Podcast Ep 160 | Rating your firm on Jim Collins' 7 Good to Great principles (1/2)

Jim Collins book Good to Great is one of the all-time busi­ness clas­sics due to the size and qual­i­ty of the research that under­pins the prin­ci­ples that he iden­ti­fied in the research about com­pa­nies that endured and achieved great per­for­mance, rel­a­tive to their peer com­pa­nies who only achieved good performance.

In Good to Great, Jim Collins iden­ti­fied sev­en core prin­ci­ples that great com­pa­nies excelled at.

In this part one of two episodes, we dig into the sev­en prin­ci­ples from Good to Great and ask you to rate your fir­m’s per­for­mance on each of these.

EPISODE TRAN­SCRIPT

Please note that this episode was tran­scribed using an AI appli­ca­tion and may not be 100% gram­mat­i­cal­ly cor­rect – but it will still allow you to scan the episode for key content.

Brad (00:00:13) — Wel­come to the Growth Whis­per­ers, where every­thing we talk about is build­ing endur­ing great com­pa­nies, com­pa­nies that last, com­pa­nies that you actu­al­ly want to work in. Cuz it’s enjoy­able cuz it gives you a reward and a pur­pose. My name is Brad Giles here in Perth, Aus­tralia, and joined today I am by my co-host with my co-host Kevin Lawrence in Van­cou­ver, Cana­da. Gday, Kevin, how are you today?

Kevin (00:00:37) — I’m great. You know, just as you said that I’ve real­ized since we start­ed this pod­cast more than three years ago, we haven’t been in per­son, we haven’t been in the same room togeth­er. Mm-hmm. , this is a com­plete, well we, we had been many times before, but it’s, you know, com­plete­ly doing all of this vir­tu­al­ly. And, uh, we’re just say­ing we look for­ward to get­ting togeth­er. We do need to set that debut. I’m doing great. Um, as always look­ing for­ward to, uh, shar­ing some per­spec­tives and sto­ries and in par­tic­u­lar today talk­ing about the great, uh, Jim Collins.

Brad (00:01:10) — Oh yeah, yeah. He is, he is, uh, he’s some­one that we’re, I guess, big fans of. We use a lot of his work because it’s, it’s so, uh, it’s so reli­able and it’s such a, a large body of work that, um, that has proven the test of time, the dif­fer­ence between a good com­pa­ny and a great com­pa­ny amongst many oth­er research projects that he’s done.

Kevin (00:01:34) — Correct.

Brad (00:01:35) — Mm-hmm. . So, we like to start with a word or phrase of the day. What might be on your mind today, Kev?

Kevin (00:01:43) — Hmm. Word today is busy. Got a lot going on and my life and my work are both full of lots of great things, but it’s very, very, uh, busy. Had a, a great day today with my daugh­ter, you know, down­town in the city doing some stuff and had a great time, but then is pop­ping back and doing the pod­cast and got, uh, team meet­ing tomor­row morn­ing, our quar­ter­ly meet­ing with the Lawrence and co firm team. And it’s just like, yep.

Brad (00:02:18) — Beautiful.

Kevin (00:02:19) — Busy, busy and, and busy with a lot of great stuff.

Brad (00:02:22) — Mm-hmm. That would be, be here.

Kevin (00:02:23) — Yeah. Busy with, busy with good­ness. I would put it as a phrase.

Brad (00:02:28) — Nice. Nice. How

Kevin (00:02:29) — About you, Brad? What, what’s, what’s the word that’s that’s pop­ping in your brain today? Uh,

Brad (00:02:33) — Resilience. Resilience. Well, uh, it’s just been on my mind late­ly. Um, resilience is one of the things that many lead­ers pos­sess, but also must pos­sess, uh, in order to endure. Um, we are faced all the time with, you know, chal­lenges that come our way. Uh, and, and yeah, resilience is some­thing that I see reg­u­lar­ly and cer­tain­ly admire.

Kevin (00:03:01) — Yeah. And we will be talk­ing about that in a few weeks in an upcom­ing episode. I mean, it’s some­thing I talk about, think about work on all the time. It’s kind of what we need to keep doing what we’re doing in the chal­leng­ing times, even in the good times. Too much of a good thing can also be bad. Oh yeah. Awe­some. Well, let’s dig right into today. So we’re talk­ing about Good To Great by Jim Collins and the idea of the episode is, Hey, you know, the prin­ci­ples, so do we mm-hmm. , but why don’t we take a step back from this amaz­ing busi­ness clas­sic that is wor­thy of being read again and again because it gives us insights of how to run our busi­ness bet­ter. Mm. And remind our­self of the prin­ci­ples, but more impor­tant­ly, look at how effec­tive­ly we’re lever­ag­ing them and liv­ing them in our busi­ness. Cuz it’s one, to know it, it’s two to real­ly ful­ly bring them to life and it’s a whole oth­er thing to ben­e­fit from it or get, uh, it’s almost a greater val­ue or per­for­mance in your orga­ni­za­tion because of it. Yeah. So that’s kind of what we’re look­ing at today. We know, ​‘em, we, you’ve like­ly read the book. It’s prob­a­bly time to reread it again, but hey, what, what, where let’s remind our­selves on how we can do bet­ter. Oh, Brad, always you, you’d add your own thoughts to that. Yeah.

