Podcast Ep 161 | Rating your firm on Jim Collins' 7 Good to Great principles (2/2)

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

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.

Kevin (00:00:13) — Hey, and wel­come to the Growth Whis­per­ers pod­cast, where every­thing we talk about is about, uh, pas­sion we have for build­ing endur­ing great com­pa­nies, uh, to the point where peo­ple talk about sell­ing a com­pa­ny, and we’re like, what are you doing? I had a con­ver­sa­tion with a c e O the oth­er day, Brad, that I’ll tell you about lat­er, but it was like he was talk­ing about sell­ing. I’m like, there’s got­ta be a way you don’t have to sell. Cause he does­n’t real­ly want to. So that’s what this pod­cast is about. I’m Kevin Lawrence here in Van­cou­ver, British Colum­bia, Cana­da, and I’m joined as always with Brad Giles in Perth, Aus­tralia. Brad, how is the world treat­ing you today?

Brad (00:00:49) — Awe­some. I love the way that you’ve told a sto­ry before you even said, hel­lo. Uh, I can’t

Kevin (00:00:54) — Even help. I can’t help myself because no, lit­er­al­ly, I, I was always talk­ing to the CEO and he goes, at the end of the day, we’re gonna work out some stuff and, uh, we’re just gonna prob­a­bly fig­ure out how we can sell the busi­ness. I’m like, whoa,

Kevin (00:01:05) — Whoa, whoa.

Kevin (00:01:07) — Why? And he explained some com­pli­ca­tions with share­hold­ers. I’m like, there’s got­ta be a way. It’s an amaz­ing, it’s a, it’s an amaz­ing com­pa­ny. I would say it’s very close to a great orga­ni­za­tion. It’s absolute­ly endur­ing. And to me, it’d be a crime to sell it. It’s like, why would­n’t you keep it into fam­i­ly for decades, aside from the fact that the fam­i­ly has a hard time get­ting along some­times. But that’s true of all fam­i­ly busi­ness­es any­way, so it just, it remind­ed me as open­ing up. So we’re gonna dig into, uh, part two today of Mr. Build­ing Endur­ing Great Com­pa­nies, Jim Collins. But before we do, Brad, you, you got a, a word or a phrase of the day you wan­na share with where your mind­set’s at today?

Brad (00:01:51) — Well, I had one and you just threw it off. So mine is don’t sell. It’s don’t sell. Like, like No, you’ve

Brad (00:01:59) — That before

Brad (00:02:00) — I did­n’t. Um, but we work with entre­pre­neurs and CEOs and lead­ers all the time, and for many peo­ple sell­ing or exit­ing, they seem to think that is a key part of what you must do. But ex ah, expe­ri­ence tells you that great com­pa­nies are built over a long peri­od of time, and that fly­wheel momen­tum does­n’t nec­es­sar­i­ly hap­pen. You don’t start a com­pa­ny and sell. That’s, that’s a deal mak­er. That’s not a busi­ness builder.

Kevin (00:02:37) — Yes. Well said. I heard some­one the oth­er day, and I’ll, I’ll look up the quote, and they were, um, I will pull this one up. And it was, did I save it on my phone? You know, you see these quotes on social media and stuff? Yes. Uh, this is the, um, uh, this is a remem­ber’s name. This is the, oh, it’s Fran­cois Hen­ry Bemo, and I’m sor­ry if I mis­pro­nounce your name. I’m sure I did. He’s, uh, c e o of the lux­u­ry, uh, watch­mak­er. ADEs pge, uh, a AP watch­es are some of the most famous watch­es. They’re some of the most pre­mi­um priced. And he, a quote from him, the board of direc­tors, mean­ing the fam­i­ly mem­bers have nev­er asked me in my 11 years for any growth per­cent­age terms ever. He said, they have nev­er said, Fran­cois, we want 10 or 15% or more. No, they say, Fran­cois, we still want to be around 200 years from now.

Brad (00:03:41) — Mm-hmm.

