Good-to-great companies share a peculiar psychology: they maintain unwavering faith that they will prevail in the end, while simultaneously confronting the most brutal facts of their current reality. This paradoxânamed after Admiral James Stockdaleâis central to how great companies think and make decisions.
Leadership does not begin with vision. It begins with getting people to confront the brutal facts and act on the implications. When you start with an honest and diligent effort to determine the truth of your situation, the right decisions often become self-evident.
âYes, leadership is about vision. But leadership is equally about creating a climate where the truth is heard and the brutal facts confronted.â â Jim Collins
Winston Churchill exemplified this approach. Upon becoming Prime Minister in 1940, he didnât try to spin reality. He established the Statistical Office to feed him the most brutal facts of reality, no matter how distressing.
Admiral Jim Stockdale was the highest-ranking U.S. military officer in the âHanoi Hiltonâ prisoner-of-war camp during the Vietnam War. He was tortured over twenty times during eight years of imprisonment, yet led his fellow prisoners with courage and resilience.
When Collins asked Stockdale how he survived, he replied that he never lost faith that he would prevail in the end. But when asked about those who didnât make it, Stockdale said:
âThe optimists. They were the ones who said, âWeâre going to be out by Christmas.â And Christmas would come, and Christmas would go. Then theyâd say, âWeâre going to be out by Easter.â And Easter would come, and Easter would go. And then Thanksgiving, and then it would be Christmas again. And they died of a broken heart.â
âYou must never confuse faith that you will prevail in the endâwhich you can never afford to loseâwith the discipline to confront the most brutal facts of your current reality, whatever they might be.â â Admiral Jim Stockdale
How do you create a climate where the truth is heard? Collins identified four basic practices:
Good-to-great leaders used questions, not answers, to get their people engaged. They didnât pretend to have all the answers. They asked penetrating questions and pushed for understanding.
Good-to-great companies created a culture of vigorous debate. People could disagree, sometimes violently, yet when a decision was made, everyone unified behind it. The key: it was a search for the best answer, not a political process.
When something goes wrong, good-to-great companies dig in to understand what happenedâbut without pointing fingers. The goal is understanding, not assigning blame. This makes people more willing to surface problems early.
Create mechanisms that turn information into information that cannot be ignored. Give people the tools and responsibility to speak up when they see problems, and make it impossible for management to remain ignorant of key facts.
The contrast between Kroger and A&P illustrates the power of confronting brutal facts versus ignoring them.
Kroger:
A&P:
When fax machines emerged in the 1980s, many predicted the death of mailâand thus Pitney Bowes. Instead of panicking or denying the threat, Pitney Bowes confronted this brutal fact head-on.
Comparison companies often created climates where people feared telling the truth. Leaders who punish the messenger, who spin problems, or who project false optimism create environments where brutal facts never surfaceâuntil itâs too late. The truth eventually emerges, but by then the company has lost valuable time.