These are notes from the book "Good to Great" by Jim Collins
They are not sorted in any particular order. I would strongly recommend the whole book to any tech leader, because these notes are highly contextul to myself and the current phase in my journey.
As one of my favorite professors once said, “The best students are those who never quite believe their professors.” True enough. But he also said, “One ought not to reject the data merely because one does not like what the data implies.” I offer everything herein for your thoughtful consideration, not blind acceptance. You’re the judge and jury.
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To use an analogy, the “Leadership is the answer to everything” perspective is the modern equivalent of the “God is the answer to everything” perspective that held back our scientific understanding of the physical world in the Dark Ages. In the 1500s, people ascribed all events they didn’t understand to God. Why did the crops fail? God did it. Why did we have an earthquake? God did it. What holds the planets in place? God. But with the Enlightenment, we began the search for a more scientific understanding—physics, chemistry, biology, and so forth. Not that we became atheists, but we gained deeper understanding about how the universe ticks.
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In these cases, the towering genius, the primary driving force in the company’s success, is a great asset— as long as the genius sticks around. The geniuses seldom build great management teams, for the simple reason that they don’t need one, and often don’t want one. If you’re a genius, you don’t need a Wells Fargo–caliber management team of people who could run their own shows elsewhere. No, you just need an army of good soldiers who can help implement your great ideas. However, when the genius leaves, the helpers are often lost. Or, worse, they try to mimic their predecessor with bold, visionary moves (trying to act like a genius, without being a genius) that prove unsuccessful.
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The Nucor system did not aim to turn lazy people into hard workers, but to create an environment where hardworking people would thrive and lazy workers would either jump or get thrown right off the bus. In one extreme case, workers chased a lazy teammate right out of the plant with an angle iron.
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Letting the wrong people hang around is unfair to all the right people, as they inevitably find themselves compensating for the inadequacies of the wrong people. Worse, it can drive away the best people. Strong performers are intrinsically motivated by performance, and when they see their efforts impeded by carrying extra weight, they eventually become frustrated.
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It might take time to know for certain if someone is simply in the wrong seat or whether he needs to get off the bus altogether. Nonetheless, when the good-to-great leaders knew they had to make a people change, they would act.
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The good-to-great companies made a habit of putting their best people on their best opportunities, not their biggest problems. The comparison companies had a penchant for doing just the opposite, failing to grasp the fact that managing your problems can only make you good, whereas building your opportunities is the only way to become great.
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• We found no systematic pattern linking executive compensation to the shift from good to great. The purpose of compensation is not to “motivate” the right behaviours from the wrong people, but to get and keep the right people in the first place.
• The old adage “People are your most important asset” is wrong. People are not your most important asset. The right people are.
• Whether someone is the “right person” has more to do with character traits and innate capabilities than with specific knowledge, background, or skills.
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There is nothing wrong with pursuing a vision for greatness. After all, the good-to-great companies also set out to create greatness. But, unlike the comparison companies, the good-to-great companies continually refined the path to greatness with the brutal facts of reality.
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They all seemed a bit, well, to be blunt, neurotic and compulsive about Pitney’s position in the world. “This is a culture that is very hostile to complacency,” said one executive. “We have an itch that what we just accomplished, no matter how great, is never going to be good enough to sustain us,” said another.
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“How do you motivate people with brutal facts? Doesn’t motivation flow chiefly from a compelling vision?” The answer, surprisingly, is, “No.” Not because vision is unimportant, but because expending energy trying to motivate people is largely a waste of time. One of the dominant themes that runs throughout this book is that if you successfully implement its findings, you will not need to spend time and energy “motivating” people. If you have the right people on the bus, they will be self-motivated. The real question then becomes: How do you manage in such a way as not to de-motivate people? And one of the single most de-motivating actions you can take is to hold out false hopes, soon to be swept away by events.
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... operated with a somewhat Socratic style. Furthermore, they used questions for one and only one reason: to gain understanding. They didn’t use questions as a form of manipulation (“Don’t you agree with me on that? ... ”) or as a way to blame or put down others (“Why did you mess this up? ... ”). When we asked the executives about their management team meetings during the transition era, they said that they spent much of the time “just trying to understand.”
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...all the good-to-great companies had a penchant for intense dialogue. Phrases like “loud debate,” “heated discussions,” and “healthy conflict” peppered the articles and interview transcripts from all the companies. They didn’t use discussion as a sham process to let people “have their say” so that they could “buy in” to a predetermined decision. The process was more like a heated scientific debate, with people engaged in a search for the best answers.
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He set the tone: “I will take responsibility for this bad decision. But we will all take responsibility for extracting the maximum learning from the tuition we’ve paid.”
When you conduct autopsies without blame, you go a long way toward creating a climate where the truth is heard. If you have the right people on the bus, you should almost never need to assign blame but need only to search for understanding and learning.