Brad (00:04:20) — Uh, we know the research, there are sev­en and, and it came up mm-hmm. , uh, from your­self. You, you said that, uh, that, uh, you were doing a sim­i­lar thing with a team and it was real­ly effec­tive, so thank you for that. Um, but con­sid­er­ing these sev­en prin­ci­ples and how do we rate, and that’s the, that’s the key. It’s good to know the prin­ci­ples, but if you wan­na, if you want to iden­ti­fy oppor­tu­ni­ties for improve­ment, you’ve got­ta be able to rate your­self against the prin­ci­ples. So if there’s a prin­ci­ple and you’re rat­ing your­self an eight, well that’s fan­tas­tic. If you’re rat­ing your­self a four out­ta 10, nowhere near as high as an eight, there could be some great oppor­tu­ni­ties to improve with­in there. And so that’s what we wan­na talk about. Yes.

Kevin (00:05:05) — And, and for exam­ple, a com­pa­ny I was with recent­ly, when they went and looked at it, they saw that the first, who then what prin­ci­ple num­ber two, they used to be amaz­ing. They used to, in the past, would’ve rat­ed them­selves at a nine. They fig­ured they were prob­a­bly down to under a five. Yeah. They got real loose in their peo­ple, part of their busi­ness. And, you know, and as a result it had impact on the cul­ture of dis­ci­pline, uh, which is lat­er one of the fir lat­er prin­ci­ples. So before we jump in this great book, good, great. I just did a search while you were talking,

Brad (00:05:39) — Uhhuh .

Kevin (00:05:39) — What year do you think, and you, you know, my guess was wrong. What year do you think Good to Great was pub­lished? What’s your, what’s your, what’s your guess?

Brad (00:05:50) — Uh, I would say 1997.

Kevin (00:05:54) — Very close.

Brad (00:05:56) — I was gonna say 1996, but 1997, we’ll go

Kevin (00:06:00) — On. Well, on my, accord­ing to Google, Octo­ber 16^th, 2001.

Brad (00:06:11) — So I was quite a way off actually. ,

Kevin (00:06:13) — Well, y yeah. I thought it was more recent than that. It, so it’s at this point, uh, 22 and a half years old, almost 23 years ago. Yeah. And in busi­ness, that’s, that’s, that’s that’s pret­ty darn enduring.

Brad (00:06:28) — Yeah, yeah.

Kevin (00:06:29) — For sure. Yeah. And he would’ve, now you, you’re par­tial­ly right cuz he would’ve been doing his research back then because the research took many, many years. So just from my own curios­i­ty, we’re talk­ing, it was more than 20 years old in a world of fads and trends and all this stuff That’s a, a, a quite an endur­ing term. But that’s,

Brad (00:06:46) — But that’s why we like it, because it’s based, it’s based on a, a, a long-term research study over 30 years. And who were the com­pa­nies that per­formed in a great fash­ion rather than a good fash­ion, uh, uh, you know, by, you know, a fac­tor of 10 or 20 or 30 times. Yes. Their peers. Um,

Kevin (00:07:06) — And that’s the essence of it. It’s not the nice list. It’s, they got notably bet­ter results. And that’s why he used data of, of pub­lic com­pa­nies because it was a avail­able in the mar­ket to get more data on them. And were giv­en the same oppor­tu­ni­ties in the mar­ket and every­thing else. They just, the com­par­i­son. Yeah. Peo­ple, some peo­ple it’s like dealt, dealt sim­i­lar cards. Some peo­ple got notably bet­ter results than oth­ers. And that was the good to greate companies.

Brad (00:07:34) — Yeah. And there might be crit­ics who would say com­pa­nies like Fan­nie Mae per­haps ran into trou­ble after­wards, or there were com­pa­nies mm-hmm. in there, for exam­ple, cig­a­rette com­pa­nies. But, but it’s not about any of that. It’s sim­ply about the data and that’s why it endures.

Kevin (00:07:54) — Yes. And the root of it is, is that those com­pa­nies were great for a long peri­od of time, and if you go back and we dig in under the hood, many of them like­ly got away from those core prin­ci­ples that made them suc­cess­ful in the first place. Yeah. But we’re not here to talk about that. What we’re here to talk about is the prin­ci­pal. So let’s, let’s dig into the first one, which is a good start­ing point. And, uh, it’s lev­el five lead­er­ship. And, and what they found in the research is the heads of these com­pa­nies, instead of the ego­ma­ni­ac pop­u­lar CEOs that we would see in on tv, or the ones that are actu­al­ly, you know, in the media and the head­lines on a reg­u­lar basis in the real world, these, these CEO o and lead­ers were not like that. Hmm. They found that they had an incred­i­ble mix of per­son­al humil­i­ty and indomitable will is the word they use in the book.

