ABPLAN's role in urging you to go for great
We do not imply that we are able to offer a Jim Collins' version of a "Good to Great " programme. Perhaps you might doubt your ability to put his approach into place in your organisation. However, we have experienced that some clients have the mindset of "Why not? Let's give it a go!"
We have the proven ability to develop a customized turnkey project for you - which will put you on the road to greatness.
So read on to find out what "greatness" is.
"Good is the enemy of Great."
Prof Jim Collins stated this as opening sentence of his remarkable publication Good to Great. He went on to say: "And that is one of the key reasons why we have so little that becomes great. We don't have great schools principally because we have good schools. We don't have great government, principally because we have good government. The vast majority of companies never become great, precisely because the vast majority become quite good - and that is their main problem."
"Can a good company become a great company and, if so, how?"
In 1996, Jim Collins and 21 research associates set out to answer this question. The study was conducted over five years and examined 1 435 Fortune 500 companies.
The finding was: Greatness is not a function of circumstance. Greatness is largely a matter of conscious choice.
Flywheel, build-up and breakthrough
What follows is an overview of the framework and concepts.
First, think of a flywheel, which captures the entire process of going from good to great. Then think of the transformation from good-to-great as a process of build-up followed by breakthrough. The process is broken into three broad stages: disciplined people, disciplined thought and disciplined action. Within each of these three stages, there are two key concepts.
Stage One: Disciplined people
This stage has to do with leadership and appointing the right people.
Level 5 Leadership: The team found that the type of leadership required for turning a good company into a great one was not a high-profile type of leader with big personalities who makes headlines. The good-to-great leaders seem very ordinary. Their strength is that they show a paradoxical blend of personal humility and strong professional will.
Collins observes: "Level 5 leaders channel their ego needs away from themselves and into the larger goal of building a great company. It's not that Level 5 leaders have no ego or self-interest. Indeed, they are incredibly ambitious - but their ambition is first and foremost for the institution, not themselves."
First Who ...Then What. The expectation was that good-to-great leaders would begin by setting a new vision and strategy. Instead "they first got the right people on the bus, the wrong people off the bus, and the right people in the right seats - and then they figured out where to drive it."
Collins observes that the old adage "People are your most important asset" turns out to be wrong. "People are not your most important asset. The right people are."
Stage Two: Disciplined thought
Once you have disciplined people on board, you need to:
Confront the Brutal Facts (Yet Never Lose Faith). Every good-to-great company embraced this paradox: 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.
Please give careful attention to the next sub-requirement of disciplined thought.
The Hedgehog Concept (Simplicity within the Three Circles)
To go from good to great requires transcending the curse of competence. Just because something is your core business - just because you've been doing it for years or perhaps even a decade or more - does not necessarily mean that you can be the best in the world at it. "And if you cannot be the best in the world at your core business, then your core business absolutely cannot form the basis of a great company."
Collins and his team found that all-good-to-great companies attain a very simple concept that they use as a frame of reference for all their decisions, and this understanding coincided with breakthrough results. This concept flows from a deep understanding about the intersection of three circles:
Circle 1: What are you deeply passionate about? The good-to-great companies focus on those activities that ignite their passion. The idea is not to stimulate passion but to discover what makes you passionate.
Circle 2: What you can be the best in the world at (and, equally important, what you cannot be the best in the world at)? This discerning standard goes far beyond core competence.
Circle 3: What drives your economic engine? You have to attain piercing insight into how to most effectively generate sustained and robust cash flow and profitability. In particular discover the single denominator - profit per... - that has the greatest impact on the economics of your organisation. It is easy to work with a number of economic generators. If you could pick one and only one ratio to systematically increase over time, what ratio would have the greatest and most sustainable impact on your economic engine?
Good-to-great companies stick to what they understand and let their abilities, not their egos, determine what they attempt.
Collins cautions: A Hedgehog Concept is not a goal to be the best, a strategy to be the best, or an intention to be the best. It is a deep-down DNA understanding of what you can be the best at. This distinction is absolutely crucial. You should also know what you cannot be the best at.
