culture

Building a "Great" Organization

Any entrepreneur will tell you that starting a business takes a lot of time, energy, and, of course, the right people. But obviously, there is more that goes into creating a successful business. When successful business CEOs are asked, the common denominator with every great company is having the right people -- and having them in the right places.

 

I recently finished Jim Collin's excellent book "Good to Great". I had heard about this book a few years ago, but was surprised to find out that it was actually published ten years ago. Talk about feeling behind the times! Surprisingly, I found that many of my peers are just now reading this wonderfully researched and written business book that Inc. Magazine uses as their standard to which all new business books are judged.

 

Collin's research team spent years pouring over data and interviewing the executives from the top performing, publicly-traded companies and came up with a list of only eleven that made the leap from good to great. From the data, they found common themes and practices that every one of these "great" companies practiced. The prevalent theme throughout the book is that all of these companies had the right people on their team, from the CEO (and his or her successor) down to the janitorial staff. Collins and his team originally thought that the leaders of these good-to-great companies would have first started with vision and strategy, but time and time again, "they first got the right people on the bus, the wrong people off the bus, and the right people in the right seats". This starts with what Collins refers to as a "Level 5 Leader" - a paradoxical blend of humility and professional will who confront brutal facts and set up their successors for success.

 

Getting the right people on your organization's "bus" will deliver the best results regardless of the compensation system. Compensation should not be used as a way to get the right behaviors from the wrong people; it should be used to get the right people then build an organization with a culture of discipline that is rigorous, but not ruthless. These good-to-great companies were tough places to work. If you didn't have what it took, you wouldn't last long.

 

So, who are the "right" people? Having the right people reduces the amount of bureaucracy because they don't need to be managed. The right people take delight in their accomplishments, but are never satisfied. The right people are those who seek to be part of a winning team. If you think of the top athletes in professional sports, they all want to be on a winning team with other like-minded individuals. Business is no different. As one Wells Fargo executive summed it up: "The only way to deliver to the people who are achieving is to not burden them with the people who are not achieving."

 

One of the more brutal questions brought up in the book is one that every leader should be asking themselves frequently. "Who on my current staff would I rehire?" This puts things into a whole new light when you look at those who are achieving and those who aren't. And any good leader knows who these people are in their organization.

 

I was fortunate enough to work for one of the eleven good-to-great-companies, Circuit City, during their expansion in the mid-nineties. As I recall, our main focus was always on staffing. We recruited sales people from other retailers by secretly shopping them. We always wanted to find and hire the best, and the best are usually employed. Circuit City is no longer in business, but not because they got beat by their competitors. Their demise lies in the fact that they hired a CEO who did not understand the concept of having the right people on the bus.

 

"Good to Great" provides real-world case studies on what works and it all begins with people. Does your organization have the right people in the right seats? If you are working too hard, the answer is probably no.

Comments
 
comments powered by Disqus

Author

Wiz E. Wig, Mascot & Director of Magic
Wiz E. Wig

Director of Magic

Read more