wells

A&P vs. Kroger 1950s: A&P was the largest retailing organization 1960s: Kroger started laying foundation for future 1970s: Kroger overcame A&P

What Happened? A&P decided not to change their business strategy, even after receiving reports that America is changing Golden Key Kroger saw the change coming and invested their money in changing their business system Confronted the “brutal truth” and adapted to the new situation

Facts are Better Than Dreams Breakthrough results come from good decisions Luck or Something Else? Infused the process with the brutal reality Developed a simple frame of reference for decisions

1. Lead with questions, not answers 2. Engage in dialogue and debate, not coercion 3. Conduct autopsies, without blame 4. Build “red flag” mechanisms

1.Lead with questions, not answers Great leaders know they don’t know everything. Use questions only to understand. Don’t use it to manipulate, blame, or put down others. Great leader hold informal meetings instead of pre arranged agenda.

2.Engage in Dialogue & debate, not coercion Heated and loud debates help create great solutions. Good to great leaders are mediators of debates. Don’t let discussions be a sham process. make sure each comment/ idea is valued and discussed on. The debate should in search of the best answer.

3.Conduct autopsies, without blame. Great leaders take responsibility for their mistakes. The purpose of autopsy is to learn the truth. Knowing the truth about past mistakes can help in not making the same mistakes.

4.Build “red flag” Mechanisms Don’t ignore any information regarding your business. By using “red flag” mechanisms, we can … Identify problems when they occur. Take advantages of opportunities. “Red flag mechanisms are useful tools for turning information into information that cannot be ignored.” (Lane Hornung)

Unwavering Faith Amid the Brutal Facts Procter and Gamble, Scott Paper, and Kimberly-Clark In confronting the brutal facts, the good-to-great companies left themselves stronger and more resilient, not weaker and more dispirited. There is a sense of exhilaration that comes in facing head-on the hard truths and saying, “We will never give up. We will never capitulate. It might take a long time, but we will find a way to prevail.”

Three categories of victimization 1. Those permanently dispirited 2. Those who got their life back to normal 3. Those who used the experience as a defining event that made them stronger. Unwavering Faith Amid the Brutal Facts The good-to-great companies were like those in the third group, with the “hardiness factor.”

“I never lost faith in the end of the story, I never doubted not only that I would get out, but also that I would prevail in the end and turn the experience into the defining event of my life.” “The optimists. They were the ones who said ‘Were going to be out by Christmas.’ And Christmas would come, and Christmas would go. Then they’d say, ‘Were going to be out by Easter.’ And Easter would come, and Easter would go. And then Thanksgiving, and then it would be Christmas again. And they died of a broken heart.” “You must never confuse faith that you will prevail in the end - which you can never afford to lose – with the discipline to confront the most brutal facts of your current reality, whatever they might be.”

The Stockdale Paradox Retain faith that you will prevail in the end, regardless of the difficulties. AND at the same time Confront the most brutal facts of you current reality, whatever they might be.

The Stockdale Paradox cont’d. This is the difference between those companies who prevailed, and changed according to what the customer wanted, and those that didn’t. 1. Kroger vs. A&P 2. Wells Fargo vs. Bank of America 3. Kimberly-Clark vs. Scott Paper “The Stockdale Paradox is a signature of all those who create greatness, be it in leading their own lives or in leading others.” These companies embraces the Stockdale Paradox and it didn’t matter how bleak the situation or how mediocre the company was, they all maintained unwavering faith that they would not only survive, but prevail as a great company.