This comic strip accurately summarizes my experience as a Big 4 consultant.
Source: Dilbert.com
A Guide to Personal Finance, Financial Modeling, and Productivity
Good to Great
Jim Collins
c 2001
258 pages
Chapters
1. Good Is the Enemy of Great
2. Level 5 Leadership
3. First Who… Then What
4. Confront the Brutal Facts (Yet Never Lose Faith)
5. The Hedgehog Concept (Simplicity within the Three Circles)
6. A Culture of Discipline
7. Technology Accelerators
8. The Flywheel and the Doom Loop
9. From Good to Great to Built to Last
p.1
Good Is the Enemy of Great
“You know, Jim, we love Built to Last around here. You and your coauthor did a fine job on the research and writing. Unfortunately, it’s useless.”
- Mckinsey partner
Key point here: Consulting partners are douchebags.
p.8
The Good to Great Companies
Abbott
Circuit City
Fannie Mae
Gillette
Kimberly-Clark
Kroger
Nucor
Philip Morris
Pitney Bowes
Walgreens
Wells Fargo
p.39
Level 5 Leadership
“Level 5″ refers to a five-level hierarchy of executive capabilities, with Level 5 at the top. Level 5 leaders embody a paradoxical mix of personal humility and professional will. They are ambitious to be sure, but ambitious first and foremost for the company, not themselves.
Level 5 leaders display compelling modesty, are self-effacing and understated. In contrast, two thirds of the comparison companies had leaders with gargantuan personal egos that contributed to the demise or continued mediocrity of the company.
Level 5 leaders display a workmanlike diligence – more plow horse than show horse.
Level 5 leaders look out the window to attribute success to factors other than themselves. When things go poorly, however, they look in the mirror and blame themselves, taking full responsibility. The comparison CEOs often did just the opposite – they looked in the mirror to take credit for success, but out the window to assign blame for disappointing results.
One of the most damaging trends in recent history is the tendency (especially by boards of directors) to select dazzling, celebrity leaders and to de-select potential Level 5 leaders.
Larger-than-life, celebrity leaders who ride in from the outside are negatively correlated with going from good to great. Ten of eleven good-to-great CEOs came from inside the company, whereas the comparison companies tried outside CEOs six times more often.
p.41
“There are going to be times when we can’t wait for somebody. Now, you’re either on the bus or off the bus.”
-Ken Kesey
p.63
First Who… Then What
The good-to-great leaders began the transformation by first getting the right people on the bus (and the wrong people off the bus) and then figured out where to drive it.
The key point of this chapter is not just the idea of getting the right people on the team. The key point is that “who” questions come before “what” decisions – before vision, before strategy, before organization structure, before tactics. First who, then what – as a rigorous discipline, consistently applied.
The comparison companies frequently followed the “genius with a thousand helpers” model – a genius leader who sets a vision and then enlists a crew of highly capable “helpers” to make the vision happen. This model fails when the genius departs.
We uncovered three practical disciplines for being rigorous in people decisions:
1. When in doubt, don’t hire – keep looking. (Corollary: A company should limit its growth based on its ability to attract enough of the right people.)
2. When you know you need to make a people change, act. (Corollary: First be sure you don’t simply have someone in the wrong seat.)
3. Put your best people on your biggest opportunities, not your biggest problems. (Corollary: If you sell off your problems, don’t sell off your best people.)
We found no systematic pattern linking executive compensation to the shift from good to great. The purpose of compensation is not to “motivate” the right behaviors from the wrong people,but to get and keep the right people in the first place.
The old adage “People are your most important asset” is wrong. People are not your most important asset. The right people are.
p.88
Confront the Brutal Facts (Yet Never Lose Faith)
All good-to-great companies began the process of finding a path to greatness by confronting the brutal facts of their current reality.
When you start with an honest and diligent effort to determine the truth of your situation, the right decisions often become self-evident. It is impossible to make good decisions without infusing the entire process with an honest confrontation o the brutal facts.
The good-to-great companies faced just as much adversity as the comparison companies, but responded to the adversity differently. They hit the realities of their situation head-on. As a result, they emerged from adversity even stronger.
A key psychology for leading from good to great is the Stockdale Paradox: Retain absolute faith that you can and will prevail in the end, regardless of the difficulties, AND at the same time confront the most brutal facts of your current reality, whatever they might be.
