Rand recently wrote at SEOmoz about applying the lessons of ‘Good to Great’ to their business. Good to Great (UK amazon link – different cover) is a book by Jim Collins that seeks to determine the differentiating factors separating ‘great’ companies from ‘good’ companies.
Rand starts by explaining how he generally hates:
management books, business theory books, success coaching and nearly everything that starts with the phrase “The XYZ Habits of Highly Effective…”
but that he was persuaded because of who had recommended it to him (including Avinash, author of Web Analytics, An Hour a Day, that we have been giving away recently).
I’m generally the other way round – I read business and management books pretty voraciously (along with quite a lot of biographies and auto-biographies of people I admire). A great recommendation is always a good starting point, however – so I’m going to pick up a copy the next time I’m in a bookshop (I’m going to buy it from an offline bookshop because I have some book tokens to spend – I wish Amazon accepted book tokens!).
Nevertheless, despite not having read the book, Rand’s post got me thinking about applications of the theory to Distilled (especially as he asked for other people’s views on the application to their own business after he shared so much of his view of how SEOmoz is doing).
The factors contributing to the overall success on the road to ‘greatness’, according to Collins are:
- Level 5 Leadership – this is all about having the right set of skills and attributes at the top, including humility, ambition for the company rather than personal ambition and the resolve to confront tough problems
- First Who, Then What – hiring people because they are great rather than necessarily they are the right shaped peg for the current hole in the business
- Confronting Brutal Facts – ruling by the numbers and being incredibly well-informed about how the business is doing
- The Hedgehog Concept (I have no idea why it’s called that!) – focussing single-mindedly on a single core competency at which they can be better than anyone in the world
- A Culture of Discipline – everyone throughout the organisation going above and beyond the call of duty for the company – the opposite of watching the clock and doing whatever you need just to get by
- The Flywheel – a great analogy whereby there is not necessarily a “eureka moment” when everything comes together, but rather a continuing effort gets the wheel spinning faster and faster until success begins to flow from that and the momentum starts to take on a power of its own
The following analysis of Distilled against these factors is based on the PDF worksheet found via the SEOmoz article.
Level 5 Leadership
Leadership is something that has always worried me in terms of building a great business. On the basketball court, I’ve always been the defensive hustler leading through swung elbows and obsessive backing up of team-mates rather than the captain or leading scorer. Seeing parallels between sport and business as I always do, this worried me. Could I lead a team of people to great results? Duncan has had a similar sporting record (with a little more skill and hand-eye co-ordination, and perhaps less need to look over his shoulder and wear a gum-guard).
Despite this, I think we score pretty well on the leadership section. Obviously there is room for improvement, but we’re doing ok. I have noticed before that we do seem to have the ‘window and the mirror trait’. Leaders should:
…point to the window to people and factors other than themselves to give credit for success. When confronted with failures, they look in the mirror and say, “I am responsible”
I certainly always blame myself for failures and I don’t think I take all the credit when things go right
One area in this section that we score lower on is that of ‘cultivating leaders’. In our defence, we only just took on our most recent hires – until which point, the directors numbered half of the company! Give us some time on this one…
I think it would be pure hubris to say that we are great leaders at this stage, but I think all we can ask for is that we might be on our way to becoming such.
First who, then what
A middling score for Distilled on hiring great people and getting out of their way. We score quite poorly on having a very rigourous recruitment process (see upcoming post about our new employees). Despite this, we have ended up with an awesome team – of whom I am very proud. In terms of giving people the freedom to define their role, I think we are gradually getting more comfortable with this and are doing a better job recently – Tom in particular has a lot of freedom to define his own role and I think our newest hires are getting a lot of input into how their work is structured and what is a priority. Also, some of the questions in this section relate to ‘getting people off the bus’ – something that Duncan and I have no recent first-hand experience of (thankfully).
Confront the brutal facts
We have a lot of room for improvement here, and beat ourselves up about it constantly. I think we actually do pretty well at collecting data about how well our business is doing, and we certainly have the skills to analyse it! The biggest problem I find is that it never becomes my top priority to analyse the data and so I end up steering the business based on gut feel and half-analysed numbers far far too often.
A lot of successful people have told me that the people they most admire know their businesses inside and out at any instant. You could grab them in the pub and they would be able to tell you the last week’s sales figures, margins on their main products, cash in the bank, capacity in the various teams in their business, how the pipeline is looking and other key performance indicators at the drop of a hat. I aspire to having this kind of data at my fingertips. I think we are getting better gradually, but we have an awfully long way to go before we could even think of calling ourselves ‘great’ at it.
The hedgehog concept
Uh oh. This is our Achilles heel. I thought we had a pretty good idea what we were good at until I realised that I tend to start a list and keep going – we can sometimes have a bit of a scatter-gun approach to doing everything at once. We really need to get better at concentrating on core strengths. Our core strengths need to satisfy being something:
- that we can be the best in the world at
- that we enjoy doing
- that makes us money
I actually think that with some of the tools we have in the pipeline, that the area we focus on might well be tools to help people manage their reputations, marketing and advertising online (as well as helping clients use these tools). I’d quite like to head in that direction and I do think we have potential to be best in the world if we define our niches well. I hope we get better at this (but I hope we keep the sense of playfulness we have at the moment where we try crazy, wacky new ideas sometimes just to see if they work!).
I think my personal biggest challenge over the next 6-12 months is to define our focus and steer the business in the best possible direction. I feel personally responsible for getting this bit right – and I think that the rewards for getting it right could be huge.
A culture of discipline
As covered above, I don’t think we are all that good at staying disciplined at concentrating on our ‘hedgehog’ (or even defining it well!), but we do pretty well at the rest the discipline areas. I felt a real affinity with the concept of hiring self-disciplined people and removing barriers to discipline, and hiring self-motivated people and removing barriers to motivation. I think this is perfect for our management style (in as much as we aren’t huge disciplinarians or rah-rah cheerleading motivators). As I mentioned before, we’ll be talking more soon about our recent hires, but I think they fit into these definitions very well.
One angle that Rand covered in his write-up was the ‘above-and-beyond’ nature of SEOmoz where they all seem to be blogging / answering emails etc. at all hours of the day. We have never had much of a long hours culture (he says, writing this post at 10.30pm…!) and I would like to build a business where our employees can contribute as much as they want, but also lead a life outside the office that doesn’t feel tethered to email or their computer screen. This isn’t in any way a criticism of the mozzers (I certainly work well outside office hours as I said) but I do think there is another element of discipline which relates to maintaining a balance even when the opportunities are exciting and right in front of your nose. I’m not always very good at this, but I am trying to build a company that is better at it than I am.
Beer o’clock on Friday afternoons. A ‘creative’ area (in the new office, when we finally move in) with beanbags etc. to get away from staring at computer screens all the time. Other ideas we haven’t thought of yet. I think that all of these things are areas where we are creating a culture of discipline in the best possible sense – i.e. removing barriers to discipline and motivation for our self-motivated and self-disciplined employees.
An up-and-coming score for us in this section. We definitely understand the benefits of growing the momentum of the business with everything we do (and I think it is sometimes easy to forget how far we have come). I don’t think we have anything like the momentum we want yet, but while we should continue spinning the flywheel as hard as we can, we also need to have some patience and remember that none of it is magic – but rather that as we continue focussing on the job at hand, if we do our job right, then we will build up some crazy momentum on our flywheel.
As we get to this stage, the momentum should build quicker and quicker, which will make it easier and easier to do new things and launch new ideas (remembering to stick to what we know best of course!).