Tag Archives: Good to Great

Good to Great Finale

Posted on May 27, 2008 | Leave a comment

Over the last several weeks, I’ve posted articles about “Good to Great”. Now is the time to collect them together and finish this off.

Here is the list of posts:

Alternatively, just select the Good to Great category. Writing about the book has really helped to clarify certain parts I didn’t understand the first time around.

Putting it all together, much of this advice from “Good to Great” should seem like common sense. However, business sometimes loses track of this when in the thick of stressful competition. It is easy to get distracted and lose focus.

Most good companies will want to be great, but yet be unwilling to address what needs to change. Other good companies will only strive to be great once they are threatened. Perhaps they think they will be safe once they are great. And still other companies are perfectly happy to be good thinking it is just to hard to be great.

You are meant to be great. Companies just need to realize that they are not living a full life and that it would be actually easier to be great than to struggle being good.

I would have been much more critical of “Good to Great” had I not seen this happen in my own career. In many ways, “Good to Great” helped to explain why things weren’t great.

Thanks to Jim Collins and his research team for writing such wonderful material!

Also, watch the video in “Good to Great Video Explanation“ to understand quickly what “Good to Great” is all about. After that I would suggest reading the book.

And then ask, how can I make my company great?

Good luck.

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Good to Great Video Explanation

Posted on May 20, 2008 | Leave a comment

This is where understanding “Good to Great” should get a whole lot easier.  If you have an hour to spare and are curious but don’t feel like reading the book yet, watch this video.  Charlie Rose, famous on PBS in America, interviews Jim Collins and covers the “Good to Great” topics during this hour long video.

They explore the myths of business and how great companies are not built from these myths.  It is a very open honest exploration of what it takes to make a great company.  Charlie Rose can be very focused and even challenging of his guests.  In this case he appears to like what Jim Collins has to say.  They seem more like friends than the typical interview process.

I see this video as an easy way to learn the “Good to Great” basics.

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From Good to Great to Built to Last

Posted on May 13, 2008 | Leave a comment

Built to Last

Finally we are at the last chapter of “Good to Great” with the title “From Good To Great To Built To Last”. This is chapter 9 of a fairly short book if you take out all the extra material at the end. Jim Collins set out to answer the question what makes good companies into great companies. Before he wrote “Good to Great” he wrote “Built to Last”.

Built to Last: Successful Habits of Visionary Companies
New York: HarperBusiness, 1994 (with Jerry I. Porras). 321 pages, 10 chapters.
Built to Last presents the results of a six-year research project into what makes enduring great companies. It has spent nearly five years on the Business Week bestseller list, had over 70 printings, and has been translated into 29 languages.

Writing “Built to Last” actually triggered the research for “Good to Great”. Jim was posed the dilemma that “Built to Last” was a great book but did not reveal the transition from good to great.

Jim, with the help of the research team, determined that “Built to Last” should be ignored to better determine the real reasons for changing. Instead of trying to back fit the original ideas, it was deemed more valuable to start from scratch.

At the end Jim revisits “Built to Last” and matches it with what was found from “Good to Great”. By and large, the “Good to Great” explains how these companies became successful in the first place.

Much of the chapter shows how the two books and concepts are compatible. Several ideas from “Built to Last” are introduced. One of these ideas is where the great companies will have core values and purpose which essentially does not change over time. Another key point is that it does not appear to matter what these values or purposes are as long as they are there. This would be the common rallying point for the company which the employees understand and believe in. Business strategies and operating practices on the other hand change quickly over time. These two different areas are seen as necessary and balanced in their changing and non-changing natures.

“Built to Last” has the concept of something called BHAG. BHAG stands for “Big Hairy Audacious Goal” and corresponds to what the hedgehog concept says. It is supposed to be something really ambitious but also possible within the framework of the company. Boeing had a BHAG to enter the commercial airline industry in the 1950′s. Before that time they were only focused on government contracts. The insight at Boeing came from understanding the market and knowing that it would be possible to be the best at commercial airlines based on their experience with military jets.

The last idea of the book comes from a question “Why bother being great? Isn’t good just good enough?”. This was something I thought about while reading the book as well. It seems like so much work to become great and sometimes it looks like good is all that will come.

