The sub-title of "Good to Great," Why Some Companies Make the Leap...and Others Don't, reveals the purpose of this book. Collins determined to find out why some companies made the leap from good companies to great companies and others did not.
To find how companies go from good to great, he first needed to identify great companies. He looked for companies that had 15-year cumulative stock market returns at or below the general market with a transition point followed by a period of returns above the market over a 15-year period. The companies needed to exhibit a "good-to-great" pattern. All companies were compared to the other to ultimately determine what distinguished good-to-great companies from the others. Eleven good-to-great companies were identified: Abbott, Fannie Mae, Kimberly-Clark, Nucor, Pitney Bowes, Wells Fargo, Circuit City, Gillette, Kroger, Philip Morris, and Walgreens. Collins found numerous celebrated factors. I found that "Good to Great" is one of the most referred to books in leadership study.
If leaders find the results of "Good to Great" important, then employees should know what they are.
One of the more surprising results of his findings was the type of leadership needed to turn a good company great. Collins refers to this kind of leader Level 5 leadership. Level 5 leadership refers to the highest level of executive capabilities. They combine extreme personal humility with intense professional will, i.e. they shun celebrity status and direct their ambition toward the goal of being a great company. See the breakdown below.
Level 5 Leader - Executive Leader
They build enduring greatness through a paradoxical blend of personal humility and professional will.
Level 4 Leader - Effective Leader
They catalyze commitment to and vigorously pursuit of a clear and compelling vision, stimulating higher performance standards.
Level 3 Leader - Competent Leader
They organize people and resources toward the effective and efficient pursuit of predetermined objectives.
Level 2 Leader - Contributing Team Member
They contribute individual capabilities to the achievement of group objectives and works effectively with others in a group setting.
Level 1 Leader - Highly Capable Individual
They make productive contributions through talent, knowledge, skills, and good work habits.
One of the primary tasks in taking a company from good to great is to create a culture where a people have a tremendous opportunity to be heard and for the truth to be likewise heard. Leaders must engage in four practices:
- Lead with questions, not answers.
- Engage in dialogue and discussion, not coercion.
- Conduct "autopsies" (reasons why things happened), without blame.
- Build red flag mechanisms that turn information into information that cannot be ignored.
Begin With Who Before What
It was surprising to Collins to find out that before vision and strategy was formed, Level 5 leaders began by hiring the right people. They got the wrong people "off the bus," then they put the right people "on the bus." They loaded the bus before they determined where they were going. Rephrasing an old adage; not "people are your most important asset," but "the right people are your most important asset."
Confront the Brutal facts and NEVER LOSE FAITH
You must maintain unwavering faith that you can and will prevail in the end, regardless of the difficulties, and at the same time have the discipline to confront the most brutal facts of your current reality, whatever they might be.
Be a Hedgehog
Collins asks, "Are you a hedgehog or a fox?" The fox knows many things, is cunning, and can devise strategies to attack the hedgehog. The hedgehog knows one thing--one big thing--to roll up into a ball with pointy quills sticking out all over. Foxes pursue many ends at the same time and see the world in all its complexity. Hedgehogs simplify a complex world into a single organizing idea, a basic principle or concept that unifies and guides everything. Leaders that build good-to-great companies are, to one degree or another, hedgehogs. They use the hedgehog nature to drive toward a Hedgehog concept--a single concept that flows from deep understanding of three driving questions:
- What are you the best in the world at doing?
- What drives your economic engine?
- What are you deeply passionate about?
These are the drivers of great companies. An adage of mine applies here, "Just because you can does not mean that you should." Just because a company has an idea for expansion or growth, does not mean they should embark on it. Excellence, economic drivers, and passion should all steer the organization.
A Culture of Discipline
Few companies have a culture of discipline. With discipline there is little need for hierarchy and with disciplined thought, you don't need bureaucracy and when you have disciplined action, you don't need excessive controls. "When you combine a culture of discipline with an ethic of entrepreneurship, you get the magical alchemy of great performance." (p. 19) Disciplined culture can only be achieved if you have the right people. Many companies are one good fire and one good hire away from success.
Technology Accellerators
Good-to-great thinking companies think differently about the role of technology. They excel in applying carefully selected technology. Technology itself is not a cause of great companies.
The Flywheel and the Doom Loop
Good-go-great is a process enacted over time. There is no single defining action, no grand program, no one killer innovation, no solitary lucky break, no miracle moment. The process resembles relentless pushing by a giant heavy flywheel in one direction, turn upon turn, building momentum until a point of breakthrough.
APPLICATION FOR EMPLOYEES
Are you the "right person" for the job?
Are you the "right person" for the job?
I began leadership studies in earnest in 2007. I found that virtually every serious student of leadership was aware of Jim Collins book. Through the years, I have heard many leaders and managers refer to Good to Great. Most of the comments were about Level 5 leadership humility and the "bus" illustration. Chapter 3 is dedicated to this idea.
The executives who ignited the transformations from good to great did not first figure out where to drive the bus and then get people to take it there. No, they first got the right people on the bus (and the wrong people off the bus) and then figured out where to drive it. They said, in essence, "Look, I don't really know where we should take this bus. But I know this much: If we get the right people on the bus, the right people in the right seats, and the wrong people off the bus, then we'll figure out how to take it someplace great." p. 41
Early in my career, my naive notion about jobs was to find someone willing to hire you for the job and develop and learn what to do. After all, I have seen scores of people hired on the basis of who they know as opposed to what they know. I thought that intelligence and willingness was enough to be attractive to would be bosses. This is a antiquated process of getting and keeping a job.
Employers today are looking for intelligent and experienced workers and are less tolerable with employees that will not help them become great.
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WOW, there is so much meat in here I almost feel overwhelmed! Where to start? I was wondering if you could tell us more about "a paradoxical blend of personal humility and professional will"--that seems, well, paradoxical.
ReplyDeleteOn your recommendation, I offered this book to a friend several years ago. After reading this, I'm going to add it to my library.
I will definitely have to look into this book.
ReplyDelete