I realize that I'm late to the party, but last month I read Jim Collin’s book, Good to Great, about companies who made the shift from good to great and their 'comparison companies' who did not. At first I was skeptical that this was just another book analyzing companies and it would be very dry and the findings would be well, obvious. However, this book was very helpful in understanding what makes a great company and how the other companies who were in the same industry and had similar opportunities failed in comparison.
Some of the findings seemed obvious at the surface, but reading about the unique ways the great companies truly used these methods and how horribly wrong the comparison companies acted gave an interesting perspective. By addressing 8 crucial topics, this book offers the chance to reflect on your own business and evaluate whether or not your company is holding true to its core values and passions.
- Level 5 leadership.
Everyone knows that leadership is important, but they don't necessarily know what makes a great leader. There are many different types of leaders, but what makes a leader truly effective is their ability to look for solutions instead of blaming others. It’s crucial that the leader is willing to get their hands dirty rather than focusing on the glory. A great leader will also plan for the future of the business even when it exceeds their leadership term and set up their successor to achieve even greater success.
- Right people on the bus and in the right seats.
When problems arise in the company, many will look for someone to blame and will focus on that particular person rather than the problem itself. A great company will first make sure they have the right people on their team (on the bus) before even creating the strategic direction of the company, and then it will determine if the employees are in the right position (in the right seats). If an employee isn't succeeding in their role, the problem may not be that they are a bad fit for the company. Instead, it could be that their role doesn’t play to their strengths and they are simply in the wrong seat.
- Confront the brutal facts.
The human body’s natural reaction to a difficult situation is fight or flight. When a problem arises, some choose to hide from the problem. A great company will instead take that problem head on and not be afraid to make a change. A great lesson learned from Good To Great is that the great companies were not afraid to listen to the data and to what their consumers were telling them. Once they were aware of a problem or a growing consumer trend, they acted quickly and were willing to pivot the company to better fit their customers’ needs.
- Be a hedgehog.
There are two distinct types of companies--foxes and hedgehogs. The fox is very clever, but chases too many opportunities at once and becomes unfocused. On the other hand, the hedgehog is extremely focused and does one thing, and does it perfectly. The fox tries many strategies to catch the hedgehog, where the hedgehog only needs to roll up into a ball to protect itself. Your company needs to find its one big thing that it can be great at and focus on that to drive the business.
- Stay disciplined.
Once you figure out what your hedgehog framework is, you need to stay focused and stick to it. “Stop doing” lists are more important than “to do” lists.
- Does it fit?
Shiny objects, especially when it comes to technology, are huge distractors for companies. Companies are often worried that they are going to be left behind or that they need to be first for everything. As a result, they can be easily distracted by new trends that might not fit their business or their hedgehog. Technology should be used as an accelerator of momentum, not a creator of it. Only utilize new technology if it is going to propel success and deliver results!
- Flywheel vs. Doom Loop.
The doom loop is when a company is reactive, overextended, delivering disappointing results, and is stuck in a loop of recurring failure. The flywheel is where a company begins to see success and builds upon it. Success or failure does not occur suddenly, so be patient. Once you start to see success, build upon it and it will give you the momentum you need to become a great company.
- Built to last.
Jim Collin’s first book, Built To Last, focused on companies that are able to achieve success and withstand the test of time. The principles are that you don’t need to have a great idea, but instead a foundation that can prosper beyond any leader. Your company also should set seemingly unachievable goals to achieve unprecedented success (discover your Big Hairy Audacious Goal).
Overall, my biggest realization after reading this book is the concept of identifying the obstacles and having the right people to solve them. I would love to see these concepts applied to the current industry leaders to speculate if they will make the transition to great or be overtaken by the competition.
We’d love to hear your thoughts, comment below on your lessons learned from Good To Great.
Featured Photo, Phoenix. StringCan Interactive. 2014.