W h y s o m e c o m p a n I e s m a k e t h e



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Good-to-Great
redefined
its Hedgehog Concept in terms of building global brands in not-so-healthy consumables (tob cco, beer, soft drinks, coffee, chocolate, processed cheese, etc. Philip Mo is' superior discipline to stay within the three circles is one key reason wh the results of the two companies diverged so dramatically after the 1964
, report, despite the fact that they both faced the
exact
same industry opportunities and threats. From 1964 to 1989 (when R. J. Reynolds disappeared from public trading in a leveraged buyout,
$1 invested in Philip Morris beat
$1 invested in R. J. Reynolds by over four times. Few companies have the discipline to discover their Hedgehog Concept, much less the discipline to build consistently within it. They fail to grasp a simple paradox The more an organization has the discipline to


136 Jim Collins stay within its three circles, the more it will have attractive opportunities for growth. Indeed, a great company is much more likely to die of indigestion from too much opportunity than starvation from too little. The challenge becomes not opportunity creation, but opportunity selection. This notion of fanatical consistency relative to the Hedgehog Concept doesn't just concern the portfolio of strategic activities. It can relate to the entire way you manage and build an organization. Nucor built its success around the Hedgehog Concept of harnessing culture and technology to produce steel. Central to the Nucor concept was the idea of aligning worker interests with management and shareholder interests through an egalitarian meritocracy largely devoid of class distinctions. Wrote Ken
Iverson, in his
1998 book Plain Talk Inequality still runs rampant inmost business corporations. I'm referring now to hierarchical inequality which legitimizes and institutionalizes the principle of "We" vs. "They" The people at the top of the corporate hierarchy grant themselves privilege after privilege, flaunt those privileges before the men and women who do the real work, then wonder why employees are unmoved by management's invocations to cut costs and boost profitability. When I think of the millions of dollars spent by people at the top of the management hierarchy on efforts to motivate people who are continually put down by that hierarchy, I can only shake my head in When we interviewed Ken Iverson, he told us that nearly
100 percent of the success of Nucor was due to its ability to translate its simple concept into disciplined action consistent with that concept. It grew into a
$3.5 billion Fortune
500 company with only four layers of management and a corporate headquarters staff of fewer than twenty-five people-executive, financial, secretarial, the whole shebang-crammed into a rented office the size of a small dental Cheap veneer furniture adorned the


Good to Great
137
distinctions and creating an egalitarian meritocracy that aligns management, labor, and financial interests

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