Kevin (00:03:42) — Right. That is the mind­set of an endur. Now, they’ve already been around for, I think, at least a hun­dred years. Mm-hmm. And it is one of the most pre­mi­um sought after brands of watch­es in the mar­ket right now. You know, sup­ply o strip­ping demand to the point where, for those that aren’t into watch­es, you know, the, the, the sec­ondary mar­ket, these watch­es are sell­ing for 2, 3, 4 times their orig­i­nal val­ue, like the store val­ue, if you could buy one in store and a wait­ing list, three years. But yeah, they’re talk­ing about 200 years, and that’s, that’s what we’re about. So my word of the day, I think I’ve already had 4,256 words, is in, in this open­ing. Mm-hmm. Um,

Brad (00:04:19) — I did­n’t notice that. I feel like I,

Kevin (00:04:21) — I’m hav­ing, I’m drink­ing some tea and maybe it’s, I thought it was decaf­feinat­ed, but it might be caf­feinat­ed. Tell us

Brad (00:04:27) — A sto­ry about the tea before we get to Jim Collins.

Kevin (00:04:34) — Well, let me, no, I’m not gonna go there. I do have a great sto­ry about tbo, what you

Brad (00:04:37) — Wear, which you wear the day.

Kevin (00:04:39) — Yeah. . Oh, now I’m throw­ing you off. Uh, you told me my word of the day, um, is passion.

Brad (00:04:46) — Yeah.

Kevin (00:04:47) — I’m full of it right now talk­ing about these prin­ci­ples. I get fired up. It’s why I do what I do. I wan­na be a part of build­ing endur­ing great orga­ni­za­tions. And, uh, so it’s, it’s, um, pas­sion. Awe­some. Don’t sell passion.

Brad (00:05:04) — Mm-hmm. .

Kevin (00:05:05) — So should we talk about the episode?

Kevin (00:05:06) — Let’s do that. That’ll be nice. So last week, in last week’s episode, last week being one 60, we spoke about rat­ing your firm on Jim Collins. Sev­en Good to great prin­ci­ples. Um, we could­n’t fit it all into one. So we are car­ry­ing that over to this week. Last week of the sev­en, we spoke about the first three, first one, of course, being, oh, this is from Jim Kah­n’s book, good to great. In case I had­n’t ful­ly Yes, yes. Ful­ly con­firmed that. So the first one was lev­el five lead­er­ship. The sec­ond one was first who, then what. And the third one was con­front the bru­tal facts.

Brad (00:05:47) — Now, this week, um, we’ve got four to go through. I think. We don’t need to go through the first three. Kev. We, we, we went through and them in great detail. They’re pret­ty self-explana­to­ry. Now, this week we start off with this idea of the hedge­hog con­cept. So this comes from a Greek para­ble about the hedge­hog and the fox. Of course, the job of the fox is to eat the hedge­hog, and the job of the hedge­hog is to not be eat­en. And, um, the head, the fox has many, many dif­fer­ent, uh, tac­tics and strate­gies and all of these dif­fer­ent things that the fox tries to do. So he can eat the fox, or she can eat the fox. Uh, eat the hedge­hog par­don of me hedge­hog. Yep. Yep. And yet, the hedge­hog is one very, very sim­ple, uh, strat­e­gy, and it works every sin­gle time. And that is to bend over when the , when the hedge­hog bends over, the spikes come out and it’s, it’s, uh, maybe not unde­feat­able, but it stops all of the ideas and the tac­tics that the box has. And that’s the para­ble, or that’s the metaphor for the mm-hmm. hedge­hog con­cept. It is the one sin­gle thing that helps us to win every time.

Kevin (00:07:16) — And it’s so basic and sim­ple where the fox itself gets dis­tract­ed and runs around in cir­cles and tries things. The hedge­hog has one basic move. And, and if we look at endur­ing great com­pa­nies, they keep an incred­i­bly sim­ple, and this hedge­hog prin­ci­ple helps peo­ple to do that. So in the hedge­hog, oh, go ahead, Brad.

Brad (00:07:35) — And why is that impor­tant? Wh why is it impor­tant to have one sin­gle move? Because entre­pre­neurs are by their very nature cre­ative. Yes. Mar­shall Gold­smith wrote a book called What Got You Here, won’t Get You There. Okay. And, uh, basi­cal­ly the cre­ativ­i­ty that gets an entre­pre­neur to take risk, start a busi­ness, and to solve all of these prob­lems all along the way, if it’s k not kept in check. What can hap­pen with­out this dis­ci­pline of the hedge­hog is that sud­den­ly they say, Hey, Kev, I’ve got a good new idea. How about if we start sell­ing liquor? What about mm-hmm. , what about if we start, we could start trad­ing hors­es, or maybe we could start a motor car man­u­fac­tur­ing com­pa­ny, or be

Kevin (00:08:22) — Or build a rock­et ship.