Understanding what can you can be the best in the world at requires brutal honesty and an absence of wishful thinking.
The Hedgehog Concept requires a severe standard of excellence.
It is not just about building on strength and competence, but about understanding what your company truly has the potential to be the very best at and sticking to it. Ask: What can I potentially do better than any other company/organisation in my business?
A personal observation: I agree with Jim Collins about the concept of focus and figuring out what your company truly can be great in and then pursuing your chosen course.
However, I also advise my clients to take careful note of trends within the external environment. One has to be open and one has to be able to adapt. The turbulent times in which we find ourselves requires this of us. The scenario conversation or scenario planning is in essence "foxy".
Stage Three: Disciplined action
This stage concerns disciplined execution and the use of technology.
A culture of discipline
All companies have a culture, some companies have discipline, but few companies have a culture of discipline.
- When you have disciplined people, you don't need hierarchy.
- When you have disciplined thought, you don't need bureaucracy.
- When you have combined a culture of discipline with an ethic of entrepreneurship, you get the magical alchemy of great performance.
Paradoxically, entrepreneurship only blossoms in a disciplined environment. If you appoint people who are not right, you need regulations and rules to ensure that they know what and how to do things. With the right people you do not need a bureaucracy. On the other hand, an organisation needs discipline. It's like flying a plane. One has to set up a system, go through checklists, taxi, take off, fly and land by the book - but at critical moments the pilot has to use his initiative and knowledge to cope with unforeseen emergencies e.g. a side wind, bad weather, technical problems, aborting a landing, etc. You need to put in place a functioning environment which will free you to attend to being a creative organisation.
Discipline is also the heart of execution. Once you have a vision you have to have the discipline of execution.
Technology accelerators
Good-to-great companies think differently about technology. They never use technology as the primary means of igniting a transformation. Yet, paradoxically they are often pioneers in the application of carefully selected technologies and thus accelerate their company's growth from good to great.
In the 21st century technology simply is part of strategy - but technology does not provide the main solution. It's having the right technology and knowing how to use it to its maximum or even using it more resourcefully than the inventor / developer intended.
Getting it right or wrong
The Flywheel
No matter how dramatic the end results, the good-to-great transformations never happened, Collins' research showed, in one fell swoop. Collins warns that those who launch dramatic change programmes, or restructurings will almost certainly fail to make the leap from good to great. The process resembles relentlessly pushing against a heavy flywheel in one direction, movement by movement, and building momentum until a point of breakthrough, and beyond.
Collins observes that the 12 great companies that came out on top in their listing did not become great overnight. The process of getting things aligned on average takes about four years. In many instances it took longer.
Should you wish to become great we will work towards the goal of getting the right elements in place which will take your company through build-up to breakthrough.
The doom loop
The alternative is just carrying on as is - or the doom loop.
Many of the paragraphs which you just read contain thoughts and phrases from Collins' publication. It is our recommendation that every leader or manager should purchase a copy of this must-read, major publication. It is not a matter of just reading these few paragraphs or about spending a few hours in a strategy session. Absorb the insights developed by Collins and really think matters through.
- What should you be doing? In what aspect of your work and industry can you be the best?
- What is hindering you from achieving it?
- How do you have to structure your company?
- Which systems must be in place?
- How do you have to lead and manage?
- Does your present company culture support your strategy?
It is essential that you attend to these matters. The answers about what to do strategically may not come to you that quickly. It is worth the effort.
Jim Collins' discussion guide
Download a discussion guide containing a series of very practical discussion questions from Jim Collins' Web site which will broaden your understanding of the various concepts developed by him.
Good to Great culture
Any company could take the decision to build a Good to Great culture. See company culture.
Company greatness starts with personal greatness.
Also visit scenario planning which is a fox's approach that, I believe, complements and strenghtens Collin's hedgehog approach.
For details about Good to Great, Jim Collins' major and highly acclaimed publication, please go to worth reading.
Last modified: 27-07-2009