1. Level 5 leadership
You need great leaders to create a great company. In this research it turned out that companies that have gone from 'Good to Great' all have a specific type of leadership:
- Modest leadership
- Powerful will
- And absolute determination to make growth happen
If you want to know more about the different leadership levels look at this article from Jim Collins or the video below.
2. Getting the right people on board
Before doing anything else level 5 leaders got the right people hired and made the strategy together with them. This gets people invested in the purpose and strategy of the company. If you have people who are not a right fit for you company this is the point where you need to get them out of your company.
3. Facts matter
Good to great companies have a way of decision making in common: it is based on hard facts. Running away from facts because they might threaten your pet project is not allowed.
4. Keep turning the flywheel
The flywheel concept is about moving in the desired direction and keep moving ever faster in that direction. You do not relax once you have past your first finish line you keep your flywheel moving thereby accelerating your growth. Amazon is famous for using the flywheel well.
5. Focus on your hedgehog idea
As stated in my previous blog you need one big idea. Where you are better then everyone else and you can really set the flywheel in motion. People feel motivated to work on it and it makes you money.
6. You need to out your technology in the right place
Good to great companies are very innovative, but also do not follow every new technological trend. Technology is there to support them in their one big idea and in sustaining their flywheel. If it does not help with that it will not be used.
7. Organizational culture is bout freedom and responsibility leading to discipline
Thinking, actions and collaboration are all focused on the hedgehog and the flywheel. This requires trust in your people And also a commitment to stay the course. People will make wrong decisions when they are more free to make them, but this does not outweigh the advantage of the added speed of them making the right decisions the rest of the time. By focussing on facts the chance of bad decision making decreases dramatically. You can always analyze your culture by using the tools described in this blog.
The study on Good to Great knew many companies. It started with a field of 1,435 companies and emerged with a list of 11 good-to-great companies: Abbott Laboratories, Circuit City, Fannie Mae, Gillette Co., Kimberly-Clark Corp., the Kroger Co., Nucor Corp., Philip Morris Cos. Inc., Pitney Bowes Inc., Walgreens, and Wells Fargo. It studies results over 4 decades. It is an older study so newer companies have also used the good to great ideas to great effect.
But is you can also see from the companies in this list almost nothing lasts forever. Being great one moment may still end with you going bankrupt later on. Being great does not immunize you from the stock market, war or normal everyday things. So use 'good to great' to grow and set your strategy, but do not become complacent.