Podcast Ep 147 | Jim Collins Three rules of Engagement for Healthy Teams

In team meetings, leaders often need a simple code of conduct through which to operate. If you have the ‘right people on the bus’, they will be self-motivated and don’t require constant coercing toward a compelling vision. In order to effectively delegate responsibility and accountability and create a high-performing team, leaders should follow Jim Collin’s three rules of engagement for healthy teams.

In this episode, we discuss Jim Collin’s three rules, what they are and why each of them are so important to create the environment for a high-performing team to thrive.




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 Lawrence  00:13

Hey, and welcome to the growth whispers podcast where everything that Kevin and Brad talk about, is about building enduring great companies. That’s what we spent a lot of time in our life studying, and we’re really passionate about, and not that we don’t get a kick out of companies that aren’t enduring a great action. We learn a lot from them. But our passion is helping founders, entrepreneurs, CEOs, leaders, executives, build enduring great companies that sustain generations and perform amazingly well over time. And because we like, it’s what we like to do. It’s what we like to study. It’s what we’d like to share. So I’m Kevin Lawrence here in Vancouver, British Columbia, Canada, and with my amazing co host, Mr. Brad Giles, down in Perth, Australia. Brandon, how’s it going for you today?

Brad Giles  01:01

It’s going very good. Good to see Kev hope that you are. Well, it’s been a little bit of a wall between chats for us. Yes. But not great. It is summer here. summer holiday time. Things are good.

Kevin Lawrence  01:16

Yeah, we’re on the opposite end. It’s a little cool. Here. We were away and had some sunshine, which was nice. But today, we’re digging into something interesting, which we’re gonna get to this thing called rules of engagement in a minute, but before we do, what’s your word or your phrase of the day?

Brad Giles  01:33

Relax? Relax. I’m just been on some holidays, as I just mentioned,

Kevin Lawrence  01:38

you were telling me to relax? No.

Brad Giles  01:42

No, it’s just relax. I’ve I’m feeling relaxed today. It’s been a very good holiday break for me with the family. You just got to go to take time out to recharge.

Kevin Lawrence  01:55

Yes. Yeah, I just did the same where I had a few weeks to recharge. And it was amazing and awesome. And yeah, although that’s not my word of the day today. My Word of the Day is happiness was some time in Mexico and this mazing chef that we met in this on the chef like environment. But he talked about in Mexico, one of the core values is happiness. And it’s a combination of gratitude, and generosity. And it was the most beautiful definition of happiness I had ever heard in my life. Wow. And I just it just it just hit me I’m like, Oh my gosh, that’s amazing.

Brad Giles  02:33

So happiness is gratitude plus generosity,

Kevin Lawrence  02:38

correct. I love it. Think about it, gratitude, where you’re able to soak up and absorb all the amazing things that are happening around you. And take energy off the things that aren’t just really appreciate what it is. And then take that and share it with some other people share some of that with others. gratitude and generosity. It’s a it’s a beautiful perspective is a side note, even this chef, his name was no, it was a fascinating guy. He talked about if someone comes to my restaurant, and they’re hungry, and they have no money. I’m gonna feed them. Why would another human I want to help. Now, if they want a beer or they want some mezcal, which is like one of the drinks, they alcoholic drinks, like, Well, no, they can pay. But if they need food, I want to help. And this guy was as much spiritual teacher as he was. Chef and he’d made some amazing food. Alright, so happiness. And you call it rest though? Would you call it? Relax? Relax, relax. Okay. All right.

Brad Giles  03:45

What a spiritual way, what a spiritual and nice way to start this episode.

Kevin Lawrence  03:52

Wonderful. Well, let’s dig into today. Today we’re talking about Collins, in his book, Good to Great has three rules of engagement for healthy teams. Now, we’re not saying these are the three rules you must adopt. These are his recommendations, and we’re going to share some more about it. So Brian, why don’t you kind of kick us off and give a little context to why the heck we should be thinking about this and why it’s important. Well,

Brad Giles  04:17

have you ever been in a meeting where it didn’t go so well? Or it was an ineffective meeting? I mean, we all have

Kevin Lawrence  04:23

Yes, yes. I’ve been in so many of those. You want to poke your eyes out? Yeah. Yeah. And literally because that would hurt but it’s like you it’s excruciating. And you don’t want to be there.

