Collins: Hedgehog Concept

This post about the Hedgehog Concept continues our 8-part series on Good to Great

Jim Collins and his team discovered the Hedgehog Concept researching Good to Great. It remains one of my favorite concepts of the book. I consider it one of the most powerful applications. My description will briefly introduce you to the concept. As always, I strongly encourage you to read the book yourself and study its contents carefully. You will find the quotes I use in today’s blog in Chapter 5 of Good to Great.

Are You a Hedgehog or a Fox?

Collins begins the chapter reviewing Isaiah Berlins’ essay on The Hedgehog and the Fox. In the essay the fox tries a variety of methods to catch the hedgehog. Each day he must create a new method. Each day he fails. The hedgehog, however, does one thing and does it repeatedly. He rolls himself into a ball with his spiny quills exposed to the fox’s mouth. The hedgehog’s single-minded application to the same approach saves his life.

The author illustrates the application of the hedgehog concept in business with how Walgreen’s became a dominant player in the convenience drug store industry. (Read pages 92-93 to understand Walgreen’s hedgehog concept.) Collin's continues “Those who built the good-to-great companies were, to one degree of another hedgehogs. They used their hedgehog nature to drive toward what we call a Hedgehog Concept for their companies. Those who led the comparison companies tended to be foxes, never gaining the clarifying advantage of a Hedgehog Concept, being instead scattered, diffused, and inconsistent.”

Find Your Hedgehog Concept Where 3 Circles Intersect

“The essential strategic difference between the good-to-great and comparison companies” writes Collins “lay in two fundamental distinctions. First, the good-to-great companies founded their strategies on deep understanding along three key dimensions—what we came to call the three circles. Second, the good-to-great companies translated that understanding into a simple, crystalline concept that guided all their efforts—hence the term Hedgehog Concept.”

The circles include:

1. “What can you be the best in the world at (and, equally important, what you cannot be the best in the world at).
2. What drives your economic engine: All the good-to-great companies attained piercing insight into how to most effectively generate sustained and robust cash flow and profitability.
3. What are you deeply passionate about: The good-to-great companies focused on those activities that ignited their passion.

Your hedgehog concept exists where the three circles intersect. Jim Collins applies the hedgehog concept to you personally on pages 96-97. Read it a couple of times to see how it can improve your career satisfaction.

“The hedgehog concept is a turning point in the journey from good to great. In most cases, the transition date follows within a few years of the Hedgehog Concept. Furthermore, everything from here on out in the book hinges upon having the Hedgehog Concept. As will become abundantly clear in the following chapters, disciplined action-0-the third big chunk in the framework after disciplined people and disciplining thought—only makes sense in the context of the Hedgehog Concept.”

Use a Council (Mastermind Group) to Find Your Hedgehog

Collins wrote “One particularly useful mechanism for moving the process along is a device that we came to call the Council. The Council consists of a group of the right people who participate in dialogue and debate guided by the three circles, iteratively and over time, about vital issues and decisions facing the organization.”

“In response to the question, ‘How would we go about getting our Hedgehog Concept?’ I would point to the diagram on page 114 and say ‘Build the Council, and use that as a model. Ask the right questions, engage in vigorous debate, make decisions, autopsy the results, and learn—all guided within the context of the three circles. Just keep going through that cycle of understanding.”

Once again, I encourage you to study chapter 5 of Good to Great, form your own council, and work through the process until you find your Hedgehog Concept. It will prove the turning point to turning your career (or organization) from good to great.

Join us on Friday to learn how to create a culture of discipline within your life or organization

Jim Collins: Face Brutal Facts

This continues our 8-part series applying Jim Collins Good to Great principles to careers

Collins wrote “One of the dominant themes from our research is that breakthrough results come about by a series of good decisions, diligently executed and accumulated one on top of another. Of course, the good-to-great companies did not have perfect track record. But on the whole, they made many more good decisions than bad ones, and they made many more good decisions than the comparison companies. Even more important, on the really big choices.,,they were remarkably on target.”

Confront the Brutal Facts, Yet Never Lose Faith

Too many companies fail to confront their brutal facts. They neglect facts that will inhibit or even condemn their success. Unfortunately, many people do the same thing. Others do not. Collins wrote “When…you start with an honest and diligent effort to determine the truth of the situation, the right decisions often become self-evident. Not always, of course, but often. And even if all decisions do not become self-evident one thing is certain: You absolutely cannot make a series of good decisions without first confronting the brutal facts. The good-to-great companies operated in accordance with this principle, and the comparison companies generally did not.”

