I owe a debt of gratitude to Jim Collins, author of the timeless classic “From Good To Great”. Jim made me see that the real enemy of great isn’t bad – it’s good.
Since first reading the book, I’ve found countless applications of his thinking – in business, and in life. Depending on what part of the world you’re in and which industry, you may have noticed the economy is starting to show early signs of growth. Many of my clients report significant increases in sales this year, and several report having had some of their best quarters yet.
And therein lies the rub.
Why good enough isn’t good – enough.
Improving sales performance is a bit like steering an oil tanker. You need to start making small, gradual changes in the short term to end up where you want to be in the long term. If you can see the white cliffs ahead, you’re already in trouble.
Smooth seas generally make for lazy sailors. When results are good, or possibly even – temporarily – great, the temptation is to slack off, just a little. Postpone investing in the longer term. Hold off on approving that project budget a little longer. See where what we’re currently doing takes us before we make a move.
And put off making the decisions that lead to great.
As a former manager, I know all too well that “no decision” has its advantages. After all, making no decisions also means taking no risks. Nobody can turn around after the facts and say “you were wrong.” It means not having to allocate scarce resources (time, money, people) which you could employ otherwise. And it means – just maybe – being in a better position to make the right decision when the pressure is on. Unfortunately, it also means leaving the door wide open for your competitors to pass you by, and dramatically shake up your industry.
What going from good to great really means.
The funny thing about what I do is this: everyone agrees that sales is a core foundation of a strong, thriving business. I’ve met literally nobody who said “sales doesn’t matter”. Nobody’s ever discounted the value of investing in training, coaching and sales performance improvement. But actions speak louder than words.
Generally speaking, I encounter two types of prospects. Let’s call them “do gooders” and “do greaters”.
The first type, (the “do gooders”) is the type that tries to run a good business. They invest when there’s a pressing need to do so, conserve cash when they can and put off decisions until it’s no longer feasible to avoid making them. They’re the kind that – sometimes – drop off the radar for a few months, and then come back in a hurry to get things going. At first sight, this seems like a low-risk approach. Conserve cash, invest when you need to, take the time to consider your options. As a manager in a corporation, generally this kind of behaviour means you’re “doing good”.
The second type (the “do greaters”) is the type that focuses on building a great business. Building is the key word here. They put in place the foundations for where they want their business to be in 9–18 months – and they do it immediately. Because they understand that, if they want to achieve double digit growth next year, the time to start doing that is now. Today. When I speak with their CEOs and senior leadership, they tell me they will often make significant bets on their “vision of the future”, and invest scarce resources even when it’s hard. Because they have one fundamental underpinning belief: their future is, in large part, the product of their own creation.
As one CEO recently told me, “Going from good to great is not about betting the farm. It’s about having the discipline to do what needs to be done – even when it’s hard.”
And guess what: their approach seems to be paying off. In Collins’ own research, he reports that those that focus on great “generated cumulative stock returns that beat the stock market by an average of seven times in fifteen years — better than twice the results delivered by a composite index of the world’s greatest companies.”
The “do gooders” are the clients I often see go through real “boom and bust” cycles. Rich years where they can’t hire staff fast enough, invest heavily in training and development, pay everyone large bonuses and max out on their marketing spend. And lean years, where they have to let go of a large part of their acquired talent pool (often including top performers and high potentials), virtually eliminate marketing expenditure (eroding brand worth and visibility) and cancel all investments in their people. Until the next series of “rich years” comes along, and the cycle repeats itself.
Meanwhile, the “do greaters” – those who make investments for the long term, today – appear to be virtually immune to those same cycles. They grow by leaps and bounds, often when most of their competitors are suffering, enjoy higher than average retention rates for key talent, strong and consistently growing brand recognition and – in time – become true leaders in their industry and profession.
In the end, Jim Collins said it best. “The vast majority of companies never become great, precisely because the vast majority become quite good — and that is their main problem. We discovered that going from good to great requires transcending the curse of competence. We learned that what matters is not merely culture, but a culture of discipline.”