The reply, from Jim, is that it actually takes more work to run a good company than a great one. This seems counter-intuitive at first. How could it be less work? Jim explains that when you have the right people, with the right concept, with the right leaders, the alignment is so strong and the purpose so fulfilling that the company essentially runs itself. It comes back to the flywheel. Once you get everyone on board and pushing against the wheel in the same direction with the same simple clarity, it becomes easier and easier to accomplish difficult tasks. The fox mentality has little focus and even less understanding of how to pull in the right people with the right tasks. There is a lot of waste in fox based companies. So, that is the point. Why waste all that time and energy just to be good. Why not be more efficient and be great?

Hard to argue with that.

One final point from the book. When you work at a great company, you are happy because you are doing what you are meant to do without having to struggle against the typical lack of direction and focus. You are glad to do what you are doing and you are just as happy to go home and live your meaningful life outside work as well. You are living at your full potential which really just translates to you doing what comes natural. Selling your time to a good company is really just a compromise.

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The Flywheel and the Doom Loop

Posted on May 12, 2008 | Leave a comment

We are getting closer to the end of “Good to Great”.  This is about chapter 8 which is titled “The Flywheel and the Doom Loop”.  Sounds a bit like something from Indiana Jones.  Seriously, it hits upon the nature of success.  Most people, from the media’s coaching, believe that things happen overnight.    Most people and companies have to work at it.  I remember years ago when Sharon Stone became an “overnight success”.  It turns out that she had already been trying to get ahead for more than a decade.

The flywheel is associated with momentum.  It takes energy to get it going, but it gets easier to make it go faster if the energy is applied in the same direction.  If energy is consistently applied, the flywheel will continue to accelerate and will eventually reach great speeds.

Companies are similar.  Instead of a flywheel, the momentum is a chosen path to a chosen focus.  As long as the ideas are attached to, the momentum builds and the company pushes forward.  It is difficult to be consistent but as long as it is, the velocity of improvement and change will increase.  “Good to Great” companies with their hedgehog concepts are more like to stick with it.  The temptations to be distracted are so huge but focus sees the true mission.

Companies have a potentially unlimited lifespan.  Unlike humans, they can live on long after the start.  This makes them an organism of their own.  The workers and managers and executives are only elements of a much larger story.  This brings in one of my favorite topics of emergence.  The sum is a quite different beast from the individual parts.  And, even more important, the company is composed of an intelligence that would be seen to exceed any individual employee.

Anyways, back to the point.  In order to achieve any kind of consistent vision, everyone has to see it as their own vision.  With the hedgehog concept, it is possible to crystallize the employees around a common vision what the company should be doing.  I would like to introduce this analogy.  Rowing!

Given that there is a goal, if everyone rows in time and in the right direction, there will be momentum and the goal will be reached.  However, if like most companies, not everyone is in sync and the leaders are always changing directions, you are not going to reach the goal.

The fox cannot stay on the same track for too long.  This explains the shift in direction and lack of momentum.  Every time the fox changes the flow, the momentum is lost.  Not only that, it pretty much guarantees that no goal will be reached simply because the goal is always changing.  It looks like much is happening but it is actually more like spinning wheels with no momentum at all.

Given that momentum builds, it will eventually hit a breakthrough.  This breakthrough is where things are actually growing in strength and with less and less effort.  There is no magic instant where the breakthrough happens.  The momentum is built from many many turns of the flywheel.  It is impossible to identify which push created the change.  The point is that it was all the changes that brought about the breakthrough.  This thinking goes against what business leaders like to think.

Also important to mention is that there was no magic program or policy or other enthusiastically promoted internal company goal that created this transition.  Essentially once started, it happens on its own.  It is similar to the difference to cheering on a team versus playing the game.  Cheering might help some but the actually players with real internal motivation that are going to make the biggest difference.

There is always going to be resistance to becoming consistent with the flywheel.  One of the first thoughts might be to worry about the “Wall Street” reaction to long term versus short term focus.   Based on the summary for the book, the flywheel is actually completely compatible with “Wall Street”.  This makes sense too given that the flywheel brings great success.  Which investor is going to complain about consistently high gains over the long term?

