Good to Great #6 A Culture of Discipline

Continuing with the breakdown of the book Good to Great by Jim Collins, the next subject centers around the discipline of an organization. This aspect of the good to great companies is an outflow of an earlier characteristic, getting the right people on the bus and in the right seats. You can’t have a culture of discipline if you don’t have the right quality of people in the organization with which to build such a culture.

A culture of discipline requires duality – on one hand it requires people to adhere to a consistent system, on the other, it gives freedom and responsibility within that system.

• A culture of discipline is not just about action – it is about disciplined people who engage in disciplined thought, who then take disciplined action.

• The single most important discipline for sustained results is fanatical adherence to the Hedgehog Concept and the willingness to shun opportunities that fall outside the three circles.

The purpose of bureaucracy is to compensate for incompetence and lack of discipline – a problem that largely goes away if you have the right people in the first place.

• Most companies build rules to manage the small percentage of wrong people on the bus, which in turn drives the right people off the bus, which then increases the percentage of wrong people on the bus, which increases the need for bureaucracy to compensate for incompetence and lack of discipline and so forth.

• Avoid bureaucracy and hierarchy and instead create a culture of discipline.

Create a system where every manager in every type of job is responsible for his or her return on investment.

• Use financial discipline as a way to provide resources for the really creative work.

Recognize that planning is priceless, but plans are useless.

• Have the discipline to say no to opportunities that fail the three circle test.

• Build a culture full of people who take disciplined action within the three circles – fanatically consistent with the Hedgehog Concept.

Disciplined action without disciplined people is impossible to sustain, and disciplined action without disciplined thought is a recipe for disaster.

Personality Driven Leadership

Dramatic improvement under a strong manager can just as dramatically decline when they depart.

• Level 4 leaders who personally disciplined their organization create an unsustainable environment. Once they leave, culture of discipline does not endure as lower level people are then frozen by indecision.

• A lack of discipline to stay within the three circles was found as a key factor in the demise in nearly all of the comparison companies

• Very few companies have the discipline to discover their Hedgehog Concept, much less the discipline to build consistently within it.

• A great company is much more likely to die of indigestion from too much opportunity than starvation from too little.

Status and authority come from your leadership capabilities, not your position.

• The Hedgehog Concept needs to align worker interest to management interests.

Start a ‘Stop Doing’ List!

Stop doing lists are more important than to do lists!

• Everyone of us have ever expanding to do list.

• Good to great companies made as much use out of Stop Doing lists, they enacted these to unplug all sorts of extraneous junk.

What is the purpose of budgeting?

• The purpose of budgeting is to determine what gets full funding and what should not be funded at all.

• Most common explanation is to decide how much to apportion each activity.

• Good to great companies use it to determine which activities best support the Hedgehog Concept and which should be fully strengthened, and which should be eliminated entirely.

When people were asked:

“Would you spend your own money this way?” a lot of must-do projects just melted away.

Do you have the discipline to do the right thing and, equally important, to stop doing the wrong things?

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