I was really looking forward to hearing Collins speak at last month’s NPODs conference and hopefully to have him answer the one question that bugs me about his book “Goood to Great”. The thing I didn’t understand was “How can you know the ‘right’ people before you know what you want to aim for?
Jim is an energetic speaker who opened with a ‘left hook’ – “good is the mortal enemy of great” and finished with a right jab – his current research is showing that the “signature of mediocrity is not resistance to change, as they had suspected, but a chronic inconsistency” Hmmm.
I liked knowing that his research is grounded in ‘contrast’ aka twin studies in psychology. Colleague Porras twigged to the idea that organisations have twins too – so their research approach is to look for the impacts of “nature” and “nurture”. The conclusion is that greatness is not a function of environment or circumstances but of choices and discipline – sounds like nurture to me.
Anyway to cut a long story short – you can read my summary notes below if you are interested in the long story – he did give us an answer to my question of “how do you choose ‘who’? and the answer is “choose based on values”. You first select “who” by choosing people who share your common values and then you collectively decide what. Of course – it all makes sense now. He also said that you cannot make people share your values, only find those who already believe in them. Interesting….
Back to the long story (and note that this is more of a draft – otherwise I will never publish it). Collins obviously knew the audience consisted of public and private sector managers and consultants. His view is that it is the wrong path for the social sector to say “great = business” because most businesses are average, so if they copy most businesses they will be importing principles of mediocrity not greatness. By implication, it’s OK to copy the business models of the great companies that Collins & previously Porras have identified.
Then he got down to business – reviewing the major messages from Goood to Great – a good refresher.
For those not familiar with the book, the pathway is building a culture of disciplined people / thought / action in that order. First who then what (what being the strategic direction) then how.
He spoke of building greatness as a cumulative process – the first few turns of the flywheel are difficult and then over time it builds its own momentum.
The metaphor is a bit machine-like for me, but some of his other analogies were cute (see later). He talked about interviewing the CEO/ President of Walgreens with a stock chart in front of him, showing the specific moment when the company shifted its trajectory from average performance to outperforming significantly. Collins’ chart showed the shift “happened” on 30 Jun 1975. But the CEO, when questioned about when the transformation happen, said “somewhere between 1971 and 1979”.
Collins said “Imagine the New York Times or Bulletin magazine writing an article “Remarkable transformation from egg to chicken”. For an outsider the transformation happens at the moment the egg shell breaks open, but for the egg/chick the shell opening is just one step in the process of growing, not the step”.
Collins emphasised that the flywheel effect is not about one huge push – trying to get in 10,000 revolutions in a week or month – which the competitor organisations seemed to prefer, but rather a disciplined every day effort to build and sustain momentum. Obviously not everyone’s choice in a “gimme now” world.
Next he talked about ‘the curious incident of the dog in the night’ (a Sherlock Holmes reference). What they found was that mergers and acquisitions didn’t ignite the momentum, nor did infusions of fresh leadership blood – 90% of great organisation’s leaders came from within the organisation. The research team didn’t see visionary, charismatic leadership but they did see leadership that he called level 5 leadership. Hubbard et al from Melbourne found a similar Aussie version – captain-coach leadership – which is committed to a cause, not to self advancement.
The signature of the successful level 5 leaders was humility – a burning ambition for the cause / company / work, not for their own gratification, coupled with a will to do whatever was required (within their values) to achieve it.
He talked a little about the power of the CEO to make such a call because they have 100% power, compared to government, where in his view, no one has much more than 50% power, so big decisions are harder enforce and the skillset may be more about legislative power – being an ‘architect’ who maps out the plan for building the conditions for the right decisions to be made.
Corporate leaders, in comparison, need to build their executive decision making skillset and Malcolm Gladwell added to this subject the following day.
Next came Disciplined Thought – the discipline to confront the brutal facts and the hedgehog concept. He gave a new story, not in the book, about the Centre for the Future of Arizona, who were grappling with how to educate a growing Latino population.
They studied public schools in growing population areas, with poor socioeconomic indicators and looked for patterns in reading. Then they confronted the brutal facts of low reading rates and got the teachers engaged in the cause: “kids will read by the end of grade 3” and continuously tracked their progress.