Create a “Climate Where the Truth is Heard”

Whether you use the principles to move your organization—or you personally—to greatness, you need a climate where the truth is heard.. Once again, I quote Collins “ There’s a huge difference between the opportunity to "’have your say’ and the opportunity to be heard The good-to-great leaders understood this distinction, creating a culture wherein people had a tremendous opportunity to be heard and, ultimately, for the truth to be heard. How do you create a climate where the truth is heard? We offer four basic practices:

1. Lead with questions, not answers: questions generate thought, answers stifle it
2. Engage in dialogue and debate, not coercion:  honest back and forth
3. Conduct autopsies without blame” evaluate projects and operations with fear
4. Build ‘red flag’ mechanisms: create systems that help you identify potential problems”

Following the same approach about yourself allows you to hear the truth about you—good or bad. Hearing the truth allows you to confront the brutal facts and change your behavior, interactions, and even your character. First, however, you must create a climate where people feel comfortable telling you the truth.

The Stockdale Paradox

Admiral Jim Stockdale was the highest ranking officer housed in the “Hanoi Hilton” prisoner-of-war camp during the Vietnam War. He survived 20 rounds of torture, deprivation, and isolation for eight years. He developed a philosophy that sustained him during the ordeal. Jim Collins called it The Stockdale Paradox. Simply stated: “you must retain faith that you will prevail in the end and  you must also confront the most brutal facts of your current reality.”

“Our good-to-great companies…all embraced the Stockdale Paradox. It didn’t matter how bleak the situation or how stultifying their mediocrity, they all maintained unwavering faith that they would not just survive, but prevail as a great company. And yet, at the same time, they became relentlessly disciplined at confronting the most brutal facts of their current reality.”

I found, for myself, that the dual belief of the paradox allows for great growth. Maintaining the faith while confronting the brutal facts stimulates personal improvement.

Wednesday we will examine how to create your own hedgehog concept to focus your thoughts

Merry Christmas

For unto us a child is born,

“For unto us a child is born, unto us a son is given: and the government shall be upon his shoulder: and his name shall be called Wonderful, Counsellor, the mighty God, The everlasting Father, The Prince of Peace.

Of the increase of his government and peace there shall be no end, upon the throne of David, and upon his kingdom, to order it, and to establish it with judgment and with justice from henceforth even for ever. The zeal of the Lord of hosts will perform this.” (Isaiah 9:6-7)

He was wounded for our transgression

“He was wounded for our transgressions he was bruised for our iniquities: the chastisement of our peace was upon him; and with his stripes we are healed. All we like sheep have gone astray; we have turned every one to his own way; and the Lord hath laid on him the iniquity of us all.

He was oppressed, and he was afflicted, yet he opened not his mouth: he is brought as a lamb to the slaughter, and as a sheep before here shearers is dumb, so he openeth not his mouth. He was taken from prison and from judgment: and who shall declare his generation? for he was cut off out of the land of the living: for the transgression of my people was he stricken.

And he made his grave with the wicked, and with the rich in his death; because he had done no violence, neither was any deceit in his mouth.” (Isaiah 53:5-9)

“And the angel answered and said unto the women, Fear not ye: for I know that ye seek Jesus, which was crucified. He is not here

 

For He is risen, as he said.

I thank God for the gift of His only begotten Son. I rejoice in His birth in Bethlehem.

I praise Him for his grace that saves and redeems me. I know that He lives and sits on the right hand of His Father. I pray that His peace may be upon you this season and all time.

Merry Christmas

On Earth Peace, Goodwill to all

Jim Collins: First Who…

The 2nd post in our 8-part series reviewing Jim Collins principles of Good-to-Great Leadership. I strongly suggest you buy the book and study it thoroughly. I found it very helpful.
Jim Collins began the chapter on First Who…Then What, “When we began the research project, we expected to find that the first step in taking a company from good to great would be to set a new direction, a new vision and strategy for the company, and then to get people committed and aligned behind the new direction.
We found something quite the opposite.
The executives who ignited the transformations from good to great did not first figure out where to drive the bus and then get people to take it there. No, they first got the right people on the bus (and the wrong people off the bus) and then figured out where to drive it.”
Mistakes of Companies that Did Not Go Good-to-Great

• “Weak Generals with Strong Lieutenants: The weak generals model produced a climate …[where] weak generals would wait for directions from above.”
• “Genius Leaders with a Thousand Helpers: set a vision for where to drive the bus. Develop a road map for driving the bus. Then, enlist a crew of highly capable “helpers” to make the vision happen.

The Key: “Who” First and “What” Second
Collins continues “The good-to-great leaders understood three simple truths:

1. If you begin with “who,” rather than “what,” you can more easily adapt to a changing world.
2. If you have right people on the bus, the problem of how to motivate and manage people largely goes away
3. If you have the wrong people, it doesn’t matter whether you discover the right direction, you still won’t have a great company. Great vision without great people is irrelevant.”

