Monday, August 22, 2011

How some companies go from good to great--a book by Jim Collins

I am reading the bestselling book ’Good To Great’ (published in 2001) by Jim Collins, who is the author of ‘Built To Last’, also a bestseller. I emphasize “bestselling” because they are books about the business world, and it surprises me that there is enough interest in the business world to guarantee a bestselling book. But apparently there is, and given the state of the economy during the past ten years, perhaps interest in these types of books is not that surprising. I for one find such books fascinating; I never get tired of reading about companies, their employees or leadership issues. Both books deal with companies, workplace leadership, greatness and longevity. ‘Good To Great’ discusses why some companies manage to become great companies starting from the level of good companies, but it also discusses mediocre and even bad companies and the likelihood of their achieving a ‘great’ status. I like the book so far because Collins is not just presenting his subjective opinions; he and his research team have done extensive research on what are considered to be great American companies, and have come up with some ideas as to why they became that way. They uncovered the qualities and characteristics of greatness—why some companies manage to become great while others don’t.

Here is his opening paragraph in Chapter 1: “Good 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. The vast majority of companies never become great, precisely because the vast majority become quite good—and that is their main problem”. The opening paragraph draws you into the book and makes you want to explore the topic further. His premise is interesting. But what is a great company? How does Collins define ‘great’? His book is not a primer on how to get to greatness. It is more of a scientific treatise that describes the qualities of companies and of CEOs that have achieved greatness and maintained those results for at least fifteen years. And that by itself makes it an exceptionally interesting book, because it is steeped in objective research about the issue.

Here are some of the ideas that Collins brings up and discusses:
·         “In a good-to-great transformation, people are not your most important asset. The right people are”.
·         Who are the right people?  Collins writes: “The good-to-great companies placed greater weight on character attributes than on specific educational background, practical skills, specialized knowledge, or work experience. Not that specific knowledge or skills are unimportant, but they viewed these traits as more teachable (or at least learnable), whereas they believed dimensions like character, work ethic, basic intelligence, dedication to fulfilling commitments, and values are more ingrained (sounds like integrity and emotional intelligence are prized highly in both leaders and the right employees)
·         He argues for rigorousness in finding and keeping the right people and in letting go of the wrong people or shifting them to positions where they may be able to blossom.  It’s not about mass layoffs and ruthless treatment of employees. He says: “To let people languish in uncertainty for months or years, stealing precious time in their lives that they could use to move on to something else, when in the end they aren’t going to make it anyway—that would be ruthless. To deal with it right up front and let people get on with their lives—that is rigorous”.  He doesn’t argue against laying off specific people but he also discusses the possibility of shifting them to other positions to give them a chance to develop their true potential. This takes emotional intelligence and common sense on the part of company leaders in order to figure this out.

Collins also discusses ‘Level 5 leadership’, which he describes as a “paradoxical mix of personal humility and professional will. Level 5 leaders are “ambitious….., but ambitious first and foremost for the company, not themselves”. They are “modest, self-effacing, understated, fanatically-driven, diligent, take responsibility for failures and give others the credit for success”. In my book, this is the definition of people with integrity and emotional intelligence. He is quite clear on one thing—that “every good-to-great company had Level 5 leadership during the pivotal transition years”; this conclusion is unequivocally supported by his team’s research data.

My questions are—why is there so little emotional intelligence in workplace leaders? Ditto for integrity and ethical character? Why aren’t they reading these kinds of books, or if they are, why aren’t they learning from them and putting their newfound knowledge into action? And why aren’t more potential Level 5 leaders being tapped for such positions? Why is it that there is so much mediocrity in workplace leaders at present? Potential Level 5 leaders are stifled into silence, bypassed, ignored, encouraged to leave or simply fired. Strange behavior on the part of companies whose visions are to be ‘the best (company, university, hospital, etc.) within the next few years’. I’m hoping for a renaissance of sorts—a new focus on integrity and emotional intelligence in workplace leaders.

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