1. SOME OF THE GOOD TO GREAT RESEARCH TEAM

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

3. RESULTS FROM TRANSITION POINT TO 15 YEARS BEYOND TRANSITION POINT CompanyResults from T +15T +15 Abbott3.98 times the market1974-1989 Circuit City18.50 times the market1982-1997 Fannie Mae7.56 times the market1984-1999 Gillette7.39 times the market1980-1995 Kimberly-Clark3.42 times the market1972-1987 Kroger4.17 times the market1973-1988 Nucor5.16 times the market1975-1990 Philip Morris7.06 times the market1964-1979 Pitney Bowes7.16 times the market1973-1988 Walgreens7.34 times the market1975-1990 Wells Fargo3.99 times the market1983-1998

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

5. 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.

6. 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

7. 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