Not only did great companies get the right people on the bus. They ensured that the people were in the right seats on the bus. I personally experienced this in one operation I managed. I inherited an operation with excellent people already in place. Unfortunately, previous management assigned them responsibilities inappropriately to the capabilities of the people. I merely changed their assignments and increased productivity of the operation by 87% in four months.
Rigorous, Not Ruthless
Collins found that great companies are rigorous but not ruthless. Collins wrote “To be ruthless means hacking and cutting, especially in difficult times, or wantonly firing people without any thoughtful consideration. To be rigorous means consistently applying exacting standards at all times and at all levels, especially in upper management. To be rigorous, not ruthless, means that the best people need not worry about their positions and can concentrate fully on their work.
They found three practical disciplines required to enforce the rigor required to become great:

1. “When in doubt, don’t hire—keep looking (Corollary: A company should limit its growth based on its ability to attract enough of the right people.)”
2. “When you know you need to make a people change, act (Corollary: First be sure you don’t simply have someone in the wrong seat.)”
3. “Put your best people on your biggest opportunities, not your biggest problems (Corollary: If you sell off your problems, don’t sell off your best people.)”

Collins concludes this chapter pointing out that the old adage “People are your most important asset is wrong. People are not your most important asset. The right people are.” He also highlights “Whether someone is the ‘right person’ has more to do with character traits and innate capabilities than with specific knowledge, background, or skills.”
This concept found by Jim Collins becomes essential to your career success. Whether you find yourself the leader needing to lure the right people onto your bus and helping others off the bus, or one of the people getting on or off the bus; prioritizing “who” first, then “what” remains critical to becoming great.
Frieday we we explore the need to face brutal facts in our organization

Jim Collins: Good is Enemy to Great

This continues our 8-part series on Jim Collins’ Good-to-Great research
Jim Collins and his research team examined 30 years of financial records for 1,435 companies. They looked for 1) 15 years of performance at or below the norm, 2) a transitional point of change (the black box), and 3) 15 years of accelerating performance significantly above industry norms. Eleven companies met the criteria. The research team interviewed staff to identify any commonalities between the great companies. Good-to-Great released their findings. I strongly suggest you study it to improve your career. Most of today’s post comes from chapter one of the book.
“Good is the Enemy of Great”
Jim Collins started the book with that statement. He continued “And that is one of the key reasons why we have so little that becomes great.
We don’t have great schools, principally because we have good schools. We don’t have great government, principally because we have good government. Few people attain great lives, in large part because it is just so easy to settle for a good life. The vast majority become quite good—and that is their main problem.”
His thoughts resonate with me. They echo Tom Peters and Robert Waterman’s landmark work In Search of Excellence. Too many of us as people, businesses, and communities fail to  push for excellence. Good satisfies our craving. For example, most of my blogs pass for good. Some worse. Few, if any, of my musings would pass muster as great. Most of us, could not describe a great effort.
Let me share another example. the operation that I manage set a goal in October to help all of the people asking us for help (6,000+) to find a job by Christmas. I believe that exemplified a great and achievable goal. We failed miserably. We only helped a little over a thousand find a job. Whenever, I tried to motivate the group to stretch further, they told me “But we placed twice as many this year as last year.” In other words, what we are doing is good because it exceeds last year’s performance. Good truly is the enemy of great.
“Timeless “Physics” of Good to Great”
The author admonishes readers (Yes, you should read the book) “As you immerse yourself in the coming chapters, keep one key point in mind. This book is not about the old economy. Nor is it about the new economy. It is not even about the companies you’re reading about, or even about business per se. It is ultimately about one thing: the timeless principles of good to great. It’s about how you take a good organization and turn it into one that produces sustained great results, using whatever definition of results best applies to your organization.”
Collins explains that he doesn’t consider his research about businesses, economies, or even organizations. He believes that his research seeks to “understand the fundamental differences between great and good, between excellent and mediocre.” He uses corporations because their requirement to publish solid financial information simplifies the research.
Move Your Career, Your Life, from Good to Great
That answers the question “Larry, why are you examining good to great in your career blog and not in your business blog?” I believe the findings Collins discovered can apply to people also. You can surround yourself with “who” first, then discover your “what”. You can confront your own brutal facts. You can find your personal hedgehog concept. You determine if you live on a flywheel or a doom loop.
The end of the year lends itself to introspection and seeking improvement. I hope these posts inspire you to seek lasting change—to conquer good, the enemy of great—and become great. Read the book and articles listed on his web site. Take the diagnostic tool for you as an individual.  I pray that you share the concepts with your friends. Build your own mastermind team so that each of you can become great.
Friday we will explore the critical practice of seeking who first…then what. Don’t miss it!