Brad (00:08:23) — Yeah, that’d be cool. Or

Kevin (00:08:24) — Open up a busi­ness in Africa, and then maybe we’ll go to Rus­sia at the same time.

Brad (00:08:30) — Yeah. That is all born of the great cre­ativ­i­ty that we love about entre­pre­neurs, but the prob­lem is that the prof­it does­n’t stick. When you have people

Kevin (00:08:41) — Get distracted.

Brad (00:08:41) — Peo­ple get dis­tract­ed, peo­ple are

Kevin (00:08:43) — Pulled in too many direc­tions ver­sus a few things that mat­ter. Yeah. So it’s tak­ing infi­nite cre­ativ­i­ty and boil­ing it down into a few core things to focus on and build dis­ci­pline. Yeah. So there’s three ele­ments of a hedge­hog. It’s what, what can you be the best in the world at? Like, you know, what are your core, core, almost your best com­pe­ten­cies? What are you pas­sion­ate about? Or what, like, what is your pur­pose as an org to use Jim’s lan­guage? And what’s your prof­it for x? How do you actu­al­ly make your mon­ey? And where should you be look­ing at dri­ving things to notably improve your prof­itabil­i­ty per what­ev­er, what­ev­er met­ric you use it against it for what wid­get or what item do you look at it against? And you put these three togeth­er, it is boils down your busi­ness real sim­ply. And at the, at the cen­ter of it all, or at the core is sit your behag, your behag should be born from what you can be amaz­ing at what you’re pas­sion­ate about and what makes your mon­ey the best. Be hags fit right into there.

Brad (00:09:45) — Yeah. And

Kevin (00:09:46) — The key is you share. Go ahead, Brad. I, I,

Brad (00:09:48) — I, I guess I like to visu­al­ize it as we’re look­ing through a win­dow in the cen­ter of that Venn dia­gram. If we main­tained the dis­ci­pline around those three areas for 10 to 30 years, what could our b a g be? What could our big hair, ace skull be? Yes.

Kevin (00:10:06) — What’s pos­si­ble? The key is if we stayed focused on those things and peo­ple get dis­tract­ed like crazy. So it’s sim­ple. And we know the sim­plic­i­ty scales and you know, and again, oper­a­tional­ly in com­pa­nies that we work with, we use it as a touch­stone. We go back and look at our hedge­hog reg­u­lar­ly. We use it to help us build the bee­hag, but we use it as a touch on to remind us what is our busi­ness. Yeah. So that what­ev­er we do needs to fit into it. And, and to quote, you know, the great Jim Collins, again, you know, one of his quotes I just loved, he said, suc­cess isn’t about cre­ativ­i­ty to be cre­ative, that’s to be human Suc­cess tru­ly is relent­less exe­cu­tion of the bor­ing basics with­in the hedge­hog. He goes, that’s it. If you’re focused on excit­ing, sexy things, you’re in trou­ble. Yeah. It’s because at the end of the day, what does the cus­tomer want?

Brad (00:11:04) — Usu­al­ly it’s pret­ty sim­ple. They, you know, there’s some sim­ple basic things. And if you mas­ter those con­sis­tent­ly, which is darn hard. Yeah. Um, and as an exam­ple, um, to this hedge­hog, one of my clients, uh, that I got called in prob­a­bly work­ing with a client a cou­ple years. He had done some deep, deep strat­e­gy work with a very pres­ti­gious strat­e­gy con­sul­tant, was well known in his part of the c e O com­mu­ni­ty. This per­son was known to do great work. And with all due respect, I looked at the work from a strat­e­gy per­spec­tive, it was okay. I don’t think it was great, but it was very, very com­plex. So after spend­ing hun­dreds of thou­sands of dol­lars on a strat­e­gy con­sul­tant com­ing up with very com­plex work, they could­n’t exe­cute it. They could­n’t. Boy. And final­ly I said to the CEO O I said, look, just let one of my team go in there.