The greatest driver in “Wall Street” is not money but rather fear.  Emotions cripple the desire to see the long term view.  Why wait when you can push for more money now?  But why?  Greed.  But what is greed?  I would propose that it is the fear of not having enough money.  Any unsatisfied want is likely to grow, even when it is being satisfied.  The point is that short term investing is bound to run a company into the ground.  It also burns up lots of energy and wastes time.  Many a company has been driven by the “Wall Street” gods without realizing that it could actually be the other way around.

Great companies don’t have to worry about the markets.  They exceed the market easily.  They have bigger fish to fry.  They love their jobs and know what they are supposed to do.  They also happen to be the best in the world.  Who wouldn’t want that?

The momentum is so strong that it brings along the whole company in a way that could never be dictated from above.  It is more like a realization that everyone reaches over time that “We can be the best at this and we will be”.

On the other hand, the Doom Loop is found at most other companies.  The doom comes from a lack of understanding that drives the company deeper and deeper into the abyss.  It starts with bad results that lead to a bad decision that leads to changes that bring more bad results and so forth.  It smells of fox.  It also brings a company down fast.  Obviously it is much easier to fall into this trap.

The Doom Loop is all about stopping momentum.  It takes a working company and brings it virtually to a halt.  All the easy changes are tried (laying off, changing CEO, changing focus, employee education) but it just makes things worse.  Part of this comes from sheer bravado/ego.  The new leaders think they can make things much better but fail to realize that there is something still good about the existing company.  They also tend to want to make it theirs and discard that which is associated with the previous leaders.

From the outside, the Doom Loop is easy to recognize.  Any long term gain is either negative or very small.  It is kind of like going on a family holiday with a destination in mind.  As the trip begins, the parents squabble over the destination.  Half way there, the driver changes direction.  The next day, the direction is changed again.  The car is in turmoil since no one is getting what they want.  Eventually they have to turn around and go home because they don’t have enough time to make the destination.  The holiday is ruined.  The family is unhappy.  No one wins.

A company with a mixed up purpose is only going to give you a mixed up result.

There is only one more chapter after this.  It’s been good writing about “Good to Great” and hopefully some of you will get the chance to read the book.

Just remember “healthy flywheel with momentum is good, doom loop bad”. :)

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Technology Accelerators

Posted on May 7, 2008 | 2 Comments

We are now up to chapter 7 of “Good to Great” with the chapter title of “Technology Accelerators”. Most good companies understand that they need technology to progress. Great companies realize that not all technology is useful and that technology is more of an aid than a primary mover. Adoption of technology should always be bound by the hedgehog concept.

Most young companies believe that it is possible to jump up the ladder of execution by relying on technology to pull them upwards. Heavy investments are made in making sure that the company is using all the latest popular tools. Unfortunately, unfocused application of technology only leads to wasted time and money.

It is easy to panic and overreact about being left behind. This comes back to the fox and the hedgehog idea. A fox is going to search for many solutions without really understanding what the problem really is. The hedgehog is going to examine the problem and determine with care what should be tried. Steady wins the race again.

No where is this more obvious than the web. During the time around 2000, the hype factor was in overdrive. Basically it was implied that anyone on the Internet was going to earn a bucket load of money. As we can clearly see, this is not true. If it was, this blog would have earned me a great fortune by now :) . Seriously, it is dangerous to jump into technology fads without understanding the true value of the technology. This is true in every aspect of technology.

The funny thing is that hedgehog companies can actually pioneer technology to solve their biggest problems. With focus and determination, the great company can create new technologies that will best suit their purposes. A good company is more likely to just react and participate.

When you stop worrying so much about the competitors and do what you passionately do the best, you can stop looking to your competitors as threats and stop using their models to do your business.

“Good to Great” makes a great point that technology is an accelerator and not a creator of momentum. You cannot count on technology to do your work for you. You are going to need to think and build the hedgehog concept on your own. Technology should not be the master of your policies but rather a tool to help you get where you need to go.

As important as technology seems, it is still the business decisions that make the biggest impact on the company. Executives in great companies rarely point to technology as being what made them great. However, it is sometimes conceded that technology helped them become greater.

One way to view this is to think like an artist. Does technology make for a better artist? Can technology make a good artist into a great one? The answer, in most cases, would be no. The point is that the artist has his or her own hedgehog thinking in place and this usually translates to using mediums (paint, sculpture, fabrics) to build what is already in their minds. The artist already knows the vision of what they want to do and only need technology to express this.

