Do you get inspired by reading/listening ? For me I get that from both ! Why not share those ideas across ? My blog is all about that
Wednesday, June 18, 2008
Good to Great - Jim Collins
It's another audiobook review again. This time this book is one of my all time favourite audiobook/book that I've read for the past 5 years surpassing The world is Flat by Thomas Friedman (I'll share with you my review of this book in the future). Not too say that other books was no good but it completely changed my perspective about business. Jim Collins was able to share his idea across based on a research done on company listed in stock exchange. Business as we all know have few phases i.e. boom, plateau, bust same as business cycle. One thing interesting is why certain company succeed while other company failed ? I wondered if there's a way that we can increase those success rate ? I suggest those who like to find out read this book. This book is a sequel of Build to Last although this book should be the prequel of that.
Here it goes The book outlines around 11 companies that have a period of mediocre performance in the 10 years period and period of consistent growth for 15 years (Outperforming the market and peers by at least a factor of 3) based on a research done by the author and his research teams. You'll be surprised that company like Coca-cola, Disney, GE, Intel and Microsoft alike were not in the list. Companies that make it to the list are Abbot Laboratories, Kimberly-Clark, Philip Morris, Pitney Bowes, Philip Morris, Fannie Mae, Wells Fargo, Walgreens, Kroger, Nucor, Gillette and Circuit City.
The author discuss on how company that are boring, not having charismatic leader manage and yet amidst all the challenge ahead. What interest me on what being mentioned by the author was few concepts that I'll mention below
1. Level 5 leaders - CEO who combined with personal humility and professional will rather than outgoing
2. Great bus driver story on how to assemble the right team i. Getting the right person on the bus ii. Getting the wrong person off the bus iii. Rearrange the right person to sit on the right place iv. Only then you start to plan where you should go
3. Stockdale Paradox - Based on the story of the POW in Vietnam. The concept of confronting the brutal facts of your current reality on the oncoming challenges, never give up even though it's gonna take a long time to succeed and finally retain faith that you will prevail in the end regardless of the difficulties !
4. Hedgehog concept - The parable of hedgehog and fox is a good story to being. Understanding of what you can be the best at. Sometimes pursuing many ends at the same time without one overall concept or unifying vision may cause you to be out of focus. Think about Freud, Darwin, Einstein and Alam Smith. Do you see the commonality ? 3 intersecting circles of Hedgehog concept (See attached graphics) i. What you can be the best in the world at (and, equally important, what you cannot be the best in the world at). This discerning standard goes far beyond core competence. Just because you possess a core competence doesn't necessarily mean you can be the best in the world at it. Conversely, what you can be the best at might not even be something in which you are currently engaged. ii. What drives your economic engine. All the good-to-great companies attained piercing insight into how to most effectively generate sustained and robust cash flow and profitability. In particular, they discovered the single denominator—profit per x—that had the greatest impact on their economics. (It would be cash flow per x in the social sector.) iii. What you are deeply passionate about. The good-to-great companies focused on those activities that ignited their passion. The idea here is not to stimulate passion but to discover what makes you passionate.
5. Flywheel concept - Change to greatness requires momentum build upon your previous effort of moving the flywheel (habit/skill/vision/goals) little by little.
Other important info - A successful well ran company can excel even on a declining industry - Concept of using stop doing list. Company will tend to be suffocate due to indigestion on the all things that you to put your hands on rather than be hungry on focusing just the few areas
If you would like to find out more, go to GoodtoGreat website. There's ample of resource from podcast, tools, article etc that able to lead your company from Good to Great !