Brad (00:08:54) — Like, will and dri­ve like no oth­er, but humil­i­ty to match it. And I love this one because we meet and work with CEOs all the time. And the best ones, you would­n’t even know that they are a C E O. You know, recent­ly we had a, a ses­sion, uh, where we took 20 CEOs, uh, worked with a, a part­ner, uh, the growth fac­ul­ty and, and, um, we a bunch of CEOs to go and spend two days with Jim and his lab in Boul­der. And the most suc­cess­ful CEO e o in the room was the most qui­etest and most hum­ble. Now, when he shared stuff, it was impact­ful. Mm. He was amaz­ing. And I’m not gonna give any more details about it, but he just, his humil­i­ty was over the top.

Kevin (00:09:44) — Mm.

Brad (00:09:44) — And yet pret­ty sure he was run­ning the biggest com­pa­ny in the room by a Mm. I don’t, he was run­ning one of the largest com­pa­nies in the room for sure. And he was, you had to kind of draw the stuff out. I had a great con­ver­sa­tion with him, but yeah. Incred­i­ble, incred­i­ble humil­i­ty and incred­i­ble will. They are not seek­ing the cam­era, they’re not seek­ing atten­tion. Their ener­gy is going into build­ing an amaz­ing dam com­pa­ny that’s this, this amaz­ing mix that they have.

Kevin (00:10:17) — Yeah. They wan­na build a busi­ness that’s big­ger than them­selves. This is one of the rules. Yes. When, when we, um, when we talk to clients who might want to work with us, um, this is one of the rules that we, we talk about with them or that we, we try to iden­ti­fy as present. Do they want to build a big­ger, a busi­ness part of me that’s big­ger than them­selves? Because if they say, look, here’s what I want. I want to get a boat that’s big­ger so I can spend more time on my boat. Well, that might not nec­es­sar­i­ly be the right kind of busi­ness that we are look­ing for. We want peo­ple who are look­ing to build a busi­ness that is big­ger than them­selves, and that is not to shine a spot­light on them as a per­son. It, it’s, it’s this mix of per­son­al humil­i­ty and indomitable will. And that’s anoth­er rea­son why, uh, a few episodes ago we spoke about the nine books that every c e o should read. One of those books, um, that we ask every c e o to read is Ego Is The Ene­my by Ryan Hol­la­day, um mm-hmm. . Because get­ting them to, they may already have that present, but under­stand­ing the chal­lenge with ego is so important.

Brad (00:11:35) — Yeah. I know what’s inter­est­ing as you’re talk­ing with this, one of the metaphor, metaphor, metaphor­i­cal­ly lev­el five lead­ers don’t wan­na stand on top of this moun­tain called the busi­ness. They want to stand behind it. And gen­er­al­ly they want to stand behind this mal that they’ve helped to cre­ate with their amaz­ing teams. Their team is more like­ly to be in front, they’re more like­ly to be in high in behind. They’re not, they’re not doing it to stand on top and be seen. They’re doing it to do it from inter­nal­ly know­ing that they’re doing, uh, an amaz­ing, amaz­ing thing. And and I, and I love what you said, gen­er­al­ly big­ger than them­selves. They’re, uh, incred­i­ble, uh, peo­ple, which Jim Cols him­self is one. Like he is focused on doing great work and yeah, it, it, it’s inter­est­ing. It’s a hard thing and it’s because some CEOs are so dri­ven, many peo­ple, and that’s their per­son­al­i­ty dri­ven by the spotlight.

Kevin (00:12:29) — And the chal­lenge is those peo­ple often don’t then put the addi­tion­al hours and work into the busi­ness. They’re putting addi­tion­al work and hours out­side, exter­nal from the busi­ness in a way that’s mak­ing them feel good, but maybe, um, maybe not get­ting ​‘em the results. So it’s fun­ny, one, one, um, one c e o worked with, we talked about this and we talked about, um, you know, lux­u­ry cars and fan­cy, you know, like hot lux­u­ry brand cloth­ing and every­thing goes, you know what, there’s noth­ing wrong with that. You know, anoth­er CEO said, you know, a lit­tle lux­u­ry’s good for the soul. Yeah. But with this, this oth­er CEO said, Hey, if you want to have a expen­sive watch or expen­sive clothes and you want to dress like a run­way mod­el, uh, when you get dressed up with your friends, or you want to dri­ve a Fer­rari when you’re out with your friends, he said, that’s fine. Yeah. But we don’t bring that to work. At work. We’re doing great work. We’re not here to com­pete with each oth­er. We’re here to com­pete against the com­peti­tors. So all of those extra things, those are, there’s noth­ing wrong, just, just time and place for those things. And that was a great lev­el five leader perspective.

