Fall 2026

Good is the enemy of great

The core idea that settling for good performance is the main reason organizations rarely become great, since good results feel satisfying enough that people stop pushing further

Good-to-great study

Jim Collins's five-year research project comparing companies that shifted from good results to great, sustained results with a set of similar companies that failed to make or sustain that leap

Transition point

The point in a company's history marking the shift from good performance to a sustained climb in performance, after which returns outpaced the market for at least fifteen years

Direct comparison companies

Companies in the same industry as the good-to-great companies, with similar resources and opportunities at the time of transition, that never made the leap to great

Unsustained comparison companies

Companies that made a short-term shift from good to great but failed to sustain that trajectory over time

Level 5 leadership

A style of leadership found in every good-to-great company, marked by a paradoxical blend of personal humility and intense professional will, rather than a big celebrity personality

First Who, Then What

The good-to-great principle that leaders start by getting the right people on the bus and the wrong people off before deciding on vision or strategy

Stockdale Paradox

Holding unwavering faith that you will prevail in the end while simultaneously confronting the most brutal facts of your current reality

Hedgehog Concept

A simple, unifying concept for a company or person built from the overlap of three questions: what you are deeply passionate about, what you can be best in the world at, and what drives your economic engine

Culture of discipline

An organizational culture where disciplined people, disciplined thought, and disciplined action replace the need for hierarchy, bureaucracy, and excessive controls

Technology accelerators

The good-to-great finding that technology never causes a transformation by itself, but can accelerate momentum once a company has the right people and concept in place

Flywheel effect

The idea that going from good to great happens through a cumulative buildup of small, consistent turns of effort rather than one dramatic breakthrough or event

Doom loop

The pattern seen in comparison companies of launching dramatic change programs or restructurings that fail to build lasting momentum, unlike the steady flywheel approach

"Dogs that did not bark"

A reference to Sherlock Holmes used to describe unexpected factors, like celebrity CEOs or executive pay structure, that turned out not to matter to a company's shift from good to great

Why change is difficult (BYU-Idaho model)

A framework showing that change requires vision, skills, incentives, resources, and an action plan together, and that missing any one element produces confusion, anxiety, no change, frustration, or false starts instead of change

Change in Price x	Probability P(x)
60%	0.3
15%	0.31
5%	0.15
-10%	0.14
-30%	0.1

Using the information in the table, determine the probability that McDonald’s stock will go up by exactly 10% over the next year.

0%

Change in Price x	Probability P(x)
60%	0.3
15%	0.31
5%	0.15
-10%	0.14
-30%	0.1

Using the information in the table, determine the probability that McDonald’s stock will go up by less than 16% over the next year.

0.46%

In your own words, list the three rules of probability.

Probability is always inbetween 0 and 1.

The sum of all the outcomes equals probability of 1.

Probability for an event not to occur is 1 minus the probability that it will.

State the five steps of the statistical process and provide a brief description for each step.

Design the Study - State a research question, what needs to be done to answer the research question. What is the population? What kind of data needs to be collected?

Collect Data - How is the sample collected, and going out to actually obtain the data?

Describe the Data - Creating graphs or calculating statistics to help visualize and describe the data.

Make Inferences - Using the information contained in a sample to draw conclusions about a population.

Take Action - Determine which action to take based on the results of the study.

Simple Random Sample (SRS)

Computer generated; draw from a hat, etc.

Stratified Sampling

Subjects are in groups according to similarity of some characteristics (e.g. age, income level, political party); specifically take a simple random sample from each group. (Homogeneous)

Systematic Sampling

Subjects are in “some” sequential order. Randomly select one subject (to start your sampling) then ask every k^th subject.

Cluster Sampling

Subjects are put into groups that “hopefully” represent the population. Randomly select one or more groups and sample everybody in that group. (Heterogenous)

Give examples of quantitative data

Anything that is a measurement on an individual would classify as quantitative data and will usually state the units of measurement along with the data.’

This includes things like height in inches, weight in pounds, distance in miles, time in seconds, number of people found in different classrooms across campus (the classrooms become the individual and the number of people in the class becomes the unit of measurement), or percentage score on an exam, etc…

Give examples of categorical data

Categorical data places individuals into groups. This includes things like hair color, eye color, gender, ethnicity, area code of a phone number, yes/no responses, and so on.

You plan to conduct an experiment to test the effectiveness of Sleepeze, a new drug that is supposed to reduce insomnia, so you randomly divide 1,000 patients into two groups, where half get Sleepeze and the other a placebo. You record the gender of each subject. You will then observe how many hours of sleep they get in a week.

Experimental Design

Response Variable - Hours of sleep they get in a week

Treatment - Sleepeze or placebo

Subjects - 1,000 insomnia patients

Experiment

Researchers control the conditions under which measurements are made.

Observational Study

Researchers simply observe what happens without controlling the conditions under which measurements are made.

Treatment

The new or experimental condition that is imposed on the subjects.

Response Variable

The variable that changes or responds to the treatment.

Subjects

Participants in a study

Which of the following belong in the operating expenses section of the income statement?

Marketing expense, R&D expense, Depreciation expense, and Rent expense

Which labor hours should be included in IBC labor costs (either in COGS or Operating Expenses)?

Direct labor hours worked selling at the booth, and direct labor hours spent making the product

Which of the following is true regarding depreciation?