Brad Giles  04:34

Yeah. Yeah. And part of the reason is that there might not be a set of behaviors or a code of conduct that is effective that prevents those things from happening. And so in his analysis of in Good to Great, I think it was 1443. I could be wrong on that number but well over 1000 companies in the Good to Great Study, he learned Jim Collins learned that these great companies had these characteristics in meetings that were that were common amongst them. And so there are these three primary things that kind of set the tone for any meeting that people are going to participate in. So that’s what we’re digging into today. What are those characteristics? Why do they matter? And how could you perhaps use this in your business to set the right tone or a tone of effectiveness for meetings?

Kevin Lawrence  05:34

Yeah, or be inspired by it to come up with your own version of it, because it’s kind of a starting point or a jumping off point. I remember. Gosh, five, seven years ago, we were at a Strat planning. Meeting for a client in the US. I don’t even remember what city we’re in, but we’re somewhere and the CEO said, Hey, I got a special thing for you. Actually, I might have been in Chicago. And he said, Coach K is speaking. Now some people call me Coach K. It wasn’t me. It was, who is the coach of the legendary basketball team from Duke in the US, and he’s since no longer at Duke. He’s retired, I believe. But Microsoft, he was he’s got an amazing track record. He coached the men’s Olympic basketball team. And he was talking about building amazing and during teams. And, you know, as he’s telling his story, about the first time he coached the men’s basketball team, because he coaches a college team in the US, and he did very well. But he goes up, and it was the US Men’s Basketball team was full of legendary players. And he said, he’s standing there he goes, You know, I’m standing there on the court. And he goes, and then God himself walked onto the court. who at that time was Michael Jordan. Yeah. And he’s like, What am I going to do with Michael Jordan? And I believe Scottie, Pippen, another NBA player, what am I good? How am I going to tell them what to do? Now, he was a very smart coach. And he knew well, he couldn’t, because that wasn’t going to be the way that he could bring his best coaching expertise, he knew he had these incredibly talented players who were the best, and they knew they were the best. So his job was to actually blend them together. Like an Italian grandmother does with an amazing pasta sauce, he had to bring them together into one amazing group. And he did it similar to what Collins talked about with the rules of engagement. Except for he didn’t make the rules. He got them all in a circle, he preceded the group a bit, and he had them come up with and make the list of the the rules of engagement the team was going to have this is the men’s Olympic team, and what they were going to hold themselves and each other accountable to most and according to the story, I think they came up with 12 things. And there was one was like, be on time. Another was respect to the cleaning and caretaking staff. Because a lot of people with a lot of power and a lot of ego could be disrespectful to the janitors rules, and one of the rules was, that ain’t going to be us. Yeah. So the team came up with this rules of engagement code of conduct, whatever you want to think. And then the team held themselves and each other accountable to it. So he didn’t have to play parent to, and which is obviously the healthiest way that’s what we want his teams, but he facilitated it. And helped to to we do this all the time. So what do we do with our own team with our own retreat, we set our own guidelines that we want to do. And even just today, I was just talking to CEO about this, because he’s got a generally a fairly new exec team. And he’s got a couple of days with him at a special place. And we were talking about how do you start off two days with your exec team, especially when they’re fresh? Yeah. And it you know, again, these rules of engagement that we create, and then we find a way to follow up on it. It’s an incredibly powerful mechanism to create team based accountability instead of parenting by the boss.

Brad Giles  09:26

Cool. So yeah, so through his research and Good to Great Jim Collins, identified these three rules. So what we’re going to do is we’re going to first of all outline what are the three rules and then we’re going to dig in and explain what each of them mean. So first of all, it’s brutal honesty, so it’s incumbent on people to say the things that need to be said. Number two is no shame, and no blame. We’re not here to shame people. We’re not here to blame people. And then of course, number three is disagree and commit. So there would be very Gary, in these teams, there’ll be very robust debate argument, people would be almost throttling each other across the table. But through that they would, at the end, commit to successful execution. So let’s spin it back. Again. brutal honesty, no shame, no blame, disagree and commit. Let’s start at the beginning. brutal honesty, so confront the brutal facts. So we’ve actually done an episode on this. It’s episode 59. Confront the brutal facts, Jim Collins method for Team hygiene. If you don’t confront the brutal facts, if you don’t step in at all times, and say, what’s the real issue here, or what’s really going on, talk about the elephants in the room, whatever it is, all the way through your meetings, people can walk away saying, We didn’t talk about this. And we didn’t do that. What a waste of time.

