Editor's Note: Home Furnishings Business published this book review of author Jim Collins' Good to Great written by Michael K. Dugan, our resident academic, in the March 2006 issue. Seeing as how this issue examines personnel matters and solidifying the right team, we thought it appropriate to share it again.
Now, at a time when furniture professionals could use more help coping with the change brought about by globalization, along comes Jim Collins with a parallel approach, only better.
His book, Good to Great, simply stated, is better than great. It is wonderful. Whether it arrived just in time or too late to save the furniture business is a good question. Collins and his army of researchers studied 1,435 companies and held them up to rigid standards of excellence before settling upon 11 that had made the difficult transition from being a good company to a great company.
What he learned in the process was surprising in many ways. At the outset, he states that good is the enemy of great, because it is too easy to settle for good performance and avoid the challenge of reaching greatness.
If he is right, and I suspect he is, what does that say about so many furniture operations that settle for mediocrity and don't even bother to become good? Alas, there were no furniture companies on his short list of 11.
By closely scrutinizing the companies that made the leap while thousands of others did not, a pattern emerges that can be applied to the furniture business quite effectively. Be forewarned, however, this application requires a heavy dose of discipline in order to make an impact.
This is no one-minute-to-perfection book. Nor is it an Excellence for Dummies publication. It is much more. Because the book is well-written and easy to grasp, it can fool you into thinking its lessons are easy to apply, but they are not.
Good to Great is suited to today's economic conditions.
According to Collins, there are seven common elements that set the great companies apart. First, not surprisingly, is competent leadership. Not just your commonplace, ordinary, command-and-control leadership, but what Collins calls "Level Five Leadership," by which the CEO looks out the window "to find someone to credit when things go well, and looks in the mirror to "find someone to instruct when things go poorly."
Level Five leaders are the opposite of the flamboyant, egocentric, celebrity types who lead by press release. At Level Five we find leaders who combine personal humility and professional will, leaders who have ambition for their companies—not for themselves.
Eager to generate sustained results, the soon-to-be great company can devote time to determining "first who then what," as Collins terms it. His findings here are anything but conventional. Instead of setting your strategic direction and then building a team to carry it out, he suggests you "get the right people on the bus first" and then figure out where to drive it.
He goes on to offer three dictates that managers should commit to memory: 1. When in doubt, don't hire—keep looking. 2. When you know you need to make a change, act—don't delay. 3. Put your best people on your biggest opportunities—not your biggest problems.
Space does not allow the exploration of all seven elements here. Buy the book and read it more than once. You will not regret it. The ensuing sections deal with the need to confront the brutal facts, yet never lose the faith, how to "establish a culture of discipline" to stay productive, how to "utilize technology accelerators" to create momentum, and how to emulate the tactics of the hedgehog who can "simplify things in a complex world" as opposed to the fox who is "scattered, confused and inconsistent."
The hedgehog always wins.
Collins uses the analogy of the flywheel to describe the great companies as opposed to the doom loop that the not-so-great frequently inhabit. The flywheel requires constant pushing in the right direction and is slow to respond at first, but when it gets rolling, it is a powerful force.
Companies that ignore the flywheel can end up in the doom loop where they try to skip some steps, lose direction, compound the problem, and make the same mistakes over and over.
Take your pick. You can choose either model. You can take your organization from good to great, or you can settle for just being good. Remember to ask yourself, "If good is the enemy of great, how can I be sure I'm not mediocre?" We all have seen good enterprises get in trouble trying to overachieve. In some cases, good is not all bad. HFB
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