Preserve the Core & Stimulate Progress

WHAT:

This week in class we read Chapter 9 in Good To Great, by Jim Collins. One of the most important ideas in the chapter I think is the notion of preserving your core ideology is a central feature of enduring great companies. However it is not enough to just preserve the key concept of your business, you must also stimulate progress within your company. The book illustrates this idea with the story of Walt Disney. Collins describes how Disney went through dramatic changes over the years - from cartoons to full-length animations, from The Mickey Mouse Club to the amusement park business. The important point here is that through all of these changes the company still strongly embraced its consistent set of core values including "passionate belief in creative imagination, fanatic attention to detail, and preservation of the "Disney Magic."

SO WHAT:

The success of the Disney business illustrates the importance of the idea of preserving your core values while still stimulating progress. Although Disney made an extreme jump from The Mickey Mouse Club to Disney World amusement parks, the company remained successful because people were still able to identify with the Disney brand and saw the new amusement parks as a way for Disney to still instill happiness in children.

NOW WHAT:

I think that after reading this chapter, I really understand the importance of embracing your core ideology while still stimulating progress. After switching my major a total of SIX times throughout my college career, I finally made a decision on what I wanted to focus on in my professional career: IT consulting. While it may sound a bit dry to most, I feel like I can really excel in this area of business. How does this have anything to do with this blog post? I am going to do my best not to stray from this area of profession because I know it is what I want to do. I guess you could call it my Hedgehog Concept in a way.

Rinsing Your Cottage Cheese

WHAT:

Dave Scott

            What does rinsing your cottage cheese have to do with leadership or being a great company? The exact same thought crossed my mind when I read chapter 6 of Good To Great, and came across a section entitled “Rinsing Your Cottage Cheese.” It’s an extreme example of a disciplined action. Through his research, author Jim Collins found that in order for a company to move from good to great, they must have a disciplined culture. The analogy describes the intense level of commitment Dave Scott, a six-time Hawaii Ironman champion, had in absolutely every part of his training. Even though he already burned 5,000 calories a day, he would STILL literally rinse his cottage cheese to get extra fat off. That’s disciplined commitment. Collins uses the analogy to illustrate the importance of doing every little thing in one’s power to reach your goals – like rinsing cottage cheese.

SO WHAT:

            I really think this point illustrates a stark distinction between good companies and great companies. Good companies can be disciplined. They may have a certain framework they follow and certain policies that guide the way they conduct business. The difference between the discipline in a good company and the discipline in a great company is the sincere dedication and willpower to see the discipline as an opportunity to be the very best. Collins uses an example comparing this difference in the actions of Bank of America and Wells Fargo during bank deregulation. While they both realized the need to cut expenses and eliminate waste, Wells Fargo “rinsed their cottage cheese,” if you will, and Bank of America just dieted. Wells Fargo froze executive salaries and shut down executive dining, whereas Bank of America didn’t even consider recommendations made at board meetings, like selling their corporate jet. Great companies confront the brutal facts of their reality, like Wells Fargo did, and they still aspire to be the best despite the circumstances. They take every single action they can in order to prevail, even if that means losing certain perks – like a corporate jet or fancy meal.

NOW WHAT:

            Before reading this chapter, I was definitely one of those people that discounted “the little things” and usually decided against taking that extra little step of effort because I really didn’t think they would make all that difference. However, after reading Dave Scott’s story, I think I’m beginning to understand why rinsing his cottage cheese isn’t all that crazy of an idea. There’s a lot that companies, and even individual people, can take away from this idea. It’s not enough to just be disciplined. You have to instill and reinforce the idea that strong discipline is the key to being great, and only then will you achieve sustained, extraordinary results.

The Stockdale Paradox

WHAT:

Admiral James Stockdale

This week in lecture we read about and discussed something known as the Stockdale Paradox. Jim Collins describes this concept in the fourth chapter of his novel: Good To Great. The name refers to Admiral Jim Stockdale, a high-ranking military officer held as a prisoner of war for eight years during the Vietnam War. Despite all of the torture and brutality he experienced, he kept an outlook of positivity. When asked why he never gave up, he said: “I never lost faith in the end of the story.” Stockdale attributed his faith in survival to two seemingly conflicting views: You must retain faith that you’ll prevail in the end and you must also confront the most brutal facts of your current reality.

SO WHAT:

I think we can all learn something from James Stockdale. The Stockdale Paradox defines the confidence and optimism that is expected of all great leaders. When we are faced with challenges and must make important decisions, we must assess the circumstances objectively – that is, confront the brutal facts. At the same time, we also have to believe in the back of our minds that we will prevail. It sounds so simple, but many people tend to avoid certain aspects of the problems and fall back on solutions that have worked in the past. In an interview with Stockdale, Collins asked him who didn’t make it out in Vietnam and he replied with: “The optimists.” Stockdale went on to explain that the optimists were the ones that believed someone was going to come to their rescue and they weren’t going to suffer. What the optimists failed to do was confront the reality of their situation. When they were eventually forced to face reality, it was too much for them to handle.  

NOW WHAT:

            Regardless of whether you’re in a situation as serious as Stockdale’s, or you’re the CEO of a failing business, don’t settle for mediocrity or failure – have faith that you will prevail. But before you make any drastic decisions or take any steps forward, or backward for that matter, take the time to understand the facts of your current reality. Understand that your business is failing and make a serious effort to understand why. Only then will your decisions become easier and easier. After reading this chapter, I want to make an honest attempt to adopt this philosophy in all that I do. 

First Who... Then What

            One topic I found particularly interesting this week during our lectures was part of our study on the “First who, then what” mindset from Good to Great, a book written by Jim Collins. In chapter 3, Collins recounts an interview with the steel company Nucor’s executives. Nucor built its workforce on the view that “you can teach farmers how to make steel, but you can’t teach a farmer work ethic to people who don’t have it in the first place.” In essence, Nucor chose to establish steel mills in traditional farming towns like Norfolk, Nebraska and Plymouth, Utah in an effort to attract employees with a farmer-like work ethic. Farmers wake up at dawn and immediately get to work, rarely stop for a break, and turn in at dusk. Employees with that kind of work ethic would make production rates soar – and that’s exactly what happened. With such an emphasis on performance and production, Nucor was able to boast an absenteeism rate of just 1.0% per year.

The main idea in this chapter was to
get the wrong people off the bus, then
get the right people on the bus.

            I really enjoyed reading about Nucor’s theory on hiring the “right” people as opposed to hiring just anyone. When you stop to reflect on the idea, it really does make sense and probably saves them a lot in terms of wasted time and lazy workers. This excerpt from the book also illustrates the point that it isn’t necessarily skill or experience that makes the greatest employees per se, but where they come from and what they value. I think more companies need to steer their human resources departments this way. When I stop and think about it, all of my peers that are in the process of finding a job for after graduation, spend countless hours editing and re-editing resumes. While previous work experience and related skills are obviously something most employers look for, it would really be nice to go into job interviews knowing a company places high value on certain character attributes and work ethic as well, like Nucor.