Leader 2 Leadership

Good to Great - Jim Collins.

In his book "Good to Great", Jim Collins describes what he found as a key components of companies that achieved significant and long term greatness. One such factor was focus. Focus on a core business, product, industry or service. Nothing new there you say, but wait…….

Good to Great - Jim Collins - also available from Amazon.co.uk

Collins describes the storey of the fox and the hedgehog. The fox is continually devising new and more complex ways to attack the hedgehog but is always flawed by the hedgehog's one and only defence, that works every time, of simply rolling himself up into a spiky ball. A key point is, the hedgehog does not do anything but that. In corporate terms this means once you have worked out your hedgehog, you need to stop doing the other things that are really just distractions for you.

In their research they found that all the great companies not only had a key simple focus that they adhered to for the long term, but also that it was based on the answers to three questions.

The first, and the one that appeals to me the most, is Passion. Is the product or industry, or any aspect of these, something the key leaders are passionate about? By passionate he means more than an interest in the rewards, it's an underlying belief and love for the company or the product or the industry. You often see this sort of passion in primary school teachers or artists, it's a motivation to the result that goes way beyond the receipt of rewards to an almost greater good. This may sound almost unachievable to some, but imagine what you would not have not do to motivate people who were passionate about their work.

The second is the belief that you could be the best in the world. You don't have to be the best in the world. In fact, none of the companies identified by their study started out being the best, but they did believe it was possible. For me this comes back to both the empirical proof that you are in the running and belief in your own abilities. By looking at what you have achieved and how it could be better, most businesses should be able to assess if they could be the best in their world. Add to this the solid rational believe, and the second criterion is met. Collins talks about how company executives know when they have this belief. He describes it as a feeling of simply knowing and having "the quiet ping of truth, like a single, clear perfectly struck note".

Thirdly, it needs to make economic sense, and you have to deeply understand the underlying economic drivers. This cannot be taught and I feel is a significant part of what we mean by industry understanding. They focussed on a single ratio and worked towards this often very insightful target. An example sighted was for a company in the convenience store industry where the traditional measure might have been profit per store, but this company selected profit per customer visit. Profit per store would have led to fewer stores so the sales were not shared, by using on per customer visit it kept them focussed on the convenience aspect and therefore the sales side of the equation. In all the examples given in Good to Great there is a cleaver denominator chosen that reflected not just the industry they are in, but the way they approached the business and how they differentiated themselves.

Discovering your businesses Hedgehog is not an easy process. Collins states that it will take years, but as long as you gather the right people with similar passion with you, it will eventually evolve. He speaks about how a regular series of 'council' meetings may help, with robust and passionate debate, but states again it could take years, and in most cases they studied it did.

This is obviously a very brutal summary of a concept that can be put to a much wider use than simply a business. Consider personal hedgehogs? - are you spending your life on the things that you should, the things that you are passionate about, that provide appropriate reward (not necessarily monetary), that you are good at? It may not at first sound easily transportable to person activities but think about it and you may start to question some of the things you are doing that are distracting you from some of your more rewarding hedgehogs…

Cheers

Steve

	Good to Great - Jim Collins - also available at Amazon.co.uk