The same is true for companies. Without that inner vision the technology is largely wasted. Also of note is that medium of business requires cognition which cannot be expressed by technology alone.

From a Citrix point of view, we are very heavily invested in our technology. Because of this it is often hard to realize the value of thought and of the hedgehog concept. It clearly makes sense to be the best at what you can do. It also makes sense that you need the passion and the ability to find the right monetary measure of profit. Technology, as great as it is, is nothing against the passion of a hedgehog company.

The reason is simple. A hedgehog company has a vision of where it is going and what it is best at and will create technologies as needed as well as extensively using matching technologies. It is going to make itself great simply because it sees beyond good and can do the work to get there.

Technology can help, but it is not going to make you great by itself.

Do you agree?

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A Culture of Discipline

Posted on May 6, 2008 | Leave a comment

This is about chapter 6 of “Good to Great” and it is called “A Culture of Discipline”.

In every new company is a seed of creativity and a sense of entrepreneurial spirit.  Bold moves are made and if success comes, the company grows.  This growth triggers problems however.  It is much more difficult to control a growing company and soon things start to go wrong.  This is perfectly normal.

The most common reaction is to bring the company back into control.  This is accomplished by hiring people to enforce process and to manage the day to day business more tightly.  As a result, the company is controlled but ultimately loses its early energy to innovate and take risk.

It is common at this stage for the originating members to become disillusioned and eventually leave.  As in other company, this is true with Citrix as well.  What is more uncommon is for the company to keep the young seed alive.

The Good to Great research team found a pattern that allowed the company to remain intact.  Some companies kept this initial energy going.  The premise is that with great freedom comes great responsibility.  A company will trust its employees with freedom but must also expect that the employees will act in a responsible way.

It is key that the company hire people that are self-reliant and self-disciplined.  The business needs people that can not only be trusted but also can be viewed as having their own guidance that will fit well with the company’s hedgehog concept.  They have to understand that the two go together and that the cost of freedom is the ability to do the right thing.

What is the right thing?  Well, the simple answer lies within following the hedgehog concept closely.  It also implies thinking clearly and thinking openly.  It is difficult to balance creativity and risk with a strong sense of responsibility.  Life is like that.  Once you get that balance however, there is a sense of control that cannot be surpassed.

It is important to note that discipline does not imply a dictatorship.  It is more about self-discipline than controlling other people.

Successful companies are going to build frameworks that guide many actions but when it comes to the things that can change quickly, that responsibility will lie with the employee.  The book gives an example of an airline that has lots of rules about the operation of the planes.  The pilot is expected to follow all the rules for the sake of safety.  However, the pilot is given the freedom to decide on highly variable environments.  In the case, the weather might be terrible and make the pilot decide whether or not to land.  It is not a process decision but rather the pilot.  This makes sense because process cannot anticipate every situation and the pilot is likely to have the best data on what to do in such a situation.

Another key point is that disciplined action comes after acquiring disciplined people and thought.  All three conditions should be there in order to make sure the company fulfills its concept.

It is the role of the Level 5 leader to build the culture of discipline.  This would largely be acquired by trusting people and by example from all levels.

It takes a great deal of discipline to focus on the hedgehog concept instead of being tempted by the latest fad or potential acquisition.  It is like the mind wants to be a fox when the truth is that being a hedgehog is much more healthy for everyone involved.

A concept worth respecting is the idea of “stop doing it”.  Success is based on both action and stopping negative action.  This is an awareness thing that means that you have to realize that you are doing something wrong first.  Once realized for what it is, it should be much easier to melt away this bad habit.

Budgeting for correct action means to drop the incorrect ones.  Again, this is defined by the hedgehog concept.  Once unfunded, the incorrect action is destined to go away.  Some companies find themselves in the wrong business and have the guts to drop the old business for a new one.  As usual, this means that it has to fit in the philosophy of the company’s hedgehog concept.

I see this mostly as a means of following through with the hedgehog concept.  Without discipline at the employee level, the company is much more likely to become a bureaucracy.   It makes sense that “Good to Great” companies would be run much more efficiently with less hierarchy and wasted imposed control.

Freedom and discipline.  That’s what you need to be great.

