Riding the flywheel to greatness
One of my favourite books from which I have often drawn inspiration in the last decade is "Good to Great: Why some companies make the leap and others don't." by Jim Collins. Collins has identified several patterns that he turned into seven principles based on a study of companies that have made the metamorphosis from good to great.
I still remember when Tom Thomas Lehmann ?? gifted me with the reading in the heart of the age of information almost a decade ago! The reflection of the reading and the exchange about this with colleagues shaped my mindset long-lasting and, thus, my perception of the world.?
I still cherish the book, but due to the public release of GPT (1) and several other AI services in the last couple of weeks, the principles in the original version are not valid anymore in the new dawned age of knowledge. At least for me.?The new reality requires adapting the principles?because of the exponential progression of technology and the resulting occasions for markets, businesses and every individual who has to learn new skills constantly.?
In addition, the new reality of agility in organisations has arrived, for example, through methods such as SAFe (2) or OKR's (3). Even when Collins's book emphasises elements of organisational agility at its core, there is a significant lack of appropriate connections between today's reality and the ideal of the principles.?
?? And that is why I have been considering how, in my humble opinion, Collins' principles should be constituted in the new age of knowledge, where digitalisation is advancing even faster than it already does and where it makes even higher demands on people and companies.?
I will now quote principle for principle, each with a brief explanation of how I understood Collins has came to this. And I will do this not word by word but in its spirit. Afterwards, I will reflect on the new reality and integrate and rephrase the principles one by one accordingly.?
?The following rows are my personal view and not a conclusive discourse on the subject, nor do they claim to be comprehensive.
To assist the reader, I will mark the recitation with a hand (??) and the version I have cheekily modernised with a light bulb (??) on the coloured blocks.?
Principles
Level 5 leadership
?? The importance of having leaders who are both humble and ambitious.
Collins concludes that the most successful companies are led by individuals who are humble and ambitious at the same time. He calls them "Level 5 leaders" according to his scale. But what particularly distinguishes them is their strong will to do whatever it takes to make the company successful. These individuals can also attract and develop other peers and build a culture of discipline and accountability.
Beyond that, it is crucial today to navigate with ease?through the rapidly changing digital landscape due to the?understanding of how structural changes in the market results from technology. Understanding causalities and correlations between emerging technologies and markets, as well as the ability to anticipate them, is one of the key skills in making decisions about which technologies or digital initiatives to follow.?
These decisions are becoming more and more frequent and therefore have to be taken more and more quickly. If they are not met, this slows down a lot. Consequently, it is a top priority of every leader.?
To achieve this (informed and quick decisions), a strong vision must be in place (in every employee's head) to?empower decision-making where the knowledge is available?and not the hierarchical power is located. Everyone must be clear about where the journey is going and what contribution they are making to it. And this also includes making appropriate decisions.?
A leader in the modern world is not just a line manager but often a team member of an agile setting, such as a software architect or a business analyst. And leaders whose job is to set framework conditions must ensure this pattern can grow. And because otherwise, it would be too easy, they have to be first adopters of this new way of working on setting a good example.?
First who, then what
?? The importance of getting the right people on the bus before figuring out where to drive it.
Collins concludes that getting the right people on board is more important than filling the company's skills gap. He argues that the most successful companies have a "genius with a tireless will to do whatever it takes to make the company great" at the management level, surrounded by a team of individuals with similar drive and abilities.
As mentioned above, driving a successful digital transformation of a business requires a deep understanding of structural market changes resulting from technology. Companies need to focus on getting the people on board who can anticipate and drive, or at least participate in, digital initiatives.?
This means future leaders may need skills beyond the urge to challenge the status quo permanently.?They need to have an understanding of the technology itself, a sharpened judgement where this could evolve, the ability to see behind the obvious?and the mastership to ask the right questions in the right way to get more insights.?
Confront the brutal facts
?? The importance of facing reality, even if it is uncomfortable or unpleasant.
Collins concludes that for the transition from being good to great, companies must be willing to confront the brutal facts of their current situation and be honest with themselves about their strengths and weaknesses.
What can I say to that? Except if you see something that is crap and you do not improve it, you're an idiot. - Of course, in an organisation, it is often not as simple as that, even if you are a leader and the more depends on it. Especially with the current pace of change. - At this point, I am assuming that the deficiency is actually noticed due to appropriate market and technology monitoring and regarding analysis. I do not talk from unknown unknowns from Donald Rumsfeld.?