Kevin (00:12:03) — They will fig­ure it out and find a way to sim­pli­fy it in the way that we make strat­e­gy real­ly sim­ple and exe­cu­tion of it easy or easy. Any­ways, it took, it took a peri­od of a few months and one of my team went in and worked with them and dra­mat­i­cal­ly sim­pli­fied it. And now they can exe­cute it and it’s much eas­i­er for them to win. But the org was stuck because, and maybe the strat­e­gy was bril­liant. I don’t think it was, but if it, maybe it was, maybe I did­n’t under­stand it. That could be, but it was too damn com­plex to get the orga­ni­za­tion to ral­ly around and get it done. So it did­n’t mat­ter. It would­n’t, even if it was bril­liant, it would­n’t work cuz it could­n’t get exe­cut­ed. Now to do that, to have insane­ly sim­ple strat­e­gy goes back to prin­ci­ple one of lev­el five lead­er­ship. It takes a hell of a lot of humil­i­ty to have your strat­e­gy look like a kinder­gart­ner came up with it. Right. And that’s what the best stuff is. Cuz then it scales, but it insults the intel­lect of some. So then they want to go for more robust com­plex and, um, that’s hard. So

Brad (00:13:07) — Smart peo­ple intu­itive­ly want to make things more com­plex because they believe that, um, that is where the um, where the sophis­ti­ca­tion and suc­cess born and the val­ue. Yeah. And that’s okay. But, but any­one can make it more com­plex. But the true art is mak­ing it sim­pler. And that sim­pler is how we bring it back to, um, yeah. The hedge­hog. And why that is just so impor­tant. I was, I was on an all hands call with a com­pa­ny in the last cou­ple of days and they were review­ing the strat­e­gy, um, all of the com­po­nents of this strat­e­gy. And one of them, of course was the, the hedge­hog. Uh, what they said, uh, at the end of that is, let’s go to the team. Cuz it was all hands and it was all online, uh, on a Zoom call. And all of the team were say­ing, what do you think, uh, about the whole call? Give us some feed­back. And a cou­ple of the peo­ple said, we love the fact that there are these cen­tral prin­ci­ples that aren’t chang­ing, that we know what we’ve got­ta do. We’re rein­forc­ing them and we know where we are going. But over time, we’re gain­ing a deep­er under­stand­ing into all of the nuances that sup­port those broad­er principles.

Kevin (00:14:31) — Yep.

Brad (00:14:33) — So let’s ask our­selves, um, how do we assess this is what we did in the last episode and we’re doing it again. Because real­ly we’re ask­ing our­selves, these are the sev­en prin­ci­ples. How do we rate our­selves? So as you con­sid­er your hedge­hog zero, we don’t have one at all, and 10, there’s sim­ply no oth­er work that we could do. Remem­ber, it’s not only just about hav­ing it and hav­ing it doc­u­ment­ed and maybe hav­ing it on the wall, but is it inform­ing your deci­sions every day, every week? Is it con­nect­ed to all of the parts of the strat­e­gy? Uh, does it real­ly clear­ly tell us what to say no to? So maybe rate your­self zero to 10 on the lever, how you’re lever­ag­ing the pow­er of this principle.

Kevin (00:15:22) — Awe­some. Let’s move on. We could prob­a­bly do an episode on each of these. There’s so much here, but let’s move on num­ber five. But cul­ture, dis­ci­pline, you know, in the root of Collins’ mod­el, and his ini­tial mod­el in good greate is dis­ci­pline. Peo­ple who engage in dis­ci­pline thought, who take dis­ci­plined action, and all of that spools up the fly­wheel. And, you know, it calls it oper­at­ing with free­dom with­in a frame­work of respon­si­bil­i­ties. And the idea is, is that peo­ple in these com­pa­nies, he found in his research, they did­n’t have jobs, they had respon­si­bil­i­ties. They’re respon­si­ble for mak­ing some­thing hap­pen. And I shared ear­li­er that quote from Jim, you know, relent­less exe­cu­tion of the bor­ing basics with­in your hedge­hog. And that’s what suc­cess is and what what cre­ates that. And you know, what’s inter­est­ing is I look at this, it’s, you know, , one of the CEOs that we work with, he final­ly got that.

