Confront the Brutal Facts Chapter 4

In the 1950’s, A&P was a leading retailing organization while Kroger was half its size.

Over the years as times began to change Kroger started seeing returns 80 times greater than A&P.


As America started changing (people wanted bigger stores with more choices, etc.), they both A&P and Kroger knew about this, but only one company did anything about it.

Kroger faced the brutal facts and decided to change.

Under successor Ralph Burger, A&P was operating like it always had been.

Burger would ask questions such as “What would Mr. Hartford do?” And he would say things like, “You can’t argue with 100 years of success.”

A&P even opened up a chain called The Golden Key.

This store did not sell A&P products, it more so ran like a superstore, and customers really liked it. But since it was not giving executives the results they hoped for they shut it down.

Kroger started experimenting too and realized that customers liked the superstore approach, so they ran with it.

4 Approaches to Create a Climate Where Truth is Heard:

Approach 1

1. Lead with questions, not answers.

Alan Wurtzel’s company was on the brink of bankruptcy, but he was able to turn it around by asking questions.

Wurtzel was stated as being one of the few CEOs in a large corporation who put more questions to his board members than they put to him.

He would constantly be asking his executive team question after question.

Being a good to great company means being humble enough to acknowledge you don’t understand enough to have all the answers.

Approach 2

2. Engage in dialogue and debate, not coercion.

Ex. Nucor was on the verge of bankruptcy. But after many long years it became the leading American steel company.


First, they had the correct leader, Ken Iverson

Second, he got the right people on the team.

Third, the team did not have the “answer” of how to be the best.

Fourth, they would yell, pound tables, and wave their arms in meetings (they would argue and debate).

Through a process of what seemed like heated scientific debate people looked fro the best answers.

4 Approaches to Create a Climate Where Truth is Heard:

3. Conduct Autospies, without blame

Joe Cullman goes on to say how he blames himself for the fact that the 7UP Company did not work out.

He took blame on himself when it was due

But if you have the right people on your team you almost never need to assign blame, you need to only search for understanding and learning.

4 Approaches to Create a Climate Where Truth is Heard:

4. Build a “red flag” mechanisms

Companies have access to a lot of information, but what they do with that information matters greatly

Graniterock implemented short pay. Short pay was when the customer pays how much he felt the product was worth.

Bruce Woolpert instituted this idea at Graniterock and said, you have get a lot of information from customer surveys, but with short pay you are more likely to listen to their response.

Unwavering Faith

Ex. Procter & Gamble became the leader in its industry and Scott Paper resigned itself to second place. Kimberly- Clark didn’t take second place as an option, and they viewed Procter & Gamble as an asset that would make them stronger.

Never giving up is key when facing the brutal facts.

The Stockdale Paradox

Admiral Jim Stockdale was a prisoner-of-war in Vietnam, who faced his current realities head on instead of trying to avoid reality.

He was unlike the “optimists” who would always say the end of their imprisonment was coming.

Retain faith that you will prevail in the end, regardless of the difficulties and at the same time confront the most brutal facts of your current reality.

Ex. Kroger was like Stockdale

A&P was like the optimists who though the end was always near.


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