Brad (00:13:37) — That is, I love that. You know, uh, one of the, one of the exam­ples that Jim uses is the mir­ror or the win­dow. And so if there was a suc­cess, does he look in the mir­ror metaphor­i­cal­ly the he or she, the, the, the leader and say, what a great job I’ve done. Or

Kevin (00:13:55) — Yes.

Brad (00:13:55) — Do they look out the win­dow and say, what a great job the team has done. That’s humil­i­ty. Right. But equal­ly an oppo­site. If there’s a fail­ure or a prob­lem, do they look out­side the win­dow and say what a fail­ure the team has done, or do they look in the mir­ror and say, what a fail­ure I’ve done.

Kevin (00:14:15) — Yeah. I love that. And as you, uh, you just remind­ed me of, um, a great exam­ple of that. Oh, it’ll come back. It was relat­ed to the win­dow and the mir­ror. Ah, we got lots of great exam­ples. The key here is, you know, are you your­self, oh, box­er, here’s the, here’s the, this is what it’s, it was a ques­tion to under­stand if some­one is a lev­el five leader or not. Mm. I don’t remem­ber. Jim shared it or some­body else shared it. But the ques­tion is, Hey, tell me about your team. Yeah. A lev­el five leader is gonna go off talk­ing about them like it’s their chil­dren and that they love them deeply and be impressed and, and go going on and on about them. And that will be the com­plete answer to the question.

Brad (00:15:06) — Yeah.

Kevin (00:15:08) — A lev­el four, which are real­ly effec­tive exec­u­tives, um, or low­er lev­els, uh, will answer it quick, short, and then fair­ly quick­ly bring ​‘em back to themselves.

Brad (00:15:21) — Yeah.

Kevin (00:15:22) — Lev­el five, it will only be about the team. The oth­er ones, it comes back to them­self pret­ty damn quick­ly and they’ll start to brag about them­selves. Mm

Brad (00:15:30) — Mm

Kevin (00:15:31) — Inter­est­ing. So here’s the ques­tion. On a scale of zero to 10, how were you in terms of being a lev­el five leader per­son­al­ly? And again, we can always improve, but gen­er­al­ly, and think about your direct reports, the peo­ple that report to you in New York, how are they in terms of being lev­el five? Just think about that and maybe there’s some­thing you wan­na do to tweak it a bit. By the way, final thought, Jim pas­sion­ate­ly said in one of our ses­sions, froth­ing at the mouth prac­ti­cal­ly nev­er pro­motes some­one who’s not a lev­el five into an exec­u­tive or senior roles. As you’re far­ther down your orga­ni­za­tion, it’s dif­fer­ent. But at the top of an org nev­er pro­mote some­one who’s not lev­el five

Brad (00:16:21) — Brick bicy­cles. T R E K. Yeah. Uh, they, uh, advent, uh, they’re amaz­ing fans of Jim Collins. They’ve got a, a cul­ture book that’s like 250 pages long. Mm-hmm. Yep. In when they were inter­viewed, they said it was some, I’m gonna get his num­ber wrong, but it was some­thing like, uh, we’ve got 5,000 employ­ees and about 160 lev­el five lead­ers. We’ve got a long way to go. I just,

Kevin (00:16:51) — I Sweet. I saw that.

Brad (00:16:52) — Yeah. I just love that, that clar­i­ty and that that def­i­n­i­tion. Um, so zero being we’re not real­ly focused or we don’t think about lev­el five lead­er­ship at all, and 10 being we just sim­ply could­n’t do any bet­ter on it. So give your­self a num­ber from zero to 10. Maybe you’ve got a four, maybe you’ve got a sev­en, and it’s about you as the leader or exec­u­tive, the oth­ers in the lead­er­ship team. And then as you begin to think about the oth­er lay­ers of lev­el, uh, or lead­er­ship in the busi­ness. So let’s maybe move to num­ber two. Yeah. Let’s

Kevin (00:17:26) — Move on to two.

Brad (00:17:27) — But num­ber one, again, was lev­el five lead­er­ship. Num­ber two first, who then what,

Kevin (00:17:34) — Which inter­est­ing­ly is very nat­ur­al for a lev­el five. Sor­ry. Con­tin­ue on, Brad. This is a behav­ior, a key behav­ior of a lev­el five out­side. Well, it’s relat­ed to their humil­i­ty, but go ahead, Brad. Sor­ry. Well,

Brad (00:17:47) — It’s relat­ed to their humil­i­ty. It, it’s, it just flows on so good from build­ing a group of lev­el five lead­ers. So if you think deeply enough about point num­ber one, then point num­ber two becomes every prob­lem is actu­al­ly a peo­ple prob­lem or a who prob­lem. So any prob­lem, who do we have the right peo­ple? This is the phrase, right? Do we have the right peo­ple on the bus doing the right things the right way? That’s the essence of this.

