No technology can turn the wrong people into the right people. No technology can instill the discipline to confront brutal facts of reality, nor can it instill unwavering faith. No technology can supplant the need for deep understanding of the three circles and the translation of that understanding into a simple Hedgehog Concept. No technology can create a culture of discipline. No technology can instill the simple inner belief that leaving unrealized potential on the table - letting something remain good when it can become great - is a secular sin.
Each turn of the flywheel builds upon work done earlier, compounding your investment of effort. ? Now suppose someone came along and asked, "What was the one big push that caused this thing to go so fast?" You wouldn't be able to answer: it's just a nonsensical question. Was it the first push? The second? The fifth? The hundredth? No! It was all of them added together in an overall accumulation of effort applied in a consistent direction.
No matter how dramatic the end result, the good-to-great transformations never happened in one fell swoop. There was no single defining action, no grand program, no one killer innovation, no solitary lucky break, no wrenching revolution. Good to great comes about by a cumulative process - step by step, action by action, decision by decision, turn by turn of the flywheel that adds up to sustained and spectacular results.
We've allowed the way transitions look from the outside to drive our perception of what they must feel like to those going through them on the inside. From the outside they look like dramatic, almost revolutionary breakthroughs. But from the inside, they feel completely different, more like an organic development process.
Clearly, the good-to-great companies did get incredible commitment and alignment - they artfully managed change - but they never really spent much time thinking about it. It was utterly transparent to them. We learned that under the right conditions, the problems of commitment, alignment, motivation, and change just melt away. They largely take care of themselves
Stop and think about it for a minute. What do the right people want more than almost anything else? They want to be part of a winning team. They want to contribute to producing visible, tangible results. They want to feel the excitement of being involved in something that just flat-out works. When the right people see a simple plan born of confronting the brutal facts - a plan developed from understanding, not bravado - they are likely to say, "That'll work. Count me in."
We found a very different pattern at the comparison companies. Instead of a quiet, deliberate process of figuring out what needed to be done and then simply doing it, the comparison companies frequently launched new programs - often with great fanfare and hoopla aimed at "motivating the troops" - only to see the programs fail to produce sustained results. They sought the single defining action, the grand program, the one killer innovation, the miracle moment that would allow them to skip the arduous buildup stage and jump right to breakthrough. They would push the flywheel in one direction, then stop, change course, and throw it into yet another direction - and then they would stop, change course, and throw it into yet another direction. After years of lurching back and forth, the comparison companies failed to build sustained momentum and fell instead into what we came to call the doom loop.
Why Greatness? ? First, I believe it is no harder to build something great than to build something good. It might be statistically more rare to reach greatness, but it does not require more suffering than perpetuating mediocrity. Indeed, if some of the comparison companies in our study are any indication, it involves less suffering, and perhaps even less work. If it is no harder (given these ideas), the results better, and the process so much more fun - well, why wouldn't you go for greatness? ? But there is a second answer to the question of why greatness, one that is at the very heart of what motivated us to undertake this huge project in the first place: the search for meaning, or more precisely, the search for meaningful work. If you're doing something you care that much about, and you believe in its purpose deeply enough, then it is impossible to imagine not trying to make it great.
The truth is, there's nothing new about being in a new economy. Those who faced the invention of electricity, the telephone, the automobile, the radio, or the transistor - did they feel it was any less of a new economy than we feel today? And in each rendition of the new economy, the best leaders have adhered to certain basic principles, with rigor and discipline.
Compared to high-profile leaders with big personalities who make headlines and become celebrities, the good-to-great leaders seem to have come from mars. Self-effacing, quiet, reserved, even shy - these leaders are a paradoxical blend of humility and professional will. They are more like Lincoln and Socrates than Patton and Caesar.
Foxes pursue many ends at the same time and see the world in all of its complexity. ... Hedgehogs, on the other hand, simplify a complex world into a single organizing idea, a basic principle of concept that unifies and guides everything. ... Hedgehogs see what is essential, and ignore the rest.