Spending time and energy trying to “motivate” people is a waste of effort. The real question is not, “How do we motivate our people?” If you have the right people, they will be self-motivated. The key is to not de-motivate them. One of the primary ways to de-motivate people is to ignore the brutal facts of reality.
p.118
The Hedgehog Concept (Simplicity within the Three Circles)
To go from good to great requires a deep understanding of three intersecting circles translated into a simple, crystalline concept (the Hedgehog Concept):
What you are deeply Passionate About
What you can be the Best in the World At
What drives your Economic Engine
The key is to understand what your organization can be the best in the world at, and equally important what it cannot be the best at – not what it “wants” to be the best at. The Hedgehog Concept is not a goal, strategy, or intention; it is an understanding.
To get insight into the drivers of your economic engine, search for the one denominator (profit per x or, in the social sector, cash flow per x) that has the single greatest impact.
The good -to-great companies are more like hedgehogs – simple, dowdy creatures that know “one big thing” and stick to it. The comparison companies are more like foxes – crafty, cunning creatures that know many things yet lack consistency.
It took four years on average for the good-to-great companies to get a Hedgehog Concept.
Strategy per se did not separate the good-to-great companies from the comparison companies. Both sets had strategies, and there is no evidence that the good-to-great companies spent more time on strategic planning than the comparison companies.
You absolutely do not need to be in a great industry to produce sustained great results. No matter how bad the industry, every good-to-great company figured out how to produce truly superior economic returns.
p.142
A Culture of Discipline
Sustained great results depend upon building a culture full of self-disciplined people who take disciplined action, fanatically consistent with the three circles.
Bureaucratic cultures arise to compensate for incompetence and lack of discipline, which arise from having the wrong people on the bus in the first place. If you get the right people on the bus, and the wrong people off, you don’t need stultifying bureaucracy.
Do not confuse a culture of discipline with a tyrant who disciplines – they are very different concepts, one highly functional, the other highly dysfunctional. Savior CEOs who personally discipline through sheer force of personality usually fail to produce sustained results.
The purpose of budgeting in a good-to-great company is not to decide how much each activity gets, but to decide which arenas best fit with the Hedgehog Concept and should be fully funded and which should not be funded at all.
p.162
Technology Accelerators
Good-to-great organizations think differently about technology and technological change than mediocre ones.
Good-to-great organizations avoid technology fads and bandwagons, yet they become pioneers in the application of carefully selected technologies.
The good-to-great companies used technology as an accelerator of momentum., not a creator of it. None of the good-to-great companies began their transformations with pioneering technology, yet they all become pioneers in the application of technology once they grasped how it fit with their three circles after they hit breakthrough.
How a company reacts to technological change is a good indicator of its inner drive for greatness versus mediocrity. Great companies respond with thoughtfulness and creativity, driven by a compulsion to turn unrealized potential into results; mediocre companies react and lurch about, motivated by fear of being left behind.
The idea that technological change is the principal cause in the decline of once-great companies (or the perpetual mediocrity of others) is not supported by the evidence. Certainly, a company cant remain a laggard and hope to be great, but technology by itself is never a primary root cause of either greatness or decline.
Across eighty-four interviews with good-to-great executives, fully 80 percent didn’t even mention technology as one of the top five factors in the transformation. This is true even in companies famous for their pioneering application of technology, such as Nucor.
p.186
The Flywheel and the Doom Loop
Good-to-great transformations often look like dramatic, revolutionary events to those observing from the outside, but they feel like organic, cumulative processes to people on the inside. The confusion of end outcomes (dramatic results) with process (organic and cumulative) skews our perception of what really works over the long haul.
No matter how dramatic the end result, the good-to-great transformations never happened in one fell swoop. There was no single defining action, no grand program, no one killer innovation, on solitary lucky break, no miracle movement.
Sustainable transformations follow a predictable pattern of buildup and breakthrough. Like pushing on a giant, heavy flywheel, it takes a lot of effort to get the thing moving at all, but with persistent pushing in a consistent direction over a long period of time, the flywheel builds momentum, eventually hitting a point of breakthrough.
