Achieve Positive Business Growth by Answering Five Key Questions
Reflecting Upon the Wise Words of Jim Collins
I recently attended the CEO Rising Summit - a Chief Execuitve Group event - to hear author Jim Collins talk about building and accelerating momentum in businesses. The conversation was based on new research as well as his legendary bestsellers Good to Great, Built to Last and How the Mighty Fall. The goal of his presentation was to help leaders refocus there teams and create sustained success.
What follows are the extensive notes I took on his presentation. While this might seem like a long read, I believe that when Jim Collins speaks, people listen. Thus, I've kept this post entirely in his voice - not mine.
Ask One Question and Then Ask More
I’ve had the great joy of being able to spend three decades of my life in pursuit of one big question:
What makes a great company tick?
My company has more than 6,000 years of combined corporate history in our research database. In those records, you’ll find multiple companies that operated with the same resources, same potential, and in the exact same moment in history – only to achieve divergent results. One became great, and the other did not.
The key to understanding this begins by asking a series of “Why?” questions.
· “Why do some businesses grow to become iconic, visionary, and enduring while others in the same circumstances don’t?”
· “Why do some companies make the leap from good to great while other companies don’t?”
· “Why do some companies fall from great to good to mediocre to bad to irrelevant to gone while others continue to rise?”
Since I believe questions are better than answers, I’m going to organize my thoughts as a set of five questions. Your homework is to take these five questions back to your team and wrestle with them.
Question #1: Do We Have 90% or More of the Key Seats Filled with the Right People?
I always start with people. Research has shown us over and over again that the “who” is of vital importance if you want to come out of any situation with momentum. Every great leader we’ve studied always takes this approach:
“I don’t need to figure out where to drive the bus. I need to first figure out who should be on the bus. I then need to determine who should be in the key seats and who should be off the bus.”
Only by focusing first on getting the key seats filled with the right people can you figure out where to drive your company and then deal with uncertainty. Because if you can’t predict the “what” – and I promise you can’t – then your ultimate hedge against what happens next is to have people who can adapt to whatever might be coming.
In other words, if you were going to climb a big mountain that you’ve never climbed before, your single most important decision is whom you have on the other end of the rope!
All we know is that your business will face a surprise and then another surprise and then another surprise. That’s just life. It’s why I’ve challenged CEOs and leaders over the years to ensure that over 90% of their key seats – their absolutely essential seats – are filled with the right people.
Sure, many of them come back and talk about how difficult this can be. However, I believe there will always be a war for talent. It should be hard to get the best people because their current employers want to keep them.
However, we’re currently in a time when everything is unfrozen. This is an excellent opportunity to think about how your company can seize the chance to fill 90% of your key seats filled with the right people. And when you have got those seats with wonderful people, your next act must be declaring how you will take care of them – not your career and not your success.
Question #2: What are the Brutal Facts and What Deserves Our Unwavering Faith?
Admiral Jim Stockdale was the highest-ranking military officer in the “Hanoi Hilton.” Shot down in 1965, he was locked in that infamous North Vietnamese prisoner of war camp until 1973. His captors could take him out at any time and torture him, and they did – for eight years.
I had the great privilege of getting to know Admiral Stockdale a bit. In preparation for my first meeting with him, I read his book, In Love and War, which alternates chapters by himself and his wife about his years in the camp.
As I engaged with the pages, sitting in my comfortable office, I found myself starting to feel depressed. It seemed so bleak because there was no end to it. I began to think about what it would be like to be in a situation like that where you didn’t know if you would ever get out. Then, suddenly, it dawned on me: I knew the end of the story.
I knew he reunited with his family. I also knew I’d see Admiral Stockton and enjoy a wonderful walk on the Stanford University campus. Then I wondered how on earth did he live out that terrible experience? When I asked him, we had this brief, but powerful exchange:
He said: “I never wavered in my faith. Not only that I would get out, but I would turn that experience into the defining event of my life that, in retrospect, I would not trade.”