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The Hedgehog Concept

Posted on April 29, 2008 | 4 Comments

For those of you already familiar with “Good to Great”, certainly the Hedgehog Concept is perhaps the easiest to remember.  In relation to all the other areas (Level 5 Leadership, First Who Then What, Confront the Brutal Facts) we have talked about so far, this idea is the most pivotal to becoming great.

Before diving in to the classic explanation of the Hedgehog Concept, let us diverge into very familiar territory.  Most people remember nursery rhymes and stories from their childhood.  If not, then most likely you have recently retold these stories to your children.  It really doesn’t matter how you know about them, but you do.  Each one of these stories has some kind of meaning even though the real meaning might have been lost years ago.

Some stories are timeless and continue to be strong.  One of these stories is “The Tortoise and the Hare” by Aesop.  The story is so short that I can include it here (from Wikipedia):

The story concerns a hare who one day ridiculed a slow-moving tortoise. In response, the tortoise challenged his swift mocker to a race. The hare soon left the tortoise far behind and, confident of winning, he decided to take a nap midway through the course. When he awoke, however, he found that his competitor, crawling slowly but steadily, had already won the race.

Written more than 2600 years ago the story is still going strong.  What does this have to do with the Hedgehog Concept?  Well, it seems very connected.  In Jim Collins book “Good to Great”, the animal characters are a fox and a hedgehog.  It is a new fable describing how companies look at their business.  A fox, like the hare, is in a hurry to prove something without thinking about the consequences.  The hedgehog, like the turtle, plods along doing what it does best not really worried about the fox.

The fox is easy distracted and is always thinking up new schemes.  The hedgehog sticks to what it knows best and can handle adversity in a consistently positive manner.

Just like the turtle and hare, most people would pick the fox to win over the hedgehog.  What is missed is that in the race of life, the duration is so long that only consistent work will win.  Fast running from point to point will not win simply because the runner has no idea where they are actually headed towards.

Steady wins the race.

Even better, because the hedgehog is so focused on specific tasks, he is expert in what he does and already knows where things are going.  Even if things change, he will not be off track much based on a more careful thinking than the fox.

In the business world this could be explained this way.  A fox leader is going to be looking for lots of growth and progress.  To the fox leader, it really doesn’t matter how it happens as long as it does.  This leads to some poor long term decisions based more on short term financial gain rather than fitting in with a simple long term way of looking at it.  For example, a fox leader could acquire companies that do business in fields that have no connection with the current business.  Worse than that, there might be zero passion to actually continue these businesses into what they were destined to become.  If a fox leader buys a company for growth, he or she is not thinking about the long term health of the bought company.  If so, it is only from the point of bringing more growth.

A hedgehog leader is more likely to be more picky when it comes to acquisition.  Most likely a hedgehog leader will determine first if it fits with what the company already does and will help the company accomplish what they do best even better.

There is a great deal of insight needed to be a hedgehog leader.  In other words, it is very hard to do.  The first action is to determine what the companies hedgehog concept is.  This takes time and is a process that can take on average four years to complete.  Jim Collins illustrates this with several company examples.

Once realized, the Hedgehog Concept for you company has powerful implications.  It gives focus and purpose and aligns everyone to a common sight of how things are and will be.

The book defines this as a simple crystalline concept that comes from a deep understanding of three questions.

  1. What can we be the best at in the world?
  2. What drives our economic engine?
  3. Where is our passion?

These questions are incredibly important to answer.  The book views it as an intersection of these three questions that leads to the definition of the Hedgehog Concept.

It does make sense.  These questions compel answers that are simple and strong.  If a company can never be the best, cannot understand how to make money, and has not passion to do it, then it will never succeed.  On the other hand, if the company knows what it is best at, knows the economics to make a profit, and is highly passionate about the business, then it is going to be a real powerhouse in the industry.

The message, in other terms, is to KNOW what you are or will be the best at.  It does nothing to state a vision or a goal, you have to already KNOW what you are best at or will be.  This point was stressed and it also makes sense.  You cannot boast that you will be the best at something when in reality that will never happen.  It’s difficult to explain so I suggest you read the book on this topic.

The economics (profits) need to be understood based on profit per thing.  This one definition shifts how the business is run.  If the profits are based on per customer visit, for example, obviously you would want to investigate how to make the most money per visit.  Perhaps convenience and service could be help.  The point is that once you know your profit point, you can work on things to improve it.  Likewise, if it is deemed unprofitable based on this metric it should not be done.  Keep in mind that this metric will be hard to define at first.  Most obvious ones are also the wrong ones.