Brad (00:16:14) — And he, you know, he went in and looked at his busi­ness through this lens and he goes, we had the oppo­site of a cul­ture of dis­ci­pline. We had a cul­ture of bureau­cra­cy. Every­thing was get­ting slow and cum­ber­some. And, but they real­ized this, when we start­ed to dig in, all the poli­cies were made with unen under­per­form­ing play­ers in mind. It was to pro­tect every­one from the week, not to empow­er the the amaz­ing. And they real­ized they had to do a whole rebuild on a lot of stuff and dra­mat­i­cal­ly gut out the bureau­cra­cy. And unfor­tu­nate­ly, the A play­ers did­n’t like it, but all the Cs could, or the low­er per­form­ers could sit there and grind it away. So at the end, they had to real­ly rethink their view of peo­ple, rethink, you know, their tal­ent, phi­los­o­phy and tools, and then gut out the bureau­cra­cy that was killing them and replaced that with bet­ter peo­ple and lighter systems.

Kevin (00:17:11) — Uh, there is so much to unpack there. We could do a, uh, a pod­cast episode just on one or two of the points, espe­cial­ly, uh, your poli­cies pro­tect­ing the weak. But one of the things that you said real­ly light­ly there, but is so pow­er­ful is Jim Collins, um, uh, and his research team iden­ti­fied at one point the dif­fer­ences in the mind­set of the peo­ple in the good ver­sus great com­pa­nies. The good com­pa­nies believe that the, they had a job, where­as the great com­pa­nies, they believed yes, that they have a respon­si­bil­i­ty. And so that’s, that’s the quick and dirty assess­ment that you could do, ask­ing your team if they’ve got a job or a respon­si­bil­i­ty, don’t obvi­ous­ly ask it direct­ly. Um, but ask­ing it indirectly

Brad (00:18:03) — Ask, what’s your role? I do this with you. So what’s your role here? And if they want to tell me their title ver­sus I’m respon­si­ble for it. You, you get very dif­fer­ent answers in dif­fer­ent orga­ni­za­tions when you ask this.

Kevin (00:18:17) — That’s the key. That’s the key, isn’t it? Yes, this is, and and if they don’t, I don’t think it’s in, I don’t think it’s out of the realms of pos­si­bil­i­ty to get peo­ple to change their mind­set and take that respon­si­bil­i­ty. Cer­tain­ly a job to do, but that’s the essence of a cul­ture of of dis­ci­pline. That’s good. Yes.

Kevin (00:18:40) — So go ahead. Go ahead Brad. I want you to wrap up that piece and we’ll move on. Yeah,

Brad (00:18:43) — Yeah. So let’s, uh, assess your com­pa­ny zero to 10. Zero. We have zero on this. We have noth­ing. 10, we cer­tain­ly could­n’t do any bet­ter. Uh, rate your firm on a score of one to 10. How well are you lever­ag­ing the pow­er of this prin­ci­ple, uh, cul­ture of dis­ci­pline that is dis­ci­pline. Peo­ple who engage in dis­ci­pline thought and who take dis­ci­pline action, oper­at­ing with free­dom with­in a frame­work of respon­si­bil­i­ties. Or if as Kev put it, a relent­less exe­cu­tion of the bor­ing basics with­in your hedgehog.

Kevin (00:19:19) — Awe­some. Num­ber six, tech­nol­o­gy accel­er­a­tion. And in this world of tech­nol­o­gy and all that oth­er stuff, this is a big one these days, peo­ple think tech­nol­o­gy is the answer, and then they burn five or 10 mil­lion if they’re a start­up tech com­pa­ny. Even it’s, it, my gosh, it’s, it’s, and it’s hard. Tech­nol­o­gy is hard, but usu­al­ly it’s again, the mind­set and the view of it. And in tech­nol­o­gy accel­er­a­tion, tech­nol­o­gy is used as an accel­er­a­tor of momen­tum. So the momen­tum is there and it adds on ver­sus the cre­ator of it. And here’s the exam­ple I’d like to give. Um, if you can’t run a sys­tem on a basic Google sheet or spread­sheet, don’t freak­ing auto­mate it. Peri­od. Full stop. You know, one of the execs that we worked with in a com­pa­ny, she was brought in, she worked for Wal­mart, she ran, uh, a mul­ti-bil­lion dol­lar p and l for Wal­mart and buy­ing and, and, and, and in the buy­ing part of the busi­ness, they ran it on Google Sheets.