I asked, “Who didn’t make it out as strong as you?”
He responded, “That’s easy. It was the optimists.”
“I’m confused,” I said.
He said, “What I mean by ‘the optimist’ were those who said we’d be out by Christmas. Christmas would come and go. They’d then declare we would be out by the next Christmas, but the next Christmas would come and go. They suffered from a broken heart.”
The lesson I learned from Admiral Stockdale was two-fold:
· On the one hand, we must confront the most brutal facts of our situation, including the reality that we won’t get out of here by Christmas.
· On the other hand, we must possess unwavering faith that we can and will prevail in the end.
Years later, when doing research for what became Good to Great, I noticed that good-to-great leaders seemed to have those same two perspectives when leading their companies, often through years of desperate difficulty. These leaders had this unwavering, unflinching resolve, belief, and faith that their company would get past any trouble no matter what they faced. They would make the company great.
At the same time, they were good at facing the cold hard facts. They were willing to pick up and look at the ugliest parts of their situation. They intentionally examined the hard realities knowing that, if they didn’t confront the brutal facts as they are, they would certainly confront us.
This mindset – “Possess unwavering faith, confront the brutal facts” – was dubbed the Stockdale Paradox.
I believe this is a Stockdale time. In fact, we’re all in a Stockdale moment: the world, our companies, our countries, ourselves. We must confront the brutal facts and, at the same time, determine the context of what it means to prevail.
However, one of the greatest mistakes in public leadership, as Churchill said, is to hold out false hope soon to be dashed by events. As leaders of companies and people, we cannot let that happen. We must ask ourselves: “What does it mean to prevail and to never lose sight of that?” Then and only then can we move forward.
Question #3: How and When Should We Change Our Flywheel?
Let me start with a story here. In the fall of 2001, I was invited up to a little company in Seattle. Its name was Amazon. I was invited to spend time with a young CEO named Jeff Bezos, the board, and the executive team. I basically taught then what my firm had learned in our research about what makes great companies tick.
At that time, those were dark days for Amazon. It was just after the dot-com bubble crashed. People wondered if the company would go the way of so many of the other dot-coms and never emerge from the great calamity that had hit the emerging e-commerce industry. How was Amazon going to come through it?
Today, we know what happened, but then it wasn’t so clear. I want to put special emphasis on one idea: the flywheel. The way you build something great can never be condensed to a single moment, reactionary move, timely acquisition, or momentary mythical miracle moment. No – it’s like pushing a giant heavy flywheel. You start by pushing in one intelligent, consistent direction, and after a lot of effort, you get one giant, slow, and creaky turn.
The difference between success and failure is that you can’t stop. After that first rotation, you keep pushing until you eventually get two and four and eight and 16 and 32 and 100 and 1,000 and a million. You then keep pushing until you hit breakthrough momentum. That’s how you build greatness:
Disciplined people who engage in disciplined thought who take disciplined action over a long period of time build flywheel momentum.
As I departed Seattle, I left them with one question: “How do you respond to this as if it’s not as a crisis?” They couldn’t respond to the dot-com crash in a way that would create a reactionary doom loop where they just kept reacting and falling down. They had to create their flywheel.
Here is the basic architecture of the Amazon flywheel, a kind of loop that goes around with inevitable momentum.
· If the company starts at the top by offering lower prices for customers, they will inevitably get more customer visits to the site.
· If they do that, they’ll get more third-party sellers.
· If they do that, they’ll expand the store and extend distribution.
· If they do that, they’ll grow revenues per fixed cost.
· If they do that, they’ll offer lower prices on more stuff for our customers.
Around and around the flywheel goes. Notice the inevitable logic of momentum built within it. It’s not a series of steps drawn as a circle; it features forward motion.
Ultimately, you can’t ask how your company should change its flywheel unless you first figure out what your flywheel is. You have to get the right flywheel in operation going in the right direction before you think about how to change it.
