Reading time: 6 min
Introduction
"Good is the enemy of excellent". This powerful statement by Jim Collins opens his major work, From Performance to Excellence, and sums up the essence of his research. The author invites us to an in-depth exploration of the mechanisms that enable some companies to turn a corner and rise to the top, while others, however successful, stagnate. This article provides an in-depth summary of this study, highlighting the key principles that emerge from this rigorous analysis.
The quest for excellence: A rigorous methodology
The book is the fruit of a five-year research project conducted with a team of 22 researchers. Far from any preconceived theoretical approach, Collins' approach is empirical: the aim is to identify companies that have managed to go from "good" to "excellent", and to understand what sets them apart from the rest.
- Selection of excellent companies: Researchers selected 11 companies that had outperformed the market by a factor of at least three over a 15-year period after a transition point, while excluding those whose entire sector had experienced the same growth. These companies included Abbott, Circuit City, Fannie Mae, Gillette, Kimberly-Clark, Kroger, Nucor, Philip Morris, Pitney Bowes, Walgreens and Wells Fargo.
- Comparison groups: To refine the analysis, these companies were compared with two groups: direct comparators (same sectors, same opportunities, but not having reached excellence) and non-continuous comparators (having experienced a brief period of excellence, but not maintaining it).
- In-depth analysis: A detailed study of each company was carried out, based on press articles, interviews with managers, and financial data, with methodical coding of the information. The researchers also paid particular attention to the "dogs that don't bark", i.e. the unexpected or absent elements that proved crucial to understanding the phenomenon.
The pillars of transformation: A three-stage model
Disciplined people:
Level 5 leadership: Contrary to popular belief, leaders of excellent companies are not flamboyant personalities, but humble, unassuming individuals who combine great professional drive with personal modesty. They put the company's interests before their own. They are closer to Lincoln or Socrates than to Caesar. They serve the company first, not the other way around.
First who... then what: These leaders start by making sure they have the right people on board (and getting the wrong ones off), even before defining the strategy. They are rigorous in their personnel decisions. It's the "right people" who are the company's greatest asset.
Disciplined thinking:
Facing up to the brutality of the facts (without losing faith): It's essential to have the courage to look reality in the face, however harsh it may be, while retaining an unshakeable faith in the company's ability to succeed. We need to create a culture where everyone has the opportunity to express themselves and be heard, where the truth has its place.
The Hedgehog concept (simplicity within three circles): Excellent companies have a simple, clear vision of their business, based on three circles: what they can be best at, what drives their economic engine, and what they're passionate about. They focus on what they do best, and abandon activities where they can't excel. It's about understanding what you can be the best at, not trying to be the best.
Disciplined action:
Culture of discipline: Excellence relies on a culture of discipline, at all levels of the organization. A culture where people are self-disciplined, where thinking is rigorous, and where action is consistent. With disciplined people, there's no need for hierarchy, with disciplined thinking, there's no need for bureaucracy, and with disciplined action, there's no need for excessive controls.
Technological catalysts: Technology is not an engine of transformation, but a gas pedal. It must be used in a targeted way, in line with the Hedgehog concept. Excellent companies don't use technology to initiate their transformation, but to accelerate it.
The steering wheel: The cumulative process of excellence
At the heart of this model is the concept of the "flywheel", a metaphor that illustrates the transformation process. The transition from performance to excellence is not the result of a single event, but of an accumulation of efforts in the same direction. You have to keep the wheel turning until it gains momentum and the results become visible. Excellent companies with successful strategies are consistent and coherent, and don't allow themselves to be distracted by fads or fleeting opportunities. There are no defining actions, no grand programs, no earth-shattering innovations, no solitary strokes of luck, no miraculous moments.
What excellence isn't
The Collins study also revealed what isn't a factor in success:
- Star leaders: Charismatic leaders are no guarantee of excellence.
- Executive compensation: Specific compensation systems have no direct impact on transformation. What matters is recruiting and retaining the right people.
- Strategy: Excellent companies have no fundamentally different strategies from others.
- Technology: It's only a catalyst, not an engine of transformation.
- Mergers and acquisitions: These are only effective if carried out in accordance with the Hedgehog concept, after the wheel has started turning.
- Sudden changes: Excellent companies don't make "revolutions", but take things one step at a time, applying the principles of discipline and consistency.
- Leading sectors: Excellence is not a question of sector of activity, but of choice and rigorous application of these principles.
Excellence: a universal challenge
"From Performance to Excellence" is not just a book about management, but an exploration of the mechanisms of excellence in general. The principles outlined by Collins apply to any organization, be it business, school, association or government. The book emphasizes that the transition from "good" to "excellent" is a challenge that everyone can rise to, provided they demonstrate curiosity, rigor and determination.
Conclusion:
In short, De la performance à l'excellence is an invaluable guide for any organization aspiring to excel. It teaches us that excellence is not a matter of luck or circumstance, but of choice. By applying the key principles identified by Jim Collins, any organization can potentially transform its performance and take itself to the next level. "Good is the enemy of excellent", and this truth should inspire us never to settle for the status quo, but always to strive for excellence.
To receive a presentation of my complete training course in progress on "Essential Financial Skills for Small Business Owners", click here.
