SOME OF THE GOOD TO GREAT RESEARCH TEAM

Ratio of Cumulative Stock Returns To General Market Good to Great Companies Comparison Companies © Copyright Jim Collins, All Rights Reserved

RESULTS FROM TRANSITION POINT TO 15 YEARS BEYOND TRANSITION POINT CompanyResults from T +15T +15 Abbott3.98 times the market Circuit City18.50 times the market Fannie Mae7.56 times the market Gillette7.39 times the market Kimberly-Clark3.42 times the market Kroger4.17 times the market Nucor5.16 times the market Philip Morris7.06 times the market Pitney Bowes7.16 times the market Walgreens7.34 times the market Wells Fargo3.99 times the market

THE THREE CIRCLES of the Hedgehog Concept Passionate About Economic Denominator Can Be Best In The World © Copyright Jim Collins, All Rights Reserved

THE GOOD-TO-GREAT COMPANIES AND THE “BEST IN THE WORLD” CIRCLE OF THE HEDGEHOG CONCEPT CompanyCould become the best in the world at… AbbottCreating a product portfolio that lowers the cost of healthcare. Circuit CityImplementing the "4-S" model (service, selection, savings, satisfaction) applied to big-ticket consumer sales. Fannie MaeBeing a capital markets player in anything that pertains to mortgages. GilletteBuilding premier global brands of daily necessities that require sophisticated manufacturing technology. Kimberly-ClarkPaper-based consumer products. KrogerInnovative super-combo stores. NucorHarnessing culture and technology to produce low-cost steel. Philip MorrisBuilding brand loyalty in cigarettes and, later, other consumables. Pitney BowesMessaging that requires sophisticated back-office equipment. WalgreensConvenient drug-stores. Wells FargoRunning a bank like a business, focusing on the western U.S.

ECONOMIC DENOMINATOR CompanyProfit… Abbottper employee Circuit Cityper geographic region Fannie Maeper mortgage risk level Gilletteper customer Kimberly-Clarkper consumer brand Krogerper local population Nucorper ton of finished steel Philip Morrisper global brand category Pitney Bowesper customer Walgreensper customer visit Wells Fargoper employee

LEVEL 5 LEADERSHIP Level 5 Executive Effective Leader Competent Manager Contributing Team-Member Highly Capable Individual Level 5: Level 4: Level 3: Level 2: Level 1: © Copyright Jim Collins, All Rights Reserved