Kevin Lawrence  11:00

And that’s true. Because the brutal facts are the real issues that need, we don’t need to talk about how our pencil crayons or pencils just aren’t the same brand they used to be, and how the paper clips, just they just don’t hold their shape. Like that. I’m exaggerating, but it’s a lot of stuff. That’s irrelevant. And as I say too much time the CEO will say, you know, for a midsize company, if it doesn’t impact the business by about a million dollars of EBITA. Maybe we don’t talk about it, because it’s not brutal enough, it needs to be highly impactful. That’s a, you know, the filter would change based on the size of the company. But there’s so it’s so easy to talk about the cursory issues and not the core issues. Interestingly, you know, we pump this one up pretty hard in the work we do with companies. Yeah, we asked questions about it. Before we get in the room. We ping the team about this. And sometimes we ping the next layer down. If we’re meeting with the execs, we get the execs to answer a bunch of questions before we enter the room. And then we would ask the directors as well. But that way, it’s it gets rid of the social awkwardness of getting it on the table, because we’ve already got it in a body of data that we can pull from number one. Number two, it’s always an agenda item. What are the brutal facts? Yeah, and we flush them out. And as we get going with teams and build trust, we don’t only flush them out, we prioritize them. And we make sure so I’ve got a meeting, I’m going to tomorrow for two days. And all we’re going to do is debate brutal facts for 810 12 hours a day. And I’ll tell you more about that one later. The main thing is the final agenda point is make sure there’s actions connected to all of the brutal facts. That is how we wrap up the meeting, before we say are nice closing comments, to make sure we’ve addressed them all. Because at the end of the day, we want to leverage our big opportunities and mitigate the brutal facts so we can be successful.

Brad Giles  13:05

I had a meeting about six weeks ago, and standard agenda quarterly planning workshop. each agenda item was 3020 minutes to 45 minutes. So it’s all structured throughout the day exactly what we’re going to do about 10am, we started talking about the brutal facts and structured agenda item, as you’ve just said, we finished at 450 because we had to close up because people had to leave. Yeah, it can be a really, really important if we’re talking about the brutal facts. Sounds simple. But it can be a really important thing. What’s important here is we’re talking about confront the brutal facts. This is a very slight deviation from that, which is brutal honesty. So when we set this as a code of conduct item for the meeting, or this is what we’re going to do. It gives people license to be brutally honest. And they say, look, are you know, are you really being brutally honest about that item because I know you’ve got another perspective, which might be the real perspective. So when so totally agree with confront the brutal facts, but also this gives a people and I remember a meeting recently where an executive said if I’m going to be brutally honest, this is what is really going on. And it just gives a license for those types of dialogues to be to be opened up. He

Kevin Lawrence  14:41

point A gives license, but I’ve been in meetings where see there’s like that’s not the case. I don’t know what you’re talking about. That’s not okay. You guys are idiots. This isn’t gonna work. I’ve had enough of this shit, blah, blah, blah, and the CEO loses it which destroys any license that you give To that, and that’s the key is when these things come up, you have to handle it well respected, and be able to find a way to keep the conversation going. Otherwise people get the message. Yeah, he’s asking for the brutal facts. He just wants the puffy facts. That’s where you

Brad Giles  15:17

need a master

Kevin Lawrence  15:19

facilitator. Oh, yeah, yes. Like in that meeting, as that CEO started to lose it. I’m like, Hey, we hear you. But let’s get back to the question. Everyone in the room is terrified, I’m not gonna fire me, that’s fine. We have a lineup of clients. Yeah, but it’s where I had to manage him because he would have those tend to and that shuts down the room. And that’s the key, even another company that I that I work with, we need that when there are two people on the team that love to fight father and son, they like to have a good old fight. And as I’ve said to them, wonderful. Do it at home. Do it outside the room. And, you know, we’ve learned in that company, because some people love to fight. Some people get clarity by fighting, and it’s honest. But it’s but it’s too intense for the room. So what we’ve learned to do is we if it is I’m saying, hey, excellent. This is important. Let’s the three of us take it offline. And we’ll talk about it at lunch, or like pulling it out of the room. So you don’t allow the room to be too toxic. So a failure

Brad Giles  16:29

would be walking away from the meeting. And anybody says, well, we didn’t talk about this. And we didn’t talk about that. Now, or a whole lead,

Kevin Lawrence  16:39

did we ever. And I’ll never bring that up. Again. That’s extensively spectrum, two ends of the spectrum.

