Wednesday, November 18, 2009

Good to Great

I recently finished reading Good to Great by Jim Collins. I used to read business-oriented books on a more regular basis when I was working for America Online's ANS Communications division and then UUNET, and it was nice returning to that style.

The subtitle of the book is Why Some Companies Make the Leap... and Others Don't. And while the book is focused on the business world, and a common metric of success such as exceeding the average return in the major stock markets, it would be a mistake to think that this book can't teach us about the not-for-profit world that ICPSR occupies.

One tenet of the story the book tells is that organizations often lose their focus, wander into the weeds, and then suffer failure, sometimes catastrophic failure. The successful companies figure out their core mission, keep it simple, and then slowly but inexorably gain momentum to dominate and win. For example, the book contrasts the story of Gillette and Warner-Lambert. While the former focused squarely on its core, Warner-Lambert flailed between different goals, eventually being swallowed up by Pfizer.

The book refers to this type of focus as the Hedgehog Concept and breaks it into three elements:

  1. What you are deeply passionate about
  2. What drives your economic engine
  3. What you can be the best in the world at

My sense is that this is an important message, particularly for successful organizations. It's easy to grow heady with success and start chasing bigger and more diverse deals, losing focus on what led to success.

Another interesting element of successful organizations was their use of "stop-doing" lists. While all organizations keep track of their "to-do" lists, which get longer and longer and longer and ..., the highly successful organizations made a conscious decisions about what to stop doing. This too resonates with me, and my experience is that if organizations don't make the hard decisions about what to stop doing, they end up spreading their resources too thinly, and then nothing gets done well.

A final interesting item I'll note here is how the budget process is described at highly successful organizations. It isn't an opportunity to ration income across a myriad of areas; rather it is an exercise to decide which areas are core and should be funded fully and completely, and which areas are not core, and should be funded not at all. Once again the root message is about focus.

There are many other very interesting observations from the research behind the book, and I'd recommend it to anyone who plays a leadership role at an organization.

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