The good-to-great leaders spent essentially no energy trying to “crate alignment,” “motivate the troops,” or “manage change.” Under the right conditions, the problems of commitment, alignment, motivation, and change largely take care of themselves. Alignment principally follows from results and momentum, not the other way around.
p.188
“It is your Work in life that is the ultimate seduction.”
-Pablo Picasso
p.197
From Good to Great to Built to Last
BHAG – Big Hairy Ambitious Goal
p.198
Built to Last Concepts:
Clock Building, Not Time Telling
Genius of AND
Core Ideology
Preserve the Core / Stimulate Progress
Since I first installed Microsoft Money on my computer, almost a full decade ago, I’ve always had a good sense of my financial net worth. The software provided two essential functions that I could not live without: the ability to download my credit card transactions to my laptop and the ability to update price quotes on my investments. Now that both of those features are gone, the time to switch to Quicken is both imminent and inevitable.
Below is my personal checklist for switching from Money to Quicken. Keep in mind that I’ve been using Money for almost ten years now (almost from the day it was first released), so this is definitely a big change for me.
Install Quicken Deluxe 2010 – COMPLETE
Bought if from Costco for only $20. Now I just need to pop it in my disk drive and follow a few on screen prompts to get the ball rolling.
Import MS Money File – COMPLETE
If you read the Intuit boards and the Amazon reviews on Quicken, you’ll notice that many people have had issues with this specific task. Hopefully I’ll be lucky and not have to deal with any of that. I’ve been using both the latest version of Money and switching to the latest version of Quicken.
Test Credit Card Transaction Download
This by all means should still work with Quicken, and quite frankly, it has to work. Because if it doesn’t, I’m returning my copy of Quicken to Costco. I have two credit card accounts that are vital to me: one at Chase and one with American Express.
Rebuild Expense Category Hierarchies
The Expense Categories in MS Money were always okay to work with, but I’ve always wanted to go in and create my own hierarchy to work with. I’ll use my switch to Quicken as my excuse to do so.
Rebuild investment purchase quantity amounts
This is a little embarrassing to admit but, for many of my investment transactions within MS Money, I entered incorrect quantity amounts in the ledger. The amounts were never off by much, but over time they added up, and I would re-balance these errors by adding an “account adjustment” line. My goal here is to enter the values accurately and create a more precise indicator of my investment value.
Reclassify Business Expense Lines
When I worked in consulting, I had an expense account that was linked to a corporate American Express card. Although I was ultimately responsible for any charges on the card, I didn’t my business expenses to factor into my net worth if I was just going to be reimbursed later on. To filter this part out of my net worth, I simply created a transfer account in Money and placed all business expenses there. I also had to create more “account adjustment” entries just to make the charges and reimbursements balance out. Anyway, I think the adjustments entries will be inevitable, but I’d like them to occur on regular quarterly intervals. Before, I kind of adjusted the balance whenever I felt like it.
Create Custom Reports
I’d like to use Quicken to take a get an even better understanding of my finances than I did before. Now that I’ve moved out of my parents house, and I’m paying my own insurance / healthcare / bills, my financial schema has become a lot more intricate. These reports can help drive better behavior on my part: One idea I had was a fast food report, showing specifically how many times and how much money I spent at restaurants deemed fast food oriented. The possibilities are endless.
Here’s a sweet deal for anyone needing desktop financial management software after Money recently shut down its online services. You have to be a Costco member, however, for it to work.
The current list price for Quicken Deluxe 2010 is $39.99 at Costco stores. If you received their coupon book in the mail, you’ll notice a $20 dollar off coupon in the packet. You must supply the original coupon to the store (no scans) and it is limited to one per household. The coupon is valid from Feb. 4 through Feb. 28, 2010.
I never liked the idea of trading in one monopoly corporation for another, i.e. switching from Microsoft to Intuit. (Keep in mind, Intuit now owns Mint as well) And yes, I’ve heard the horror stories people had when they tried to transfer their data over. But getting this package for only $20 just seems too good a deal to pass up. Worst case scenario, I lose 20 bucks and have to find another desktop solution.
I’ve always been more of a quant than a designer, so building PowerPoint decks can often be a frustrating process. While I’m not naturally gifted, I feel that the more times I try and the more options I can add to my palette, the better I will eventually become.