In order not only to address and discuss problems, obstacles or delicate situations but also to accelerate improvements, a heuristic in the form of a corresponding corporate culture and institutionalised mechanisms are key. The culture empowers every individual to speak openly and where it is allowed to express themselves critically or sceptically. This also means that permanently and almost obsessively optimistic leaders are rather harmful. And it requires some kind of organisation which weaves itself into the structures of the daily working day. And as a third aspect, it requires a solution- and future-oriented view. Not a problem-oriented and blame-seeking attitude. It is about; how we achieve the desired state together as fast as possible.
?
The hedgehog concept
?? The importance of finding the intersection between what you are passionate about, what you can be the best at, and what drives your economic engine.
Collins consolidates that the most successful companies find their sweet spot between what they are passionate about, what they are good at, and what they earn money with. The focus of the efforts on this sweet spot will truly drive their success.
领英推荐
Digital technologies present an ever-increasing range of opportunities for the company themselves or their products and services. But they must also be able to master them. This means they must either build up the necessary skills quickly or acquire and integrate them via the ecosystem.
In addition, many new technologies are accompanied by new business models. Let's consider the well-known platform business, or the change from a one-off payment model to a recurring revenue model.?
A culture of discipline?
?? The importance of having a disciplined culture focused on achieving long-term success.
Collins considers that the most successful companies have a culture that enables the employees to work collaboratively across different teams and departments to achieve breakthrough performance on the one hand and on the other to execute the executive board's strategy.?
The exponentially increasing amount of digital technologies obviously offers many opportunities but also carries the inherent risk of backing the wrong horse. Or even just temptation, wanting to try everything and finally get lost in the endless universe of possibilities.?
Therefore, it is crucial to keep the balance between curiosity and focus. Leaders, and again this means every individual who has appropriate knowledge and thus decision-making authority and thus responsibility in the organisation, need the ability to execute digital initiatives and bring them to an end. They also need to have a sharpened sense of judgement that allows them to choose the right time and the right topic that will help achieve tomorrow's success. Line management once again has the task of ensuring this can happen: Achieve results and wisely channel the curiosity that drives many knowledge workers.?
Technology accelerators
?? The importance of using technology to amplify a company's strengths and achieve breakthrough performance.
Collins considers that the most successful companies use technology to amplify their strengths and achieve breakthrough performance. This requires a deep understanding of the technology and how it can be used to drive the company's success, as well as a culture that is able to adapt to new technologies and take advantage of them quickly.
Well. There is only one aspect to add that has not already been mentioned above.?
Those companies that apply real empowerment of their employees through groundbreaking new AI technology and implement perfectly fitting workflows and tools for the creation of customer value will gain a significant advantage over their market competitors.
Therefore, the reformulation, in this case, is also somewhat softer.?
The flywheel and the doom loop
?? The importance of understanding that great results are not the product of one-time efforts, but of sustained, consistent effort over time.
Collins considers that the most successful companies focus on a flywheel, a long-term, sustained effort to achieve success. This is opposed to a doom loop, a series of one-time efforts that do not lead to lasting success. He also argues that achieving greatness is a continuous process that requires consistent and sustained effort over time.
With this principle, I honestly struggled with the projection to the knowledge age at the first attempt. The question then forced itself on me was: In the context outlined above, how do we even know whether we are doing the right thing to contribute to long-term success? I am not talking about "we think" we are doing the right thing, but we can determine it through reasoning and evidence.?
More precisely, how can we identify whether monetary success belongs to the "good" (supports sustainability) or to the "bad" (one-trick pony) category in Collin's classification?
After a few nights and some walks, I have arrived with the following criteria that may give clues as to whether they are "good" results:?
In summary I came up with the last adapted principle:?
If you have stayed until now, thank you for your interest ??, and I am curious ??whether you share my view.?
Sources/Additions
(1) GPT stands for Generative Pre-trained Transformer. It is a type of language model developed by OpenAI. GPT models are trained on a massive amount of text data and are able to generate human-like text that is often difficult to distinguish from text written by a human.?The dawn of the knowledge age | LinkedIn
(2) SAFe stands for Scaled Agile Framework. It is a methodology for managing and coordinating large and complex projects, particularly in software development. SAFe is based on the principles of Agile development, which emphasises flexibility, collaboration, and rapid iteration.?SAFe 5 for Lean Enterprises (scaledagileframework.com)
(3) OKRs stands for Objectives and Key Results. It is a framework for setting and measuring progress towards specific, measurable, and time-bound goals. OKRs are used to align an organisation's efforts towards achieving its overall objectives, by breaking them down into smaller, measurable goals that can be tracked and evaluated on a regular basis.
Coaching Quality Strategy
2 年Great article Florian, however L5s are rare gems. If you read the "No rule rules" book, it talks about the same rare combination of being humble & a skilled leader, and that Netflix pays them top market, as they are irreplaceable.