Good to Great Review

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I just finished a library book by Jim Collins called Good to Great: Why Some Companies Make the Leap… And Others Don’t. I wasn’t really sure what I was getting myself into when I started, because most self-help/leadership books that I’ve read have all kind of said the same thing. “Hey, everybody, you need to treat everyone nice. Lead by example. Be a servant leader. Manage your time well, only check your email twice a day.” There’s probably some truth to all of that, but I was looking for something different in this book. I’ve been struggling with the fact that I have some good employees that have the potential to be excellent. And I’ve been asking myself how I can help push them over the fence toward CONSISTENT LEGENDARY CUSTOMER SERVICE.

On a secondary level, I had been looking for more productivity in my community service – how to surround myself with hard workers, identify a need, and succeed in meeting it. This book tackles both of these questions head on.

Good is the Enemy of Great

Jim starts out by talking about his research team. Unlike many of these types of books, he did not throw theories at his readers, he did not hypothesize, he did not type in capital letters to GET HIS AUDIENCE EXCITED!!! Instead, he and his team spent 6 years looking at companies that spent 15 years or more being average or worse, had a moment of change, and then spent at least 15 years performing at least 3 times better than their industry & general stock market (what he calls a GOOD TO GREAT company). He then compared these companies to companies that continued to perform average or worse, as well as companies that had a moment of change with temporary results but were not able to sustain it (what he considers a GOOD company).

He begins by pointing out the difficulty in becoming GREAT if you are simply GOOD. The opposite of great is not terrible, it is good. When you are terrible, there is a definite motivation to improve (your job or your company may be on the line), but when you are good there is often no immediate threat to your stability and it is very easy to remain average. The book explores the how’s and why’s of companies that broke the mold and became great while other companies around them remained simply good. The following is a brief summary of what I took away from this book.

Level 5 Leadership

I had never heard of Level 5 Leadership until I started this book. From what I understand, this theory implies that there are five levels to leadership, each building on the last. The fifth and highest level indicates the perfect leader – someone who is humble, yet also very rigorous. Someone who avoids the personal spotlight, yet deeply desires for their company to achieve excellence. The idea here is someone that has a dual nature – someone who possesses personal humility and professional will, who encourages questions & debates but will not stand for anything less than excellence. These leaders give credit for their success to those around them while shouldering responsibility for the company’s shortcomings.

In the comarison companies, Jim and his team found that the most charismatic leaders were hindered by their charisma. Level 5 leaders will not waste time being showy, they will quietly seek results. And more often than not, they will get them.

First Who… Then What

One of the most interesting pieces of information was that these Level 5 Leaders did not necessarily come in with a new direction. The common theme had less to do with where they were taking the company, and more to do with the people that would carry it. The analogy that Jim uses is a bus. The first priority was to get the right people on the bus, in the right seats, and then to get the wrong people off the bus. THEN you worry about figuring out where you are taking the bus.

He affirms that the RIGHT people do not need to be micro-managed and do not need to be motivated to reach for excellence. If they are the right person, they will not settle for anything less than excellence. If that doesn’t describe you (or your employees), it might mean that you (or they) are in the wrong seat, or it may mean that you/they are on the wrong bus entirely. The Level 5 Leaders spent a good deal of time and resources making sure that everyone was where they were supposed to be so that everyone would win.

Confront the Brutal Facts (yet never lose faith)

A common theme among all of the Good to Great Companies was that there was some sort of change or shift in the company or in the industry that presented a great challenge for the company. Companies responded to these shifts in a number of ways. 1) They buried their head in the sand and continued with business as usual until they became irrelevant and were eventually bought out. 2) They chased growth for growth’s sake and generally made unwise investment choices because they were knee-jerk reactions. 3) They locked themselves in a meeting room where they were brutally honest about the situation that they found themselves in and fully realized that there needed to be some sort of a change. The Good to Great companies obviously chose #3 – but it didn’t stop there. In addition to recognizing a changing landscape, these companies maintained their faith that they were going to pull through and thrive as a company.

The Hedgehog Concept (3 circles)

Once there was agreement that something had to be done to preserve the company, the obvious question is “What the heck do we do now?!” Jim and his team found a pattern that, in my personal opinion, is probably the biggest gem in this book. These companies asked themselves three questions (Jim calls this the 3 Circles), and wherever these questions intersect means that you are FREAKING ONTO SOMETHING BIG!

1) What could we be the best in the world at?
2) What makes the best financial sense?
3) What are we the most passionate about?

When you argue and debate and hash out these questions until the answer to all three of them are the same answer, you have your big idea. The next part is the hard part: Once you have the answer to these three questions, that answer drives your business. You chase no rabbits, you make no acquisitions that do not build on the 3 Circles, and you do not change course.

There are a couple of other themes that he presents in this book that I thought were worth blabbing about. The companies hired disciplined people who engaged in disciplined action using disciplined thought. When you have a 3 Circles Idea that everyone can get behind and pursue almost fanatically, and when you have the right people on the right seats in the bus, it allows a level of professional freedom that eliminates the need for most of the red tape found in most organizations. It also allows the company to create technology that accelerates its momentum toward its NEW BIG ASS GOAL rather than create technology for technology’s sake. #disciplinedtechnology?

The last point that Jim and his team brings up is that these are big changes, but changes that generally happen slowly. Like somebody pushing a heavy wheel barrel (he uses a flywheel analogy but since I don’t know what that is, I’m using a wheel barrell), the first steps are the worst and the slowest, but as you gain momentum it carries itself.

What’s really cool is that these points are written about businesses, but they can apply to anything – is there a way that we can implement some of these ideas in the way that we approach community development or fundraising or any of our other slacktivities?

 

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