How can your company go from Good to Great? We’ve been exploring this through 12 questions Jim Collins offered his Australian business owners and Growth Summit attendees at Melbourne this February.
Let’s define greatness again in Jim Collins terms. Collins suggests three outputs to measure your business for greatness.
- 1. The first is truly superior performance in the arena in which you operate. In business, the measure is financial—return on invested capital. “I think that, to be considered great, a company must have sustained returns on invested capital substantially in excess of other companies in its industry,” Collins offers.
- To be great, a company also has to make a distinctive impact. Collins added I define that by a test: “If your company disappeared, would it leave a gaping hole that could not easily be filled by any other enterprise on the planet?” Collins calls this the “The Wonderful Life” factor. People would miss the company if it went away. It could be something unique or different or innovative, or the distinctiveness could be in the execution—you do something so well that you're irreplaceable. If you can't answer what would be missed, then you haven't yet made a distinctive impact.
- The third factor is endurance. A truly great enterprise has the capacity to last beyond any product cycle, any founder, any individual leader, and still maintain superior performance and distinctive impact.
At Positioning Systems we’re dedicated to providing our customers with Strategic Discipline. Here is Collins insights on creativity and discipline. “Discipline stands out in our work because it's so much rarer than creativity, but creativity and discipline go hand in hand. What do humans do? We create. We don't have to learn to be creative. We have to unlearn what gets in the way of our creativity. Discipline, on the other hand, is not the natural human state. So it's a differentiating factor. What is superrare is the ability to blend creative thinking with discipline and to do it in such a way that the discipline helps rather than hurts the creativity. It's a special group of leaders who can do that.”
Is your company short on discipline? Is it a characteristic that can be improved on and practiced more effectively by your organization? Consider contacting Positioning Systems for help with this Super Rare ability we call Strategic Discipline.
Let’s continue with the final three of Collins 12 Questions to take your company from Good to Great:
10. Do we passionately embrace the Genius of the AND—especially the fundamental dynamic of “Preserve the Core AND Stimulate Progress”?
According to Collins, “No truly great company exists purely to make money.” It reminds me of a biblical reading from last week’s Holy Week. The author noted that, “Without a purpose any problem is too big.” If your focus is money there will never be enough to satisfy you. There are great dichotomies in running a business Collins noted. It requires embracing what he called, “and people not or people” He said the “one giant and” that separates enduring companies from ones that fail, is the dual endeavors of preserving the core of a company and stimulating progress or growth.
It is about separating out the values of a company with the practices that build up around the values.
One of my clients starts every meeting with his team asking someone to recite the company’s Core Values, Strategy Statement, and Core Purpose. It usually requires anywhere from 5-15 minutes for this to be accomplished. Do you have any question that this President believes in “and People.” He’s has a constant vigil for building the company culture. He possesses the 3rd Core Behavior Collins calls productive paranoia (From Great by Choice) It’s rare to find this combination in a leader. If not a level 5 leader, he’s certainly on short path to attaining it.
11. What is our BHAG – our Big Hairy Audacious Goal – and do we have the SMaC to achieve it?
Discovering your BHAG is the merging point of your Hedgehog Concept. These are all components of our One Page Strategic Plan. The journey to discovery is often time consuming, and with the “Whirlwind” that most companies are mired in, the investment in discovering your BHAG frequently never occurs. With technology changes and VUCA increasing each day, the energy to invest in a goal 10 to 25 years in the future is often looked upon as an exercise in futility. Still this investment pays big dividends.
“Good to great is never done,” said Collins, who said business owners need to find the one ambitious goal that will dominate their lives and their companies. “If you know for certain you will achieve it, it is not a BHAG,” he said. “The climb will make your stronger.”
12. What should be on our Stop Doing list?
This is perhaps the most practical question for anyone wishing to improve their productivity. Collins notes, “Most business owners and entrepreneurs have a To Do List, but Collins recommends starting a Stop Doing List as well. These are the things that if you stop doing them, will equally help your company on its path to greatness.”
What importance does your business place on discipline? “Discipline begins with what we have the discipline not to do,” Collins notes. Several of my customers have made it a priority to create a Stop Doing List. It’s actually an assignment that was part of the E-Myth’s Time Management process. Have you done a time log recently to discover how you’re spending your time? Most everyone I know is not only reluctant to complete a time log, but loathe the idea of even considering doing one. What a waste of time they feel. I don’t have time for it! You can’t manage what you don’t measure.
The first step to knowing how to improve your time is to discover how you are currently spending it. Once documented you discover where you are investing time incorrectly. Where can you delegate? Where are you perhaps doing work that is reverse delegation and the work of your subordinates? If you’re having a issues with reverse delegation and having the monkey put back on you, check out The Problem with being the Chief Problem Solver, Getting Your People to Solve Challenges – Get the Monkey Off Your Back, and More Questions to Get the Monkey Off Your Back.
What activities are you doing that you shouldn’t be? Make a stop doing list now and then commit to stop!
There’s the list of 12 questions Collins identified to move your company from Good to Great! How you do? If you’re interested in improving your company’s discipline check out Positioning Systems’ Strategic Discipline. Or contact us to schedule a 4 Decisions Needs Assessment of your business.
Next blog we’re going to revisit purpose and why your business needs a Core Purpose.