Microsoft recently released a deck of “cool” PowerPoint examples that take slide building to a whole new level. They range from clever animations to unique ways to arrange your photos. While they definitely spark my interest from a creative perspective, I highly doubt I’ll ever use these in one of my board of directors presentations. Anyway, regardless of whether you like them or not, it’s always fun to find new inspiration.
The new material can be found at: http://bit.ly/ppt157
Complete an Updated Resume Every Month
Just having a job is not as secure as it used to be, especially in this type of economy. Regardless of how my comfortable my current job may become, I always need to be prepared for my next step. That’s why a resume and a CV are so important. After what I went through last year, I now equate Corporate America to a game of musical chairs: when the music stops, you don’t want to be the one without a seat. How do you do that? You need to watch your own ass. Don’t assume someone will do it for you.
Backup Important Documents Every Quarter
I’ve already begun the process of digitizing my important documents. Now I just need to save it somewhere other than my hard drive. While I have nearly 200 gigs of data saved on my computer, probably less than 1 gig of that is actually important. I’ll look into some online storage solutions to complete this goal.
Write My Will
While my health condition is not as dire as it was a year ago, but given the circumstances, I still should be prepared for the worst. I care for my family and writing a will is a great way to be unselfish. Also, I have the software already, so I might as well use it.
Move all Investment Accounts to Vanguard
I still have an old IRA at TD Ameritrade and at this point, I should move it all over to Vanguard. There have been too many instances where I’ve been hit with random and unexpected transaction fees. This is even coming from what is considered one of the cheapest online brokers available. Also, I think the cheapest fund TD Ameritrade has, in terms of expense ratio, is double that of the typical Vanguard fund. Furthermore, by moving all my investment accounts to one institution, it’ll be much easier to track my net worth.
Take a Speed Reading Course
With all the books I want to read, and an MBA on the horizon, my reading speed is going to need to pick up if I want to have more free time. I hope to increase my speed significantly before I enroll into a major business school program.
Provide for My Family
I will give back at least $1000 to my family members. Regardless of how cheap I am, I know I can afford it. Easily. My relationship with my family right now isn’t terrible, but it could be better. And this is definitely one area of spending that I don’t feel bad about when I splurge.
Any legitimate Excel user has used VLOOKUP and knows the syntax by heart. (Lookup Value, Array, Column, etc.) But many of these same users have never used INDEX MATCH before. INDEX MATCH has certain features that make it superior to VLOOKUP in many situations. Regardless of which method you think is better, (I have my opinion) it is definitely worth it to learn both formulas and have both at your disposal.
First our point of reference: the trusty VLOOKUP formula. VLOOKUP returns a VALUE based on a defined array and column reference. The syntax from Excel is as follows:
=VLOOKUP ( lookup value , lookup array , column , range lookup )
Below is an example of using VLOOKUP to return the value “Shirts” based on the lookup value “1089.”
Our goal was to lookup the Product Type of ID “1089″ and VLOOKUP did that without a hitch. So how does INDEX MATCH replicate that functionality?
The basic INDEX function returns a VALUE based on a defined array / column and a row number. The syntax from Excel is as follows:
=INDEX ( array , row number )
Below is an example of using INDEX to return the value “Shirts,” assuming that you already know that the value is three cells down on your defined array.
(you also have the option to specify column number, but that isn’t relevant in a basic INDEX MATCH formula)
If you go 3 cells down in the INDEX array, you get the value “Shirts.” But the problem we have when trying to do a lookup is that we typically don’t know what position our return value is located, which in this case is 3. The “3″ needs to come from another formula.
The basic MATCH function returns a NUMBER based on the relative position of a lookup value within a defined array / column. The syntax from Excel is as follows:
=MATCH ( lookup value , lookup array , match type )
Below is an example of using the MATCH formula to return the position of “1089″ within our column reference.
Since “1089″ is three cells down in the array, the value “3″ is returned.
When we combine both the INDEX formula and the MATCH formula, the number that the MATCH formula returns becomes the row number for your INDEX formula.
=INDEX ( array , MATCH formula )
Below is an example of using the INDEX MATCH to return ”Product Type” for our lookup value.
As you can see, it returns the same value we got from VLOOKUP.
