#pm_library: “Good to Great”
Today in #pm_library, a few words about Jim Collins’ book “Good to great”. We can learn why some companies have managed to change and stay ahead of the competition for a long time.
“Good to great” describes a study that a team led by Jim Collins carried out. The team analyzed 1,400 companies to find 11 that grew at least several times faster than the market over the next 15 years. In addition, they analyzed the appropriate number of comparative companies that did not experience such growth at the same time, even though they started from the same point in the same industry.
Humble leaders
One of the essential factors of change is the specific type of leader — the 5-level leader. What features does such a person have? 5-level leaders put the good of the company first, not their ego. They do not shine in the media, are reluctant to accept awards, focus on the organization’s development, and attribute merit to the team and… luck. However, they can also make difficult, even drastic, decisions to put the company on the right track.
It turns out that these leaders didn’t start with the brilliant strategy they created but with building the right team. Who first, Then what. 5-level leaders didn’t look for people who would perfectly implement their bright ideas. They made a team that would work out such a strategy together and then executes it.
Great companies are also stand out because of their Culture of Discipline. The important thing is that this discipline is not imposed by regulations or a system of penalties and rewards. The organization must consist of people who can be self-disciplined.
The tale about the Hedgehog
Successful companies often focused on one simple (but validated) strategy and then treated it as their primary direction. These companies did not make too many changes and experiments that could distract the company’s activities. Instead, they focus only on answering those three questions: What lights your fire (“passion”)? What could you be best in the world at (“best at”)? What makes you money (“driving resource”)? This concept it’s called Hedgehog Concept. Why? It is tough to explain it in one paragraph; I refer you to the book.
Employees of companies that have followed the path of “Good to Great” unanimously stated that they did not notice a breakthrough moment in which the company makes some groundbreaking change. It was more like the launch of a flywheel. Slow, arduous, hard work that sets the flywheel in motion at one point, this momentum was driving the entire company to develop.
In “Good to Great,” we can get to know The Flywheel Concept. If you want to see how The Flywheel concept could be successfully implemented, I recommend reading “Working Backwards. Insights, Stories, and Secrets from Inside Amazon” by Colin Bryar and Bill Carr.
Is it a book for the Product Managers?
As a Product Manager, why do I reach for another business book? I have always felt that I have to make up for this competency gap as a person without a business education (or experience as a startup founder).
After reading “Good to Great,” I understood better some processes implemented and decisions taken in the companies I’ve been working in. As PM in the future, I will try to use the acquired knowledge to support stakeholders in putting the company on proper development. Some of the conclusions can be applied on a microscale to the product group itself.
To sum up. “Good to Great” is a long and sometimes overwhelming book, but it’s worth getting through. I’ve told you about many theories, but there are many good and bad examples from the companies you know. After the reading (or listening) of the audiobook, you’ll be surprised how much you learned. I was.