Kevin (00:18:21) — Yeah. And it’s a mind­set because lev­el four lead­ers will try and fig­ure stuff out and then get peo­ple to do the work. Lev­el five lead­ers embrace this prin­ci­ple and say, well, I just need to get the right per­son. They will fig­ure it out, and then they will go and do the work or just con­firm with me before they go and do the work. You know, this is real­ly like, if I’m gonna go and build a new house, I go get an archi­tect first, and then we work on the design ver­sus I design it. And when it’s pret­ty close, I take it to an archi­tect. That’s all that it is. And the dif­fer­ence is, is that these peo­ple with first two, then what? Think about every­thing as in find­ing the archi­tect, that’s just their way of being and, and said dif­fer­ent­ly. As one of my clients says, yeah, he calls it, well, it’s like, I just like to buy the answers to the exam.

Kevin (00:19:18) — Now, he did­n’t say he did that in uni­ver­si­ty , but he said, in life, I just wan­na go buy the answers. I wan­na buy the answers to the exam. So I go find some­one who’s an expert. And in his world, we’ve had meet­ings where, you know, he went and asked some­one else, like who would be the best coach for him to hire, which, um, con­nect­ed us. And he loves to tell that sto­ry. I’m not brag. He, he, he tells it again and again and again how he found me. We, I’ve helped him find best inve invest­ment bankers and, and best firms to help him recruit exec­u­tive. Like he, he cons, his thing is, and what he does, who is the best that we can hire? Let’s go get them on every­thing. That’s

Brad (00:19:57) — So fun­ny. That’s, sor­ry. That’s so fun­ny because we get that all, all the time as well. Who is the best coach that we can hire? Like, and that’s that, uh, uh, peo­ple say, that’s why we come to you because we, we heard that you were the best and that’s why. Yeah. Yeah. But that’s the mind­set. My point is, is not to plug an advert in the mid­dle here. My, my point is that’s the mind­set. Who is the best sales man­ag­er that we could find? Or c f o or invest­ment banker or what­ev­er it is. Yeah.

Kevin (00:20:28) — So the tell­tale sign here is that when we have prob­lems, we actu­al­ly, as a senior leader, try to believe it’s our job to fig­ure it out. When real­ly, if it’s first two, then what, who is the best per­son to either fig­ure it out or help me fig­ure it out, but not try­ing to do things on your own. That’s the sign of, of a lev­el four or low­er and miss­ing the prin­ci­ple. Uh, it’s, it’s, um, there’s anoth­er exam­ple I was think­ing about, um, of a client with First tooth and what, and we’re just talk­ing about it last week. It’ll,

Brad (00:21:00) — It’s okay. You think about it. We’ll put some music on in the back­ground while every­body Exactly.

Kevin (00:21:03) — Well, there’s, I got­ta, you know what I’m think­ing there, there’s so many things in my brain about these principles.

Brad (00:21:09) — Yeah.

Kevin (00:21:11) — It’s just, so the, the root of it is, um, I’ll give you an exam­ple. So one of the com­pa­nies I was work­ing with, and this was the tell­tale sign, the CEO o was stuck at lev­el four. Yeah. There was a mess in a depart­ment and it, and, and it was­n’t func­tion­ing prop­er­ly. And at the end of the day, the CEO was like, you know, I just need to go and dig into it and fig­ure out the root of it and, and kind of get these sys­tems in place. And once we get the sys­tems fixed and every­thing dialed in, you know, then we’ll go, we’ll go hire some­one to come and run it. Hmm. And that is, it sounds noble and it sounds good. And the CEOs learn all kinds of stuff when they drop into a part of the busi­ness that’s that’s, that’s not first two, then what, that’s first what then who Yeah. Let’s get it fig­ured out and then go find some­one. Which real­ly, psy­cho­log­i­cal­ly you’re dis­count­ing the brains and capa­bil­i­ties of oth­er humans ver­sus your own. Yeah. And you prob­a­bly do know your busi­ness best, but if you’re basi­cal­ly, you’re, you’re over-rely­ing, and I could do this myself, but you’re over-rely­ing on your­self as a sub­ject mat­ter expert ver­sus going and find­ing them and let­ting ​‘em run with it.

Brad (00:22:16) — Well, that’s the right peo­ple. You got­ta get the right peo­ple. Yes. Doing the right things in the right way and not doing it for them.

Kevin (00:22:25) — Exact­ly. And this is why we use the tal­ent reviews so much in com­pa­nies. We go through our key lead­ers reg­u­lar­ly, ide­al­ly, quar­ter­ly, and make deci­sions to con­tin­ue to grow and devel­op them or change their rules, or if they’re tox­ic and should­n’t be there, you know, to give ​‘em a last chance and get ​‘em out. But it’s all about this because most busi­ness prob­lems are because you did­n’t have the right per­son in a job. There’s, there’s, there’s root of it jour­nal­ing you and you knew it. And gen­er­al­ly we let peo­ple under­per­form for too long and then it bites us.

