Like many, I love reading a good “business” / “leadership” book where I say “yes, that’s what I’ve been talking about” or “exactly” or “I wish more people would do this.” Sometimes you hear of fundamental leadership concepts referred to in podcasts, leadership trainings, or recently published books, and that’s what happened to me. I was listening to a podcast, and they were talking with Jim Collins the author of the book, “Good to Great” 1 published in 2001. They referred to several leadership concepts that I realized I had heard for so many years in one way or another. So, I had to read his book published more than 20 years ago. I wondered with such hindsight if I would agree with the findings and recommendations of the book and overall, I do. Below, I share my high-level synopsis of the book’s leadership concepts that make companies good to great with some thoughts on what’s still applicable today.
The concepts introduced in the book are:
“Level 5 Leadership
First Who…Then What
Confront the Brutal Facts
Hedgehog Concept
Culture of Discipline
Technology Accelerators
Flywheel” (Collins, 2001, p.12)
Collin’s groups the first 2 leadership concepts under a “disciplined people” category.
Level 5 Leadership
Sometimes people look at their “leader” (and yes, I put this in air quotes because just because you may have a C-suite title, that doesn’t mean you are a leader) and see someone who is constantly talking, has an ego, likes to have big ideas even if they don’t make sense to all employees, and is not in tune with how the company really works or what it takes to get things done. This does NOT describe Level 5 Leadership at all.
Here are some specific notes from the book that describe Level 5 Leadership:
Level 5 leaders channel their ego needs away from themselves and into the larger goal of a great company. (Collins, 2001, p.21)
Level 5 leaders are a study in duality; modest and willful, humble and fearless. (Collins, 2001, p.22)
It is equally about ferocious resolve, an almost stoic determination to do whatever needs to be done to make the company great. (Collins, 2001, p.30)
Level 5 leaders look out the window to apportion credit to factors outside themselves when things go well (and if they cannot find a specific person or event to give credit to, they credit good luck). At the same time, they look in the mirror to apportion responsibility, never blaming luck when things go poorly. (Collins, 2001, p.35)
Collins also noted that potential Level 5 leaders exist all around us, if we just know what to look for, and that many people have the potential to evolve into Level 5. (Collins, 2001, p.39)
What if all leaders were Level 5 leaders? Wouldn’t that be great? I know when I’ve seen this type of leader at the top, that there have been great results!
First Who…Then What
Many have trouble with this next concept and I’ve even written about this in previous pulse points and blog posts. Many people have a hard time putting people in the right role.
Here are some specific notes from the book that describe the concept First Who…Then What:
The main point is to first get the right people on the bus (and the wrong people off the bus) before you figure out where to drive it. The second key point is the degree of sheer rigor needed in people decisions in order to take a company from good to great (Collins, 2001, p.44)
The weak generals, strong lieutenants model did not work at Bank of America. When the new CEO inherited this model, here’s how he described the management climate: “I came away quite distressed from my first couple of management meetings. Not only couldn’t I get conflict, I couldn’t even get comment. They were all waiting to see which way the wind blew.” (Collins, 2001, p.43)
A couple of executives who exemplified Level 5 Leadership said, “I don’t know where we should take this company, but I do know that if I start with the right people, ask them the right questions, and engage them in vigorous debate, we will find a way to make this company great.” (Collins, 2001, p.45)
In determining “the right people,” the good-to-great companies placed greater weight on character attributes than on specific educational background, practical skills, specialized knowledge, or work experiences. 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.” (Collins, 2001, p.51)
Those who build great companies understand that the ultimate throttle on growth for any great company is not markets, or technology, or competition, or products. It is one thing above all others: the ability to get and keep enough of the right people.
It might take time to know for certain if someone is simply in the wrong seat or whether they need to get off the bus altogether. Nonetheless, when the good-to-great leaders knew they had to make a people change, they would act. (Collins, 2001, p.58)
We uncovered 3 practical disciplines for being rigorous in people decisions:
When in doubt, don’t hire - keep looking. (Corollary: A company should limit its growth based on its ability to attract enough of the right people.)
When you know you need to make a people change, act. (Corollary: First be sure you don’t simply have someone in the wrong seat.)
Put your best people on your biggest opportunities, not your biggest problems. (Corollary: If you sell off your problems, don’t sell off your best people.) (Collins, 2001, p.63)
If you’ve ever worked in a “wait to see where the wind blows” today culture, then there’s probably 1 or more of Collins’s leadership concepts missing including the First Who…Then What one. But when you have the right people on the bus in the right seat, it’s magical. And look at those 3 disciplined approaches to people decisions – many companies are being tested with this especially given the sheer number of open positions at companies. It’s all about staying disciplined – how does your organization compare?