Brad Giles  16:46

Well, that really is a great segue into our next point, which is no time and no blame, right? We’re not here to shame people. And we’re not here to blame people. We’re here to build a great company. So we want to scientific debate with people engaged in a search for the best answers that is predicated by brutal honesty. Okay. So, so from good to great. This was a sentence that I loved out of that book. When you conduct autopsies. without blame, you create an environment where the truth is heard. If you have the right people on the bus, you should almost never need to assign blame, but only need to search for understanding and learning. So this creates trust. When we know Look, we assume that we’ve got the right people on the bus, we assume that everyone is here with the right intent. Therefore, everyone with the right intent, we’re not going to shame others, and we’re not going to blame others when looking for the answers.

Kevin Lawrence  17:46

As long as you have a traffic cop who manages it when it gets a little off the rails, because it needs it needs the traffic cop or facilitator. So I remember something were Jimson I don’t know if it’s in one of the private sessions we did with him. One of his work bigger workshops are where, but I think it was him. I was private sessions. And we did one in London with him. I remember and he said it might have been there. But what he said is, hey, brutal facts are awesome. And when you should do is prioritize the most important ones. But let’s once you have one, you then need to gather the facts about the brutal facts don’t drop into debating a brutal fact, because you’re gonna have an opinion fest. Even when they’re talking about the brutal facts, you need to gather. Here’s all the facts that we know so many other situations, exactly, real facts. And then once you have the facts, and then you can debate it and come up with a solution. But that’s like, it’s a discipline to come up with the brutal facts, then it’s a real discipline to come up with the facts about the most important brutal facts before you start debating because by nature, we like shortcuts, and we go to opinion fast. So we had a situation in a company where the CFO, I love the guy, he was a wonderful soul. And he was not effective. And the finance team was no longer effective. So one of the brutal facts is, there was about three of them on the flip chart we made at the beginning of the meeting about the finance team being ineffective. So I said, Hey, I just heard this from Jim, before, a few weeks before, so I’m like, I gotta test this. This is probably the right time to test it because it’s very sensitive, because everyone loved the guy. And he knew he wasn’t effective. So I said, Well, let’s do let’s do breakouts. And let’s brainstorm all the facts about the brutal facts about the finance team not able to keep up with the nice language I used. And people came up with all these facts and we got two pages of facts. And then we were able to have a very constructive debate and with the CEO in the room, then talk about solutions. Yeah, but there was no it was it was is a very safe conversation because it was facts. It wasn’t judgments and blames and finger pointing in the end. I mean, he also had to find a way to step up because he just it was undeniable that was 47 facts on the flip charts. But it was like it was almost like it was done with love and intent of helping the finance team give the business what it needed. Because we it was there was no shaming or blaming, it was just solving based on facts.

Brad Giles  20:28

I remember another example, I was working with a team. They had a larger division and a smaller division, probably the law, the smaller division was, I don’t know, 1/10 the size of the larger one, but it was losing money. And so we went into this quarterly session with this knowledge saying, look, it’s losing a lot of money, the profit from the larger division is paying, basically propping up the other one, what are we going to do about it, that leader of the smaller division stood up? And he said, Look, I take full responsible responsibility for it. We’re going to implement a plan. And we using that brutal honesty, we worked and worked and worked to say, look, we’re going to have to shut it down and do it in a coordinated manner. Unless we can come up with some Hail Mary, very soon. Long story short. So we’ve, we’ve, we’ve gotten to that point, there was no shame and no blame on that leader for that being in that way. But fast forward two weeks, and then the finance team where the CFO is on the leadership team said, Oh, by the way, it looks like we’ve made some mistakes. And that division isn’t actually losing that amount of money after Oh, making a small profit. Oh, but it was. Yeah, it was terrible. It was disgusting. But during that meeting, that no shame and no blame, it was just it was just honorable to be in there and see that person stand up, take responsibility. There’s no shame or no blame past.

Kevin Lawrence  22:14

What a test for them. Yeah, it was,

Brad Giles  22:16

it was a really, really good test. Anyway, moving on to the third rule. disagree and commence this one. So let’s zoom back. Well, let’s just take a step back, we’ve got to be brutally honest. Number two, we’re not here to shame people. We’re not here to blame people. And we’ve got to have robust debates, tough arguments as a result of those first too, with building a great business at the end of that,

Kevin Lawrence  22:46

okay. And by the way, Brad, that almost frames it up brutally honest, allows us to get all the right stuff on the table. No shame, no blame allows us to process it and handle it, and debate it in a healthy environment. And this one allows us to close it off. Like it’s exactly, you can’t debate forever. And at some point, you know, there’s a thing and Robert’s rule of Rules of Order. He’s gonna call the question, we got to as quickly as we can, we’re gonna appropriately make a decision and move on.