Question #4: What Should Be on Our ‘Stop Doing That’ List?
I mentioned earlier the idea of disciplined people who engage in disciplined thought who take disciplined action. People often think that means doing more and putting more actions on our to-do list.
Wrong! We must first ask, “What should we stop doing?”
In fact, this “Stockdale Moment” might be the time to stop doing a bunch of stuff that, if we were really disciplined, we would have stopped doing a long time ago.
The key to doing less is the concept of “Preserve the Core and Stimulate Progress.” This is what enduring companies do really well.
When Ann Baker became CEO of Telecare at 29, she had the family company on her shoulders. As a business operating in the mental health services arena, she knew there were many parts of the company’s flywheel that really didn’t make sense.
But she had people wondering what she was going to do with the company. They openly wanted to know if she would preserve the spirit of the company her father had put in place. That spirit was a basic idea that fueled many people who worked for Telecare: “We are not here to deliver services; instead, our core value is to help people who are struggling with mental health issues realize their full potential.”
When Baker first sat down with her team, she told them: “Before we decide what’s going to change, we have to first figure out what will never change.” They quickly realized that Telecare would never change her father’s core philosophy. With that essential ideal in place, it was much easier for them to focus on the things that need to change and what the company should stop doing in order to move forward.
Question #5: How Can You Help Someone Else and Serve Others in This Time?
In Great by Choice, Morten Hansen and I wrote about the great mountaineer, David Breashears. David was on a great quest to fulfill his BHAG (big hairy audacious goal): to put an IMAX camera on the top of Mount Everest and shoot a film from the top of the world.
In May 1996, he woke up on this adventure at Camp 3 on the side of Mount Everest. He got really nervous because there had been these wicked winds and cold temperatures the night before. One of our favorite principles – the idea of productive paranoia – reared its head. David is a productive paranoid and started doing what any such person does: ask “what if” questions. Specifically, he wondered “What if all that cold and wind presages a ferocious storm?”
He then looked down the mountain to see a whole bunch of other climbers coming up that same day. He began to ask, “What if all those climbers are up here with us when that storms hits, and we are caught not being able to pass each other going up and down the mountain?” He made the decision to go down to a lower camp and reset.
David made the correct choice. It was a ferocious storm. The other teams got caught in that storm, and some of them never made it back down the mountain.
Morten and I had a frank conversation about this with David:
We asked, “Why were you able to make the decision to go down when the other teams made the decision in the exact same hour, on the same mountain, on the same day to go up.”
He said, “Because we could. We had more options.”
We replied, “What do you mean?”
He responded, “We brought enough oxygen canisters for multiple summits. The other teams did not. So, we had the option to go down.”
Our #1 takeaway from that chat was this: “It’s what you have done before the storm that gives you options when it comes.”
Some people in the market can declare, “We did a good job preparing our oxygen canisters before the storm came, so we’re strong!” There are others who recognize that the storm is here, and they no wish they had more oxygen canisters. If you get through this current storm, you should never get caught on the side of the mountain again without extra oxygen canisters.
But David did something else that led to our #2 takeaway: “Look for ways to help others – no matter what.”
Sure, he wanted to get his IMAX camera on the top of Mount Everest, and he eventually did. But as the storm was unfolding, he saw that people were in trouble. In a great act of Level 5 Leadership, he gave up a good chunk of his oxygen canisters to help the rescue efforts to save other climbers. I personally believe this was an even greater accomplishment.
One of the best and most calming things you can do during difficult times is ask these questions:
· Who needs our help?
· Who can we help?
· How can we be of service?
No matter how stressed, scared, and uncertain you and your team are, I’ve seen this approach deliver profound comfort and focus.
Burst Consulting Stands Ready to Help Your Business
Are you ready to take these five questions from Jim Collins to your team and wrestle with them until you can find a way forward through this current Stockdale Moment? Contact me today and schedule your free consultation. I want to help your team find success so you can move from good to great!