Passion is the energy that drives being great.  If you do not believe in your company and products or services then there is little hope that customers will either.  In other words, passion for growth and money is not the same thing as being passionate about the business.  Passion is what holds it all together.  Perhaps it is easy to see that a hedgehog has passion for his simple one thing versus a fox which has lots of energy but no consistent passion.  A hedgehog leader is like a strong consistent fire whereas the fox leader is more like a flash fire.  Short term the fox looks better.  Long term, the burning fire still burns with the passionate hedgehog.

The team that researched “Good to Great” found some surprises along the way.  First of all, having a strategy had no effect on being great or not.  Everyone has strategies.  Having strategies that fit the Hedgehog Concept questions is another matter.  Secondly, the great companies came from all different ranges of business.  In other words, it didn’t matter what kind of business you are in, it still applies and you can still get great results compared to ANY company.

Coming back to my own world, I will confess that I am more like a fox or hare.  This comes from years of conditioning since… well, I don’t know when.  Every once and awhile I sense things like a hedgehog/turtle and good things happen.  However, patience can be difficult.  It seems more exciting to be racing around chasing fires.  Perhaps the strongest reason to be a hedgehog is that it gives you consistency and the realization that you are the best at what you do.  In theory life would be more rewarding and also more simple.

Are you a fox or a hedgehog?  Read this excerpt from the book.

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Confront the Brutal Facts

Posted on April 28, 2008 | 1 Comment

Continuing on to Chapter 4 of “Good to Great”, we have “Confront the Brutal Facts“.  Each of these chapters reveal something crucial to becoming a great company.  In this case, it is the ability to face reality but at the same time not lose faith.

Most employees face the brutal facts everyday.  They deal with the world at a level that typically reveals to them the true state of affairs.  This is not always true since employees can be sheltered from real world events but for the most part the employees are more aware than the higher ups.  As the levels get closer to the top boss, more typically the information is filtered.  Something at the bottom that is reported as bad often gets changed into something good at the top.  A typical name for this is spin.

Likewise, something revealed at the top as being bad can be spun going down as well.  It can be perceived that employees don’t like hearing any bad news and therefore it must be revealed in a positive light.

In “Good to Great” this instead means:

In confronting the brutal facts, the good-to-great companies left themselves stronger and more resilient, not weaker and more dispirited. There is a sense of exhilaration that comes in facing head-on the hard truths and saying, “We will never give up. We will never capitulate. It might take a long time, but we will find a way to prevail.”

This chapter is hard to fully understand.  The Stockdale Paradox takes some getting used to.  The conclusion is that you first need to see reality for what it is.  There is no use in pretending.  Being optimistic is not going to make things better.  In fact, it is only going to make things worse.  Secondly, always believe that you will get through it.  See yourself rising above whatever lies in front of you.

So many companies falter when it comes to facing the brutal facts.  Years ago when I worked on OS/2 at IBM, it was clear that many things were being done inefficiently.  There were scores of people working on the project and yet it seemed like such a hassle to get releases out the door.  From an inside perspective, the amount of wasted effort was so high.  There were countless status meetings, mindless testing, dictating what would and what wouldn’t get fixed…. going on and on.

Brutal facts are the things you know are there but cannot face.  It’s the obvious stuff that somehow goes unnoticed and ignored.  It takes courage to face problems that are big.  Obviously part of that is knowing that you will come out okay regardless of what happens.

The brutal facts for most companies are largely the same.  Much like biology, companies can suffer a form of extinction.  As in biology, it often happens because the environment changes and the company cannot adapt fast enough to survive.  In the business world, the pace of evolution is much faster.  The limiting factors cannot be controlled.  However, one advantage over nature is that the crisis can actually be made aware of.  In other words, a company can face the problem and come up with a solution over time.  A creature does not usually have this luxury.  The bigger the animal, the more likely it will become extinct.  The same can be true for companies given the inertia and lack of focus.

Some companies manage to survive this crisis, but they never come back into the limelight.  There are a number of victims in the computing industry that match this profile.  There will also be many more to come.

