Conventional wisdom says great companies start by setting a new direction, a new vision and strategy, then getting people committed to that direction. But the good-to-great companies operated differently. They first got the right people on the bus (and the wrong people off the bus), and then figured out where to drive it.
Collins introduces the powerful metaphor of a bus to explain this concept. The good-to-great leaders began their transformations by first getting the right people on the bus, the wrong people off the bus, and the right people in the right seatsâand then they figured out where to drive it.
âLook, I donât really know where we should take this bus. But I know this much: If we get the right people on the bus, the right people in the right seats, and the wrong people off the bus, then weâll figure out how to take it someplace great.â â Jim Collins
Three practical reasons emerged for why good-to-great companies put âwhoâ before âwhatâ:
Adaptability: If you begin with âwho,â you can more easily adapt to a changing world. The right people will figure out how to succeed regardless of circumstances.
Motivation: The right people donât need to be tightly managed or fired up. Theyâre self-motivated by the inner drive to produce the best results.
Direction clarity: If you have the wrong people, it doesnât matter whether you discover the right directionâyou still wonât have a great company.
The comparison companies often followed a âgenius with a thousand helpersâ modelâa brilliant leader who sets the vision and recruits people to help execute it. The problem: when the genius leaves, the helpers are lost.
Genius with Helpers:
Right People on Bus:
Getting the right people on the bus requires rigorous standardsâbut good-to-great companies were not ruthless cultures. Thereâs a crucial distinction:
Ruthless means hacking and cutting, especially in difficult times, or firing people without thoughtful consideration.
Rigorous means consistently applying exacting standards at all times and at all levels, especially in upper management. It means making tough decisions about people while treating everyone with dignity.
The good-to-great companies had cultures where people either thrived or quickly self-selected out. There was no ambiguity about what was expected.
The research revealed three practical disciplines for being rigorous about people:
Good-to-great companies limited their growth by their ability to attract enough of the right people. Theyâd rather delay growth than hire the wrong people. A company should keep looking until it finds the right person.
The moment you feel the need to tightly manage someone, youâve made a hiring mistake. The best people donât need to be managed. When you know you need to make a people change, act. Waiting too long is unfair to the people who are performing.
If you want to get rid of problems, donât sell off your problems with your best people. Let your best people work on your biggest opportunities, not your biggest problems. Managing problems makes you good; exploiting opportunities makes you great.
Dick Cooley at Wells Fargo exemplified the âFirst Whoâ principle. In the 1970s, he began building one of the most talented management teams in bankingâlong before he knew what changes banking deregulation would bring.
Surprisingly, the research found no systematic pattern linking executive compensation to the shift from good to great. How you pay people matters less than who you pay and whether they are the right people in the first place.
âThe purpose of compensation is not to âmotivateâ the right behaviors from the wrong people, but to get and keep the right people in the first place.â â Jim Collins
Comparison companies often focused on âwhatâ firstâpursuing hot markets, new strategies, or turnaround programs. But without the right people, even the best strategies fail. And when the market shifts, thereâs no one capable of adapting.