APPLYING TECHNIQUES OF JIM COLLINS IN OUR PROFESSIONAL LIFE

James C. "Jim" Collins is 62 years old well-known American researcher, author, speaker and consultant. He is focused on the subject of business management, company sustainability and growth.

I have taken reference of 3 books here: Built To Last released in the year 1994, Good to Great released in 2001 and How The Mighty Fall released in 2009.

The article is divided into 3 sections:

• Building A Lasting Career
• Are You On Good To Great Track?
• How Mighty Careers Fall

Let me try and share my views on how we can build a lasting career. Basically there are following 4 steps:

1.      Big Hairy Audacious Goals (BHAGs)

Good BHAGs are clear and compelling, are aligned with the core ideology, are constantly replaced by another (once they are achieved), come with a high level of goal commitment and belief, and fall well outside the comfort zone.

Let us look at few good examples of BHAGs.

“Become the company that changes the worldwide image of Japanese products as being of poor quality.” - Sony

Imagine this in a context where Japan was badly defeated in World War 2. I think it’s a very bold goal especially when you have just started.

“Enable human exploration and settlement of Mars.” - SPACEX

This is in a situation where a Mars Orbiter and Rover Mission is accomplished with such a difficulty.

We all have goals in our life but is it just any ordinary goal or a BHAG. To differentiate and set a BHAG for yourself ask these questions to yourself:

• Is it long-term? (minimum 10 years)
• Is it measurable and life changing?
• Is it something people will understand if you share it?
• Will it require you to stretch yourself out of your comfort zone?
• Does it create momentum, excitement and stimulate you?

2.      Clock Building rather than Time Telling

The reason the visionary companies succeeded is that instead of focusing on one idea or one great leader, they focused on the process of coming up with ideas, and producing leaders.

Both Ames and Wal–Mart had vast untapped opportunity with their basic strategy of low–price rural discounting, but while Wal–Mart maintained steady organic growth consistent with that strategy, Ames deviated from the strategy in favour of wild growth. In 1988, Ames acquired Zayre, aiming to double the size of the company in a single year. Wal–Mart retained focus on small towns before making an evolution into urban sites; Ames revolutionized itself overnight into urban retailing and catapulted itself into decline.

Similarly, in our career we can do two things:

• Base our career on one right opportunity or idea
• Build our Competencies

I suggest Become an Architect of your own career and follow these rules:

• Not a big, great opportunity or idea should define your success.
• Your career success should continue beyond life span of an idea or an opportunity. By which I mean you should be able to visualize new ideas or career path well in advance.
• Willingness to adapt change.

3.      Genius Of The “And”

Test of the first-rate intelligence is the ability to hold 2 opposed ideas in the mind at the same time and still retain ability to function. - F. Scott Fitzgerald

We can do either of these two:

• Tyranny of the OR will force you to believe that certain things cannot be simultaneously pursued.
• Genius of the AND is the ability to embrace things that are seemingly paradoxical.

We always think following:

• Change OR stability
• Conservative OR bold
• Self-Development OR family life
• Long-term goals OR short-term goals
• Logical OR creative
• Data OR intuition
• Result OR value creation

Now replace OR with AND and you will see a lot of things changing from a perspective point of view. This means a lot, as you will start thinking on how to achieve paradoxical ideas at same time. Simple example is lets say you are pursuing a course along with the job, then plan some trips with your family to compensate for the loss of family time.

4.      Experiment a lot

Visionary companies do plan, but many of the best moves came from experimentation, trial and error, opportunism and accident.

Few examples are Johnson & Johnson’s accidental discovery of using talc as a skin soother after customers complained of skin irritation from medicated plastics they were producing, 3M getting into the masking tape business and Walmart introducing people greeters.

Ways to make evolutionary progress includes:

• Giving ideas a quick try.
• Accept mistakes and letting the weakest idea die.
• Taking small steps towards your goal.
• Persistence

Now that we know how to build a lasting career, lets analyze if our career is on a good to great track.

1.      Confront The Brutal Facts

We all have set goals for our self and are always positive about achieving it. But it is important to always make a balance between Optimism and Realism.

And the best way to do it is by analyzing the facts.

Dreams and Optimism can be biased but facts are always unbiased.

Let us understand this with an example of James Bond Stockdale - a United States Navy Vice Admiral and Aviator who was prisoner of war for over seven years during Vietnam War.

When asked who didn't make it out of Vietnam, Stockdale said the Optimists who kept imagining that they will be out by Christmas or Easter or Thanksgiving, as they eventually died of a broken heart.

Graph of Optimism:

• No optimism leads to complete loss or absence of hope.
• Right optimism leads to peak of success.
• And over optimism leads to delusion where you think you are doing good but facts stats otherwise.

2.      Hedgehog Concept

Let us understand this by relating it to story of Fox and Hedgehog. A fox does a lot of things at the same time like accessing the environment, distance, speed, etc. to quickly come up with strategies to catch the hedgehog.

But the hedgehog can only do one thing and does it perfectly – it defends itself by curling up into a ball and raise its spines.

Now, here the fox is pursuing many ends at the same time and see all the complexity, but Hedgehog simplifies a complex world into a Single Organized Idea.

Hedgehog Concept is not a strategy, goal or intention but it is an Understanding. Understanding of 3 things:

• Your Passion – That will drive you even when things are not working as desired.
• What you do Best – It will always give you a competitive advantage.
• Money Matters – Make sure that you are also able to generate money from what you are passionate about.