Every company would like to be the best at something, but few actually understand - with piercing insight and egoless clarity - what they actually have the potential to be the best at and, just as important, what they cannot be the best at. And it is this distinction that stands as one of the primary contrasts between the good-to-great companies and the comparison companies.
Few successful startups become great companies, in large part because they respond to growth and success in the wrong way. Entrepreneurial success is fueled by creativity, imagination, bold moves into uncharted waters, and visionary zeal. As a company grows and becomes more complex, it begins to trip over its own success - too many new people, too many new customers, too many new orders, too many new products. Lack of planning, lack of accounting, lack of systems, and lack of hiring constraints create friction.
?The purpose of bureaucracy is to compensate for incompetence and lack of discipline - a problem that largely goes away if you have the right people in the first place. Most companies build their bureaucratic rules to manage the small percentage of wrong people on the bus, which in turn drives away the right people people on the bus, which then increases the percentage of wrong people on the bus, which increases the need for more bureaucracy to compensate for incompetence and lack of discipline, which then further drives the right people away, and so forth.
Letting the wrong people hang around is unfair to all the right people, as they inevitably find themselves compensating for the inadequacies of the wrong people. Worse, it can drive away the best people. Strong performers are intrinsically motivated by performance, and when they see their efforts impeded by carrying extra weight, they eventually become frustrated
When used right, technology becomes an accelerator of momentum, not a creator of it. The good-to-great companies never began their transitions with pioneering technology, for the simple reason that you cannot make good use of technology until you know which technologies are relevant.
Those who built good-to-great companies weren't motivated by fear. They weren't driven by fear of what they didn't understand. They weren't driven by fear of looking like a chump. They weren't driven by fear of watching others hit it big while they didn't. They weren't driven by the fear of being hammered by the competition.
Sustainable transformations follow a predictable pattern of buildup and breakthrough. Like pushing on a giant, heavy flywheel, it takes a lot of effort to get the thing moving at all, but with persistent pushing in a constant direction over a long period of time, the flywheel builds momentum, eventually hitting a point of breakthrough.
The comparison companies followed a different patter, the doom loop. Rather than accumulating momentum - turn by turn of the flywheel - they tried to skip buildup and jump immediately to breakthrough. Then, with disappointing results, they'd lurch back and forth, failing to maintain consistent direction.
The good-to-great leaders spent essentially no energy trying to "create alignment", "motivate the troops", or "manage change." Under the right conditions, the problems of commitment, alignment, motivation, and change largely take care of themselves. Alignment principally follows from results and momentum, not the other way around.
The right people don?t need to be tightly managed or fired up; they will be self-motivated by the inner drive. ? If you have the wrong people, it still doesn?t matter whether you discover the right direction; you still won?t have a great company. Great vision without great people is irrelevant.
Stop and think for a moment: What is the purpose of budgeting? Most answer that budgeting exists to decide how much to apportion to each activity, or to manage costs, or both. From a good-to-great perspective, both of the answers are wrong. In a good-to-great transformation, budgeting is a discipline to decide which arenas should be fully funded and which should not be funded at all.
Do you have a "to do" list? Do you also have a "stop doing list"? Most of us lead busy but undisciplined lives. We have ever-expanding "to do" lists, trying to build momentum by doing, doing, doing-and doing more. And it rarely works. Those who build the good-to-great companies, however, made as much use of "stop doing" lists as "to do" lists. They displayed a remarkable discipline to unplug all sorts of extraneous junk.
We entered a remarkable moment in history when the whole idea of trying to build a great company seemed quaint and outdated. "Built to Flip" became the mantra of the day. Just tell people you were doing something, anything, connected to the internet, and - presto you became rich by flipping shares to the public, even if you had no profits (or even a real company). Why take all the hard steps to go from buildup to breakthrough, creating a model that actually works, when you could yell "New technology!" or "New economy!" and convince people to give you hundreds of millions of dollars?