A few months back I had the pleasure of reading Good to Great by Jim Collins. While the title and the cover design may seem cheap and cheesy the contents of the book were anything but. While it looks, feels, smells, and reads like a book it is actually a research paper five years in the making.
The research premise was this: What made publicly traded companies that had chugged along at average market performance all of the sudden shoot up and outperform the market and their competitors (by at least three times) for an extended period of time (approx. 15 years). With these parameters set they sifted through the mountains of stock data that has accumulated since Wall Street began. After it was over they had eleven companies left. Some of them you’ve heard of (Gillette, Walgreens) some of them you haven’t (Nucor). They then went through extensive studies and interviews of these eleven companies to see what, if anything made them similar.
What I found amazing about the findings was the sheer simplicity of them. As I read through the book I couldn’t help but be amazed at how silverorange, although not using the same terms and vernacular, had managed to follow most if not all of the ideas.
One idea/rule that we had unknowingly been practicing was this: A company should do an honest evaluation of itself and its surrounding environment and draw three circles.
- Circle one: What are the company’s talents?
- Circle two: What can the company become the best in the world at given their competitors, geographic location, etc?
- Circle three: What is economically feasible?
Where these three circles intersect (a talent that you can exercise and become the best in the world at while making money) is what your company should do 100% of the time. No exceptions. Anything outside of this area will be a distraction and hindrance no matter how sweet the deal may seem.
I extend my respect to the mammoth companies like Gillette, Walgreens, Fannie Mae, and Wells Fargo for being able to stop and think like the little guys.
Comments
Steven Garrity - April 13, 2003 4:48 pm
<p>Something your slick Venn diagram doesn’t address directly is the pleasure and enjoyment of work. Though I do think it is addressed implicitly in that taking pleasure in your work can affect your ability to become the best in that field. It’s hard to be great at something you hate.
In our case, the contracts that we enjoy the most haven’t always been the most lucrative. However, when you take into account the improvement in the work environment created by the more enjoyable projects, you introduce an intangible benefit that has to be weighed against the dollar value of a project.
Also, the projects that seem like the coolest or most fun don’t always turn out to be the most favoured projects. The eventual impact and utility of work can also influence how satisfying (and hence, enjoyable) it is. For example, writing (or designing, or typesetting, or printing, or shipping, or selling) a book that will never be published is a lot less fun than dealing with a book that book that may change the world (even in a small way).
Peter Rukavina - April 19, 2003 4:22 pm
<P>
I was once a voracious reader of pop business psychology books -- Tom Peters et al. Then I realized that, in essence, they were all describing something that was mostly not possible to accurately describe. It's easy to find patterns and commonalities among successful enterprises; almost impossible to try and force a broken enterprise to become a good one by trying to emulate them.
Good enterprise, like good sex, is a wonderful mystery.