Brad Giles  23:20

And there’s two bits. The first is that we don’t want to have sham processes just to allow people to have their say, like, we want to have brutal honesty, no shame, no blame people standing up presenting facts, okay. But the second part is the worst thing you can do as a leadership team member is go six weeks into the quarter. And so if I told you, it wouldn’t work, because it undermines the trust, it undermines the commitment and everything. So when we will disagree. And we will commit there may be things that we decide on as a leadership team or as a team that you disagree with. But as a successful team, we commit to their successful execution.

Kevin Lawrence  24:06

Yep. And it’s hard, like holy, like, in my role, I’ve got a CEO that we have a lot of debates. And there was one decision that they made, and I’ve just learned said, Look, I am going to fight you tooth and nail on this decision, because I do not agree with it at all. And once you decide, I’m gonna support you on this decision with all my mind, but man, it’s hard. Especially when you disagree. I had I had a client. Her name was Judy. She was my second client. This goes back in the early mid 90s. And she was a fiery, strong woman. I loved her. She was amazing. And I’m pretty fiery myself. And we’re working through something and we couldn’t agree. And she gave me she said that she was Kevin before I didn’t know the concept. I just knew debate until you win. And she says, Kevin, we’re just gonna have to agree to disagree. I’m like, What are you talking about? We’re not done to need to debate this, you know, and I just because I, you know, I believed I was right. And she just hadn’t realized yet. And she wasn’t we’re just going to agree to disagree. And I’m like, it was kind of relieving, was like, Okay, we admit that we disagree. But we’re going to agree to proceed with in this case, her idea. She was my client after all. And it’s a very, very powerful, I use it all the time. Yeah. It’s like, I know, so and so that, you know, this is different than what you were thinking. But can you agree to disagree and can be committed to this going forward? And they say, yes. And when people are willing to say, yes, it saves us from an extra three hours debate. But the key is they have to be committed. Yep. Not just pretend committed. Yeah, I had one,

Brad Giles  25:59

one issue. And there must have been three, maybe four weeks ago, and we debated this particular subject for it must have been an hour or an hour and a half, fiery, fiery debate where people were retracting, and they were stopping talking. And then they were yelling, and, and so we got to the point. And I’m like, right, Are we committed? Are we going to do this? It’s disagree and commit. And we went around the table? Yes, yes. Yes, yes. Yes, yes. No. And I thought we must have been, we must have spent the last 20 minutes all on the same page saying yes. And I think it was the CFO. And the CFO said, No, this, this doesn’t make sense. And then he can he commenced, he said, I’m prepared to disagree, if necessary, but this is why I disagree. And he outlined it, the whole table’s turned, and we didn’t do it. But the team needed to go through that that debate. So yeah, disagree is

Kevin Lawrence  27:12

healthy. When that happens. It was if it’s if it’s enhancing your thinking and helping you to make a better decision, which is the intent of debate.

Brad Giles  27:21

Yeah, indeed. Well,

Kevin Lawrence  27:23

what a good awesome,

Brad Giles  27:25

good chat today.

Kevin Lawrence  27:26

do you want to close it out essence, the essence is some guidelines or codes of conduct. And Jim Collins gives you a great set to start with. Right? And, you know, and there’s other ones that we’ve had, by the way, you know, what said in the room stays in the room. There’s 17 other principles people have called, but this is a hell of a foundation to set yourself up to win. And it’s the essence of what people want in these meetings, to have healthy debates, and to have a healthy team.

Brad Giles  28:01


Kevin Lawrence  28:02

So brutal honesty, no shame, no blame disagreeing commit all guidelines to help create a functional team last thing that I’ll share. The key thing is if you do this exercise and decide them, you need a mechanism to keep them top of mind. And I recommend putting them at the top of the week. The agenda, as a reminder of the principles are the code of conduct that we use to conduct our meetings, so it gets operationalized otherwise, it was a one time activity that gets forgotten and lost in the ether.

Brad Giles  28:33

Indeed, good, good checked, brutal honesty, no shame, no blame, disagree and commit. Well, I hope you’ve enjoyed this episode. Of course. You can find us on youtube if you’re interesting too. interested to see our smiling faces just search our growth whispers and you can find Kevin and he’s got an interesting weekly newsletter at www.Lawrenceandco.com. And myself of course, got a weekly newsletter as well at evolutionpartners.com.au. I hope you’ve enjoyed the episode, and look forward to chatting to you again next week. Have a great week.