Since his previous books, Collins has been challenged on whether companies can really be built to last. This seems particularly unlikely given the decline and collapse in many previously leading financial and industrial companies over the last year.
But there are examples of enduring greatness (P&G, Johnson & Johnson, GE etc).
Collins still believes that, whatever its history, a company does need to decline. Products and services may become obsolete but that doesn’t mean that the companies that make / supply them need to become obsolete and irrelevant. And its future – whether it prevails or fails, endures or dies - is largely in its own hands. Companies decline not because of broader changes in the world or competition but because of what do to themselves.
In Good to Great and Built to Last, Collins looked at great companies. He still believes that the starting point for any truly great organisation is to get the right people and then do – who and then what. And that good is the enemy of great. And great comes from conscious choice and discipline. According to Collins, this isn’t a perspective, but an empirical fact.
In How the Mighty Fall, Collins looked at the process of decline. There is a 5 stage process:
- Hubris born of success
- Undisciplined pursuit of more
- Denial of risk and peril
- Grasping for salvation
- capitulation to irrelevance and death.
In the first 2 stages, companies look the same from outside, so how do you know if you’re in one of these stages? Note you can get all the way to the end of this process and come back and be great – even if you stumble, the future’s still in your hands. (Collins’ next book will look at what stops an organisation doing something great from spinning out of control.)
The answer is not to think of yourself as great (the minute you do, you’re not).
Getting to great / avoiding the fall
The main action you can take to avoid decline is to take responsibility for your results, rather than taking personal credit for good times but blaming external events for the bad. Both decline and ascent are self inflicted.
You also need to ensure that you have a set of values and a purpose beyond just making money. This is the hedgehog concept that I think goes beyond Collins’ BHAG concept. It refers to a combination of being passionate about; being the best in the world and economic demination (see my posts on ‘mojo’).
You need to execute well - most companies fall not because they fail to take advantage of new innovations but because they fail to execute.
And don’t forget about Level 5 leadership. The main attribute here is humility, built on ambition for the organisation rather than themselves, and the determination to do what is needed to succeed. And note that great leaders can’t make a company great on their own – they need to get the best people into the key seats – and it’s this team that make the company great. But poor leaders can ruin a company completely on their own!
You need to keep great leaders onboard – it takes at least seven years to become great,
Finally put people first. Before any financials are discussed, talk about how many key seats you have on the bus – and how many of these are filled with the right people. Have the numbers.
Oh, and don’t worry too much about mergers and acquisitions, executive compensation, or motivating people (the right people are self motivating) – these have no correlation with great performance.
More specifically:
- Conduct a self-diagnosis (see Collins’ website)
- Track seats and people in these seats
- Build a personal Board of Directors – choose people for their character (I like this idea)
- Turn off electronic gadgets – disciplined thought needs time to think (at least3 days of white space every 2 weeks)
- Double your questions to statements ratio (focus on being interested vs being interesting)
- Help your organisation build a Council to focus on the hedgehog circles above
- Do a not-do-to-list (stop doing vs start doing) – do we add this an action to our to-do-lists?
- Replace job titles with responsibilities
- Re-articulate and re-commit to your values you will not compromise
- Set your BHAGs 15-25 years into the future.
Collins left us with the challenge to “be useful”! I hope you found this blog / this post useful – please comment below if you do!
Find further conference reports at
http://strategic-hcm.blogspot.com/cipd09
Come back on Friday 20 November for a summary of the whole conference.
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One of the most powerful insights I gathered from JC's Good to Great, on running a business or organisation is from the metaphor of a "bus ride". Get the right people in the seat and then decide the direction(strategy).
ReplyDeleteWhat more can a HR guy ask for in futhering his call for competency based human capital development?. So I thought, when I tried selling the common sense behind the concept to the management. Sadly, I did not go far because the general feeling was that they were no where near "Good" to think of becoming "Great"!. :). Well, at least, they were honest to admit.
I suppose HR will have to content and stay the course on the more popular David Ulrich's 'outside-in' and other bottomline-focus model of HC management.
Yuvarajah,
ReplyDeleteI think there are ways to make a compelling case to management - I'd be happy to help you with this!
Of course, it does depend upon the management team.
I like Lynda Gratton's explanation of this. There are one group of managers - the accountants - who can be convinced by metrics etc.
There's another group who believe in all this already, and they don't need to be convinced.
But the last group will never be convinced. Lynda calls them the b******s.
With this group, HR needs to accept its lot or go and work elsewhere.
Greetings and thanks for the offer, Jon.
ReplyDeleteYou are right, "accountants" CAN be convinced by metrics. Unfortunately, they are ONLY fixated on financial indicators and don't have to "struggle" to get invited to the executive. It's not their fault if their profession doesn't demand of a holistic competency model in monitoring the "operational" side of a business. I wished I could share the list of HR Audit from KPMG, just to showcase the financial perspective of strategic HR.
Yes, working with the "BS" group can have it's price. Yes, it's either HR ride along or leave the scene.
As for me, I had become a Ronin !
OK, I'm going to have to do a post on this to try and convince you. I'll try for Mid-December.
ReplyDelete