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The steps to creating a successful business

April 13, 2020
“Good is the enemy of great,” says noted author Jim Collins, who has spent much of his career determining what separates successful companies from unsuccessful ones.

“Good is the enemy of great,” says Jim Collins, noted author. He has spent much of his career determining what separates successful companies from unsuccessful ones. He shared his findings at an event I recently attended.

Stage 1: Disciplined people. Collins said there is something about the leaders of companies that matters, and it is not personality. “With the good to great leaders it was not about their charisma, or personality; it was about their humility. Their humility was their ability to put themselves into service to something that is bigger than they are. I am here to build something great not for my own self-aggrandizement.”

However, greatness is about more than the leader. “More important than where I am driving the bus, is having the right people on the bus in the right seats, as well as getting the wrong people off the bus,” he explained. He added that employees in great companies understand that “We only succeed if we help others succeed.”

Stage 2: Disciplined thought. Collins talked about rejecting the tyranny of the “or” and instead focus on the genius of the “and.” Think of it this way. The question is not do you want to focus on cost or quality, rather it is how we focus on cost and quality.

He suggests companies institute what he calls Brutal Fact Monday. This is a meeting where all the facts — both good and bad — are shared. “If we do not confront the facts, they will confront us,” Collins said. “Failure to confront facts is a precursor to catastrophic decline.”

He explained that during good economic times it can be difficult to tell a great company from one that is good. “When times are bad, the great companies do well.”

Stage 3: Disciplined action. Growth is not a function of markets, or investments, Collins said. “The throttle on growth is people. It is about people first. If you don’t have enough of the right people, your growth will be limited.” Growth is also about a cycle of momentum. “It is a series of good decisions, executed well by disciplined people over time.” Disciplined action also involves setting marks that no matter what comes, you stay the course – an important message, especially as we navigate the business disruptions brought on by the COVID-19 pandemic. “You need unrelenting consistency in your actions,” according to Collins.

Stage 4: Building greatness to last. Following the first three steps, will get you to greatness, but not all great companies last and endure. In order to make your business last you need to practice what Collins calls “productive paranoia.” With productive paranoia you are always worried that bad times are coming, but you also constantly ask the question “what is certain to change in our world 15 to 20 years from now and what do we need to do to be marching ahead of it?”

“There is a difference between lasting and being worthy of lasting,” Collins said. “Those companies [that are worthy of lasting] have a dynamic to preserve the core values of what they stand for and they will always stand for something beyond making money.”

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