A while ago I was talking to a professor who does some teaching on leadership, and he said he wasn’t a fan of Jim Collin’s Good to Great because he had seen Collins’ “first who, then what” principle often used to justify laying off talented people from organizations.
I told him that I thought that would indeed be a pretty bad application of the principle, but that these people were misunderstanding Collins. Collins’ principle is sound; but this misapplication of it is not.
I was just recently dipping in to Good to Great again, and noticed that Collins actually deals with this very issue. It comes down to the distinction between being ruthless and being rigorous:
To be ruthless means hacking and cutting, especially in difficult times, or wantonly firing people without any thoughtful consideration.
To be rigorous means consistently applying exacting standards at all times and at all levels, especially in upper management. To be rigorous, not ruthless, means that the best people need not worry about their positions and can concentrate fully on their work.
. . .
To be rigorous in people decisions means first becoming rigorous about top management people decisions. Indeed, I fear that people might use “first who rigor” as an excuse for mindlessly chopping out people to improve performance. “It’s hard to do, but we’ve got to be rigorous,” I can hear them say. [Note: I’ve actually heard people say that! Pretty bad.] And I cringe. For not only will a lot of hardworking, good people get hurt in the process, but the evidence suggests that such tactics are contrary to producing sustained great results.
The good-to-great companies rarely used head-count lopping as a tactic and almost never used it as a primary strategy. Even in the Wells Fargo case, the company used lay-offs half as much as Bank of America during the transition era.
In contrast, we found layoffs used five times more frequently in the comparison companies than in the good-to-great companies. Some of the comparison companies had an almost chronic addiction to layoffs and restructurings.
It would be a mistake — a tragic mistake, indeed — to think that the way you ignite a transition from good to great is by wantonly swinging the ax on vast numbers of hardworking people. Endless restructuring and mindless hacking were never part of the good to great model.
I would just have one improvement here. Probably few people set out to purposely take a “mindlessly hacking” approach. Most who do so probably don’t even realize it, but instead think they are doing right.
So I think the most helpful point Collins makes here is that the disposition of every organization should be to value and keep its people. Lay-offs are an over-used tactic, especially in downturns, and do not generally correlate with sustained great results (as I’ve blogged on before).
The disposition of a company should be to retain its people (assuming alignment with the values and that they are performing) both because this most aligns with the value of people and because it actually benefits the organization more. For, as Collins points out later on this same page, the ultimate throttle on growth for any company is “the ability to get and keep the right people.”
So the lesson of the “first who, then what” principle is not that people are easily expendable. They are not, and should not be treated as such. The lesson is actually the opposite: people are valuable, and the disposition of an organization ought to be to keep them. Endless restructuring and removing of talented people, even due to changes in strategy, were “never part of the good to great model.”