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Ep: 52 - Business Column - The Most Popular Content Among Hypergrowth Guests
Business Column - The Most Popular Content Among Hypergrowth Guests
The first book I will present to you today is a piece of content that has been the most popular, until now, amongst all the guests at Hypergrowth. Good to Great, a book written by Jim Collins in the early 2000s, is truly a bible for all business managers.
So, why is this book so popular?
It's simple. It builds on and draws from over 40 years of extensive research.
And what Jim Collins was looking for in this research is the common denominator that distinguishes merely good companies from those that become great.
Before discussing Jim Collins' findings, let's first take a look at some stats included in this book.
1435 = The number of companies Jim Collins has analyzed in his research
40 = The number of years that these thousands of companies have been analyzed
11 = The number of companies Jim Collins has seen distinguish themselves and go from "Good to Great"
Now, what exactly did these companies have to accomplish to become part of this exclusive circle?
Over a period of 15 years, the 11 companies considered "Good to Great" accumulated more than 3x the returns usually acquired in their respective industries.
Here are some companies in this ranking:
1. Pitney Bowes
2. Wells Fargo
3. Philipp Morris
Here are some myths surrounding successful companies:
1.A successful business needs to change very quickly if it is to be successful.
2. A successful business must offer "options" to employees as well as high salaries in order to have a motivated team.
3. A successful company must also acquire other organizations in order to grow.
All of these myths, which can sometimes be true, are essentially dispelled by the author. Jim Collins focuses more on 4 fundamental concepts that any "great" company should have;
The "Good to Great" Principles:
The Flywheel Effect;
1. In the book. Jim draws on a metaphor of an enormous wheel. I invite you to imagine as you listen to this podcast, a huge wheel weighing 25 tonnes, 30 meters in height. This wheel represents your company. And your goal as a manager is to make this wheel advance as quickly as possible. After multiple days of pushing and pushing this wheel, you manage to make a complete turn. You keep pushing and the wheel manages to make a second turn, this time a little faster. And then the wheel does a third and a fourth lap. One day, without knowing why, the wheel moves on its own and even accelerates. Suddenly. you don't have to push it as hard as you did at the beginning. Jim Collins calls this the "flywheel effect." He says that all the companies that have gone from "Good to great" have gone through this change without even necessarily realizing it. None of these 11 great companies are able to pinpoint the exact moment that propelled them to another level. On the contrary, most of these leaders will even say that brutal changes in an organization are very often what leads to the failure of a company.
First lesson to retain:
1. Small actions lead to small victories that result in momentum. Momentum is what then allows companies to accelerate faster.
First who then what;
1. This is the concept in the book that fascinated me the most. Jim Collins noticed that the companies that made the leap from good to great are those that chose the "passengers" before choosing the "direction." An excellent example from inside the book goes like this; David Maxwell became CEO of Fannie Mae in 1981. At the time, the company was losing $1 million a day. To improve the situation, Maxwell told his investors that the company needed to rebuild the existing team before even thinking about a new vision.So he says in a meeting with the board that only A-Players will be accepted on the executive team. In the following weeks, more than 50% of the management team is replaced by new executives considered perfectly adequate to do the job. It was only after rebuilding the team that Maxwell decided to re-attack the "what" of the equation. When he left the company, Fannie Mae was now making $4 million a day in profit. And those results continued long after he left.
There are three lessons to retain here, according to Jim Collins:
1. Great leaders understanding that by putting the "who" before the "what," you'll be able to better adapt to a rapidly changing world. The people in place will be able to help reframe the company's vision if eventually, the direction is not the right one.
2.Second, Jim Collins says that by having only A-Players in your team, you'll never have to motivate them. They'll motivate themselves.
3.And lastly, if on the other hand, you have the wrong people with you, nothing else really matters. Having a good vision but mediocre leaders will always end in mediocre results.
The Hedgehog Concept;
1. The third concept is called the Hedgehog concept. In order to simplify the idea for our listeners, simply put: the hedgehog concept is in fact just a formula to understand in which sphere you can become the best at what you do. This where this subtlety becomes important. Companies that manage to bridge the gap have done the hard work of understanding where they can be the best in the world instead of wondering where they are the best. You can be the best in very few areas and that's what differentiates the great from the not-so-great. Jim Collins uses an image by showing that the most successful companies are in the middle of; what they are passionate about, what they can be best at, and what defines their economic engine.
The lesson to retain here:
1. I'll use a very common expression: the riches are in the niches.
Stop doing list;
1. As much as a manager may have a very long list of things to do in the running of his company, a manager must also learn to say no! Jim Collins shows through several examples that an executive needs to focus 100% of his energy on his "hedgehog concept" in order to bridge the gap from good to great. Decisions can be very difficult, such as cutting out internal departments or selling divisions of the company.
1. The premise of the book comes from the famous pareto principle, which posits that 20% of our efforts will bring you 80% of the results. One Thing is a rather short book that is excessively simple to digest in its content. The two authors, Gary Keller and Jay Papasan, invite us to continually ask ourselves the question; what is THE THING I am trying to achieve right now? Very often, we're going to find that by doing less we're going to accomplish more. Personally, because of its simplicity, the book has totally changed the way I do business. And let me tell you a little bit about how I was able to integrate it into my daily routine.
First, I tried to circle "The Thing" that I could do that could make the most impact in my business. It was too complex for me to boil it down to just one thing. So I decided to do one in between and limit my "one thing" to 3 things;
1. How can I improve my clients' experiences?
2. How can I better educate my employees on Facebook advertising best practices?
3. How can I acquire more clients?
These 3 questions then became directions that I absolutely had to follow if I wanted to improve the management of my company. Now, as mentioned in the book, after pinpointing the "one thing" to do for your company, you need to find time to accomplish this task.
Being much more productive in the morning, I decided to devote the first 90 minutes of my day to what I now call my ; One thing work. All the actions I take in the first 90 minutes of the day should be directed towards the 3 points mentioned above.
I started this exercise almost 24 months ago now and the results are phenomenal. Dedicating part of your time every day on the things you know will impact your organization over the long term is extraordinary.