Read an Excerpt
The following are short excerpts from the monograph Good
to Great and the Social Sectors: Why Business Thinking Is Not
the Answer, published in 2005 by Jim Collins. The full monograph
can be obtained from most online booksellers.
Author’s Note
During my first year on the Stanford faculty in 1988, I sought
out professor John Gardner for guidance on how I might become
a better teacher. Gardner, former Secretary of Health, Education
and Welfare, founder of Common Cause, and author of the classic
text Self-Renewal, stung me with a comment that changed my life.
“It occurs to me, Jim, that you spend too much time trying
to be interesting,” he said. “Why don’t you
invest more time being interested.”
I don’t know if this monograph will prove interesting to
everyone who reads it, but I do know that it results from my growing
interest in the social sectors. My interest began for two reasons.
First is the surprising reach of our work into the social sectors.
I’m generally categorized as a business author, yet a third
or more of my readers come from non-business. Second is the sheer
joy of learning something new—in this case, about the challenges
facing social sector leaders—and puzzling over questions
that arise from applying our work to circumstances quite different
from business.
I originally intended this text to be a new chapter in future
editions of Good to Great. But upon reflection, I concluded that
it would be inappropriate to force my readers to buy a second
copy of the book just to get access to this piece—and so
we decided to create this independent monograph. That said, while
this monograph can certainly be read as a stand-alone piece, I’ve
written it to go hand-in-hand with the book, and the greatest
value will accrue to those who read the two together.
I do not consider myself an expert on the social sectors, but
in the spirit of John Gardner, I am a student. Yet I’ve
become a passionate student. I’ve come to see that it is
simply not good enough to focus solely on having a great business
sector. If we only have great companies, we will merely have a
prosperous society, not a great one. Economic growth and power
are the means, not the definition, of a great nation.
Jim Collins
Boulder, Colorado
July 24, 2005
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We must reject the idea—well-intentioned, but dead wrong—that
the primary path to greatness in the social sectors is to become
“more like a business.” Most businesses—like
most of anything else in life—fall somewhere between mediocre
and good. Few are great. When you compare great companies with
good ones, many widely practiced business norms turn out to correlate
with mediocrity, not greatness. So, then, why would we want to
import the practices of mediocrity into the social sectors?
I shared this perspective with a gathering of business CEOs, and
offended nearly everyone in the room. A hand shot up from David
Weekley, one of the more thoughtful CEOs—a man who built
a very successful company and who now spends nearly half his time
working with the social sectors. “Do you have evidence to
support your point?” he demanded. “In my work with
nonprofits, I find that they’re in desperate need of greater
discipline—disciplined planning, disciplined people, disciplined
governance, disciplined allocation of resources.”
“What makes you think that’s a business
concept?” I replied. “Most businesses also have a
desperate need for greater discipline. Mediocre companies rarely
display the relentless culture of discipline—disciplined
people who engage in disciplined thought and who take disciplined
action—that we find in truly great companies. A culture
of discipline is not a principle of business; it is a principle
of greatness.”
Later, at dinner, we continued our debate, and I asked Weekley:
“If you had taken a different path in life and become, say,
a church leader, a university president, a nonprofit leader, a
hospital CEO, or a school superintendent, would you have been
any less disciplined in your approach? Would you have been less
likely to practice enlightened leadership, or put less energy
into getting the right people on the bus, or been less demanding
of results?” Weekley considered the question for a long
moment. “No, I suspect not.”
That’s when it dawned on me: we need a new language. The
critical distinction is not between business and social, but between
great and good. We need to reject the naïve imposition of
the “language of business” on the social sectors,
and instead jointly embrace a language of greatness.
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The pivot point in Good to Great is the Hedgehog Concept. The
essence of a Hedgehog Concept is to attain piercing clarity about
how to produce the best long-term results, and then exercising
the relentless discipline to say, “No thank you” to
opportunities that fail the hedgehog test. When we examined the
Hedgehog Concepts of the good-to-great companies, we found they
reflected deep understanding of three intersecting circles: 1)
what you are deeply passionate about, 2) what you can be the best
in the world at, and 3) what best drives your economic engine.
Social sector leaders found the Hedgehog Concept helpful, but
many rebelled against the third circle, the economic engine. I
found this puzzling. Sure, making money is not the point, but
you still need to have an economic engine to fulfill your mission.
Then I had a conversation with John Morgan, a pastor with more
than 30 years of experience in congregational work, then serving
as a minister of a church in Reading, Pennsylvania. “We’re
a congregation of misfits,” said Morgan, “and I found
the idea of a unifying Hedgehog Concept to be very helpful. We’re
passionate about trying to rebuild this community, and we can
be the best in our region at creating a generation of transformational
leaders that reflects the full diversity of the community. That
is our Hedgehog Concept.”
And what about the economic engine?
“Oh, we had to change that circle,” he said. “It
just doesn’t make sense in a church.”
“How can it not make sense,” I pressed. “Don’t
you need to fund your work?”
“Well, there are two problems. First, we face a cultural
problem of talking about money in a religious setting, coming
from a tradition that says love of money is the root of all evil.”
“But money is also the root of paying the light and phone
bills,” I said.
“True,” said Morgan, “but you’ve got to
keep in mind the deep discomfort of talking explicitly about money
in some church settings. And second, we rely upon much more than
money to keep this place going. How do we get enough resources
of all types—not just money to pay the bills, but also time,
emotional commitment, hands, hearts, and minds?”
Morgan put his finger on a fundamental difference between the
business and social sectors. The third circle of the Hedgehog
Concept shifts from being an economic engine to a resource engine.
The critical question is not “How much money do we make?”
but “How can we develop a sustainable resource engine to
deliver superior performance relative to our mission?”
********************
I do not mean to discount the systemic factors facing the social
sectors. They are significant, and they must be addressed. Still,
the fact remains, we can find pockets of greatness in nearly every
difficult environment—whether it be the airline industry,
education, healthcare, social ventures, or government-funded agencies.
Every institution has its unique set of irrational and difficult
constraints, yet some make a leap while others facing the same
environmental challenges do not. This is perhaps the single most
important point in all of Good to Great. Greatness is not a function
of circumstance. Greatness, it turns out, is largely a matter
of conscious choice, and discipline.
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Business executives can more easily fire people and—equally
important—they can use money to buy talent. Most social
sector leaders, on the other hand, must rely on people underpaid
relative to the private sector or, in the case of volunteers,
paid not at all. Yet a finding from our research is instructive:
the key variable is not how (or how much) you pay, but who you
have on the bus. The comparison companies in our research—those
that failed to become great—placed greater emphasis on using
incentives to “motivate” otherwise unmotivated or
undisciplined people. The great companies, in contrast, focused
on getting and hanging on to the right people in the first place—those
who are productively neurotic, those who are self-motivated and
self-disciplined, those who wake up every day, compulsively driven
to do the best they can because it is simply part of their DNA.
In the social sectors, when big incentives (or compensation at
all, in the case of volunteers) are simply not possible, the First
Who principle becomes even more important. Lack of resources is
no excuse for lack of rigor—it makes selectivity all the
more vital.
Copyright © 2005 Jim Collins, All rights reserved.