Crucial People-First Lessons From “Good to Great” by Jim Collins
A recent Harvard Business Review article, “Digital Transformation is Not About Technology,” reminded us of the legendary business leadership book by Jim Collins, “Good to Great,” and one of its many key lessons and principles of good business — First Who, Then What, or making sure you have the right people on the bus.
Or, People First.
This passage from the HBR article is astonishing:
“A recent survey of directors, CEOs, and senior executives found that digital transformation (DT) risk is their #1 concern in 2019. Yet 70% of all DT initiatives do not reach their goals. Of the $1.3 trillion that was spent on DT last year, it was estimated that $900 billion went to waste. Why do some DT efforts succeed and others fail?
Fundamentally, it’s because most digital technologies provide possibilities for efficiency gains and customer intimacy. But if people lack the right mindset to change and the current organizational practices are flawed, DT will simply magnify those flaws.”
In GTG, Collins writes in chapter 7 that technology is not the savior. More specifically, he says, “technology is an accelerator of momentum, not a creator of it.” It’s all about the people. The employees.
The premise is that technology alone won’t solve issues and it needs to fit within your Hedgehog Concept (more on that below). 80 of the 84 CEOs interviewed during the research didn’t even list technology in their top five factors of success of going from good to great, and sustaining that success.
Like all major points in GTG, it’s a great reminder about the importance of people and process as priorities. Mark J. Cundiff wrote a wonderful overview of chapter 7 on his blog, Learning to Lead — Good to Great #7: Technology Accelerators.
GTG is a must read, and if you haven’t read it yet, or want a quick refresh, here is a brief overview of this influential book and some of the core groundbreaking components. If you want to dive deeper, check out this GTG overview from the man himself, Jim Collins, which includes several of the good-to-great companies featured in his team’s research and why they outperformed the comparison companies.
- The Bus — First Who, Then What: before worrying about which direction you’re going, get the right people on board, the wrong people off, and put the right people in the right seats. THEN start deciding where you’re going. Along the way your Hedgehog Concept will begin to emerge.
- Hedgehog Concept: a strong argument for focusing on the one thing your company is best in the world at, what it’s not the best in the world at, what your key economic drivers are, and what your core people are incredibly passionate about. To get there, you’ll have to confront brutal truths, also known as The Stockdale Paradox.
- The Stockdale Paradox — Confront the Brutal Facts: you can’t move forward if you don’t honestly address how you got to where you are. The Stockdale Paradox is named after Admiral Jim Stockdale, a United States military officer held captive and tortured for eight years during the Vietnam War. Despite everything, he never doubted he would make it home alive. Unlike his more optimistic prison mates (“we’ll be home by Christmas”; “we’ll be home by Easter”), which is good for short-term distraction, he confronted the reality of their situation head-on while retaining the faith that he’d prevail in the end. He lifted prisoners’ morale by creating a tapping code so they could communicate with each other and developing a milestone system that helped them deal with torture. And he hid intelligence information in innocent letters to his wife.
Collins and his team describe The Stockdale Paradox as:
“You must retain faith that you will prevail in the end, regardless of the difficulties.
AND at the same time…
You must confront the most brutal facts of your current reality, whatever they might be.”
- Flywheel Effect: as described by Collins — “No matter how dramatic the end result, good-to-great transformations never happen in one fell swoop. In building a great company or social sector enterprise, there is no single defining action, no grand program, no one killer innovation, no solitary lucky break, no miracle moment. Rather, the process resembles relentlessly pushing a giant, heavy flywheel, turn upon turn, building momentum until a point of breakthrough, and beyond.” In other words, it’s a slow burn, a constant push of incremental steps in the right direction. There is no overnight success or one big aha moment.
Change is inevitable, and the good-to-great companies consistently found ways to deftly navigate the vast and churning sea of change, always led by people that were purposefully chosen to occupy a seat on the bus.
People First. Always.