Jim Collins is well known for distilling large amounts of data about successful companies into catchy soundbites and key principles for running a good business. Until now he has concentrated on hugely successful companies with billions of dollars of revenue and 100,000s of employees.
In Great by Choice, Collins looks at companies when they were starting out and faced particularly challenging circumstances. At many stages in its life a company can be
fragile. Collins focuses on how to protect and grow the company despite adverse events. There is even a chapter on luck.
Several of the insights that seem like they could be useful for us are:
20 mile march – these are pre-set targets that essentially regulate behaviour. If times are tough the organisation still needs to strive to meet its 20 mile target. When times are easier the 20 mile target acts as a check on reckless behaviour and over-stretching. I think the hardest challenge for us will be determining what an appropriate 20 mile march is. Is it related to growth, profitability, sales, customer satisfaction, new products, new services or something else altogether?
Fire bullets, then cannonballs – trying small things first and then following up the ones that work with larger, big ticket efforts. I think we do a little of this but not always in a conscious way. The biggest handicap I think is that we don’t determine beforehand at what point (or at what results) a bullet should become a cannonball. So we fire lots of bullets but sometimes pick up on the successful ones and sometimes not, depending on what else we have on the go at any given time. Like all organisations, to launch a cannonball is a significant commitment and there is always an opportunity cost. While we are preparing, priming and delivering our cannonball there are other things we are not doing. We do have a really good internal reference point in the Polytech initiative that we ran and there are some learnings from this that we can apply to determining our bullet/cannonball strategy.
SMaC recipes - these are the Specific, Methodical and Consistent ways in which a business is run. The SMaC will tend to vary very little over the life of the organisation. This sounds appealing but I think could be tricky for us. My perception is that we like to be a little fluid and to have the freedom to do things if they interest us, not just if they fit in with a plan or ways of working. On the other hand, maybe I am overplaying this somewhat and we flex and display fluidity within fairly consistent boundaries. I’m not sure. Fortunately, tucked away on page 188, Collins gives his list of workshop questions that he uses with executives to help them determine their own SMaC. Time for a little self-diagnosis methinks. I think I’ll be clearer about our SMaC or what is needed once I’ve applied the lens of these questions to our organisation.
Leading above the death line – this metaphor didn’t really work for me but the principle behind it resonates. Collins calls this ‘Productive Paranoia’. This is all about cash reserves, preparing for worst case situations, running scenarios and trials of
what can go wrong – building in the buffers and shock absorbers for dealing with unexpected events. I think this is something we need to start doing and haven’t to date. This has really been a function of our evolving but steadily growing company. When we were just a company of two or three, the worst case scenario was pretty easy to mitigate. Now we are a company of 15, with hiring plans for 2012, things are a little more complex and negative impacts are less easy to cushion. It is time for a different,
more cautious strategy here.
When reading the book too I got an uncomfortable flashback to one of Collins’ principles from a previous book. This principle is that successful organisations celebrate success but also confront the brutal facts. I think this is an area where organisationally we are weak. We tend to operate inside our own bubble a little with strong reinforcement from each other and our customers about how great we are. We don’t often spend time with the ‘ones who got away’; we rarely review unsuccessful projects; and we don’t dwell, or
necessarily even share, the times when we lose bids. Our internal news items are overwhelming positive. This makes us happy! But doesn’t necessarily build the focus or care that we need and can make us too cavalier when we don’t shine.
Lots of food for thought in Great by Choice and some useful business planning and diagnostic tools.