By Jim Collins
Reviewed by Christopher Zoukis
Any company wishing to leap across the chasm separating a good company from a great company needs to re-evaluate its perception of how and why change occurs. The author, Collins, admonishes those who place their faith in the prevailing myths surrounding corporate change. He cites seven myths and debunks each one. For example, great companies “don’t motivate people – their people are self-motivated.”
Change does not happen miraculously. Collins’ illustration is the hatching of a chicken from an egg. From the outside perspective, the hatching appears to be instantaneous. From the inside – the chicken’s perspective – the hatching is the result of slow growth, development and evolution. The inference is that change occurs slowly, the result of indentifying and sustaining the direction of the corporation. Companies do not effect change by changing direction willy-nilly. Collins calls this type of change the Doom Loop, because it results in further directional changes, which destroy momentum and focus. Warner-Lambert’s protracted dissolution between 1979 and 1998 is the perfect example.
According to Collins, successful change takes place because of people, which means putting “who before what.” Collins’ illustration is a bus. Great CEOs – the bus driver – focus on finding the right people to ride on the bus. The right people are those who are self-motivated and pursue excellence. The wrong people are mediocre and produce only mediocrity. Once the CEO has the right people on board the bus, he/she focuses on the “what,” which is likened to a Hedgehog.
The Hedgehog Concept is a singular idea that informs every decision the company makes. The Hedgehog Concept encompasses three primary questions: “What can we be the best in the world at? What is the economic denominator that best drives our economic engine? And what are our core people deeply passionate about?” Honest answers to those three questions define a company’s Hedgehog Concept, which is essential in the leap from good to great. Collins warns that identifying the Hedgehog Concept requires time, discussion, and courageous action.
Courageous action sometimes involves the “stop doing list.” To illustrate this point, Collins uses the Kimberly-Clark Corporation, which was good at two things: consumer paper goods and paper mills. To become great, Kimberly-Clark decided focus on consumer paper goods. The company sold its paper mills, because the paper mills were on the “stop doing list.”
Collins concludes by re-emphasizing there is no “magic moment” in the leap from good to great. The leap necessitates “simplicity and diligence.” Senseless distraction is often the culprit, a roadblock best avoided by concentrating on “the right things.” If each person in a company focuses on moving their department from good to great – by choosing the right people – it can make all the difference.