Brad (00:23:01) — Yeah, yeah, yeah. Bureau­cra­cies are built to, to pro­tect the com­pa­ny against the small per­cent­age of peo­ple who aren’t doing the right thing.

Kevin (00:23:10) — Yep. You got it.

Brad (00:23:12) — Yeah. Uh, so if we are hap­py with that first, who, then what? Then we ask the ques­tion, how do you rate your firm on this prin­ci­ple? Remem­ber, zero being we don’t real­ly think or focus on it at all. 10 being there’s no work left to do here. We could­n’t do any bet­ter at it at all. First who than what are we focus­ing on? Um, first of all, get­ting the right per­son in the job, doing the right things the right way.

Kevin (00:23:46) — Yeah. And you could mea­sure it by the per­cent­age of peo­ple who are high per­form­ing in their rules. You could also mea­sure it with your own thought process and how often do you go to who ver­sus try­ing to solve things or, or does your team go to find­ing a who ver­sus try­ing to fix it themselves?

Brad (00:24:05) — Yeah. Yeah. Good.

Kevin (00:24:06) — Won­der­ful. Let’s move to three.

Brad (00:24:10) — Let’s move to three. So first one, lev­el five lead­er­ship. Sec­ond one, first, who then what third prin­ci­ple from Jim Collins con­front the bru­tal facts. Con­front the bru­tal facts. Many com­pa­nies have ele­phants or bru­tal facts that are just sit­ting there that peo­ple don’t want to deal with. That can be quite expen­sive. Uh, and the first thing that comes to mind is some­one like Kodak or Block­buster where they weren’t pre­pared to con­front the bru­tal facts. And after years and years and years, they went out­ta busi­ness. Now that’s an extreme exam­ple, but we Yeah. Always need to con­front the bru­tal facts. I don’t know if it was you that told me once, Kev, but it could have been when I was watch­ing Jim Collins. Um, he, uh, goes into a room in his lab tree, uh, with a group of exec­u­tives at pre­cise­ly eight 30. And he says, what are the bru­tal facts that we must con­front? Facts not opin­ions. Yes.

Kevin (00:25:14) — Because

Brad (00:25:15) — Every­one’s pre­pared to bring out opin­ions, like there’s no tomor­row, but the facts are indis­putable. And then they talk about those facts.

Kevin (00:25:26) — Yes. That was an exam­ple he shared in one of the ses­sions. And, uh, and it’s a dis­ci­pline. So in most com­pa­nies that we work with, we have it built into the oper­at­ing sys­tem of our quar­ter­ly meet­ings. Yeah. It’s a sec­tion on the agen­da every quar­ter. Cuz you know, peo­ple don’t want to talk about them, so, but you need to make a space to talk about them. It’s kind of like, if you don’t want to do it, you still got­ta do it. And, and this is one that basi­cal­ly it keeps us from hurt­ing our­selves. Keep us, you know, there’s the metaphor of the ostrich stick­ing its head in the sand is keep­ing us from doing that win­ter’s issues. So in these quar­ter­ly meet­ings, we have a very dis­ci­plined process, but we do a sur­vey in advance of the peo­ple attend­ing and often their direct reports. We ask about bru­tal facts as one, we, we check on a pulse on engage­ment. And what are the oppor­tu­ni­ties, uh, very, very stock, all like what are the biggest oppor­tu­ni­ties and, and bru­tal facts. But we, we ask peo­ple about it because what I know is some­times peo­ple won’t say it in the room, but they will say it in the survey.

Brad (00:26:26) — Mm-hmm. .

Kevin (00:26:27) — So recall with the CEO review sur­vey results, and in the meet­ing we ask the exec­u­tives to look at the sur­veys and come and present the top three or four bru­tal facts that must be addressed and why. So we’ve got a good poll, pull poll on dif­fer­ent sources to get them. And then we have bump on the flip chart. These are things we need to address in this meet­ing. Many of them will turn into an action. Some of them turn into a goal for the quar­ter or inte­grat­ed into part of a goal. But, you know, we, we have this process and it’s very, very good because it becomes very nat­ur­al to talk about them. But this one CEO took it up a notch. His actu­al­ly’s name is Kirk. He’s a great CEO at Van­cou­ver. And Kirk says like, Hey, I wan­na make sure every sin­gle one of them is either han­dled in the meet­ing or it’s actioned or it’s not needed.

