From good to great. Part 1
We continue to read good books from this list from Milfgard , and I continue to write extracts from them. I do this for two reasons: to apply in our studio, and so that others can familiarize themselves with brief content and understand for themselves whether it is worth reading the original source. The book is called “Good to Great” by Jim Collins. She tells about what companies have done that have become not only good, but great and have been able to preserve this success.
We quickly get used to good things and, therefore, we stop seeing opportunities to do really great things. There is one widely known method: “do not fix what works”. This also applies to companies. There are just good companies, and there are outstanding companies that achieve outstanding results. A large-scale study was conducted by the author team of Jim Collins, for which they spent more than 10 man-years and the result is worth it.
The researchers selected companies that:
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The study was conducted regardless of the industry to which the companies worked. As a result of the study, 11 outstanding companies were selected: Abbott, Circuit City, Fannie Mae, Gillette , Kimberly-Clark, Kroger, Nucor, Philip Morris , Pitney Bowers, Wal greens, Wells Fargo . Honestly, from this list I heard only about two and put them in italics. These companies are not as well known as Coca-Cola, General Electric or Intel, however, their performance exceeded the market average by more than three times over 15 years!
But the researchers did not stop only on outstanding companies. For each company, they found a large analogue company with which they could compare, but which did not achieve the same success. As a result, a number of points were found that distinguish outstanding companies from mediocre ones.
It turned out that each of the outstanding companies was headed by a level 5 manager. And the levels developed by researchers are only five and these are:
The fifth level is the highest degree of hierarchy of abilities for top management. There is no need to move consistently from the first level and above. It is possible to develop the qualities of managers of lower levels later, but it is important to understand that level 5 includes the qualities of all lower levels.
What are the qualities inherent in managers level 5? —Skromnost + will. They are both modest and strong-willed, shy and courageous. The head of level 5 thinks about the successor, the main thing for them is the success of the company , not their personal success. They do not exalt themselves and do not like publicity. They have an unwavering determination to do what needs to be done. They will sell the factories or lay off their brother if it is necessary for the prosperity of the company. When it comes to company failures, they “look in the mirror”, i.e. blame themselves; when it comes to success, they “look out the window”, i.e. do not attribute these merit to others or luck.
Interestingly, in 10 of 11 outstanding companies, the head of level 5 was found among his own employees. They did not call the "star" -top manager from the side, but he was inside the company.
It often happens that when we have an idea, we start looking for a team for its implementation. It is remarkable that the leaders of outstanding companies act differently. The first thing they start with is a team. They pick the right people and (attention!) Get rid of unnecessary. Only after that they decided where to go. Frames do not just decide everything. The basic idea is that WHO is more important than WHAT. This is more important than vision, strategy, organizational structure.
Companies did not follow the strategy of “genius and 1000 assistants”, where a talented leader determines a strategy and the whole enterprise rushes to its intended goal. The problem is that this model stops working as soon as the leader leaves. Thus, the company cannot develop steadily over a sufficiently long period of time.
The leaders of great companies are strict (but not cruel) in making decisions regarding personnel. Yes, they cut people if necessary, but in extreme cases they do so much less than other companies. They make decisions and quickly put it into action. When it is necessary to lay off 1600 people, they do it in one day, without stretching the “pleasure” for months or years.
The management teams of the most successful companies argue fiercely with each other, working out the necessary decisions, but they act as a united front in the implementation of this decision.
It turned out three basic principles of personnel issues:
If you see a trend in your market, do not hide your head in the sand like an ostrich. You need to look around and see that the picture has changed. For example, when the level of well-being of people grew up the townspeople of my city began to like clean shops more, but a little more expensive than cheap dirty grocery stores with a queue at the checkout. In our city there is a striking difference between the shops "Lenta" or "7th" compared to "Magnets". The leaders of the latter would be good to reduce the level of rudeness and increase the level of cleanliness.
Consumers feel the attitude and go to those stores where they think about them. Successful companies often completely rebuilt their business and did everything in a new way in accordance with new trends. They redesigned shops, closed pharmacies, reoriented to other segments of the market, while ordinary companies simply closed their eyes and pretended not to see anything.
Facts are better than dreams. If you carefully analyze the situation - the right decisions become obvious. And vice versa: without having enough information about the situation, you cannot make the right choice. But in order to always be up to date with the events in your company there must be an atmosphere where the truth can be heard. Four principles can be applied for this:
Belief in success is a very important thing. You can challenge Goliath and not only not lose, but also, perhaps, win. A relatively small corporation, Kimberly-Clark challenged Procter & Gamble when the latter entered the market. All other competitors in the industry just gave up, but Kimberly-Clark remained the only competitor to P & G in the field of consumer paper products and now we can see its products in all stores in the world. They did not lose faith in success and this was a matter of pride for KC employees. Viktor Frankl also believed in success and also won.
