Leadership & Great Companies

I recently revisited the book Good to Great by Jim Collins which I read a few years ago studying for my MBA. Now, with the TED talk about inspiring leaders and its affinity to both NLP and DBM, it was time for another post.

“It is your Work in life that is the ultimate seduction”, Pablo Picasso.

In NLP (Neuro Linguistic Programming) and DBM (Development of Behavioural Models), you drill down on actions by asking:

– What do you do?
– How are you doing it?
– Why are you doing it?

With more modelling this goes deeper, however focusing on this three questions, and looking at the TED talk, we are looking to answer the question what a successful leader is made of, and what are successful companies made of:

– What does s/he do?
– How is s/he doing it? How is he leading, managing and setting example?
– Why is s/he doing it? What motivated the leader and makes him so good in what he is doing and how he is doing it.

The latter seems to be key to a lot of discussions around leadership. Hence in Jim Collins book it is about “good to great”, the “level5 leader”. As of the graph above, the level5 leader builds enduring greatness through a paradoxical blend of personal humility and professional will. S/he differs from the effective leader, e.g. level4, through the input of personal humility and professional will: the main difference is the personal involvement and drive rather than “just following a vision and stimulating higher standards”.

Now my first question that comes to mind is “incentive”: why would a leader be like that? What are the incentives for that?

It seems to me that most examples of level5 leaders are either owner managers or they seem to have a big share package 🙂 Some of course just want to do it for the recognition but let’s be honest: does anyone really care if you have build a great company over a period of 5 years and you didn’t see any financial rewards from it? I don’t think so.

Of course there are personalities that focus on the larger goal of building a great company, and their ambition drives them on to be above and beyond themselves and only think and work for the organisation.

Another principle Collins introduces is the hedgehog concept, e.g. waiting and being on top of things rather than being a fox that tries all possibilities. Maybe not the best summary of the concept, but I am personally not convinced that this is the best analogy in the first place. It is about “focusing on one big thing” rather than diversifying (too much) and having not real focus.

Let’s have a look at the circles:
– What are you passionate about?
– What you can be the best in the world at?
– What drives your economic engine?

Anyone having achieved a Master Practitioner in NLP and has worked with coaches, coached people or is interested in personal development knows what s/he is passionate about. The fundamental will to live and what makes you tick and cry, what makes you feel complete. What gets you out of bed in the morning. Collins however looks at the company perspective here.

Same with the next circle, from a corporate perspective it is all about: what you are good at? Don’t try to build an engine if you don’t know anything about engineering and don’t try to be a doctor if you cannot see blood. What is it you are good at? What are your skills? This could be something your company is currently not involved in.

Now the economic engine: money and share options? Maybe if you look at this model from a personal perspective but Collins refers to the ROI of your business, how do you measure economic success for the company.

Let’s reflect for a moment: the circles don’t only apply to corporate success but can be equally used to look at personal success. Then, once modelled for the individuals of a company, or maybe founding members of a company, transferred into a model for a successful business. As one of my managers used to say: “I recruit people that I trust and I can work with, I can then teach them the details they need to learn” – personality plays a key role in who we work with and how we (and a company) become successful.

Reading the Collins book, he goes on and describes the use of technology and its importance for further greatness of companies. Definitely a must read book for any manager and aspiring leader.

And the latter is then responsible for keeping the momentum going, or as Collins calls it the “flywheel effect”. Once a company is going, and growing, one needs to look at the results, energize the people and build the momentum to drive the company forward. Not too fast, not too slow, and always looking at the underlying processes. Companies without the right processes, monitoring and feedback tools are prone to fail as control is everything. If you don’t know where your profits come from or whether you make money, you are doomed straight away, becoming a fox.

This sums up the key principles of successful companies by Collins and shows the resemblance between successful personalities/leaders and companies. Maybe another pointer to make a company “more personal” and look at it from a different perspective. What do you think?