Book Review: Good to Great (Jim Collins)
This will be the first book review blog post. Earlier this year I laid my hands on Good to Great by Jim Collins. After completing the book, I am left inspired. I wish if only I had read this a few years ago! There are so many interesting insights in the book, that I felt compelled to write this through it and give it a chance to marinade within my own head. Most important keyword to keep in mind is being disciplined.
Good to Great is where The ‘Flywheel effect’ concept was introduced. I’ve seen it referenced it many strategies, different shapes and loops – we had one even in my previous experiences. After reading this book, I’m left with one clear insight. There’s a lot more that needs to be in place before that flywheel spins along insanely. Here are some of the key tenets from the book. Before the flywheel gains momentum, the following three are important to inculcate
- Recruit and nurture disciplined people
- Indulge in disciplined thought
- Stay on course with disciplined action
Let’s dive into each of the above
Disciplined People
The book talks about two key concepts here. First is about companies having what the author refers to as Level-5 Leadership. Second is following the tenet of ‘First who, then what’. These are crucial pre-requisites to building momentum.
Level-5 Leadership
The book outlines the different levels of leadership (1-5), where-in level-5 leaders are those with both ambition and tenacity. It points to an interesting juxtaposition of professional will and personal humility. Through several examples, it outlines how Level-5 Leadership create self-propelling organisations that can separate itself from the pack of good to great companies.
First who, then what
Building great products, teams, companies requires the right people, those with discipline, curiosity rigour, humility, belief and drive. This assembled ‘right team’ can figure out the path to success. I’ve also seen this called out in Frank Slootman’s book ‘Amp it up’ where he refers to needing bus-drivers as opposed to mere bus-passengers to scale a company. These are cases where a company, the leadership does not have to expend energy creating motivation to achieve outcomes. Motivated people create positive, spectacular outcomes. For every contributing individual, as a pre-requisite, it is important to have that honest conversation about who I am, where I am and is this the right place for me to thrive. If it’s not a match then I’m better off the bus!
These two aspects about disciplined people are a strong foundation helping companies iterate to find the momentum to scale rapidly.
Disciplined Thought
With the right people, it’s important to think through the choices, be deliberate on direction and expectations. There a couple of interesting concepts in this. First is the reference to the Stockdale paradox and second is the ‘hedgehog concept’. Let’s dig through this a bit more.
Confirm brutal facts
Here the book refers to the use of the Stockdale Paradox, where you accept the following conflict. “Retain faith that you’ll prevail in the end, regardless of the difficulties AND at the SAME TIME.. confront the most brutal facts of your current reality, whatever they might be“. Having this unwavering faith, despite brutal facts is essential to play ‘the Infinite game’ (as Simon Sinek put it). In order to understand current realities and to unravel brutal facts – it is essential to be curious, lead with questions, engage in dialogue and debate, and conduct autopsies without blame (it has to be about the problem or the process, not the person)! Encourage behavior that allows people to raise red-flags so that mere information is turned to ‘information that can’t be ignored’ when relevant.
The Hedgehog concept
My most favourite part. At the surface, this appears like the age-old, oft repeated ‘keep it simple silly’ combined with a mantra that singular focus always wins. Diving deeper, there’s a brilliant simplification, essentially an intersection of three things. First, acknowledging what can we be the ‘best in the world at’ and what can we not be the best at? Second, what is our economic engine? If progress were to be measured by profit per X, what would X be? A measure of per Employee, Store, Customer, ProductLine, Brand, CustomerVisit or something else depending on your business. It is vital to get a singular metric on X, as it pushes the limits of focus. Lastly, what are we deeply passionate about? Saving lives, developing great leaders, building communities, and more such examples are in the book.
The stockdale paradox and the hedgehog concept forces the disciplined people to go through disciplined thought. It results in a direction that is deliberate and thought-out. And not decisions that appear to be just shooting from the hip.
Disciplined Action
With the right people, thinking things through in a deliberate and rigorous manner, the last pre-requisite to the flywheel getting into momentum is following up with disciplined action. This is a mix of two things – one is embedding a culture if discipline within teams and second is leveraging technology as an accelerator for the momentum, not necessarily depending on it as the creator of the momentum. Let’s dig in further.
Culture of Discipline
Early stage businesses trying to gain momentum and grow, need to ensure the fabric of entrepreneurial spirit within each employee. At the same time there needs to be a cohesion across all parts of the organisation to ensure that we march in the same direction, beyond being blocked for approval each time. There’s a simple 2×2 grid in the book referring the ethic of entrepreneurship vs. the culture of discipline. A great company scores high on both dimensions. And for companies to operate at that intersection, it is required to give individuals and teams enough leeway and autonomy, however within a certain framework. In the product world, we come across the jargon of “Empowered teams” – a team can that make decisions at the edges on their own, but within the strategic context of the company, thus ensuring a high velocity organisation headed in the same, intended, direction.
Together with disciplined people with the right attributes this also ensure a fanatical adherence to the hedgehog concept. Deliberate deeply on new ideas by putting on the lens of the hedgehog concept, even if they seem like a good short term solution. Discard ideas that fail the test of even one of the circles, unless something else has changed. Lastly, in this scope there’s also an interesting thing I’ve often come across – Start making a Stop-doing list! A deliberate articulation of what we will NOT do!
Technology as an accelerator
The last component of the disciplined action is the role of technology in driving the flywheel. Having worked in technology industry for over 20 years, I’ve always had a bias for all things tech. But there’s an interesting finding in the book that these companies that set themselves apart from good to great, did not use technology as the creator of the momentum. Instead, having played with different kinds of technology to explore what it can do for the hedgehog, technology always played the role of accelerating the momentum, not creating it. This brings into perspective that technology alone cannot be the sole differentiator of a business, but rather a key enabler.
Flywheel – build up and break through
Iterating through these prerequisites, there’s a potential of the flywheel to buildup and breakthrough, rather than to get into a doom-loop! Setting these allow companies to Crawl, Walk and run with their business outcomes. At the start, each push feels harder having to iterate, but when momentum gathers there’s no stopping you.
From Theory to Practice
While I was close to the finish of the book, I had a thought – what can I do to implement these changes? The book also addresses this from several angles – but why bother with greatness? but it takes time? But it’s outside of my realm of control? And so many buts..! The answer was pretty simple though – Crawl first 🙂
A definite read super super super high on my list. You can start with refering to some material already available on the official website.