All Aboard the ?Good to Great? Bus (Jeff Hankins Publisher’s Note)

Rarely do I make book recommendations, but “Good to Great” by Jim Collins succeeded in giving me a wake-up call about the way our organization needs to operate and move forward.

If you’re looking for good, fundamental thoughts to help you take your business to the next level, then jump on the “Good to Great” bus with me.

During the past month I’ve made some of the toughest business decisions of my career. You can probably relate — think about those critical times when difficult and often emotional decisions have to be made with a certain amount of uneasiness about the outcome or response from your staff.

Collins describes how 11 publicly traded companies shared what his research team identified as key common traits that over a period of time elevated them from being good to great.

Interestingly, the research process started with 1,435 companies selected from Fortune 500 rankings dating to 1965. When the list was narrowed to 126 companies, four Arkansas firms remained in the mix: Alltel Corp., Dillard’s Inc., Tyson Foods Inc. and Wal-Mart Stores Inc. None reached the final stage for various reasons.

The great companies in the final list share three key traits that Collins and his team deemed the “Hedgehog concept.” The firms determined what they could be the best in the world at doing, focused on activities they were deeply passionate about and understood that a single, measurable denominator drove their economic engine.

For example, Walgreens decided it could become the best at convenient drugstores. For Nucor, it’s low-cost steel. For Kimberly-Clark, it’s paper-based consumer products. And for Circuit City, it’s big-ticket consumer sales.

Collins found that the great companies aren’t afraid to make changes in top management. Furthermore, they instill a culture of discipline that eliminates the need for bureaucracy and excessive controls to get people to perform their jobs. They establish a basic framework of operation and then give employees freedom and responsibility.

The companies are run by what Collins describes as surprisingly low-key “Level 5” leaders who are not household names like Jack Welch or Michael Eisner. Level 5 leaders exemplify “ambition first and foremost for the company and concern for its success rather than for one’s own riches and personal renown.” They are humble, modest, fanatically driven and “infected with an incurable need to produce results.”

Here are a few of the best thoughts in the book:

• “Great vision without great people is irrelevant.”

• “You can’t manufacture or ‘motivate’ people to feel passionate.”

• “Those who built good-to-great companies made as much use of ‘stop doing’ lists as ‘to do’ lists.”

• “The right people will do the right things and deliver the best results they’re capable of, regardless of the incentive system.”

• “When used right, technology becomes an accelerator of momentum, not a creator of it.”

• “The moment you feel the need to tightly manage someone, you’ve made a hiring mistake.”

The “Stockdale Paradox”: “You must maintain unwavering faith that you can and will prevail in the end, regardless of the difficulties, and at the same time have the discipline to confront the most brutal facts of your current reality, whatever they might be.”

One of the fundamental findings is that every great company has “the ability to get and keep enough of the right people.” I can’t help but remember that is a guiding principal that helped lead Witt and Jack Stephens to build their multibillion-dollar financial empire in Little Rock.

“People are not your most important asset,” Collins writes. “The right people are.”

Which leads to the powerful bus analogy in the book:

Executives who led what turned out to be company transformations got the right people on the bus, got the wrong people off the bus, got people in the right seat on the bus and then figured out where to drive the bus.

Collins and his research team did an amazing job of identifying these common characteristics among 11 great companies. I’m convinced we can all use them to take our companies to the next level.