Brad (00:20:30) — Yeah.

Kevin (00:20:30) — Lit­er­al­ly on Google Sheets is how they man­aged it. You can. So I believe in tech­nol­o­gy, it’s awe­some, but what peo­ple think is tech­nol­o­gy is the solu­tion to get momen­tum and to make it work. No, once it’s work­ing, it can enhance it and give you extra data, extra insight, uh, save time, save errors, a lot of stuff. But it isn’t the mag­ic answer. Peo­ple think that it, that it is. And you, we see this in like imple­men­ta­tions of Sales­force or ERPs or CRMs, you know, it’s a, it’s a man­age­ment tool that can, Sales­force does­n’t dri­ve sales on the, you know, Sales­force does much more than sales man­age­ment, but it does­n’t dri­ve sales. It gives a man­ag­er and the team abil­i­ty to com­mu­ni­cate bet­ter and gath­er infor­ma­tion and have some good reminders and sys­tems, but in itself does­n’t dri­ve sales. It enables awe­some sales peo­ple that are well trained to poten­tial­ly sell more. And I don’t even know if that’s true, but that’s, we don’t need to get into that debate. So it’s Well,

Brad (00:21:30) — I I think it should be true. I think it should be true, because that’s the prin­ci­ple that we’re talk­ing about, right? Yeah. It’s not tech­nol­o­gy accel­er­a­tion. This is not, it’s not solv­ing prob­lems, it’s accel­er­at­ing momen­tum. Okay. Yes. It’s not, it’s not the gen­e­sis or the cre­ation of momen­tum. We’re gonna start with noth­ing and we will cre­ate momen­tum because we’ve imple­ment­ed Sales­force and we’re not pick­ing on Sales­force. It’s just a soft­ware pro­gram that every­body knows. Instead, we could say we have a high per­form­ing sales team who are cur­rent­ly using Google Sheets. If we switch

Kevin (00:22:07) — Yes.

Brad (00:22:08) — If we switch the man­age­ment of that sales process and the record­ing of that data, which is work­ing real­ly, real­ly well over to a C R M like Sales­force, will it accel­er­ate momen­tum? That’s the biggest

Kevin (00:22:23) — Bril­liant exam­ple. Brad, thank you for a great exam­ple. If we have a low per­form­ing sales team, Sales­force or any soft­ware appli­ca­tion isn’t going to fix it.

Brad (00:22:34) — Yeah.

Brad (00:22:36) — If we have a high per­form­ing sales team and auto­mate and give them tech­nol­o­gy, it’ll help them to be more. But fix­ing an under­per­form­ing sales team is an under­per­form­ing sales team. That’s a man­age­ment issue. Won­der­ful. We have anoth­er pod­cast that we did on how soft­ware can’t replace man­age­ment. We did that prob­a­bly 50 episodes ago. I remem­ber that.

Kevin (00:22:54) — That was a good one. That was a good talk. Um, um, yeah. So, uh, c e o that that i, i I would say, I know I don’t work with over here. Um, um, she was say­ing how, um, they haven’t, they hire, they used to hire copy­writ­ers all the time. They’ve got a very effec­tive process. It works real­ly, real­ly well. Yep. Um, but we all know that arti­fi­cial intel­li­gence is, uh, is, is a big deal now. And a lot of peo­ple are switch­ing over to that. But there’s a, what she said to me is, is we haven’t hired, uh, a copy­writer in nine months because we’re migrat­ing, uh, and get­ting or gain­ing the tech­nol­o­gy acceleration

Brad (00:23:46) — Yes.

Kevin (00:23:47) — Through those tools.