One of the key difference with INDEX MATCH is that, rather than selecting an entire array table, you are only selecting the lookup column and the return column of what would be a VLOOKUP array. While not a big deal when it comes to simple lookups, this can definitely become a factor if you are dealing with large files that have thousands of lookups. By limiting your arrays to only the lookup and return columns, you reduce the processing load on Excel. The difference is illustrated below.
The other key difference is that INDEX MATCH formulas work as a right to left lookup, whereas VLOOKUP only works left to right. As you can see in the example below, I can use INDEX MATCH to lookup a value that is to the right of my return value using INDEX MATCH. This is not possible with the VLOOKUP formula, as you would have to rearrange your data set, or copy your lookup column so that it is always to the left of your return value.
I reversed our formula by looking up the ID of the “Shirts” Product Type. I just changed our lookup value and swapped the lookup and return columns.
A lot of Excel websites do a poor job of explaining how to use INDEX MATCH. I’m not saying my way is any better, so here’s any easy way to remember how to use the formula, if you don’t want to mess with the detailed explanations but know how to use VLOOKUP. Here’s how I think about the formula as I’m typing it in:
=INDEX ( Column I want a return value from , ( MATCH ( My Lookup Value , Column I want to Lookup against , Enter “0″ ))

For six months last year, I traveled to Los Angeles every week to consult with a client. I stayed in Pasadena, which was only a few minutes away from Burbank, where Jay Leno taped the Tonight Show at the time. As my project was wrapping up, I thought about getting into the audience of the Tonight Show before I left LA. But there was one thing that prevented me from doing so: Jay Leno SUCKS.
I wish nothing but the best for Conan. He’s more talented than Leno could ever wish to be. If he leaves for another network, he’s probably better off than staying with NBC. And if they put Leno back on at 11:35, I’ll never watch the Tonight Show again.

Recently, I came across the features link for the next version of Excel, Excel 2010, here.
Here’s bullet point number five from the webpage:
“Connect, share, and accomplish more when working together. Co-authoring through the Microsoft Excel Web App makes it possible for you to edit the same spreadsheet with others simultaneously from different locations. See changes from others appear as they are made and with the number of editors in the workbook shown on the status bar, you’ll always know who else is editing the workbook with you.”
Having recently completed my first Google Docs implementation, I was somewhat curious as to when Microsoft would copy Google’s collaborations features. During my research, I came across Sharepoint Workspace 2010, which had many of Google Docs’ features, but I didn’t know that Microsoft would integrate collaboration into each of the programs in the next Office release.
Only time will tell whether or not this holds up to Google’s offering. But I guess that’s how innovation works these days – Google does something cool and Microsoft copies them.
It’s been a year since it all went down. The embarrassment, the dissillusionment; feeling betrayed by a company I once adored. Since I was layed off exactly one year ago, I’ve suffered through kidney failure, became an independent contractor, and moved to California for a job with health benefits. To be completely honest – I’m NOT over it. I’m still upset about the way I was let go. I’m still upset at the people who were spared. I’m upset at the people who simply didn’t give a shit about my predicament – a poor, gravely ill kid being laid off in the worst economy since the Great Depression and put on the verge of losing his health insurance.
I started this post more than 6 months ago, but never found the time to finish. I think today, as I try to fully and respectfully close the door on this chapter of my life, is a fitting time to finish it.
I walked to the elevator of our downtown office and I knew it would be the last time here. My chest was still hurting but I could finally breathe normally. I didn’t know it at the time, but I was suffering from pluerisy. I was way too sick to be working that day, but not sick enough to get laid off. I carried my laptop in with a cheap reusable grocery bag - I was fully intent on keeping my real laptop bag as a part of my severance. As the elevator door opened, one of my colleagues stepped out.
“Hey, how’s it going?” he asked.
“Good.” I responded.
As I went up the elevator, I realized how meaningless that question has become in the corporate world. My good response that day actually translated to ”I’m getting laid off in 30 minutes.”
I came into the office and sat down near the windows to enjoy the view for one last time. The view was awesome, probably the best thing about that office. I was on time for the meeting, but the partner who conducted my severance meeting was not.
He made me wait before we started. I assume he was on the phone with the HR representative to discuss how they were going to fire me. I’m sure my counselor was on the line too. I sat there looking out at Seattle and I truly wanted to be angry at them. I wanted to go in there and cuss the shit out of him. I wanted to tell him that he was about to make a big mistake. That I was smarter than the entire analyst class combined and most of the senior consultants.