When a fox runs up to the hedgehog, the hedgehog produces one effective and simple action: it collapses into a ball. When we want to create a great company, we need to think about what simple actions can lead us to success. All great companies made seemingly simple decisions and followed them. How to make a simple decision? The answer is given in the form of three circles.
It is important to find the intersection of all three circles and work in this area of ​​activity.
In order to develop an understanding of the decision within the three circles, you must begin to develop this decision. And do it periodically with the help of informal meetings. Here are the characteristics of the board:
Great companies took an average of 4 years to develop a concept, so it makes sense to start immediately.
PS: About half of the book is included in this article. The greater part is still ahead, so the next article will be soon. You can wait for its release, but I strongly recommend that you familiarize yourself with the original source. The book is quickly read and captures.
UPD: In this publication, you can see selected quotes, and spmbt shared a link to the source in the comments .
UPD 2: Released the second part of the article .
If someone has experience in applying at least some of the principles outlined above, please share your experience in the comments.
1. Research
We quickly get used to good things and, therefore, we stop seeing opportunities to do really great things. There is one widely known method: “do not fix what works”. This also applies to companies. There are just good companies, and there are outstanding companies that achieve outstanding results. A large-scale study was conducted by the author team of Jim Collins, for which they spent more than 10 man-years and the result is worth it.
The researchers selected companies that:
- first for five years they were middling
- there was a turning point
- then their total return rose to 3 times the market average.
- held the achieved result for 15 years and more (you can not carry 15 years in a row)
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The study was conducted regardless of the industry to which the companies worked. As a result of the study, 11 outstanding companies were selected: Abbott, Circuit City, Fannie Mae, Gillette , Kimberly-Clark, Kroger, Nucor, Philip Morris , Pitney Bowers, Wal greens, Wells Fargo . Honestly, from this list I heard only about two and put them in italics. These companies are not as well known as Coca-Cola, General Electric or Intel, however, their performance exceeded the market average by more than three times over 15 years!
But the researchers did not stop only on outstanding companies. For each company, they found a large analogue company with which they could compare, but which did not achieve the same success. As a result, a number of points were found that distinguish outstanding companies from mediocre ones.
2. Level 5 executives
It turned out that each of the outstanding companies was headed by a level 5 manager. And the levels developed by researchers are only five and these are:
- Head of the fifth level. His leadership allows to achieve exceptional and long-term results, due to the paradoxical combination of outstanding personal qualities and strong professional will.
- Effective leader. It forms the vision of the future of the company and consistently ensures that the company moves along the intended path. Provides high standards of quality work.
- Competent manager. It organizes people, rationally allocates resources in order to accomplish assigned tasks.
- Valuable team member. He makes a personal contribution to achieving the goals of the company. Works effectively with other team members.
- Highly professional employee. Contributes through the active use of their abilities, knowledge, experience and ability to organize their work.
The fifth level is the highest degree of hierarchy of abilities for top management. There is no need to move consistently from the first level and above. It is possible to develop the qualities of managers of lower levels later, but it is important to understand that level 5 includes the qualities of all lower levels.
What are the qualities inherent in managers level 5? —Skromnost + will. They are both modest and strong-willed, shy and courageous. The head of level 5 thinks about the successor, the main thing for them is the success of the company , not their personal success. They do not exalt themselves and do not like publicity. They have an unwavering determination to do what needs to be done. They will sell the factories or lay off their brother if it is necessary for the prosperity of the company. When it comes to company failures, they “look in the mirror”, i.e. blame themselves; when it comes to success, they “look out the window”, i.e. do not attribute these merit to others or luck.
Interestingly, in 10 of 11 outstanding companies, the head of level 5 was found among his own employees. They did not call the "star" -top manager from the side, but he was inside the company.
3. First, who ... then what
It often happens that when we have an idea, we start looking for a team for its implementation. It is remarkable that the leaders of outstanding companies act differently. The first thing they start with is a team. They pick the right people and (attention!) Get rid of unnecessary. Only after that they decided where to go. Frames do not just decide everything. The basic idea is that WHO is more important than WHAT. This is more important than vision, strategy, organizational structure.
Companies did not follow the strategy of “genius and 1000 assistants”, where a talented leader determines a strategy and the whole enterprise rushes to its intended goal. The problem is that this model stops working as soon as the leader leaves. Thus, the company cannot develop steadily over a sufficiently long period of time.
The leaders of great companies are strict (but not cruel) in making decisions regarding personnel. Yes, they cut people if necessary, but in extreme cases they do so much less than other companies. They make decisions and quickly put it into action. When it is necessary to lay off 1600 people, they do it in one day, without stretching the “pleasure” for months or years.
The management teams of the most successful companies argue fiercely with each other, working out the necessary decisions, but they act as a united front in the implementation of this decision.
