One of the first points made in the book is the idea that good is the enemy of great. Collins says that we don’t have great schools because we have good schools. What we have is good enough so no one is pushing to get to great. The same things happen in companies. usually whoever sets up a company has a strong vision for the problem they are solving and for who. If that founder moves on and someone else takes the reins then the vision can become diluted or twisted. He gives the example of Walmart. Sam Walton set up his business to offer his customers the best possible value for their money. Once he was no longer there the focus remained the same but it has had to this day a massively negative impact on their supplies who are squeezed to the point of failure. The author proposes that this was never Sam Walton’s vision for his company.
So what is it that moves the needle from good to great in a company?
There needs to be a ‘Level 5’ leader. This is someone who among other things deflects praise to the team while owning all of the failures. A good company can have a genius leader who leads through command and control but this results in their people being incapable of making decisions, using their initiative or taking charge. Great leaders motivate people to be autonomous.
A great company gets the right people on the bus in the right seats. Jim Collins makes the point that the leader must think ‘first who, then what’. There is no point in trying to move a company forward with the wrong people making the critical decisions. The right people must be in place before strategy, org structure or tactics.
A great company also faces up to the brutal reality of their current situation. A company will not go from good to great without knowing where they are right now. If the leader is too charismatic and outspoken then the direct reports might be too afraid to bring the truth to them. Collins mentions Winston Churchill who during WWII had a ‘statistical office’ who reported directly to him. Their job was to give him cold hard facts without interference from the chain of command.
The author also talks about The Hedgehog Concept. A fox wants to eat the hedgehog so he uses his cunning to stalk his prey, he is lightening fast, he is fleet of foot and at the perfect moment he strikes. But the hedgehog just rolls up into a ball and the fox is thwarted. the message here is that the fox has a bag of tricks, the hedgehog has one trick. The hedgehog’s trick is better than anything the fox can offer. In business, you should be the hedgehog. Do one trick better than anyone else. Own the space and dominate.