Good is the enemy of great

BOOK REVIEW

M. Gautham Machaiah

If there is one book that every business leader has to read at least once in his lifetime, it is Good to Great by Jim Collins. The book, a result of five years of research, challenges several management myths that are prevalent even today.

Spread across nine chapters, the book analyses what it takes for a company to catapult from good to great and sustain that greatness. The essence of the book is captured in the very first line which declares, “Good is the enemy of great.”

One of the stepping stones in the journey from good to great is Level 5 leadership. Level 5 leaders embody a mix of personal humility and professional will. They are ambitious first and foremost for the company, not for themselves. They look out of the window to attribute success to factors other than themselves. When things go poorly, they look in the mirror and blame themselves, taking full responsibility.

Mediocre ego-centric leaders on the other hand do just the opposite. They look in the mirror to take credit for success, but out of the window to assign blame for disappointing results.

The book also challenges the old adage that people are your most important asset. “People are not your most important asset. The right people are,” says Collins. In the chapter titled, First Who Then What, the author adds that Level 5 leaders succeeded by first getting the right people on the bus, the wrong people off the bus, the right people in the right seats—and then they figured out where to drive it.

The study, however, found that good to great leaders were rigorous, not ruthless in people decisions. They did not rely on layoffs as a primary strategy for improving performance, while average leaders heavily relied on restructuring.

Once the right people are in the right place, it is time to confront the brutal facts of your current reality. Creating an atmosphere where truth is heard involves four basic practices: Lead with questions, not answers; Engage in dialogue and debate, not coercion; Conduct autopsies without blame; Build a red flag mechanism.

At the core of the book is the Hedgehog concept, which is an understanding of what your organisation can be the best at in the world, and what it cannot be the best at. The good to great companies are like hedgehogs—simple, dowdy creatures that know “one big thing” and stick to it. The comparison companies are more like foxes—crafty, cunning creatures that know many things yet lack consistency.

Another foundation of a good to great company is the culture of discipline. “When you have disciplined people, you do not need hierarchy. When you have disciplined thought, you do not need bureaucracy. When you have disciplined action, you need not have excessive controls. When you combine a culture of discipline with an ethic of entrepreneurship, you get the magical alchemy of great performance,” the author explains.

Do not confuse a culture of discipline with a tyrant who disciplines. A culture of discipline involves a duality. On the one hand, it requires people who adhere to a consistent system, yet, on the other hand, it gives people the freedom and responsibility within the framework of that system. The transition begins not by trying to discipline the wrong people into the right behaviour, but by getting self-disciplined people on the bus in the first place.

This is followed by technology accelerators. Good to great companies think differently about technology. None of the good to great companies began their transformations with pioneering technology, yet they all became pioneers in the application of technology once they grasped how it fit into their Hedgehog concept.

At a time when myopic business leaders aim at instant breakthrough, the book advocates a “crawl, walk, run” approach or the flywheel method. The process of transformation is like pushing a giant flywheel. It takes a lot of effort to get the wheel moving, but with persistent effort over a considerable period of time, the flywheel builds momentum, eventually hitting a point of breakthrough.

One of the reasons why companies head towards doom is the selection of leaders who undo the work of previous generations. One single defining action, one killer innovation, one sweep of hacking people will not allow you to skip the arduous build-up stage and jump right to breakthrough. Those who launch radical change programmes and wrenching restructuring will almost certainly fail to make the leap.

And finally, to make the shift from a company with sustained great results to an enduring great company with iconic stature, you need to discover your core values and purpose beyond just making money. Enduring great companies preserve their core values and purpose while their business strategies endlessly adapt to a changing world. Profits and cash flow are absolutely essential for life, but they are not the very point of life.

Though Good to Great was first published over a decade ago, it shall continue to be a beacon to business leaders for all times to come. For an emerging economy like India where a large part of the industry is characterised by poor leadership, absence of core values and a desire to reap profits overnight, the relevance of this book cannot be over-stated.

Good to Great is a must-have in the library of every business leader, or anyone aspiring to be one.

Good to Great by Jim Collins

HarperCollins Publishers Inc., 2011, Rs 650