Good to Great

In the first blog of this series, I chose to illustrate the concepts in the book 7 Habits of Highly Effective People. Such people are an integral part of great organizations. However, there are many other aspects for making an organization stand out over a long period. In his book, Good to Great, Jim Collins has decoded those elements for us.

Leadership is a vital ingredient in the making of a successful organization. However, Jim Collins has found that great companies are led by Level-5 Leaders. These leaders have a blend of professional will and personal humility. They consider serving all the stakeholders as their primary responsibility above their personal gains. They personify the values of the organizations they work for.

These leaders apply the same yardstick while selecting people. They first find people who are aligned with the values and standards of the organizations. Later, they assign roles that are right for them. This is against the conventional process of hiring for a vacancy. These great organizations spend a lot of time hiring. However, they do not shy away from firing people misaligned with the principles of the organization. Collins calls it getting wrong people off the bus. They do it humanely.

Great Companies are brutally honest in looking at facts. They strive to find the truth in every situation. It makes decisions self-evident. They engage people in an open conversation and do not force them to accept the decisions made. If anything goes wrong, they do a proper root cause analysis and refrain from blaming individuals. Over time, they develop a process of identifying red flags in the decision-making.

Great companies work in a focused way. They choose an area at the intersection of their passion, the economic engine, and what they can be best in the world. Jim Collins refers to it as their hedgehog. It seems boring and non-glamorous for people outside the organization. However, they prefer focusing on their strength instead of trying new tactics.

These organizations have a culture of discipline. They hire people who express their creativity within the established framework. Their thoughts and actions are disciplined too. Hedgehog is at the center of all their decisions and actions.

These companies do not jump on the technology bandwagon. They adopt technology only if it furthers the organization's visions built around its hedgehog. Technology is used as a means, not an end, by these organizations.

Finally, great organizations have the consistency of purpose. Leaders take steps that move the company towards that goal. When leader after leader push in one direction, the flywheel builds momentum. Ordinary companies kill that momentum by creating resistance by frequently changing direction, strategy, engaging in misguided acquisitions. Jim Collins uses the word "doom loop" to explain the latter phenomenon.

I have made a pictorial summary of the key concepts in the book. Please let me have your feedback on it.

Subodh

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