There would certainly be people at places like Microsoft, Google, and Apple that face the brutal facts everyday.  Since the beginning of Microsoft, Bill Gates has always been worried about being overrun by another company in popularity.  This basic worry has driven him and his company to be always looking for the brutal facts and pushing towards meeting these kind of challenges.  Steve Jobs, as well, is not sitting idle.  He knows well enough that you cannot become complacent and that the market is not going to wait for you to catch up.

Likewise, Citrix has its own realm of brutal facts to face.  It’s tempting to conjecture what those facts are but I will leave that up to you.  There seems to be some reluctance to face these facts currently, at least publicly.

The key message with brutal facts is that you must have faith that you will persevere.  It does make sense when these two ideas are tied together.  It is kind of like an old fashioned movie.  The victim is tied to the rail road tracks and left.  The train can be seen at a great distance.  The victim is alone.  Usually this is where someone saves the day.  But what is the victim thinking?

A) What train?
B) My hero should be here soon.  I’ll just wait.
C) What can I do to get off the tracks?

The ignorant ones says A.  The optimist says B.  The realist says C.  My point is that the train is coming regardless and unless you plan to do something, you are going to die.  At least the realist has a chance.  At least the realist has the faith and conviction to face impending death.

Jim Collins also makes some other suggestions that should help move things along.  The point is to encourage the truth to come out.

  1. Ask questions instead of dictating answers
  2. Encourage debate and discussion instead of silence or coercion
  3. Conduct investigations into wrongs but without blame
  4. Create a safe way to raise red flags when things are about to go horrible wrong
  5. Motivating people and producing vision is not as important as facing brutal facts
  6. Charismatic leaders can hide brutal facts quite easily (think what it does to make people ignorant)

The sooner you face reality to sooner you can progress.  It also means that you get a healthier company that will live a much more productive and long life.

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First Who, Then What

Posted on April 24, 2008 | Leave a comment

1. WHO 2. WHAT

Continuing on the path of understanding what makes good into great, the next step is understanding the value of the idea “First who, then what“. This is the third chapter of “Good to Great”.

For most companies, “what to do” is often considered more important than “who to do it”. It is very common for large companies to treat employees like interchangeable gears. Back at IBM they even had a term for people that did software. On charts, we were often referred to as Programmer Units. I’ve never forgotten this attitude that all programmers were the same. This kind of thinking is prevalent amongst management structures that every worker is the same caliber.

Unfortunately for everyone’s sake, this is not the truth. Also unfortunately, the decision to focus on “what” before “who” tends to skew the results towards failing. According to Jim Collins and his research team, “who” is always more important than “what”.

The logic is this. If a manager is looking to build the right team, he or she is going to have to find the right people for that team. Much like professional sports, the individuals have to fit together and have to be in the right jobs. As Jim states, you need not only to get the right people on the bus, but you also have to get the wrong people off the bus. Once you have the right people, you need to make sure they are seated in the right locations. This goal is tied to the level 5 leadership model since the leader needs to trust the team and have strong faith that most things will take care of themselves with the right people involved.

I can relate to this perspective from the early days of Citrix. We had very few people and were always constrained to hire very few engineers per year. The team we had was strong and even though we were very different people, we worked hard and worked exceptionally well together. We would often disagree but we would always come to a conclusion.

We had an interview process that was very picky. We didn’t want to hire the wrong people. We wanted obviously to bring in the right people and have they do the right things. It’s common sense really but you would be surprised how uncommon this thinking usually is. As part of the process we had the ability to veto people. It only took one dissenting vote to turn someone down. Of course, it was necessary to justify it and argue the point but it was the way things were done.

As a result, we hired some exceptional people. Most of these people made a large contribution to Citrix and some continue on to this day. Overall, we were hiring for Citrix’s future and this process payed off.

Back to “who then what”. If you decide to hire people this way, you will be allowing your company to grow in unexpected ways. A bus of the right people is able to tackle unknown markets much easier than the wrong people. In other words, the bus of talented people is able to navigate much easier through difficult times and wonderful opportunities. It is like you are hiring for any possible situation.

That is where “what” finally comes in. The best laid plans are often changed. Something which is good now might be terrible later. Conditions are always fluctuating. The universe is not constant. People can adapt much easier than a leader can plan for. You would need to be omnipresent to be fully aware of all the possible outcomes.

