Book: Good to Great by Jim Collins
“First Who…Then What”
Discovering the Strategy
When reviewing the strategies used by the executives who took their companies from good to great, Jim Collins finds that:
“…They first got the right people on the bus (and the wrong people off the bus) and then figured out where to drive it.”
Whereas conventional wisdom may lead one to assume that most CEO’s will first have a vision for their business, then proceed to carry out the steps to getting there. Collins research in the book discovered the companies who experienced the greatest growth had leaders who figured:
“Look, I don’t really know where we should take this bus. But I know this much: If we get the right people on the bus, the right people in the right seats, and the wrong people off the bus, then we’ll figure out how to take it someplace great.”
It makes sense that having great people will lead to great things because naturally the things these people do will be touched by their greatness. Not only this but plans fail or don’t go right all the time. A CEO can have the greatest plan in the world, however, what happens WHEN something doesn’t go right? In this case, they are forced to lean on their team members. At which point the company’s future is only as bright as the people within. These executives realized:
“First, if you begin with who rather than what, you can more easily adapt to a changing world.”
“Second, if you have the right people on the bus, the problem of how to motivate and manage people largely goes away.”
“Third, if you have the wrong people, it doesn’t matter whether you discover the right direction; you still won’t have a great company. Great vision without great people is irrelevant.”
It may seem obvious now, if you get good people in the right positions then good things are going to happen! But how do you find these people? Evaluating Jim Collins book reveals there are many ‘intangibles’ at play here. These people aren’t necessarily the most qualified or the best performers or the most well-known, or sometimes they won’t even have experience at the position they’re designated. Ultimately, you’re looking for somebody who’s self-motivated by an inner drive to contribute something great to the world. It falls unto the owner to get said person to genuinely believe that that contribution they so desire to make has a direct link to their company.
Case Study Example: Wells Fargo
Jim Collins explains that in the early 1970’s then-CEO Dick Cooley foresaw massive changes coming to the banking industry. He didn’t quite understand what they would be or where they would take Wells Fargo, however, he needed to get the best people on his team in order to be ready for the future.
“…He and chairman Ernie Arbuckle focused on ‘Injecting an endless stream of talent’ directly into the veins of the company. They hired outstanding people whenever and wherever they found them, often without any specific job in mind.”
According to Dick Cooley, “That’s how you build the future…If I’m not smart enough to see the changes that are coming, they will. And they’ll be flexible enough to deal with them.” He was correct, those changes came and the banking industry fell 59% behind the general stock market. However, Wells Fargo outperformed the market by over three times!
In further research, Collins was stunned to find nearly every person on that executive team went on to become CEO of a major company.
- Bill Aldinger, Household Finance
- Jack Grundhofer, U.S. Bancorp
- Frank Newman, Bankers Trust
- Richard Rosenberg, Bank of America
- Bob Joss, Westpac Banking
Wells Fargo had amassed a “Dream-Team” with a simple approach: “You get the best people, you build them into the best managers in the industry, and you accept the fact that some of them will be recruited to become CEO’s of other companies.”