Brad (00:23:50) — Yes. Won­der­ful. So what to self-assess your­self on a scale of zero to 10, how well do you lev­el the prin­ci­ple and live the prin­ci­ple that tech­nol­o­gy accel­er­ates your momen­tum ver­sus believ­ing or oper­at­ing like it would solve the prob­lem and cre­ate momen­tum. So have a good sys­tem in a man­u­al for­mat, a spread­sheet of who knows what, and tech­nol­o­gy will enhance that amaz­ing sys­tem ver­sus you got a bro­ken sys­tem, let’s get soft­ware or tech­nol­o­gy to fix it

Kevin (00:24:23) — Because then you got a bro­ken sys­tem with new software.

Brad (00:24:27) — Yes. Because you end up I imple­ment­ing the bro­ken­ness. You need to fig­ure out the solu­tion to the bro­ken­ness first. That’s a one. It’s the same thing hap­pens is, is that, you know, when, when you do, like, I got­ta go back to A C R M or Sales­force imple­men­ta­tion, when the IT depart­ment does it and they get all excit­ed about it ver­sus hav­ing the end users involved con­sis­tent­ly. Peo­ple get in, you know, tech­nol­o­gy’s hard. Like it’s real­ly, real­ly hard, but let’s move on Fly­wheel in the doom loop, we have done episodes on this before, and the root of it is, is that the fly­wheel is this piece of mass that you get your MO busi­ness, you get momen­tum and it goes faster and faster and faster and build­ing up more and more pow­er based on hun­dreds and thou­sands of lit­tle inputs. And if you under­stand your fly­wheel and you can build it, it’s talked about in Good.

Brad (00:25:17) — Great. And, and you know, Jim has a, um, uh, a tool, uh, or a sep­a­rate book called, uh, turn­ing the Fly­wheel Lit­tle Red Book is a guide to it. And under­stand­ing what real­ly dri­ves your busi­ness, if you under­stand it, and it’s tru­ly a tight fly­wheel, it becomes a focus for all your strate­gic deci­sions. And in the com­pa­nies that we work with, it dri­ves our strat­e­gy, it dri­ves our invest­ment deci­sions in the com­pa­nies we work with. One I work with in India, we’ve been using it prob­a­bly for, they went and did a pri­vate ses­sion with some oth­er CEOs at Jim, prob­a­bly sev­en or eight years ago, rough­ly. And they’ve been using it ever since. Yeah. And so in every quar­ter­ly or semi-annu­al annu­al meet­ing, they look at the fly­wheel and how, and they’ve nailed it. They’ve, they, this is their sec­ond iter­a­tion after they first locked it, and they red, yel­low, green it on how healthy it is and, and to know, and it’s dead.

Brad (00:26:17) — It’s a dead rep­re­sen­ta­tive of where the busi­ness is strong and weak and where they’re on and off strat­e­gy. Hmm. And they break it down. They’re all around India. They break it down by loca­tion. And so when we get the reports from the loca­tion heads, they show us how they’re reg­u­lar green and then they iden­ti­fy how they improve cer­tain parts and what they’re gonna do next. But it real­ly is like a, a guide to build­ing your, to, to con­tin­ue to build that momen­tum in your busi­ness that tech­nol­o­gy can help to, uh, auto­mate. It’s just amaz­ing. I just, I’ve got anoth­er, I I got, I prob­a­bly got 10 exam­ples on Fly­wheel because it’s such a core dri­ver in our clients, but Brad, you prob­a­bly got some­thing you wan­na share in there too.

Kevin (00:26:56) — Yeah. So the episodes that, uh, we’ve record­ed 117, um, the biggest prob­lem with most fly­wheels is a two part, uh, and then episode 118. Uh, so if you’re inter­est­ed to dig into Fly­wheel, you can go back and lis­ten to those, uh, growth Whis­per­ers episodes. Mm-hmm. . Yeah. Fly­wheel. Um, look at the Ama­zon fly­wheel. It’s time­less. They built it in 2000, 2001, uh, when, when this research was being con­duct­ed by Jim Collins and it’s a part of this book. Um, and you look at it today and it’s, it’s still, it still makes sense. It’s still, it’s still per­fect­ly legit because it’s, it’s log­i­cal and it’s how they’ve scaled to be one of the biggest orga­ni­za­tions in the world. Yeah. Um, for, for us, uh, yeah, we, we have firms where we’ve got KPIs for each, um, for each of the, the parts of the fly­wheel. Let’s say you’ve got five parts to your fly­wheel, we ask what are the things that dri­ve that? Yeah. We’re doing the red, yel­low green as well around them. But also we’re say­ing how do we, how do we mea­sure, how do we know what are the parts that need to be all green for that com­po­nent to be green there? Um, so yeah, the fly­wheel in the doom loop is the sev­enth of sev­en prin­ci­ples in good to great under­stand­ing that we haven’t real­ly touched on the doom loop. Um, but it’s the inverse of the fly­wheel. It’s, it’s, it’s, uh, it’s where peo­ple, it’s