Jim Collins: Good-to-Great

This begins an 8-part review of Jim Collins roles of leadership to go from Good to Great


Many of you must fill leadership roles as you develop your career. So, we will analyze the literature on leadership. In a previous post we reviewed what Jim Collins calls Level 5 Leadership. That chapter outlined the traits of great leadership. Today we begin a review of the roles of leadership Collins found in his research for the book Good to Great.

I review the concepts found in Good-to-Great to help you understand the culture of great companies for those of you who

1. Find yourself leading and want to exert great leadership
2. Work for companies that could become great
3. Yearn to find a great company that will appreciate your efforts

How Collins Identified Traits of Good-to-Great Companies
Let me restate how Collins and his team found the traits. They reviewed the financial records of companies that appeared on the Fortune 500 list between 1965-1995. Collins writes they were “looking for companies that showed the following basic pattern: fifteen-year cumulative stock returns at or below the general stock market, punctuated by a transition point, then cumulative returns at least three times the market over the next fifteen years. We picked fifteen years because it would transcend one-hit wonders and lucky breaks.”
From the research, Collins found 11 companies that met the criteria. He compared those companies with two types of companies. What he called:

• Direct comparisons: “companies that were in the same industry as the good-to-great companies with the same opportunities and similar resources at the time of transition, but that showed no leap from good to great.
• Unsustained comparisons: companies that made a short-term shift from good to great but failed to maintain the trajectory—to address the questions of sustainability.”

Then, his group asked questions to identify what happened “in the black box” (the point of transition and beyond). They compared the data to identify common traits shared by all the good-to-great companies and lacking from the comparisons.

Traits of Good Companies that Became Great

Collins team found the great companies shared the following characteristic:

1. Good is the Enemy of Great
2. Level 5 Leadership
3. First Who…Then What
4. Confront the Brutal Facts (Yet Never Lose Faith)
5. The Hedgehog Concept (Simplicity within Three Circles)
6. A Culture of Discipline
7. Technology Accelerators
8. The Flywheel and the Doom Loop

He closed the book by describing how companies go from good-to-great to built-to-last (another of his books). The last chapter proved almost prophetic. Several of Collins great companies failed miserably during the economic downturn (particularly Circuit City that closed and Fannie Mae that the government took over). His curiosity led him to examine what happened. Then he wrote about it in How the Mighty Fall.

I hope you enjoy our review of Jim Collins findings. As always, I strongly encourage you to purchase Good-to-Great and read it several times. I thoroughly enjoyed the book. Applying it to my work improved our productivity, satisfaction, and passion for what we do. I firmly believe that you will find the same motivations. I know that it will improve your career.


So do not miss Wednesday’s blog when we begin our review with First Who…Then What

Rejuvenate During Holidays

Many people find the holidays a difficult time. Despair and depression affect many people. Loneliness and isolation darkens an increasing number of homes each year. The recession, upside down home prices to mortgages, uncertain job outlooks cause millions to worry and despair. Our government gridlock rushing from one looming shutdown to another impasse.

In addition, certain industries or occupations experience more stress at years’ end than others:

• Retailers obviously experience challenges, pressures, and long days during the holiday season. They do a huge portion of their annual sales in six weeks.
• Accountants close out corporate books and prepare for four months of tax season.
• Airline, hotel, & restaurant workers host large number of guests during the holidays
• UPS, FedEx, and postal workers work more hours and must push more packages
• Mental health counselors and therapists cope with an increase of cases and crisis

These represent a small portion of the people who experience added stress during the holidays. Many others carry stress that spills over from the rest of the year. Continual stress saps your energy. In other words, most Americans arrive at the holiday season drained, tried, and worn out.

Engage in Relaxing Activities

The holidays also provide an excellent time to rejuvenate and renew your energies. The proximity of Christmas Eve, Christmas Day, and New Year’s Day allow salaried workers to leverage 3 vacation days into 9. Try doing some of these activities to reduce your stress, increase serenity, and energize your cells:

• Just sit in front of your Christmas tree with the tree lights on and others off
• Take walks in the peaceful times of day (bundle up if its cold, protect nasal passages)
• Take quiet, hot bathes, close your eyes, and imagine your are in a tropical lagoon
• Listen to soothing music in the dark at the end of long day
• Buy or check a meditation or yoga download or DVD and practice it each evening
• Wish 10 people a day a Merry Christmas, Happy Hanukah, Happy Kwanza or holiday
• Read a good book sitting in front of a Christmas tree, fireplace, or soft light
• Make a list of all the good things in your life
• Serve a meal at a homeless shelter, battered women’s shelter or for neighbor in need
• Check into an inexpensive hotel with a pool or hot tub and free breakfast and relax
• Take a cruise or vacation to a tropical location

I hope you find a way to rejuvenate your life and recharge your soul.

Join me Monday when I rejoin our series on leadership with more on Jim Collins Good to Great