It turned out three basic principles of personnel issues:
- Do not hire an employee if in doubt. Keep looking. Whether a person is suitable or not - the question is more of his character and abilities than his knowledge, education and experience.
- If a person needs to be fired, - act, making sure that he was not in the wrong place. Then it can be transferred to another position.
- Make sure that the best people work in the most promising , and not the problem areas.
4. See the hard facts in the face, but do not lose faith.
If you see a trend in your market, do not hide your head in the sand like an ostrich. You need to look around and see that the picture has changed. For example, when the level of well-being of people grew up the townspeople of my city began to like clean shops more, but a little more expensive than cheap dirty grocery stores with a queue at the checkout. In our city there is a striking difference between the shops "Lenta" or "7th" compared to "Magnets". The leaders of the latter would be good to reduce the level of rudeness and increase the level of cleanliness.
Consumers feel the attitude and go to those stores where they think about them. Successful companies often completely rebuilt their business and did everything in a new way in accordance with new trends. They redesigned shops, closed pharmacies, reoriented to other segments of the market, while ordinary companies simply closed their eyes and pretended not to see anything.
Facts are better than dreams. If you carefully analyze the situation - the right decisions become obvious. And vice versa: without having enough information about the situation, you cannot make the right choice. But in order to always be up to date with the events in your company there must be an atmosphere where the truth can be heard. Four principles can be applied for this:
- Lead by questions, not answers. It is good to hold informal meetings where you will ask questions like: “What bothers you as an employee? Can you tell me about it? Can you help me understand? " In this case, the manager may see the problem and respond to it promptly.
- By engaging in dialogue and dispute avoid coercion. Loud disputes, heated discussions, etc. At meetings of great companies this happened very often. The process was reminiscent of a scientific debate, where all participants sought to find a suitable answer.
- Perform an autopsy, not establishing who is to blame for death. The leader says: “I will take responsibility for this unfortunate decision. But you are responsible for learning all the useful lessons from this situation. Consider that our financial losses are your tuition fees. ”
- Create an inevitable feedback mechanism. For example, “underpayment” allows a client to pay as much as he considers necessary on the basis of satisfaction with a product or service. The client simply outlines the goods that does not satisfy him and does not pay for them. With "underpayment" it is impossible to ignore the facts. You often do not suspect client dissatisfaction until you lose it.
Belief in success is a very important thing. You can challenge Goliath and not only not lose, but also, perhaps, win. A relatively small corporation, Kimberly-Clark challenged Procter & Gamble when the latter entered the market. All other competitors in the industry just gave up, but Kimberly-Clark remained the only competitor to P & G in the field of consumer paper products and now we can see its products in all stores in the world. They did not lose faith in success and this was a matter of pride for KC employees. Viktor Frankl also believed in success and also won.
5. The concept of a hedgehog
When a fox runs up to the hedgehog, the hedgehog produces one effective and simple action: it collapses into a ball. When we want to create a great company, we need to think about what simple actions can lead us to success. All great companies made seemingly simple decisions and followed them. How to make a simple decision? The answer is given in the form of three circles.
- What can you be the best in the world and what kind of activities you can not? This is more than a core competency, because core competency is simply something you can do best, but not the best. But what you can become the best in the world may not be what you are doing now.
- How does your economic model work? All great companies had a clear understanding of how to maximize profits. Each great company developed its own key indicators (often unusual) by which business performance was measured.
- What do you especially like to do? You have to do what you and your employees have real passion for. You don’t need to stir up passion for what people don’t want to do, but you need to find a sphere where people will get a high from work.
It is important to find the intersection of all three circles and work in this area of ​​activity.
In order to develop an understanding of the decision within the three circles, you must begin to develop this decision. And do it periodically with the help of informal meetings. Here are the characteristics of the board:
- Advice exists for understanding the most important problems of an organization.
- The composition of the top management. 5-15 people.
- Everyone can argue and discuss, answer and ask. But based on the interests of the company, and not from their own
- Respect for other board members.
- Everyone has a deep knowledge of certain aspects of the activity.
- Council - permanent structure
- The Board meets periodically. No more than once a week, but at least once a quarter
- Without compromise, because These are not the best solutions. The final decision is made by the head of the company.
- The Council is an informal body. It is not registered in the organizational structure and it is not in the documents. He just is.
Great companies took an average of 4 years to develop a concept, so it makes sense to start immediately.
PS: About half of the book is included in this article. The greater part is still ahead, so the next article will be soon. You can wait for its release, but I strongly recommend that you familiarize yourself with the original source. The book is quickly read and captures.
UPD: In this publication, you can see selected quotes, and spmbt shared a link to the source in the comments .
UPD 2: Released the second part of the article .
If someone has experience in applying at least some of the principles outlined above, please share your experience in the comments.
Source: https://habr.com/ru/post/283796/
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