"...the three most important pages ever written in business..."
I was rereading Scaling Up by Verne Harnish and came across a sentence that caused me to head to my bookshelf to grab Jim Collins’ Good to Great. In the Strategy section of Scaling Up that describes creating Strategic Thinking Teams (the council) Verne states: “Grab a copy of Collins’ Good to Great: Why Some Companies Make the Leap…And Others Don’t and read the three most important pages ever written in business – Pages 114 to 116 – where he describes the 11 guidelines for structuring such a council.”
While having discipline around strategic thinking and seeking counsel from diverse perspectives are, of course, sound, foundational components of a well-run company, the “three most important pages ever written in business” piqued my curiosity. I thought surely something written about engaged employees, crisp operational execution, or even cash being king would garner that accolade. Books and articles such as How to Win Friends and Influence People, Marketing Myopia, The Art of War, most anything by Peter Drucker consistently make the Most Influential lists but Harnish didn’t call those out (although he does have extensive recommendations of such classics throughout Scaling Up).
Pages 114 – 116 of Good to Great cover more than just the council, though. For those that have read the book, you may remember the Hedgehog Concept (“The fox knows many things, but the hedgehog knows one big thing.”) and the need for a company to deeply understand 1) What the company can (and, equally important, cannot) be good at; 2) What drives the company’s economic engine (profit per x); and 3) What the company is deeply passionate about (great companies do those things that ignite passion). This process is depicted as three intersecting circles with the great companies executing at that sweet spot in the middle.
Collins describes the characteristics of the council in the three pages (who should be included, cadence for meetings, rules of conduct) but the lead in makes a critical point: any discussions on strategy should involve an iterative process guided by the three circles. Ask questions, dialogue and debate, execute decisions, and perform autopsies and analysis on what worked and what didn’t work all through the lens of what the company can be best in the world at, how to generate cash flow and profitability, and what the company stands for (the passion).
The guidance on the characteristics of the council is a good reminder that assembling and regularly consulting with the people who understand your business and/or industry is a fundamental requirement. The idea that the three circles should be a guide for questions, debate, and analysis is also impactful. Thought provoking statements like the “three most important pages ever written in business” are invaluable, though, if they grab your attention and cause you to seek out ideas – even ones you studied previously and had since forgotten.