One enduring business book that every C-level should read is Good to Great by Jim Collins. Although some of the examples that he uses may be dated (Circuit City from 2001), the keys to creating a great company are timeless. I initially read and applied his philosophies in my corporate job when the book was first published. I recently read it again, and realized that I’ve been consulting to small businesses on these topics for over 10 years. I’ll highlight a few points, chapter by chapter, on what all companies should be doing:
Chapter 1: Good is the Enemy of Great
Historically, the great companies were led by people who worked tirelessly toward a vision that they created. You may have heard that the millennial generation does not have that same will to work for the outcome. They want the benefits of success without willing to sacrifice – “good” may be good enough, but it will never be great.
While I do believe that work/life balance is more important to this generation than any previous generations, I don’t believe that they don’t work hard. They understand the “work smarter not harder” mantra. Let’s also not forget that millennials are more connected than any previous generations, so they are never unplugged. Millennials can make companies great, and this is important since they will be ½ of the working population by 2020.
Chapter 2: Level 5 Leadership
Good to Great was published well before another book that I refer to often, The Five Levels of Leadership by John Maxwell. Collins talks only of the Level 5 leader (humility, strong will, company minded), but Maxwell further defines all of the levels, showing that they build on themselves to get to Level 5. Maxwell’s book came out 10 years later, and I think he benefited from much more research on leadership in those years.
Chapter 3: First Who… Then What
Collins got it right 15 years ago: great companies have great people. For service companies, everyone has to be an A-Player to be great. Product companies might be able to become great without all A-Players, but only in limited positions.
I’ve been focused on hiring and retaining A-Players my entire career. Collins says: “Get the right people on the bus, get them in the right seats, and get the wrong people off the bus.” Too many companies allow the wrong people to stay, and the negative impact is almost immeasurable. One of the first things I look for when working with companies is to find the people who are in the wrong positions or on the wrong bus. Then I help the company find the right people. While I’m not a full-time recruiter, I help my clients find A-Players and have a great history of doing so. (Read my eBook: Perfect Hire Blueprint to learn how you too can find A-Players.)
Retention of A-Players is also critical, and I agree with Collins’ view that you can’t motivate people. You need to provide the right environment for them to thrive and then get the right people who will motivate themselves.
Chapter 4: Confront the Brutal Facts (Truths)
CEOs can be deluded into thinking that everything is great. Many times the people around him/her don’t want to give bad news (AKA: CEO Disease). This is critical in making decisions.
Collins speaks of the Stockdale Paradox (after Admiral Stockdale, who was a POW). The essence of it is this: maintaining the unwavering faith that your company will prevail, while confronting the most brutal facts of the current reality.
For some companies, their business has changed forever because the world has changed. It could be as subtle as customer’s expectations (ex. free shipping), to something more drastic such as lack of demand (ex. daily newspapers). Tenacity is a key attribute of a CEO. As long as there is a willingness to reinvest, the company can turn profitable again with an assessment and a good strategic plan.