Brad (00:27:20) — So he, his idea was at the end of the meet­ing, we go through every sin­gle one to make sure it’s han­dled to our sat­is­fac­tion. Mm-hmm. , which is a, which is a dis­ci­plined thought, you know, it’s a very dis­ci­plined approach, which gets into one of the lat­er, um, pieces of it. So it’s very, very pow­er­ful. But get­ting back to what you’re say­ing about, you know, Jim Collins’s tech­nique, he says, you know, and an exer­cise that we do, depend­ing on what they are, is you take the num­ber one bru­tal fact and then you list all the facts about the bru­tal fact. Yeah. And so we had a sit­u­a­tion where, uh, a finance func­tion was dra­mat­i­cal­ly under­per­form­ing in a busi­ness and the CFOs in the room and one of his VP of finance is also in the room. And so then we, we broke out into break­out groups with flip charts and then peo­ple list all the facts. We had three pages of facts

Kevin (00:28:11) — Mm-hmm.

Kevin (00:28:11) — like ap, uh, increas­ing ar, increas­ing, um, get­ting penal­ties from sup­pli­ers, get­ting cut off from sup­pli­ers and reports hav­ing issues and bad deci­sions being made. But it was real­ly inter­est­ing cuz you took a very sen­si­tive sit­u­a­tion, Hey, c f o, you’re not doing your job. Basi­cal­ly you and your team are under­per­form­ing to be talked about the spe­cif­ic facts. So it took the judg­ment and opin­ion out and then we were able to work on actions to solve it. But it did­n’t become a fin­ger point­ing, uh, opin­ion fest. So incred­i­bly, incred­i­bly pow­er­ful. But it’s just built, it needs to be built into the DNA n a oth­er­wise peo­ple will hide them and they will rise up and uh,

Brad (00:29:00) — And they can sit there for years, years,

Kevin (00:29:03) — Years until some­thing blows up.

Brad (00:29:06) — Yeah.

Kevin (00:29:06) — And a thou­sand dol­lars prob­lem becomes a hun­dred thou­sand dol­lars law­suit or a mil­lion dol­lar, who knows what the num­bers are.

Brad (00:29:11) — But yes, I do the same thing, Kev. I of course you do. Yeah. We, we, um, we have it as a stand­ing item on our agen­da every sin­gle time. We call it the ele­phants. Uh, and the, there can be some, some crack­ers that come through. I tell you, we had one Syd­ney client in the last cou­ple of months and we start­ed at about 10:00 AM I think it was maybe just after 10:00 AM and, uh, through the bru­tal facts exer­cise. And we fin­ished at 5:00 PM that day. And it was a one day meet­ing. Uh, wow. It, yeah, it was, uh, they had some stuff to work through, there’s no doubt at it. But the c e o at the end when we were wrap­ping up, he said we need­ed to do it. Yeah. We need­ed to get that stuff through and we need­ed to argue and debate and dis­cuss Yes. And agree on the right pri­or­i­ties to move this busi­ness forward.

Kevin (00:30:08) — Yeah. Cause if you don’t deal with the bru­tal facts, you’re com­ing up with enter­tain­ing goals ver­sus the real one. And Brad, you know, it’s a great exam­ple. We had one recent­ly too. We had a two day ses­sion and one of the bru­tal facts is that we are notably over­staffed. And so we spent the rest of that day and part of the next day work­ing through how to fix a notably over­staffed issue on a rea­son­able sized com­pa­ny. It was­n’t fun. And it was inter­est­ing. I had a con­ver­sa­tion with a ceo. I said, Hey, you want to do this in a room with me? I’ve worked with this com­pa­ny for a decade so I know them well. Yeah. Or do you want me to leave it to you guys to do on your own next week? You say, no, we’re doing it now.

Brad (00:30:53) — Yeah.

Kevin (00:30:53) — Because nobody, because cuz even doing the work with­in a bru­tal fact is, is it’s, it’s kind of like drop­ping, drop­ping in and try­ing to do your, your email from the, the, the, the city sew­er sys­tem inside of the city sew­er sys­tem. It’s hor­ri­ble. It’s not, it’s it’s excru­ci­at­ing. And so the real­i­ty is we, you know, we, we we pushed through in the room because we need­ed almost the strength of the team to do it in the room at that moment. Yeah. Because it was the most impor­tant thing. Yeah. And that’s what the bru­tal facts are meant to flag.

Brad (00:31:27) — Yeah. Yeah.

Kevin (00:31:29) — Okay. It’s inter­est­ing because, because you know, some CEOs shy away though.

Brad (00:31:34) — Hmm.

Kevin (00:31:35) — Because they think they’re sup­posed to be the inspir­ing pos­i­tive lead­er­ship and they don’t want to talk about the bad things

Brad (00:31:45) — And y Yeah. And they don’t want to talk about the bad things. That’s such a, that’s such a true state­ment there because they want to empow­er or, or moti­vate the team. And if they talk about what­ev­er the big prob­lem is, for exam­ple, we’ve got too many peo­ple, then we’re gonna have to deal with it. And that’s gonna be demo­ti­vat­ing and then that’s gonna cre­ate oth­er prob­lems. But if you can build it as a habit, it’s so valu­able. It real­ly is.