The point of this is that the right “who” can handle any “what”. Any “what” cannot be handled by any “who”. This is the fatal flaw for organizations that treat all “whos” the same. Replaceable units are a mixed bag really. The mixed bag is poorly suited to tackle the random whats that will be coming.

In related hiring ideas, don’t hire the genius unless he or she can work with the team. An island of intelligence is close to useless if there is no way to get there or back. Also, never hire someone that never admits to not knowing the answer to a question. It is healthy to admit not knowing things. It is extremely unhealthy to pretend for the sake of deception. If you have any doubts during the hiring process, don’t hire. Even in desperate conditions, hiring when you have doubts is going to be a waste of everyone’s time.

If there is a need for shifting people around or even firing, do not procrastinate. Everyone suffers when decisions are not made quickly.

Finally, throw your best people on the biggest opportunities instead of your biggest problems. Opportunities are always bigger potential growth areas and are also the most challenging to get going. Problems are important to solve but do not require your best people.

When I was involved with the interviewing process, I would typically ask very difficult questions. I didn’t expect to get a decent answer but I wanted to see how the interview candidate would approach the problem or idea. Some candidates would answer “find out from a book” which was always an instant turn off. Others would attempt to remember things from school. And the last group would answer using their minds.

I had a great deal of respect for the people that used their minds creatively. This fits in with the theory that it isn’t necessarily what you know but rather how you look at things that makes you the right kind of person. “Good to Great” classifies this as either innate abilities or character traits. Based on the research, these qualities had more strength than knowledge, skills, or background.

If you hire the right people, your company is on the path for great success. If you hire the wrong people, you bog your company down into the average. It seems like a very simple choice. I guess it depends on the environment that hires people. Obviously nobody wants to hire the wrong people, right?

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Level 5 Leadership

Posted on April 22, 2008 | 3 Comments

Yesterday I wrote about “Good to Great” in general. Today I am going to focus on an idea called level 5 leadership. It is chapter 2 of the book and I remember being surprised by its revelations. At first it didn’t make sense that it would be true but by the end of the book it all fit together perfectly.

Level 5 leaders are fairly rare. There are plenty of level 4 leaders out there. The level 4 leaders match popular thinking of what a CEO should be. Level 5 is a step up and very difficult to achieve.

Being more specific, level 5 leaders are strong willed but modest. They are willing to take the blame but not the credit. They think of their companies first and themselves last. They are the ultimate broker for creating an environment that shoots into the stratosphere for performance.

It makes sense if you step back. If the leader is positioned to do what ever it takes to make the company successful and be willing to let his employees take the lead. The level 5 leader becomes more of an enabler than a king.

This presentation gives a good summary of what it takes to be a level 5 leader.

You will probably never hear of a leader who is at level 5. By definition, they are humble and do not need to be in the spotlight. The point is that level 5 leaders don’t need the flashy things in life and yet they can build a company that is truly great.

Level 4 leaders typically demand large salary packages. They have big plans that are solely their ideas. They take credit and give blame. They think about themselves before they think about the company. These are over simplifications and obviously the worst aspects. There are plenty of successful level 4 leaders that aren’t at all bad.

It is far more likely that a level 4 leader will not setup a workable plan for a successor. The reasons are fairly simple. The leader will feel threatened by the successor candidate. The leader also wants to guarantee that the company will not do better than it currently does. Bad things happening after the departure make the previous leader look good.

Part of the definition pits personal ego against company ego. A level 4 leader is thinking about personal ego mostly. A level 5 leader is bringing together a company ego. The company ego can be strong but only if the personal ego of the leader is less. The company ego defines itself through its employees. The CEO sets the tone for that energy. A great company will have a healthy ego built from individual contributions. A good company will be driven solely by the presence of its level 4 leader. Once the level 4 leader is gone, the company ego dissolves and the company will most likely falter.

The reason this was such a surprise was that it didn’t seem like level 5 leaders even existed. The media only focuses on the highly visible leaders (as can be expected). To find out that level 5 leaders are always more successful than level 4 should send a message to all businesses that there is a better way of leading companies.

The real question is why this idea has not caught on widely. Should level 5 be the goal? Is there a level 6? Is this theory sound? Lots of questions.

Does anyone know of a strong argument against what was said in “Good to Great” for level 5 leadership?

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