Accumulated Depreciation is found as a negative number on the Balance Sheet

Calculate net income given the assumptions provided.

Revenue minus COGS gives gross profit; subtract operating expenses for operating income; subtract interest expense for pretax income; subtract tax (pretax income times the tax rate) for net income

You purchase an enrober to manufacture chocolates with a given useful life. What is your accumulated depreciation after part of that useful life has passed?

Cost divided by useful life gives depreciation per period; multiply by the number of periods elapsed

Using given assumptions, what is operating profit?

Revenue minus cost of goods sold gives gross profit; subtract total operating expenses (marketing, labor, rent) for operating profit

Income taxes are calculated by

Subtracting interest from Operating Profit and multiplying the result by the tax rate

Which of the following belong on the income statement?

Net income, Operating income, Income tax expense, Revenue, Cost of goods sold, and Interest expense

The cumulative sum of net income shows up where in your financial statements?

Retained earnings

What is the Accounting Equation that tests if your balance sheet is correct?

Assets equal Liabilities plus Equity

R&D Department

designs the product line, invents and revises products

Marketing Department

prices and promotes products, handles sales forecasts

Production Department

decides how many units to manufacture and manages assembly lines

Finance Department

raises money and manages the company's financial resources

Foundation Spreadsheet

the tool used to enter all departmental decisions

Rehearsal Tutorial vs Practice Rounds

Rehearsal is a scripted walkthrough; Practice Rounds let you compete for real before the simulation resets

Decision Audit

a complete record of all past team decisions, used to spot strengths and weaknesses

R&D and Marketing

R&D makes sure products meet what Marketing says customers want

R&D and Production

Production buys assembly lines for new R&D products; must be told if a product is discontinued

Marketing and Production

Marketing's forecasts guide Production's manufacturing quantities and capacity needs

Marketing and Finance

Marketing works with Finance to project revenue and set accounts receivable policy

Finance and Production

Production tells Finance what it needs for equipment; Finance can ask Production to scale back

Finance's watchdog role

Finance reviews all other departments' decisions for realistic forecasts, pricing, and capacity needs

Market segments

groups of customers with similar needs, like Low Tech and High Tech

Price criteria by segment

Low Tech wants cheap products, High Tech will pay more

Age criteria by segment

High Tech wants new products, Low Tech prefers proven ones

MTBF criteria by segment

High Tech wants higher reliability, Low Tech accepts lower

Positioning

combination of a product's size and performance

Perceptual Map axes

size on the vertical axis, performance on the horizontal axis, both 0 to 20

Low Tech segment position

wants large, slower-performing products (upper-left on the map)

High Tech segment position

wants small, faster-performing products (lower-right on the map)

Segment drift rate difference

High Tech segments drift faster and farther than Low Tech

Segment overlap over time

shrinks each year as High Tech moves faster than Low Tech

Criteria that change yearly

only positioning criteria changes each year

Criteria that stay constant

price, age, and MTBF criteria stay the same every year

Buying criteria importance

each segment weighs Price, Age, MTBF, and Positioning differently

Perfect customer survey score

requires ideal position, lowest price, ideal age, and top MTBF — score of 100

Rough cut circle radius

4.0 units from segment center

Fine cut circle radius

2.5 units from segment center

Positioning rough cut penalty scale

1% loss near fine cut edge up to 99% loss near rough cut edge

Price range per segment

$20.00 wide, with lower prices scoring higher

Price rough cut penalty

each dollar outside the range cuts about 10% of the score, up to $9.99

MTBF range per segment

6,000 hours wide, with higher MTBF scoring higher

MTBF rough cut penalty

each 1,000 hours below range cuts about 20% of the score, up to 4,999 hours

Age score rough cut

none — a product is never too young or old to be considered

The 4 P's

Price, Product, Promotion, Place — used to build the customer survey score

Awareness

built by the promotion budget; % of customers who know the product exists

Accessibility

built by the sales budget; ease of interacting with the company

Accounts receivable and score

longer payment terms protect the score; 0 days cuts it 40%

Base score calculation

convert each buying criterion's importance % into points, then score the product against the ideal

Stock out

when a product runs out of inventory and loses sales to competitors

Seller's market

when segment demand exceeds supply, so customers accept even poorly-scoring products within the rough cut

Product limits

a company must have 1 to 5 products

R&D project timing

all projects begin January 1; unfinished projects lock further changes on that product

Repositioning direction

usually moves a product down and to the right on the map

New product naming rule

must start with the same letter as the company name

Assembly line lead time

capacity/automation must be bought the year before a new product launches

Six-month R&D project cost

$500,000

One-year R&D project cost

$1,000,000

Automation and R&D speed

higher automation slows down short repositioning moves

Price appeal rough cut

appeal drops to zero $10 above or below the price range

$1,500,000 promotion budget effect

adds about 36% awareness

$3,000,000 promotion budget effect

adds just under 50% awareness (diminishing returns)

Awareness maintenance budget

about $1,400,000/year keeps 100% awareness

Accessibility maintenance budget

about $3,500,000 combined keeps 100% accessibility

First-shift capacity

units producible in a year with one 8-hour shift

Second shift output

doubles capacity but costs 50% more in labor

Capacity unit cost

$6 for floor space plus $4 per automation point

Selling capacity

recovers $0.65 per dollar of original investment