But at this point, it was so meaningless. All the things I hated about my job were no longer relevant. The job was gone and I needed to move on. I wanted it to be over.
The partner came out 5 minutes late as I was staring into space. That tardiness really ticked me off. My final meeting and you’re still going to be an asshole partner about it? Anyway, I didn’t let it show. We sat down and discussed what was going on. As he opened his mouth, I immediately stopped listening. I was thinking in my head,
“Man, I should take some Post Its before I leave today. You can never have enough.”
The partner didn’t really go into detail about why I was getting fired. He just mentioned the economy. I really don’t recall how emotionally stable I was at the time, but if it became a performance review discussion; if he started picking apart my performance, talent, skillset, and value to the firm, then it could have been a really interesting discussion. Take away my income. Take away my health insurance. But don’t you dare claim that I was inferior to the incompetent blob of ass kissers known as Deloitte’s analyst group.
But nope, just “the economy.” That’s why I got laid off. I think we both just wanted to get this over with. Before the meeting ended my counselor chimed in about how good a job I did. I thought in my head,
“Hmm, maybe I’ll take some white out too.”
I was handed a general release. In terms of layoffs, this basically means “sign this, promise you won’t sue us, and we’ll give you some extra money.” I may have had a case against them as there were definitely a lower number of people of color in the office after that day. Most disgruntled people say they’ll have their lawyer look at it. But I, like most people, don’t actually have a lawyer. I ended up signing the document before I left.
I was a maestro when it came to analyis and any type of spreadsheet work. I gave up two and a half years of my life to this job. I traveled cross country week to week and sacrificed a normal social life. And it all culminated in a 15 minute meeting on a Monday. I deserved better.
I left the partner’s office and sat down to write my farewell email. In consulting, where the turnover rate was so high, we get farewell emails all the time. I always assumed my farewell message would be profound, well-written, and a jumping point to better things. This was probably the most disheartening point of the day. There were people I wanted to give a proper farewell to. People I actually liked. But I had no motivation to do so, and I had to get out of the office within an hour.
So I dug into the folder where I kept all my farewells, copied lines of text from three different emails, and shot it off. Was it grammatically correct? Who knew? Who really cares at this point.
Right before I shot off the email, I got a message from a senior consultant regarding a project I had signed up to do. He had spent a good amount of time drafting the email with a list of prep items we needed to get done. I quickly shot an email back.
“I’d love to help you with this, but unfortunately I’m drafting my farewell email now.”
Made me wonder how many people knew about the layoffs. The Big 4 service lines take a very clandestine approach when they reduce their workforce. They just try to scuttle you out the door as quickly as possible.
I closed my computer for the last time. But I still had a big decision to make. To the right were the elevators, where I could leave the office once and for all and never look back. To the left were the row of cubbies that gave me an opportunity to say goodbye to everyone.
My initial instinct was to leave – none of this mattered anymore, so why prolong this? I wanted to walk out so badly, but I didn’t want to show them I was weak. I didn’t want them to think that I was leaving with my tail between my legs. My ego got the best of me. Plus, I wanted to scare some of the people who hadn’t been let go “yet.” So I forced myself to say goodbye.
I did my lap around the office, shaking hands with everyone I ran into. There were a lot of people in the office that day, as no one was really staffed on a billable project. I shook hands with people I didn’t care for, and people I absolutely hated. I look back at the people I talked to that day and I realize that these were some of the most superficial jerks I’ve ever met. If I learn nothing else from this experience, I at least know now that I made poor choices when it came to people.
I had joined this firm thinking that I could rise above the politics, that talent and achievement would be fairly recognized, that I could learn and do anything I wanted, that race and culture didn’t disadvantage me in any way. But these assertions were just as hollow as a consulting sales pitch. Since the day I set foot in the office, I never had any chance of success and there was no way I could avoid getting laid off. At the end of the day, my biggest mistake was signing the offer letter in the first place.
I’m not over it. I’ve told myself I am but I know I’m not. There’s still a bitterness to my tone, and consulting related posts in my blog, that I just can’t shake. I don’t forgive the company for what they did to me, because that would go against everything I stand for. I can only hope to forget. I just want to put this in the past and resolve to make better decisions in the future.
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