Book Byte #13 "Good to Great" by Jim Collins
Why Some Companies Make the Leap...and Others Don't
đŁ Curious Quotes from the Author:
âGood is the enemy of great. 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. Few people attain great lives, in large part because it is just so easy to settle for a good life.â
âWhen [what you are deeply passionate about, what you can be best in the world at and what drives your economic engine] come together, not only does your work move toward greatness, but so does your life. For, in the end, it is impossible to have a great life unless it is a meaningful life. And it is very difficult to have a meaningful life without meaningful work. Perhaps, then, you might gain that rare tranquility that comes from knowing that youâve had a hand in creating something of intrinsic excellence that makes a contribution. Indeed, you might even gain that deepest of all satisfactions: knowing that your short time here on this earth has been well spent, and that it mattered.â
âThe purpose of bureaucracy is to compensate for incompetence and lack of discipline.â
âGreatness is not a function of circumstance. Greatness, it turns out, is largely a matter of conscious choice, and discipline.â
âGreat vision without great people is irrelevant.â
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âA company should limit its growth based on its ability to attract enough of the right people.â
âLetting 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.â
âFor, in the end, it is impossible to have a great life unless it is a meaningful life. And it is very difficult to have a meaningful life without meaningful work.â
âThe moment you feel the need to tightly manage someone, youâve made a hiring mistake.â
âThe good-to-great leaders never wanted to become larger-than-life heroes. They never aspired to be put on a pedestal or become unreachable icons. They were seemingly ordinary people quietly producing extraordinary results.â
đ Cognition of the Bookâs Big Idea:
The Author and his team researched 3 different types of companies:
1. Good-to-Great companies - At Average stock price for 15 years then went on to 3 times the average stock price
2. Direct Comparison Companies: They remained average even after being the same structurally as the great company
3. Un-sustained comparison companies made a transition that didnât last and caused it to go back below average stock price.
The team examined over 2,000 pages of executive interviews and meetings to figure out what went wrong and what went right.
The Author describes whatâs called the hedgehog concept which helps distill their business decisions into the choosing the right choices.
Consider a smart fox pursuing a hedgehog. Every day, the fox devises a slew of surprise attacks and sly techniques to consume it. And each time, the hedgehog does the same thing: it coils itself into a spiny, impenetrable ball. The hedgehog's success is due to its commitment to this simple method.
Developing your own company hedgehog method can be done in 3 parts:
1. What can we be the best in the world at?Â
2. What can we be passionate about?Â
3. What is the key economic indicator we should concentrate on?
From then on, every choice made by the company is guided by this philosophy, and success follows.
When viewed from a distance, good-to-great organizations appear to undergo a quick and dramatic shift. Companies have no idea they are changing because their transition has no clear slogan, launch ceremony, or change program.
Their success is the result of little, gradual steps toward their direct strategy. These small changes, like a flywheel, provide results that drive organizations to push harder - until enough speed is accumulated for a breakthrough. Their steadfast belief in the hedgehog notion is rewarded by a virtuous circle of motivation and progress.
When a good-to-great organization considers whether to adopt a certain technologyâŚ
they weigh it against their company goals and values. If this technology can help them theyâll implement it. Otherwise, they will either ignore it or adopt it at the same rate as their industry.
Comparison Businesses, on the other hand, frequently perceive new technologies as a threat. They are concerned about falling behind in a technological fad and hustle to implement the technology with no overarching plan.
During the move from good to great, every organization had âLevel 5 Leadershipâ. Level 5 leaders are not just exceptional personalities, team members, managers, and leaders; they are also single-mindedly ambitious on behalf of the firm, fanatically motivated toward success, and want their organization to perform long after they have leftâŚand theyâre Humble.
In actuality, it is more important to inquire "who" than "what." Put another way, even before establishing a defined course of action, the transition from excellent to outstanding always starts with bringing the appropriate people into the organization and removing the incorrect ones. This is due to the fact that successful people will eventually find a way to succeed.
Good-to-great companies also engage in this. They face the harsh realities of their situation, but they never waver in their belief that they will ultimately succeed.
Good-to-great businesses understand how to strike a fine balance between acknowledging these facts without getting dejected, whether they are faced with fierce competition or significant regulatory changes. Some even view it as a challenge.
A business cannot confront hard truths if they are never acknowledged. Leaders must so foster an atmosphere in which difficult topics can be discussed without fear of repercussions. If people feel compelled to withhold the painful truth from a powerful and charismatic leader, this trait may work against them rather than in their favor.
One strict tyrant is not the same as a culture of self-control. Sometimes, tyrannical CEOs might lead their companies to a brief period of prosperity. However, a dictatorial approach to enforcing discipline in a firm is unsustainable. People will seize the chance to rebel once they are not under the dictator's constant observation. And the discipline will collapse once the dictator is permanently removed.
đ ď¸Fixing the Tech Industry
There are a lot of mediocre companies out there. They might of been great at one point, but have lost what little innovation theyâve had, especially if they were the first to market. Personally Iâve been a part of many companies in this position. In the pursuit of profit, the status quo is enforced with rigorous discipline, leaving anyone who has an ounce of innovative spirit is left to flounder away ideas that probably would of made the company go from good to great.
One should always help the company they work for, itâs always in your best interest to act professionally and further the cause of the companies values, but if the managers donât hold up the ideals of the employee either, it becomes a one way street and employees donât feel the need to do anything but whatâs required.
đ¤ Collaborate with others with this Social Media Prompt:
What is one thing that you feel you could be best at that the world could benefit from?
In what do you find your passion?
What would you focus on as far as the economics of your business go? What KPI?