Good to Great, but You are the Business
After finishing the book Good to Great by Jim Collins, I was surprised to learn that there were several measurable factors that made “great” companies standout from their “good” counterparts. It was both encouraging and empowering to realize that there was some framework, some set of principles that can help create a truly great company. As I was reading, I couldn’t help but think of the companies Collins studied as if they were people. Using this perception, I saw that many of the factors that made great companies could also make great people. I’ll explain some of those analogies here.
Level 5 Leadership
Collins describes effective “Level 5” leaders of great companies as having a “paradoxical blend of personal humility and professional will”. These leaders are deep thinkers and are sometimes shy, but know what it takes to get their company to the next level. In contrast, non-Level-5 leaders have big egos and high profile personalities and take a more controlling position on their company, resulting in mediocre performance. I believe Level-5 personalities individually are also happier and more successful in reality. These kinds of people invest in themselves, are driven by intrinsic motivation, genuinely care about others, and do not constantly seek validation from external factors. They are successful because they play long term games, not shying away from valuable activities that may lack “social” acceptance, just as successful companies focus on heads-down execution and don’t get caught up in media perception.
First Who … Then What
Successful companies first figure out the right people to hire in order to solve a specific problem instead of first setting a vision, strategy, and roadmap. Once the right people are on board, then the company can figure out the best way to go forward. This principle holds true in our lives as well. Choosing who to spend your time with, and then figuring out what to do is much more valuable than picking an activity and then putting together an ad-hoc group to do that activity. Surrounding ourselves with optimistic, ambitious, happy individuals has the potential to create significant positive-sum results for all those inside that network. Next time you go do something, think about the people not the activity. You’d be surprised by how valuable (and fun!) simply doing nothing with the right people is.
Confront the Brutal Facts (Yet Never Lose Faith)
Collins found that in a paradoxical way, successful leaders both have solid conviction that they will win in the end and at the same time can confront the brutal facts of reality. Great companies strike just the right balance and can be flexible yet steadfast in pursuit of success. People also have to strike the personal balance between being stubborn in what you want to achieve and the principles you believe in and at the same time take feedback graciously, be empathetic to others’ situations, and be open minded about the world. Optimally, someone should find balance closer to the center of the spectrum instead of defaulting to always being on one side or the other. Being aware of this paradox and utilizing it to think deeply about how you make decisions and interact with people can go a long way. Sometimes you realize that certain beliefs can benefit from stubbornness and others can benefit from openness.
The Hedgehog Concept
The main driver of great businesses is what Collins calls “The Hedgehog Concept”. This concept is basically one specific area where the company has the potential to be the best in the world. Finding and “fanatically adhering” to this core concept creates successful companies. For example, Walgreens used to be in the popular food services business but realized that their resources would be much better utilized for their Hedgehog Concept - convenient corner drug stores, leading them to outpace the competition by several multiples. We too should strive to find our Hedgehog Concept, something that uniquely drives us to achieve greatness. This could be a deep specialization in a field or a combination of skills that only you can provide. After finding the thing(s) that drive you, stick to them and cut out anything that doesn’t fit.
A Culture of Discipline
All companies have a culture, some companies have discipline, but few companies have a culture of discipline. When you have disciplined people, you don’t need hierarchy. When you have disciplined people, you don’t need bureaucracy.
This one is pretty clear - we should strive to be internally disciplined everyday, in everything that we do. Once you find habits, decisions, and frameworks of thinking that improve your life significantly, discipline simply means consistently doing those things and being relentless in improving yourself. Being disciplined, you won’t rely on habit trackers, you won’t rely on coaches, and you won’t rely on short term gratification.
Technology Accelerators
Good-to-great companies don’t simply apply technology for its own sake, but think about carefully choosing technology to accelerate its natural growth. Furthermore, technology is never a cause of great companies. This is a key observation for individuals as well, especially when software is eating the world. We should not adopt a new app or new technology just because it’s popular, without considering its potential negative effects. Using technology itself will not make us better people or suddenly inflict positive change. Removed from technology, you should be focused on growing in areas that matter to you, and sparingly use technology to facilitate this personal growth. If the tech doesn’t do this, just delete it.
The Flywheel and the Doom Loop
Collins observes that no great companies achieved “overnight success” or made broad, sweeping changes that forced them into greatness. There was no single action or process that sparked high performance. In reality, the process resembled pushing a heavy flywheel over and over again with small decisions that gradually build up until the flywheel’s own momentum can propel the business to outsized results. We can see this in personal success everywhere we look. It may not seem that way due to the constant exposure to seemingly instant internet celebrities, but successful people built themselves up over years and years of hard work and dedication, over a time in which they probably received very little monetary or societal compensation. Aim to push your own flywheel by building compounding skills whenever you can - these are skills that build upon themselves and result in high growth in a short time period, like reading, writing, learning to code, networking, etc. Even though in the short term, progress seems to stall, in the long term, your flywheel will be spinning itself, and people will take notice.