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Kimberly-Clark, on the other hand, viewed competing against Procter & Gamble not as a liability, but as an asset. […] At one internal gathering, Darwin Smith stood up and started his talk by saying, “Okay, I want everyone to rise in a moment of silence.” Everyone looked around, wondering what Darwin was up to. Did someone die? And so, after a moment of confusion, they all stood up and stared at their shoes in reverent silence. After an appropriate pause, Smith looked out at the group and said in a somber tone, “That was a moment of silence for P&G.”
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Another long pause, and more walking. Then he turned to me and said, “This is a very important lesson. You must never confuse faith that you will prevail in the end – which you can never afford to lose – with the discipline to confront the most brutal facts of your current reality, whatever they might be.”
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Charisma can be as much a liability as an asset, as the strength of your leadership personality can deter people from bringing you the brutal facts.
Leadership does not begin just with vision. It begins with getting people to confront the brutal facts and to act on the implications.
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Characteristics of the Council
- The council exists as a device to gain understanding about important issues facing the organization.
- The Council is assembled and used by the leading executive and usually consists of five to twelve people.
- Each Council member has the ability to argue and debate in search of understanding, not from the egoistic need to win a point or protect a parochial interest.
- Each Council member retains the respect of every other Council member, without exception.
- Council members come from a range of perspectives, but each member has deep knowledge about some aspect of the organization and/or the environment in which it operates.
- The Council includes key members of the management team but is not limited to members of the management team, nor is every executive automatically a member.
- The Council is a standing body, not an ad hoc committee assembled for a specific project.
- The Council meets periodically, as much as once a week or as infrequently as once per quarter.
- The Council does not seek consensus, recognizing that consensus decisions are often at odds with intelligent decisions. The responsibility for the final decision remains with the leading executive.
- The Council is an informal body, not listed on any formal organization chart or in any formal documents.
- The Council can have a range of possible names, usually quite innocuous. In the good-to-great companies, they had benign names like Long-Range Profit Improvement Committee, Corporate Products Committee, Strategic Thinking Group, and Executive Council.
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They had freedom, but freedom within a framework. Abbott instilled the entrepreneur’s zeal for opportunistic flexibility. “We recognized that planning is priceless, but plans are useless,” said one Abbott executive. But Abbott also had the discipline to say no to opportunities that failed the three circles test. While encouraging wide-ranging innovation within its divisions, Abbott simultaneously maintained fanatical adherence to its Hedgehog Concept of contributing to cost-effective health care.
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Throughout business history, early technology pioneers rarely prevail in the end. VisiCalc, for example, was the first major personal computer spreadsheet.
Where is VisiCalc today? Do you know anyone who uses it? And what of the company that pioneered it? Gone; it doesn’t even exist. VisiCalc eventually lost out to Lotus 1-2-3, which itself lost out to Excel. Lotus then went into a tailspin, saved only by selling out to IBM. Similarly, the first portable computers came from now-dead companies, such as Osborne computers. Today, we primarily use portables from companies such as Dell and Sony. This pattern of the second (or third or fourth) follower prevailing over the early trailblazers shows up through the entire history of technological and economic change.
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No, those who turn good into great are motivated by a deep creative urge and an inner compulsion for sheer unadulterated excellence for its own sake. Those who build and perpetuate mediocrity, in contrast, are motivated more by the fear of being left behind.
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Picture a huge, heavy flywheel—a massive metal disk mounted horizontally on an axle, about 30 feet in diameter, 2 feet thick, and weighing about 5,000 pounds. Now imagine that your task is to get the flywheel rotating on the axle as fast and long as possible.
Pushing with great effort, you get the flywheel to inch forward, moving almost imperceptibly at first. You keep pushing and, after two or three hours of persistent effort, you get the flywheel to complete one entire turn.
You keep pushing, and the flywheel begins to move a bit faster, and with continued great effort, you move it around a second rotation. You keep pushing in a consistent direction. Three turns ... four ... five ... six ... the flywheel builds up speed ... seven ... eight ... you keep pushing ... nine ... ten ... it builds momentum ... eleven ... twelve ... moving faster with each turn ... twenty ... thirty ... fifty ... a hundred.
Then, at some point—breakthrough! The momentum of the thing kicks in in your favor, hurling the flywheel forward, turn after turn ... whoosh! ... its own heavy weight working for you. You’re pushing no harder than during the first rotation, but the flywheel goes faster and faster. Each turn of the flywheel builds upon work done earlier, compounding your investment of effort. A thousand times faster, then ten thousand, then a hundred thousand. The huge heavy disk flies forward, with almost unstoppable momentum.
Now suppose someone came along and asked, “What was the one big push that caused this thing to go so fast?”
You wouldn’t be able to answer; it’s just a nonsensical question. Was it the first push? The second? The fifth? The hundredth? No! It was all of them added together in an overall accumulation of effort applied in a consistent direction. Some pushes may have been bigger than others, but any single heave—no matter how large—reflects a small fraction of the entire cumulative effect upon the flywheel.
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