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  • “Good to Great” by Jim Collins, Pt.1

    The purpose of a compensation system should not be to get the right behaviors from the wrong people, but to get the right people on the bus in the first place, and to keep them there.

    It’s one of the seminal management books, that looks at organization structure, management and human capital within an integrated framework. The greatest takeaway from Good to Great, was great companies were consistent, relentlessly pursued value and were hyper-focused on maximizing their resources to get the best return on investment: the “Hedgehog Concept.” This is what I learned:

    Good To Great Pt. 1


    1.      Level five leadership; first who, then what-get the right people on the bus and the wrong people off the bus-people are your most important asset is wrong-the right people are your most important asset; confront the brutal facts-the facts of your current reality, yet never lose faith; the hedgehog concept-become the best in the world at something; create a culture of discipline; good-to-great companies never use technology as the primary means of igniting a transformation, yet they are pioneers in the application of carefully selected technologies-technology should not be the root of greatness or doom; to build good-to-great companies there must be a shift in core values and a purpose beyond making money combined with the key dynamic of preserve the core/stimulate progress.

    2.      Level five leadership is not just about humility and modesty. It is equally about ferocious resolve, an almost stoic determination to do whatever needs to be done to make the company great.

    3.      Professional will; creates superb results, a clear catalyst in the transition from good-to-great; demonstrates an unwavering resolve to do whatever is necessary to produce the best long-term effects, no matter how difficult; sets the standard of building an enduring great company-will settle for nothing less; looks in the mirror and not out the window-to apportion responsibility for poor results, never blaming other people, external factors, or bad luck.

    4.      Personal humility; demonstrates a compelling modesty; acts with quiet, calm determination-relies principally on inspired standards and not charisma; channels ambition into the company, sets up successors for even greater success in the next generation; looks out the window, not in the mirror to apportion credit for the success of the company-to other people, external factors, and good luck.

    5.      There would only be seats for A players who were going to put forth an A+ effort, and if you weren’t up for it, you better get off the bus, and get off now.

    6.      Yes, compensation and incentives are important, but for very different reasons in good-to-great companies. The purpose of a compensation system should not be to get the right behaviors from the wrong people, but to get the right people on the bus in the first place, and to keep them there.

    7.      The good-to-great companies probably sound like tough places to work-and they are. If you don’t have what it takes, you probably won’t last long. But they’re not ruthless cultures, they’re rigorous cultures. And the distinction is crucial. To be ruthless means hacking and cutting, especially in difficult times, or wantonly firing people without any thoughtful consideration. To be rigorous means consistently applying exacting standards at all times and at all levels, especially in upper management.

    8.      How to be rigorous; when in doubt, don’t hire-keep looking; practical discipline-when you know you need to make people change, act; put your best people on your biggest opportunities, not your biggest problems.

    9.      When you decide to sell off your problems, don’t sell off your best people.

    10.  Good-to-great management teams consist of people who debate vigorously in search of the best answers, yet who unify behind decisions, regardless of parochial interests.

    11.  Facts are better than dreams; one of the most dominant themes from our research is that breakthrough results come about by a series of good decisions, diligently executed and accumulated on top of another.

    12.  Leadership is about vision. But leadership is equally about creating a climate where the truth is heard and the brutal facts confronted.

    13.  Lead with questions not answers; engage in dialogue and debate, not coercion; conduct autopsies without blame-when you create autopsies without blame, you go a long way toward creating a climate where the truth is heard. If you have the right people, you should almost never need to assign blame but only to search for understanding and learning; create red flag mechanisms that turn information into information that cannot be ignored.

    14.  The Stockdale Paradox; retain faith that you will prevail in the end, regardless of the difficulties; confront the most brutal facts of your current reality, whatever they might be.

    15.  Those who led the comparison companies tended to be foxes never gained the clarifying advantage of a Hedgehog concept, being instead scattered, diffused, and inconsistent.

    Good luck.

    Calvin Wilson
    Founder and CEO
    Upstart: Business and Management for 20-40 Year Old Professionals

    Filed Under: Management


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