Making the Leap from Good to Great – Part 3: Technology Accelerators & the Simple Momentum of Success

Over the past few months, I have been diving deep into Jim Collins’ seminal management handbook, “Good to Great: Why Some Companies Make the Leap... and Others Don't.” I’ve explored Collins’ theory for how a business can go from being merely good to being actually great. You’ll find Part 1 here and Part 2 here.

In this post, the third and final of the series, I’ll be focusing on the final two of the seven characteristics Collins lists as being essential in the creation of a great company. One relates to the use and adoption of technology in taking a business forward, and the other considers the wisdom and benefits of making small, incremental changes to a business rather than root-and-branch reform.

Technology Accelerators

In his extensive research, Collins found that good-to-great leaders approached technology in a different way from their peers in companies that didn’t make the transition successfully. Great companies didn’t just buy in to the latest technology because it was trendy or because it was creating a lot of buzz in the marketplace. Any technology they employed was chosen for a specific purpose, one that matched the single, unifying aim of the business. If it didn’t serve the goal of the company then there was no point in investing in it or bringing it on board.

Of the many businesses and leaders that Jim Collins surveyed and researched in compiling his book, he found that the leaders of the great companies saw technology as simply a part of the solution to their challenges, to be employed alongside other methods for leveraging success. Many of the top executives of great businesses didn’t even include technology as one of top five factors in creating exceptional results. Collins makes an interesting distinction to illuminate the point by saying that “when used right, technology becomes an accelerator of momentum, not a creator of it.”

It’s worth noting that this book was written at the turn of the new millennium (2001), and since then attitudes toward technology have matured. Now, I would like to think that in business and in our general lives, we appreciate and understand technology as a means to getting results or improving our lives, or making things easier, rather than thinking of it as an end in itself.

However, it’s useful to keep this idea in mind, particularly in a sector such as Cradlepoint’s, which is driven by technological development. The onus is always on us to be thinking about what the end user of our products and technology wants to achieve. How can we help them meet their targets and get the results that they’re looking for? They’re interested in the final outcome, the bottom line, not the technology for its own sake, and as a technology vendor we have to be very aware of this as we build solutions for our customers.

The book highlights a further interesting distinction between great companies and the rest. Great companies strive for excellence for its own sake but mediocre companies are crippled by constant comparison with their peers and motivated only by not wanting to come last. Ironically, this reactive and fearful mindset is the reason they are in this position at all.

The Flywheel and the Doom Loop

One thing that readers of Good to Great will come to learn is that he loves neat little phrases that illustrate his points and create concepts that stick in your mind long after you’ve put the book down. The Flywheel and the Doom Loop are two such examples. I’m going to start by looking at the Doom Loop, and get the bad news out of the way first.

The Doom Loop is a description of what happens when a company reacts to a set of circumstances (fluctuations in the market, the challenge of a competitor, etc.) without fully understanding the situation. This could mean choosing a new direction for the business, hiring a new leader, or making an acquisition. However, because the business hasn’t built up the necessary momentum to make a success of this new strategy it can often fail and damage the business, not to mention staff morale. Businesses can’t take short cuts to creating momentum by rallying everyone around a new company vision – it’s got to be earned and accumulated over time.

This is where we bring in the Flywheel analogy, and Collins quotes revolutionary Russian composer Igor Stravinsky to illustrate his point: “Revolution means turning the wheel.” It’s a simple sentence and perfectly helps us to understand his point that effecting a significant change is not about tearing up the blueprint and parachuting in a new way of doing things (the Doom Loop). Instead, it says, significant change can only be achieved via an accumulation of small initiatives that together help to build momentum until the business achieves a breakthrough. Like a flywheel. There is no one defining, singular action or decision, no flash of inspiration or miracle moment. Just an accumulation of effort over time.

Accumulation of effort and maintained momentum over time are far from glamorous concepts and a little at odds with the sorts of stories we might read of companies who have taken action to turn their fortunes around. But Collins has a theory for this. He thinks we’re all too ready to be influenced by dramatically presented stories in the media of drastic company makeovers, and that only this can be the true nature of a business revolution. In truth, the reality is a lot more prosaic and what has happened inside the business can be quite at odds with the outsider’s perceptions. In fact, the Good to Great research found that in many cases staff were not fully aware a transformation was taking place until it was already well underway. Such is the nature of quietly fostering a revolution by simply turning the wheel. The more it turns, the more the momentum builds. When staff see results, they become even more motivated and as their efforts keep applying energy to the flywheel the company’s success continues to grow.

I hope you’ve enjoyed this three-part series on Jim Collins’ influential text, “Good to Great: Why Some Companies Make the Leap... and Others Don't.” I’ve certainly enjoyed writing it, as it’s a book that continues to influence me every day, some 16 years after its initial publication.

I’d love to hear of your experiences if you’ve employed his principles within your own businesses, so please do leave a comment below or get in touch.