Collin’s then clusters the next 2 leadership concepts under a “disciplined thought” category.
Confront the Brutal Facts
Sometimes people and companies can get off track by not addressing the reality of what’s going on. Whether it’s a leader or leaders being out of touch with what it really takes to do something when people speak up, or simply team members not feeling like they can speak up to help point these things out, one thing is for sure, a good pause and reflect goes a long way.
Here are some specific notes from the book that describe the concept Confront the Brutal Facts:
One of the dominant themes from our research is that breakthrough results come about by a series of good decisions, diligently executed and accumulated one on top of another. Of course, the good-to-great companies did not have a perfect track record. But on the whole, they made many more good decisions that bad ones. (Collins, 2001, p.69)
The good-to-great companies displayed 2 distinctive forms of disciplined thought. The first is that they infused the entire process with the brutal facts of reality. The second is discussed in the hedgehog concept. (Collins, 2001, p.69)
There is nothing wrong with pursuing a vision for greatness. After all, the good-to-great companies also set out to create greatness. But, unlike the comparison companies, the good-to-great companies continually refined the path to greatness with the brutal facts of reality. (Collins, 2001, p.71)
A primary task in taking a company from good to great is to create a culture wherein people have a tremendous opportunity to be heard and, ultimately, for the truth to be heard. (Collins, 2001, p.88)
Collins offers 4 basic practices to creating a climate where the truth is heard:
Lead with questions, not answers.
Engage in dialogue and debate, not coercion.
Conduct autopsies, without blame.
Build “red flag” mechanisms. (Collins, 2001, pgs.74-78)
This concept is speaking my language – it’s all about creating and maintaining a culture where people felt heard and understood. This is key if you really want to know what’s going on in the organization. I encourage you to take a moment and reflect what type of speak up culture (or lack thereof) you have.
Hedgehog Concept
I bet you could sit here and think of someone or an organization that overcomplicates things. If you know me, I often say that life is complicated enough, so in my practice, we will simplify. This is what Collins is talking about around this leadership pillar.
Here are some specific notes from the book that describe the Hedgehog Concept:
Collins starts off by referencing an essay about a fox and a hedgehog and their differences… Foxes pursue many ends at the same time and see the world in all its complexity. They are “scattered or diffused, moving on many levels” never integrating their thinking into one overall concept or unifying vision. Hedgehogs, on the other hand, simplify a complex world into a single organization idea, a basic principle or concept that unifies and guides everything. It doesn’t matter how complex the world, a hedgehog reduces all challenges and dilemmas to simple-indeed almost simplistic – hedgehog ideas. For a hedgehog, anything that does not somehow relate to the hedgehog idea holds no relevance. (Collins, 2001, p.91)
A Hedgehog Concept is a simple, crystalline concept that flows from deep understanding about the intersection of the following 3 circles:
What you can be the best in the world at (and, equally important, what you cannot be the best in the world at).
What drives your economic engine.
What you are deeply passionate about. (Collins, 2001, pgs.95-96)
Just because something is your core business-just because you’ve been doing it for years or perhaps even decades-does not necessarily mean that you can be the best in the world at it. And if you cannot be the best in the world at your core business, then your core business cannot form the basis of your Hedgehog Concept. (Collins, 2001, p.99)
Getting the Hedgehog Concept is an iterative process. The Council can be a useful device. (Collins, 2001, p.119)
As the category suggests, holding strong to your vision, your Hedgehog Concept takes discipline. Many times we see companies doing random things and we think why in the world are they doing that – doesn’t that distract the company, the consumers, the employees and do more damage in the long-run? If you’ve ever thought that, you may have come across an organization who did NOT know their Hedgehog Concept.
Last, Collins discussed the last 2 leadership concepts under a “disciplined actions” category.
Culture of Discipline
Often companies lack discipline when it comes to following through on their focused strategy (e.g., the one that aligns with the Hedgehog concept previously discussed). They can get distracted into a shiny new opportunity that comes along that they think they should do because another company in their industry is doing so, or they’ve built in so many red tape processes that the magic of the company seems to be lost. Whatever it is – this leadership concept needs to be reexamined by the leaders.
