A few years after completing my MBA and two years after starting my own business, one of my Business School professors brought me Jim Collins’ 2001 book, ‘Good to Great‘. It’s rare a business text has me hanging on its every word, but this one surely did, and still does a dozen or so years later. I go back to it regularly to ‘sanity check’ my own business management. It always highlights something I’m not doing and puts me back on the right road.
If you’ve not come across it yet, I earnestly implore you to give it a read. The quick premise is: there are loads of ‘OK to good’ businesses, products, performance & staff – but what sets apart the GREAT businesses with GREAT performance? Collins went right back through the history books to find companies that achieved truly outstanding performances, well above the market, and compared them to similar companies who’d had the same opportunities to be great in the same market at the same time, but somehow didn’t do it.
Collins found that each of the ‘Great’ companies did the exact same things in the exact same order. Here they are:
- The GREAT companies all had “Level 5 leaders” ~ a work horse, not a show pony; they lead by example; they would never ask staff to do anything they wouldn’t do themselves.
- They were humble but purposeful – they blamed errors on themselves, and celebrated wins on everyone else doing things right (‘The Mirror and the Window’)…how many managers do you know that do the direct opposite?
- Hire only the best ~ make no compromises if unsure; if you don’t think they’re right, don’t hire; if they are not working out, get rid of them fast
- Happy productivity ~ happy staff doing good work, achieving results… means motivated staff, means better content/products means happy clients, mean profits made & happy shareholders
- get the “right people on the bus, in right seats; wrong people off the bus”
- staff are the ONLY competitive difference these days
3. CONFRONT BRUTAL FACTS
- Collins talks about the ‘Stockdale Paradox‘, a terrific story of a General imprisoned in the Hanoi Hilton during the Vietnam War; he found that those that did not make it were the eternal optimists (‘we’ll be out by Christmas…’). Those that did make it out had faith they’d prevail in the end, but they absolutely had a handle on where they were right now and how to deal with it.
- Brutal Facts; bring the bad news, do not brush this under the carpet; if things are smelling bad, deal with them
4. HEDGEHOG PRINCIPLE
- a hedgehog understands one thing it can be best at – it rolls up into a ball and protects itself from danger
- The fox may be clever and have loads of cunning plans, but the hedgehog wins every time
- What can you be #1 in your market(s) at? (If you can’t be #1 in the market, then stop doing it)
- have big hairy audacious goal (many years out) ~ this drives on the business, and keep pressing towards it
- measure the right things ~ fire bullets to calibrate, fire cannons to go big
6. TECHNOLOGY as ACCELERATOR
- tech is not as end in itself, but is used to accelerate growth (such as a new systems)
- don’t get blindsided by technology for tech’s sake; go for the minimum viable product and get it it there and use it as you go
7. THE FLYWHEEL
- Another great analogy is the flywheel ~ imagine a huge one that takes all your effort to move one inch; as more of you come in and help, you get it moving and after a while it builds a momentum of its own
- which push is the decisive one? None of them, argues Collins, but together it works
- so keep doing those million little things well
This is but a humble overview of the main 7-stage model. If you don’t even do stage 1, none of the other 6 stages will make you great. You have to do all 7.
For more, get the book – you’ll not regret it. And don’t listen to Collins’ critiques (there are a few)… they probably found it too hard to do. For building a great business is no easy, one breakthrough matter. It can take years and years.
But it’s worth it.