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Book Review – Good to Great

by mel starrs on June 19, 2006

in Book Review

Baby Hedgehogs by Chief Trent

I’ve had the Jim Collins book ‘Good to Great‘ on my bookshelf since before I embarked on my MBA exploits. As part of my ‘Business Excellence’ module, I finally got the chance for an excuse to read it.

There are loads of reviews out there, including some which are less than complementary. I agree with some of the criticism levelled at the book (especially the confirmation bias effect), but there were a few bits and pieces which I took away as useful. My thoughts on each section are below:

  • Level 5 Leadership – I’m not overly convinced by Collins’ argument here – by placing the emphasis on ‘personality traits’ it makes the model near impossible to replicate elsewhere.
  • First who…then what – I am a firm advocate of this sentiment, especially getting the wrong people off the bus. Collins portrays a very idealistic view of the world though. Reality doesn’t always work this way! I do agree with the sentiment of limiting growth to meet the capabilities of the current staff. The danger in doing things the other way round can be damaging to all parties. Fast growth without the accompanying growth in staff (and by this I mean either growing the capabilities of existing staff or increasing the number of staff) is a very dangerous strategy which can backfire in a number of ways, including disappointing clients, disillusioning your overstretched staff and failing to meet financial targets.
  • Confront the brutal facts – I can see how this builds upon the previous point. Trying to implement this without having the right people would be another recipe for disaster.

Spending time and energy trying to “motivate” people is a waste of effort. The real question is not, “How do we motivate our people?” If you have the right people, they will be self-motivated. The key is not to de-motivate them. One of the primary ways to de-motivate people is to ignore the brutal facts of reality.

  • Hedgehog Concept – knowing one big thing and sticking to it. A great example I have come across recently of this is Isis. As developers, Isis know waterside regeneration and they stick to that, and only that. A brave move, but it seems to be paying off for them. (Outperforming the industry average of profit/sales % by almost double for 2004 according to ICC Plum).
  • A Culture of Discipline – the key is diligence and sticking to business which sits within the Hedgehog concept. In other words – knowing when to say no, knowing exactly what your strategy is, and knowing when projects fall outside of this scope. Having a ‘stop doing’ list, rather than a ‘to-do’ list. This is one thing I think I could apply all over my life – not just work!
  • Technology Accelerators – Collins believes that technology doesn’t drive these ‘Good to Great’ companies, but merely assists them. This bangs against what I have recently read in books such as ‘The World is Flat‘. As Collins is looking at well established companies, he hasn’t looked at start-ups who have based their entire business proposition on a new or emerging technology. His findings are interesting though, and perhaps a cautionary note as to what expectations should be for technological advances in a well established company.
  • The Flywheel and the Doom Loop – the sentiment of this chapter is that big gestures are doomed, especially if they are labelled and badged as such. Very much a Kaisen approach. I think the context is important here – when faced with an urgent threat, it’s sometimes better to take a great leap than baby steps:

Don’t be afraid to take a big step if one is indicated. You can’t cross a chasm in two small jumps. – David Lloyd George

Some of the ideas thrown up by this chapter I am currently further exploring by reading Kaplan and Norton’s Balanced Scorecard

Overall, the book presents an RBV (resource based view) of management which sits well with today’s fashion of eshewing the old school “command and control” way of doing things, which probably explains the book’s popularity.