Book Review - From Good to Great

Collins breaks down the process of transformation into several areas that make this book easy to read and the content easy to digest.  The important concepts from Good to Great include:

• Level 5 Leadership
• First Who, Then What
• Confront the Brutal Facts
• Hedgehog Concept
• Culture of Discipline
• Technology Accelerators
• The Flywheel

Level 5 Leadership

According to Collins’ research every organization successful in transforming from good to great had leaders who shared common traits.  Collins labels these traits as “Level 5 Leadership.”  All the leaders had a balanced mix of personal humility and professional will and were ambitious for the company – placing the organization’s interests in front of their own.  A dedication to succession planning to ensure that the organization would experience greater success in the future was also a recurring theme.  These leaders displayed modesty and were often understated but at the same time were fanatically driven and infected with an incurable need to produce results.  Time after time, companies turn to larger-than-life, celebrity leaders as the answer.  Collins’ research shows that this approach is actually negatively correlated with transformation.  Finally, all the leaders were much more “work-horse” than “show-horse” in their management approaches and attributed their success to good luck instead of their own greatness.

First Who, Then What

Probably the most quoted line from Good to Great is, “Start by getting the right people on the bus (and the wrong people off) and then figure out where to drive it.”  This basically sums up the idea of addressing the “who” questions for your organization before asking “what” the organization will do.  Level 5 Leaders were all rigorous but not ruthless when it came to people decisions.  They did not rely heavily on layoffs and restructuring as a primary strategy for improving performance.  Collins goes on to outline three disciplines for people decisions.

• When in doubt, don’t hire – keep looking
• When you know you need a people change, act
• Put your best people on your biggest opportunities, not your biggest problems

Great teams, like great leaders, share a number of common traits.  They typically consist of people who debate vigorously in search of best answers.  For these teams, the purpose of compensation is not to get the wrong people to do the right thing but to get the right people on board to begin with.  Great people are attracted to organizations that show a commitment to people and understand that people are not the organization’s most important asset – the right people are!  The “right” person has more to do with character traits and innate capabilities than with specific knowledge, background or skills.

Confront the Brutal Facts

All progress starts with the truth, and all good to great companies began by confronting the brutal facts of their current situations.  This exercise flushes out decisions that are self-evident once they are unveiled.  In order for this to work, the organization’s culture must be one where people have a tremendous opportunity to be heard and, ultimately, for the truth to be heard.  Collins provides four guidelines for getting to the truth.

• Lead with questions, not answers
• Engage in dialogue and debate, not coercion
• Conduct autopsies, without blame
• Build red-flag mechanisms into information that can’t be ignored

All good to great organizations responded to adversity by facing realities head-on and emerged from adversity stronger than before.  While charisma can be a positive, it may also be a liability if it deters people from bringing forward the brutal facts.  Collins contends that leadership doesn’t start with vision but, rather, getting people to confront the brutal facts and to act on the implications.  The key to being a great organization is not how to motivate people – if you have the right people they will be self-motivated.  The key is not to de-motivate them by ignoring the brutal facts.

Hedgehog Concept

Once you have the right people in place, the next step is to address the “what” questions about your organization.  Collins labels the “what” of a great organization the Hedgehog Concept.  The starting point to identifying your firm’s Hedgehog Concept is to ask yourself three questions.

• What can you be the best in the world at?
• What drives your economic engine?
• What you are deeply passionate about?

It is important to not only understand what your company can be best in the world at but also what it cannot be best at.  If you can’t be the best in the world at your core business, then your core business cannot form the basis of your Hedgehog Concept.  What you can be best in the world at is not equivalent to core competencies.  In order to identify what drives your economic engine, look for the denominator that has the single greatest impact on your business.  Finally, Collins points out that getting the Hedgehog Concept is an iterative process.

Culture of Discipline

In order for an organization to transform from good to great it must build a culture of self-disciplined people who take disciplined action, fanatically consistent with the three areas of the Hedgehog Concept.  A culture of discipline involves duality.  On the one hand, it requires adherence to a consistent system, yet, on the other hand, it gives people freedom and responsibility within the framework of the system.  The culture shouldn’t be just about action—it needs to be about getting disciplined people who engage in disciplined  thought and who then take disciplined action.  The single most important form of discipline for sustained results is fanatical adherence to the Hedgehog Concept.  In this type of culture “stop doing” lists are more important than “to do” lists.

The Flywheel

Collins wraps up with a model (The Flywheel) that encapsulates ideas previously discussed in the book that were common among good to great companies.  Sustainable transformations follow a predictable pattern of buildup and breakthrough; it takes a number of concerted efforts to get the flywheel moving faster and faster until it starts moving on its own – that is the breakthrough.  Comparison companies followed the Doom Loop where they tried to skip buildup and jump immediately to breakthrough.  Then, with disappointing results, they’d lurch back and forth, failing to maintain a consistent direction.

Good to great transformations often look like dramatic, revolutionary events to those on the outside, but they feel like organic, cumulative processes to people on the inside.

Good to great transformations never happened in one fell swoop.  There is no single defining action, no grand program, no one killer innovation, no solitary lucky break, and no miracle moment.  Insiders were often unaware of the magnitude of the transformation until later.  
Comparison companies tried to create breakthrough via acquisitions whereas good to great companies used large acquisitions after breakthrough. 

Conclusion

Good to Great is a book filled with valuable concepts for any organization attempting to transform itself into greatness.  The book also provides support for the ideas that Boomer Consulting has been addressing with clients for years.

• Assessing the current situation of the firm as the initial step (all progress starts with the truth)
• Building a team that supports your firm’s goals
• Committing to the personal and professional development of team members
• Finding leaders who will support the firm’s initiatives for transformation
• Building a culture that is attractive to employees and facilitates transformation
• Leveraging technology as a strategic asset and an accelerator for growth