Kevin (00:32:18) — Yeah. And Brad, do you want, when we talked about the Stock­dale para­dox, admirable Stock­dale and that’s Know his sto­ry, which you can read in Good to Great. And it, you need to read it, I if you have it or reread it, but you wan­na share one or do you want me to cov­er that one? Yeah,

Brad (00:32:36) — Look very brief for the, uh, Admi­ral Stock­dale was a pris­on­er of war in the Viet­nam War. Um, and uh, uh, his sto­ry with the valu­able time that we’ve got basi­cal­ly was that he’s in this pris­on­er of war camp with many oth­er pris­on­ers. Some of the, some, some of the pris­on­ers had a pos­i­tive or a neg­a­tive atti­tude. Uh, and the first ones to die were the ones with a pos­i­tive atti­tude because they thought to them­selves, we’re gonna be out of here by Christ­mas. They’ll be, you know, they’ll be, uh, and then we’ll be back home and we’ll be hav­ing, we’ll be hav­ing Christ­mas din­ner with our fam­i­ly back in, uh, the Unit­ed States. And of course Christ­mas came and went and then they lost all hope. Uh, and then there’s the neg­a­tive peo­ple, um, who thought, we’re nev­er gonna get out of here, we’re nev­er gonna get out of here. And they even­tu­al­ly passed. But the ones that that sur­vived, um, were the ones that retained the faith that they would pre­vail in the end regard­less of the dif­fi­cul­ties. So they con­front­ed the bru­tal facts, the bru­tal facts of the sit­u­a­tion. This is where our cur­rent real­i­ty sits. Um, we will pre­vail, but we’ve got­ta face what’s here and now today.

Kevin (00:33:55) — Yeah. And, and, and, and I love that exam­ple is that cuz it’s, it’s the com­bi­na­tion of opti­mism and, and pes­simism, opti­mism and real­ism. Yeah. That makes peo­ple suc­cess­ful. Not pure opti­mists. Obvi­ous­ly we know pure­ly neg­a­tive does­n’t, you’re not gonna win any­thing. But some­times there’s a mis­tak­en belief that the pure osto opti­mist do the best They don’t. Yeah. Because they end up miss­ing the bru­tal facts and they get swiped out­ta the game. Yeah. So it’s the bal­anc­ing of those two in the right proportion.

Brad (00:34:24) — Indeed. Awesome.

Kevin (00:34:25) — So zero to 10 think­ing about your­self and think of you and your team, how good are you at con­fronting the bru­tal facts that’s not only get­ting ​‘em on the table, but it’s dis­cussing ​‘em and get­ting them han­dled so that they don’t slow you down or take you out or, or hurt your orga­ni­za­tion. Zero to 10. How effec­tive are you, you and your team at doing that?

Brad (00:34:49) — Clean­ing ​‘em up? So let’s just wrap, work­ing through them, through breath. Yep. Clean­ing them up, work­ing them through them. Zero to 10. Yeah,

Kevin (00:34:56) — Exact­ly. So wrap it up. So wrap up. We we’re, yeah, we’re cov­er­ing the first three of the sev­en prin­ci­ples from good to grade, just to rate your­self num­ber one, lev­el five lead­er­ship. That’s that pow­er­ful mix­ture of incred­i­ble will, indomitable will and per­son­al humil­i­ty. Num­ber two, first, who then what? Get the right per­son. Basi­cal­ly. Let them fig­ure out the what and how. And num­ber three, con­front the bru­tal facts. Deal with the ugly issues ear­ly. Have a client, uh, film minors. A guy I worked with in the US he calls it down Texas. They called Chuck and Nira on the table, you have your ele­phants, he called it Chuck­ing the rat, which in north­ern Cana­da they called putting the dead moose on the table. Every­one’s got their ani­mal, but it’s, you know, con­fronting those issues and let’s, uh, deal with that. So that’s, thanks for lis­ten­ing. That’s been this week’s episode of The Growth Whisperers.

Kevin (00:35:45) — We’ll get more next week around the, the Good to great prin­ci­ples. Uh, I’m Kevin Lawrence here in Van­cou­ver, Cana­da, along with my amaz­ing co-host Brad Giles in Perth, Aus­tralia. Sub­scribe, uh, wher­ev­er you lis­ten to your pod­casts and please give us a, a rat­ing. Uh, we appre­ci­ate it, uh, for the video ver­sion to see our hap­py smi­ley faces and, uh, if you’d like to watch videos, youtube​.com, search dot growth whis­pers. Uh, for myself and my team at Lawrence and Com­pa­ny, uh, we have our week­ly newslet­ter and lots of resources. And here to help. Uh, let’s just go to lawrence​and​co​.com. That’s a ndco​.com. And for Brad and his team at e Evo­lu­tion part­ners, evo​lu​tion​part​ners​.com​.au. He also has a great week­ly newslet­ter and lots of great con­tent and resources for you. Have a great week. See you next week. See ya.