☕ Good Morning! Sippers,

Here are this week’s notes!

Good is the Enemy of Great

That’s what makes death so hard—unsatisfied curiosity. —BERYL MARKHAM,

Being good can prevent greatness. This is why there are few great schools, governments, or companies.

Many people settle for a good life instead of striving for greatness. Most companies never become great because they are content with being good. A man named Bill Meehan pointed out that the companies in the book "Built to Last" were already great from the start. This made the author wonder if good companies can become great and how to achieve that.

Five years after the dinner with Bill Meehan, the author, and his research team conducted a study on companies that went from being good to becoming great and maintained their success for at least fifteen years. They compared these companies to a control group that failed to make the same leap. The companies that made the cut showed remarkable success, with higher stock returns than the general market. One example is Walgreens, which had been an average company for over forty years before becoming a great company that outperformed technology superstar Intel, General Electric, Coca-Cola, and the general stock market.

Our research showed that almost any organization can improve and even become great if they apply the framework of ideas we've uncovered.

This book is not about any specific company, but rather about answering the question of whether a good company can become great and how.

UNDAUNTED CURIOSITY

Author: People ask me why I take on large research projects. The answer is simple: curiosity. I enjoy exploring unanswered questions and embarking on journeys to find the answers. It feels like an adventure, like Lewis and Clark's expedition, where we don't know what we'll discover, but we'll report back when we return. Here's a summary of my latest adventure.

Phase 1: The Search

The author assembled a team of 21 researchers to search for companies that exhibited the good-to-great pattern, which is a 15-year cumulative stock return below the market, followed by a transition point, and then cumulative returns at least three times the market over the next 15 years. They found 11 examples from a universe of companies that appeared on the Fortune 500 in the years 1965 to 1995.

The selection was limited to the good-to-great pattern, and the research focused on how to turn a good organization into one that produces sustained great results. The surprising list of companies that made it to the list taught the researchers that it is possible to turn good into great in the most unlikely of situations.

Phase 2: Compared to What?

The research team contrasted the good-to-great companies with a carefully selected set of comparison companies, consisting of direct comparisons and unsustained comparisons. The crucial question was not what the good-to-great companies shared in common, but what they shared that distinguished them from the comparison companies.

This gave them a total study set of twenty-eight companies, including eleven good-to-great companies, eleven direct comparisons, and six unsustained comparisons.

Phase 3: Inside the Black Box

The research team conducted a deep analysis of each case by collecting articles, conducting interviews with executives, and analyzing data on the twenty-eight companies. They developed all concepts from the ground up, derived directly from the evidence, by systematically contrasting the good-to-great examples to the comparison companies and making note of "dogs that did not bark." The research process consumed 10.5 people years of effort and generated significant amounts of data.

Here are some gems 💎

💎 Celebrity leaders from outside the company are not associated with taking a company from good to great.

💎 Executive compensation structure is not a key driver of corporate performance.

💎💎 Strategy alone does not separate good-to-great companies from comparison companies, and the focus should be equally on what not to do.

💎 Technology does not cause a transformation from good to great, but it can accelerate it.

💎 Mergers and acquisitions play no significant role in igniting a transformation from good to great.

💎💎💎 The good-to-great companies paid scant attention to managing change, motivating people, or creating alignment, but under the right conditions, these problems can largely disappear.

💎 The good-to-great companies did not have a name, tagline, launch event, or program to signify their transformations.

💎 Good-to-great companies were not necessarily in great industries, and some were in terrible industries.

💎💎 Greatness is largely a matter of conscious choice rather than a function of circumstance.

Via, Good To Great: Why Some Companies Make the Leap...And Others Don't.

How the Tendencies Weave Throughout Our Characters

Our inherent tendencies are not influenced by factors such as birth order, parenting style, religious background, or gender, nor are they linked to being an extrovert or introvert. Furthermore, these tendencies remain consistent across different environments, whether we are at home, at work, or with friends, and they do not change as we age.

Essentially, we are born with these tendencies ingrained within us.

It is surprising to discover that most individuals fall into one of the four categories with clear patterns in their behavior and perception. However, identifying a child’s Tendency can be challenging, and even as adults, our Tendencies remain consistent unless we go through a character-reshaping experience.

The context of our lives can also impact how helpful our Tendencies are, with extreme cases like North Korea where a Questioner’s curiosity could land them in jail.

It’s worth noting that even individuals with the same Tendency exhibit a wide range of personalities and qualities that influence how they express their Tendencies. For example, an ambitious Rebel seeking a successful career will behave differently from one who prioritizes other values over professional success.

Some people think they have more than one Tendency, but after asking more questions, they usually fall into one category. Even if we have a main Tendency, we all have a little bit of each type in us. We all follow some expectations because we don’t want to face the consequences of not doing it.

🚓 For example, someone might wear a seat belt after getting a fine.

We might question why we have to do something or feel frustrated by inefficiency, but we still follow some expectations because they matter to others. Even someone who always follows rules might skip a meeting if their child is sick.

We all want to have control over our lives and prefer to be asked rather than told what to do. If we feel like we’re being controlled too much, we might resist and not want to do what’s being asked of us.

The author had a conversation with a man who believed he was a Questioner just because he ignored the speed limit. However, identifying one’s Tendency is not as simple as that, as it requires analyzing several examples of behavior and the reasons behind them.

The author has observed that people find the Obliger and Rebel Tendencies the most challenging, whether as a member of that Tendency themselves or while dealing with others. The author also thinks it’s a mistake to try to map the Four Tendencies against other personality frameworks, as each framework captures a certain insight and no single system can fully capture human nature.

The Four Tendencies describe only one aspect of a person’s character, but it’s still an important one as it explains why we act and why we don’t act.

Via, THE FOUR TENDENCIES.