Kevin (00:28:33) — You, you, yeah. When, go ahead Brad.

Brad (00:28:35) — Uh, where, where com­pa­nies don’t achieve results, peo­ple become dis­en­gaged. Um, and then new fads or new things are brought in that aren’t dis­ci­plined, aligned around a hedge­hog or some­thing of that nature, uh, are key to suc­cess. They’re just new fads. And then fun­ni­ly enough, they don’t work. And so it, the com­pa­ny spi­rals downwards

Kevin (00:28:59) — Instead of get­ting back to the core dis­ci­plines and the root cause and the bru­tal facts, they just start slap­ping lip­stick and, and, and paint all on every­thing. Yeah. They try and hype stuff up, try and they don’t fix the core ugly prob­lems. They, you know, it’s like if they had a rot­ten board on their house, they just try to fill it and paint over it ver­sus get­ting it ripped out and replaced. Yeah. And, and, and then they won­der why it does­n’t work. It’s, um, yeah. Awe­some. So before we’ve cov­ered today, we’ve cov­ered, um, hedge,

Brad (00:29:33) — Hedge rate your­self. Sor­ry, Kev, just make sure that you rate your­self zero to 10 on the fly­wheel. Yeah.

Kevin (00:29:38) — How clear are you on your fly­wheel? How reg­u­lar­ly you focus­ing on it, and is it dri­ving your strate­gic deci­sions? I mean, ide­al­ly and is it all green or, or, you know, deliv­er­ing to the, what the KPIs say it should be

Brad (00:29:52) — Momen­tum, so,

Kevin (00:29:53) — Yep. Exact­ly. And you can feel the momen­tum build­ing, uh, the hedge­hog con­cept, three cir­cles of sim­plic­i­ty, num­ber one. Num­ber two, the cul­ture of dis­ci­pline, relent­less exe­cu­tion of the pour­ing basics. Tech­nol­o­gy is a won­der­ful accel­er­a­tor of good things that are hap­pen­ing in your busi­ness. You don’t look at it as the prob­lem solver. And then fly­wheel, final­ly the fly­wheel and doom loop. You are build­ing momen­tum in your busi­ness cuz you know your fly­wheel and you’re fuel­ing your flywheel.

Brad (00:30:19) — Awe­some. Well, I hope that you have enjoyed, um, this two-part series rat­ing your firm on Jim Con’s sev­en, good to great prin­ci­ples. There’s so much to unpack there, but we just thought that yeah, the, the, these prin­ci­ples, uh, would add val­ue, get you to think dif­fer­ent­ly, get you to rate and there­fore iden­ti­fy the oppor­tu­ni­ties. So again, hope you’ve enjoyed the episode. If you are so inter­est­ed, you can find us on YouTube by search­ing the growth whis­per­ers and do, if you are watch­ing us on YouTube or wher­ev­er you, uh, lis­ten to pod­casts, uh, some of the, the, the, the great results that we see in, in, in lis­ten­er engage­ment hap­pen when you actu­al­ly rate us. So we’d real­ly appre­ci­ate it, uh, if you’re enjoy­ing the episode, to, to rate us, uh, either, uh, on YouTube or on your, where you get your pod­casts. Um, if you’d like to find out more about Kevin, you can find that and infor­ma­tion about his week­ly newslet­ter, which is pret­ty awe­some at lawrence​and​co​.com. And for myself, you can find infor­ma­tion about us at evo​lu​tion​part​ners​.com​.au and obvi­ous­ly our newslet­ter, which comes out week­ly as well. Hope you’ve enjoyed the episode and look for­ward to chat­ting to you again next week. Have a great week.