This, he explained, was an example of the social sector having to spend more time to define what they mean by “great performance” whereas business has much more simple scorecards as long as we understand that $ are both an input and an output.
This linked to Goran Carstedt’s comments about profit being an output but not a purpose.
The description of the hedgehog concept was as per the book – the intersection of three circles / questions:
What are we deeply passionate about?
What are we genetically encoded to be the best at? (Link to recent HBR article about changing the corporate DNA as a long complex process).
What drives our economic engine?
For corporates – what is enough of a valuable contribution to society that they will pay for it? For non-profits and the social / government sector what drives our resource engine ie what will others fund their $, time, volunteers and reputation?
Third thing is Disciplined Action
These orgs have a “To do” list and equally a ‘Not to Do’ list – the discipine to say no, to turn away some types of business in order to be the best at what we do. This reminds me of David Maister – you don’t have a strategy if you never say no to any type of income and the Lynne Twist story of returning a Hunger Project donation that she felt was “guilt money”.
The one area where we are still all equal is time, so it’s how we invest and spend it that makes a difference for orgs. See link to Bower re HBR article “Who owns your strategy?” (your people do, because they decide where they will invest and spend their time). So disciplined action is about constantly reinforcing how we want poeople to act – GE story whether your values matter hinges on what you do with people who are good performers who won’t support the corporate values, same with Vodafone here recently.
The signature of mediocrity, which Collins is studying at the moment, is not resistance to change as they suspected … but chronic inconsistency – the hallmark of the fox. These orgs change too much, not too little.
But… there is a caveat. Great orgs hold tight to their core and they adapt to the environment, otherwise you get great orgs that crash and burn when the market turns a la Peters In Search of Excellence.
Note to self: too much US content, must find more Australian examples – time to review the First XI by Hubbard et al for starters.
Which then lead on to BHAGs and a lunch time reflection that maybe Australians don’t resonate with BHAGs because we are more realistic than optimistic and more responsive than initiating and more fearful of failure than success.
Then Collins asked us to form “learning pods” and discuss what burning question we’d want to ask if we were at a dinner party with him.
Finally I might get my question answered. Our pod also wondered whether the findings relating to the past were relevant for the current and future? And also whether the jump from good to great was too much for Australian organisations – who was up to it?
Some of the conversation centred on how to deal with a world that is more out of control – which linked to our question of relevance. Collins used a mountain climbing analogy – where as we climb higher on the mountain and the environment is more severe than in the foothills, how do we do our best work? How do we do more than just aim to survive? By striving for a goal – the mountain peak – otherwise, just surviving can become our focus.
If the choice is ‘summit or die’, then choosing summit is a better option.
And what if the environment is so chaotic and the path is unknown and we have multiple options – we don’t know the best route to the top because the peak has never been climbed before?
What is the best hedge? Pick the right partner/s so that no matter what the mountain (goal) gives you, you have a partner who can adapt to whatever the mountain would throw at them. The essence of trust.
Eg Amgen wanting to get into biotechnology. They didn’t know what would be a goer but they did have confidence that the people in the company would figure something out and find a path to financial success in biotechnology.
Some of his pending research on Level 5 leaders asks questions of them – how did they become / evolve / grow? Was it conscious / lucky breaks / in their nature / or in their nurture?
Then the answer to the question I had been waiting for: who are the right people? How can you know?
Collins listed five characteristics:
They fit the core value/s – he says you can’t “get or make” people take on values, only find those who already believe.
Then the culture systematically reinforces those values. And back to sustainabiltiy one of those values seems to need to be adaptability – an outward customer service /market focus.
2. These people don’t need to be tightly managed – they may need to be focussed but not managed – if you are micromanaging you don’t have the right peope or you aren’t the right boss.
3. These people understand they don’t have a job – they have responsibilities. Eg pilots and air crew and air traffic controllers have a responsibility to make sure airplanes don’t crash.
4. These people do what they say. And part of that is the “no” – being careful about what they commit to.
5. Finally these people navigate by the mirror – when things go wrong they ask what was my responsibility / role in this, what can I learn – and when things go well they are a window – who else and what else contributed to this success?
Then it was time to run off to a lunch time appointmetn, having heard what I came for – the essence of rightness is a values fit.