You have build a mighty career for yourself but if you don't nurture it continuously, it can lead to decline of your career.

Let us start understanding this section with 2 examples.

Reference taken from 2 article - The rise and fall of the Ames chain and Ames chief to get $8 million contract

For years, Ames Department Stores was a well-run smaller, then medium-sized, discount department store chain, growing moderately but consistently every year. It was a business managed by the Gelman brothers who created the company and nurtured it.

Ames' philosophy was to operate stores in smaller communities and thus be a big fish in a small pond, simultaneously avoiding the competition-intensive cities.

Because of health, the Gelmans parted and new, ambitious management took over. Where the Gelmans were satisfied with gradual growth, there was now a push to become a big company overnight.

Management thought, the way to do this would be to acquire a major discount retailer and they took over Zayre (chain of discount stores) which lead to loss of $1.3 billion.

The original Ames Department Stores were still profitable but the problem was the huge debt from the borrowing to acquire Zayre.

This problem was not new, about five years ago, heavy inventory losses deeply concerned Gelman. The losses were modified, but it took considerable time to get them down. Another problem was Ames' purchase of the G. C. Murphy Co., one of the nation's most respected variety store chains. Ames has lost about $100 million on Murphy.

To save the company, eventually Stephen L. Pistner was appointed as chief executive and was paid a $1.5 million annual salary and $500,000 signing bonus, he will also receive a $3.5 million bonus if Ames wins court approval for a re-organization plan before Nov. 1, 1991.

But eventually even after a lot of efforts Ames closed on September 6, 2002.

Reference taken from article - From Subhiksha to Viswapriya: Subramanian's fall from grace

Now let’s look at an Indian Company. In March 1997, Subhiksha opened its first outlet in Chennai and expanded its operation to other states and by October 2008, the company had emerged a major player with 1,600 outlets.

Subhiksha was doing so good that even Azim Premji of Wipro Group, used to praise "the young man" for his business acumen and had also invested in the retail chain.

But imagine a growth from 120 stores in Tamil Nadu in 2002 to 1600 stores across India in 2008. Subhiksha failed because it expanded fast with thin or zero margins. There was a mismatch between cash outflow and inflow.

And eventually in September 2008, Subhiksha faced difficulties in operating its stores. The company had reportedly defaulted on payments to its vendors who refused to replenish supplies. The company also failed to pay salaries to its employees.

On February 11, 2009, Subhiksha announced that it was closing down all its 1,600 outlets till May 2009. It was not only the Financial problem due to its inability to raise enough equity capital, analysts said the retailer had expanded rapidly during the last three years and supply chain management practices were flawed.

Now that we have seen few examples of how mighty companies fall, lets relate the following concept to fall of these companies and to our professional life.

1.      Hubris from Success

“Hubris” refers to excessive pride or arrogance. Stage 1 starts when companies become over-confident, and forget the true foundations of their success.

Symptoms:

• Success entitlement & arrogance – Believing that anything you do will lead to success and you are failproof.
• Neglect the primary flywheel – Like in the case of Ames they were good at big fish in a small pond philosophy but they neglected it and went to build a new flywheel.
• What makes us Successful replaces Why we are successful – What is like saying I am successful because I read a lot and why is like saying I have a lot of knowledge. What forces you to keep reading and why makes you believe that I already know everything.
• Decline in learning orientation – I have seen all and I know all attitude.
• Discounting the role of luck – Luck cannot supplement hard work or opportunity but plays a complementary role in our success. It is like starting to think that it is me and only me who have earned this success.

2.      Undisciplined Pursuit of More

The arrogance from Stage 1 leads the company to overstretch, jumping into areas where it can’t be great or pursuing growth without the right people or resources.

Symptoms:

• Unsustainable quest for growth – Thinking no goal is small for you and not setting a reasonable timeline.
• Undisciplined Discontinuous Leaps – Basically forgetting the Hedgehog Concept.
• Declining proportion of right work profile – You start adding work to your profile which is of no value add.
• Discipline takes a back seat – You are blinded by unrealistic goals.

3.      Denial of Risk

Audacious goals stimulate progress but big bets without empirical validation or against evidence, can bring companies down.

Symptoms:

• Amplify the positive, discount the negative – You only think of what is going as per plan and ignore the reality.
• Big bets & bold goals without empirical validation – Like taking up a profile or a job which does not proportionate with your current skills.
• Not taking responsibility of failure – You just don’t want to believe the fact that you can make a mistake and so you put them on others or circumstances.

4.      Grasping for Salvation

Leaders’ responses at this point determines if the organization sinks or swims.

Symptoms:

• Tendency to make dramatic big moves – Like trying to take up over challenging job just to prove you are still the same old winner.
• Panic & grasping for savior opportunity – Depending or keep thinking about that one situation or movement that will get you back where you were.
• Hype vs Result – Trying to hype your results without sufficient evidence backing it.
• Confusion & bravado movements – Looking for that Bravado movement where you can play the hero.

Final Take

So, what if your career is falling. Following may be of some help:

• Breathe – Calm Yourself – Think – Focus – Aim at a specific goal at a time.
• Take one shot at a time – Don’t focus on too many things at a time, start small.
• Never give up your core purpose – Work back on the core flywheel that have brought you here till now.
• Be willing to kill even the big idea you’ve been in for long time – Let go even the best of the idea that has not produced results.

Don't forget to share your thought.

Aniket A. Sonar