7 IMPORTANT LESSONS FROM JIM COLLINS’ ‘GOOD TO GREAT’

This is the most important of all the lessons from ‘Good To Great’. If you don’t take anything else away, this is the one thing always to remember. Nothing is more important to a business than the talent it employs – what Jim Collins calls ‘getting the right people on the bus‘.

Collins describes the experience of Admiral James Stockdale  – the highest-ranked American prisoner-of-war in the Vietnam War – in ‘Good to Great’, calling it ‘the Stockdale Paradox’.

Stockdale was locked up for a long time – over eight years. Many of his fellow prisoners gave up the will to live during this time. They were the optimists. The ones who said we’ll be out by Christmas or Easter or their next birthday eventually ran out of hope. In contrast, Stockdale lived day to day, accepting the brutal reality of his situation.  But he never lost faith that he would make it out alive, and it would become the defining event of his life.

Collins and his research illustrate the need to confront the brutal truths head-on. This isn’t about pessimism but a call for radical candour. It’s about facing the future, armed with an unwavering resolve to face the facts, however stark they may be. Collins suggests great companies can evidence this unwavering commitment to reality. Ignorance or denial is the antithesis of progress. Progress can only begin with truth, however unpleasant.

Despite the circumstances you’re going through, if you have a clear BHAG, you can hold fast to that mission. Your company can make the leap. Trust that you will reach your destination but accept whatever life throws at you. So often, organisations are in denial about what’s happening around them. With hindsight, I can see that most of my time at Peer 1, we were in denial about the impact of the Cloud on our business, or more specifically, AWS. Perhaps we’d have been in a different place if we’d confronted this.

Why do some companies make the leap? What lights your fire? What could your business be the best in the world at? And what makes you money – your profit per x? These are the three circles of the ‘Hedgehog Concept’. According to Collins, where they intersect is where you’ll find your BHAG or mission. Going through this process forces you to think, who is my customer, and what’s their problem? And it is a great process that forces you to define your sandbox. Powerful stuff!

Collins ‘Hedgehog Concept’ is a principle that champions the synthesis of passion, proficiency, and profitability. Collins artfully draws from the parable of the cunning fox and the singularly focused hedgehog. Where businesses often scatter their efforts, trying to master all, the brilliance lies in discerning that intersection where one’s true passion meets what one can be best at and where the economic engine thrives. It’s not about being a jack-of-all-trades but rather mastering that core niche that drives sustainable success. The ‘Hedgehog Concept’ is a clarion call to cultivate depth, focus, and unwavering clarity in your organisational.

All good in theory, but when I ask clients what they could be best in the world at, I’m often met with blank faces. Even worse, laughter! Often, they’re selling lots of stuff to lots of different customers. Finding one to focus on is hard. Discussion can go round and round. Similarly, when I ask them what they’re passionate about, a common response is, ‘Er – nothing’ (massive face-palm!) It brings me back to having the right people. If your team finds it hard to be passionate or care enough about something, they may not be the right people. This is important. They need to evangelise your mission.

Rinsing out the cottage cheese is the expression Jim Collins uses to describe the importance of good company and a culture of discipline in ‘Good to Great’. Strange use of words until you understand he’s referring to athlete David Scott. During the stretch, when Scott won six Ironman triathlons, he rinsed his cottage cheese to eliminate any excess fat. Whether this helped or not, this small action showed Scott’s disciplined thought, disciplined action, focus and commitment to being the best.

According to Collins, good to great companies think differently about technology. Instead, they avoid fads and focus solely on technology that can accelerate momentum in the Hedgehog Concept.

Transformation doesn’t happen in one fell swoop. There’s no single big action, or killer innovation, or miracle moment. 

Transformation doesn’t happen in one fell swoop. There’s no single big action, or killer innovation, or miracle moment. Instead, as Collins describes in ‘Good to Great’, it’s more like relentlessly pushing a giant, heavy flywheel. Turn by slow turn, you gradually build momentum until, at last, it starts to spin by itself.

Collins’ masterful analogy of the ‘Flywheel’ and the ‘Doom Loop’ encapsulates the rhythm of sustained success versus the turbulence of inconsistent efforts. The ‘Flywheel’ depicts the gradual momentum built by organisations that make consistent, strategic pushes in one direction. It’s a cumulative effect of every push, every choice, every strategy, all driving towards business greatness. Conversely, the ‘Doom Loop’ symbolises those who, lacking patience and clarity, jump from one new direction or trend to another, seeking instant results. In their haste, they never allow the flywheel’s momentum to build up.

I often discuss this idea with new clients and suggest we look for flywheels in their business. This sums up what I do for a few people for a living – uncovering the flywheel of their business model. Yes – they have a plan containing their numeric hopes and dreams. But to get there, they need a model that begins to spin for itself. Vision, core customer, culture, innovation – once properly calibrated, everything interlinks to build the momentum you need for growth.

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