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Charting Your Future: Small Business Lessons from Good to GreatSubmitted by Flynn Zito Capital Management on April 22nd, 2022
The best-selling book, Good to Great: Why Some Companies Make the Leap. . .and Others Don’t, offers surprising insights into the success of “great” companies that consistently and significantly beat average market returns on a sustained basis. The author, Jim Collins, and his research team set out to discover what makes a good company great. Their results were unexpected, and all of the great companies shared common themes. Although these businesses were all members of the Fortune 500, small business owners can also benefit from these dynamic examples.
It’s no secret that leadership plays a vitally important role in the success of a company. In fact, the charismatic leader has always been the paradigm, yet research shows that great leaders are less concerned with their own accomplishments than they are with the success of those around them, as well as the progress of the company itself. According to Collins, leaders of great companies are typically modest and do not seek fame, but are driven by inner fire and an unwavering ambition to make the company succeed. A tireless, shoulder-to-the-grindstone work ethic, while still enjoying an outside life, are other common traits.
In many ways, the corporate culture can be compared to a great hunt. There are foxes that are sly and cunning, and then there are hedgehogs. Hedgehogs recognize the wiliness of the foxes, but they also know their own best attributes. When being hunted, the hedgehog, its back covered with sharp quills, will curl itself into a ball of imposing needles that cannot be eaten. Likewise, great companies embrace the plain and honest truth head-on, and they use what they have to fight back. Findings suggest that building a highly successful company is contingent upon the awareness of what the company can do, as well as what it cannot do. For small businesses, implementing the “Hedgehog Concept” means building upon strengths—the great things the company is capable of doing. The ways of the fox, pursuing many things without a central focus, may impede success.
But, how does any company get all workers onboard with the vital mission? Many use motivation and pep rallies, but great companies do not need to resort to those tactics. Instead, they hire and keep only the best people: those who are dedicated and hardworking, who will not hesitate to let their voices be heard, but who will stand behind the end decision. A culture of discipline allows dedicated workers to have creative freedom, while they work toward shared, defined goals. It can create an atmosphere of respect and hard work, avoiding the perils of bureaucratic fiefdoms.
Many companies, large and small, have concerns about staying on the cutting edge of technology, but great companies shy away from blindly following the latest trends. Instead, they embrace what truly works for them and meets their needs. They are highly selective, but unconcerned with “fashion.” Interestingly enough, all of the great companies studied used only the technology that suited their highly defined goals, and then went on to become technology pioneers.
Often, companies seek answers in radical changes. In fact, great companies produce remarkable transformations, but outside appearances are deceiving. Inside those cultures there are no sudden alterations, except steady, determined, eye-on-the-prize efforts that create them. They persevere and build up to something great, and do not skip the process, as do their less stellar counterparts.
The most well-known, proven methods of developing financial confidence as a business are often contrary to common, modern concepts. In Good to Great, Jim Collins builds a strong case for modesty, honesty, respect, and determination. Utilizing these simple principles can help small business owners build great companies and work towards outstanding results.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual or business owner.
This article was prepared by Liberty Publishing, Inc.
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