Hardk Nock Tigers

“Good to Great” is a best-selling book written by business guru, Jim Collins. He summarizes the research compiled by his team of twenty people who spent five years studying 11 companies that posted exceptional results over a fifteen year period. These companies achieved exceptional growth rates and stock performance. The research attempts to distill how these 11 companies went from “good to great.” What they found were seven common characteristics:

Leadership: The best performing companies are led by humble but driven leaders. Despite their lower profile style they are tenacious about the performance of their organizations. Collins refers to this style as “level 5″ leadership style, and unlike the traditional charismatic leaders, level 5 leaders are reserved but tenacious at the same time.

The right people: Collins describes getting the right people with the right skills on the team as “First Who, Then What.” Alternatively he says, “Get the right people on the bus, then figure out where to go.” So, the first priority of leaders at successful companies is to make sure that they have the right people in key positions.

Facing Reality: Leaders of successful enterprises also “confront the brutal facts” of their situation. They are honest about what’s working and what is not; furthermore, they don’t sugar-coat their situation or the operating environment. Even when the news is bad, they face reality because they know that this is the only way that they can ultimately make realistic plans to move forward.

Hedgehog Concept: The hedgehog concept is a simple but core concept for these successful companies. Just like the animal from which then concept’s name is derived, these leaders put their heads down and push ahead with an intense effort. Their companies focus on a few simple goals: How they make money; What they are best in the world at doing; and What motivates them to succeed.

Discipline: The leaders of these companies instill a high level of discipline into their organizational culture. Discipline helps to focus effort and leverage resources.

Technology: These companies use technology to help accelerate their growth. Technology is a way to leverage resources to achieve their objectives. In military parlance, technology would be termed a “force multiplier.”

The Flywheel: The flywheel refers to the concept of “success breeds success.” As these organizations become more successful, then their growth begins to compound just like the momentum of a flywheel.

“How the Mighty Fall” attempts to answer the question: How would a company know if it is failing? This question was inspired at a conference at the US Military Academy at West Point, NY where noted author and business guru, Jim Collins, was facilitating a select meeting of a twelve US Army Generals, twelve CEO’s and twelve social sector leaders. They were gathered to discuss whether America is on the verge of failing after over 200 years of success, and Collins was the referee for the debate. He had previously led research teams to uncover how companies became successful and published his findings in his earlier books, “Good to Great” and “Built to Last.” After the West Point conference, he decided to dig back into the research files from the previous work; however, this time he would look not for patterns of success, but for failure: What are the telltale signs of an organization in decline and what could be done to reverse failure? After studying companies that struggled and failed, he and his team of researchers found that there were five stages of decline:

Stage 1 – Hubris Born of Success: When organizations and individuals achieve high levels of success, they often develop an attitude of overconfidence. Their overconfidence leads to carelessness and sometimes even recklessness. Thus, while success should be celebrated, it must not cloud reality or drive foolish behavior.

Stage 2 – Undisciplined Pursuit of More: When successful organizations and individuals become overconfident, they often have a desire to achieve even higher levels of success and expend their resources in a quest for more market share, more new products, or new markets. They sometimes acquire other organizations in this pursuit, and will often stray outside of their industry or core expertise. Often, these ventures don’t work out, but when blinded by prior success, failure is tough to admit which leads to the third stage of decline.

Stage 3 – Denial of Risk and Peril: Blinded by prior success, it is not unusual for organizations that are in decline to deny that they are at risk or peril. Like a professional athlete, they sometimes view setbacks as temporary slumps, and keep doing more of the same hoping that they will recover. All the while, they are simply digging themselves deeper into a hole until the hole gets so deep that recovery might not be possible without drastic action.