Here are some specific notes from the book that describe a Culture of Discipline:
When you put these 2 complementary forces together – a culture of discipline with an ethic of entrepreneurship – you get a magical alchemy of superior performance and sustained results. (Collins, 2001, pgs.121-122)
The good-to-great companies built a consistent system with clear constraints, but they also gave people freedom and responsibility within the framework of that system. They hired self-disciplined people who didn’t need to be managed, and then managed the system, not the people. (Collins, 2001, p.125)
The good-to-great companies had Level 5 leaders who build an enduring culture of discipline, the unsustained comparisons had Level 4 leaders who personally disciplined the organization through sheer force. (Collins, 2001, p.130)
The good-to-great companies at their best followed a simple mantra: “Anything that does not fit with our Hedgehog Concept, we will not do. We will not launch unrelated businesses. We will not make unrelated acquisitions. We will not do unrelated joint ventures. If it doesn’t fit, we don’t do it. Period.” (Collins, 2001, p.134)
It takes discipline to say “No, thank you” to big opportunities. The fact that something is a “once-in-a-lifetime opportunity” is irrelevant if it doesn’t fit within the 3 circles. (Collins, 2001, p.136)
In good-to-great transformations, budgeting is a discipline to decide which arenas should be fully funded and which should not be funded at all. In other words, the budget process is not about figuring out how much each activity gets, but about determining which activities best support the Hedgehog Concept and should be fully strengthened and which should be eliminated entirely. (Collins, 2001, p.140)
Following through with actions that align to your focused vision and strategy – makes a lot of sense to me! And when you see companies who do that, it makes sense to the employees and even consumers. My questions for you - when it’s time to act, do you have the latitude to do so?
Technology Accelerators
Technology utilization is key in organizations, but many get confused on how to think about it.
Here are some specific notes from the book that describe the concept of Technology Accelerators:
Good-to-great organizations avoid technology fads and bandwagons, yet they become pioneers in the application of carefully selected technologies. (Collins, 2001, p.119)
When used right, technology becomes an accelerator of momentum, not a creator of it. The good-to-great companies never began their transitions with pioneering technology, for the simple reason that you cannot make good use of technology until you know which technologies are relevant. And which are those? Those – and only those – that link directly to the three intersecting circles of the Hedgehog Concept. (Collins, 2001, pgs.152-153)
How a company reacts to technological change is a good indicator of its inner drive for greatness versus mediocrity. Great companies respond with thoughtfulness and creativity, driven by a compulsion to turn unrealized potential into results; mediocre companies react and lurch about, motivated by fear of being left behind. (Collins, 2001, p.119)
Have you been at a company where they didn’t have the discipline to invest and utilize the right technology that propels their focused vision / strategy or in other words “Hedgehog Concept” forward? If you have, you could share in the sentiment that it gets frustrating for team members, pricey for the organization, and overall could lead to not achieving the potential that’s within reach.
By having all 6 previous leadership concepts discussed at a company, the team is pushing little by little, gaining momentum, and then it eventually – breakthrough; a leadership concept referred to as the flywheel effect! The leaders interviewed in the book noted that there wasn’t really any 1 big event they deemed as the “breakthrough,” it just seemingly happened over time by building this culture. The way Collins describes this idea still seems relevant today. If you have great leadership, the right people, are in tune with reality, get focused on the right thing(s), stick to that vision/strategy, encourage innovation and differing thoughts, and use technology to accelerate what you need to do, and do all of this by taking baby steps every day, then that’s how culture is built and sustainability of an organization comes to fruition.
If you’ve read the book, you see the companies they used in their study on page 2. There have been a couple who have not done so well but the majority appear to be in operation today with strong stock prices. If you are an expert on how any of these company’s cultures are doing now, would love for you to reach out and share your insights.
Need someone to dig into leadership work with you? Reach out for coaching or consulting here: https://www.badeauconsulting.com/
We’ve talked a lot about leadership and culture and remember, it’s not an overnight process. Team members and organizations need to take baby steps along the way. To assess where you and your organization are in your employee engagement culture journey, download my “Culture Pulse: Employee Engagement Questionnaire” here: https://www.badeauconsulting.com/culturepulseeequestionnaire
I look forward to providing monthly pulse points to help you stay up to date with how the workplace culture scene is evolving.
About Jaclyn T. Badeau, CPA, CGMA, MBA, EQ Certified
Jaclyn Badeau is the Founder and President of Badeau Consulting. She specializes in employee engagement initiatives that help companies inspire confidence back into their team for innovation and growth. Jaclyn’s background in cultivating high performing teams, delivering coaching and mentoring, serving as a global business risk advisor, and facilitating internal and external leadership training to a global workforce gives her the unique perspective of what employees need and what works. She is also a multi award recipient and passionate about sharing her expertise and knowledge in volunteer advisory and leadership positions roles for many associations and not-for-profits.
About Pulse Point
Pulse Point is a monthly blog to stay up to date with how the workplace culture scene is evolving.
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1 Collins, J. (2001). Good to Great: Why Some Companies Make the Leap…and Others Don’t (1st ed.). Harper Collins.