I recently made a presentation to a group of business owners, using the book Good to Great by Jim Collins as a model for growth in uncertain times. Of course the question came up about two of the G2G companies that have recently become “Goats”, specifically Circuit City and Fannie Mae, whose performance has been less than great rather recently. What happened to them and if the model is so good why did it happen and why should I follow it?
Great question. The short answer is that all companies or organizations, no matter how great they are, can get off track and fail. That’s why there are so few truly great long lasting organizations. And failure seems to come a lot faster than the process of becoming great.
But I think it’s instructive to look at the two companies in question see what caused the fall from grace.
In Circuit City’s case, it seems as though the leadership got comfortable with their success and stopped paying attention to the “brutal facts” of the changing retail/technology landscape. Their “Council” probably stopped challenging the senior leadership on the facts and the changing lanscape was hidden with the profits generated by the existing model. They slipped into tunnelvision, stopped innovating and started reacting instead of leading the company through the changes.
In Fannie Mae’s case, their Core Ideologies and Hedgehog changed. They strayed from what they were good at and started financing deals that no longer made common sense. And with that change their culture changed and their results changed with them.
As we face a challenging future, we can use these examples to guide us to making good decisions to capitalize on opportunities. Make sure you are confronting the brutal facts regularly, not hiding them behind your results and intuitions. Things are really changing right now. We want to lead through the changes instead of reacting to them.
And while changes will be necessary, make sure they are an evolution of your core values and core purpose, not a wholesale shift that abandons what you are good at.
While I prefer learning from the great ones, it helps every once in a while to learn from the “Goats” as well.