by Matt Perman
Tom Peters, in Re-Imagine!: Business Excellence in a Disruptive Age:
To my 30-year-old readers: I hereby wager that when you’re my age, Wal-mart and Dell will be either dead or irrelevant.
I’m not positive on that — I think they can last. But that doesn’t mean they will. Will be interesting to see.
(Tom Peters, by the way, was I think around 60 when he wrote this. So I’m putting this in my tickler file for about 2036.)
by Matt Perman
A great post at 37 Signals from a while back. Here’s the first paragraph:
More on why Pixar’s movies are so much better than the competition: According to “Pixar Rules — Secrets of a Blockbuster Company,” the company has created an incredible work environment that keeps employees happy and fulfilled. The result: “A tightknit company of long-term collaborators who stick together, learn from one another, and strive to improve with every production.”
by Matt Perman
This was a good article from last month on business as missions in the Wall Street Journal. Here are three interesting excerpts:
Faith-at-work movements have been popular at least since the 1857 businessmen’s revival in New York City, in which noon-hour prayer meetings were so full of the city’s professionals that many businesses closed during the gatherings. But churches have typically kept business people at a distance, needing their money but questioning their spiritual depth. With the business as mission movement, that has changed. In 2004, the Lausanne Committee for World Evangelism, founded by Billy Graham, featured a track on business as mission. At a recent missionary conference in Hong Kong, Doug Seebeck says mission leaders apologized to the business people present. They had been guilty of asking for their money while keeping them in the foyer of the church, outside of the sanctuary.
….
Now Mr. Seebeck says, “Business is the greatest hope for the world’s poor.”
….
While advanced economies question capitalism, Christians who work in developing countries see how essential business is to provide jobs and health care, build communities and even minister to souls. For these business owners, a desk job overseas has become a full-time ministry.
by Matt Perman
A good word from Tom Peters and Robert Waterman’s In Search of Excellence: Lessons from America’s Best-Run Companies:
Just as you don’t learn anything in science without experimenting, you don’t learn anything in business without trying, failing, and trying again. The trick, and it’s a tough one, is a common cultural understanding of what kind of failure is okay and what kind leads to disaster. But don’t kid yourself. No amount of analysis, especially market research, will lead to true innovation.
Or, as Jim Collins puts it, “try a lot of stuff and keep what works.” That is, branch and prune:
The idea is simple: If you add enough branches to a tree (variation) and intelligently prune the deadwood (selection), then you’ll likely evolve into a collection of healthy branches well positioned to prosper in an ever-changing environment. (Built to Last: Successful Habits of Visionary Companies, 146).
And this doesn’t just apply to your business or organization. It applies to the rest of your life as well. Try stuff. Make things happen. Build on what works.
by Matt Perman
From Jim Collins’ Built to Last: Successful Habits of Visionary Companies:
A company must have a core ideology [core purpose plus core values] to become a visionary company. It must also have an unrelenting drive for progress. And finally, it must be well designed as an organization to preserve the core and stimulate progress, with all the key pieces working in alignment.
These are universal requirements for visionary companies. They distinguished visionary companies a hundred years ago. They distinguish visionary companies today. And they will distinguish visionary companies int he twenty-first century.
However, the specific methods visionary companies use to preserve the core and stimulate progress will undoubtedly change and improve. BHAGs [huge, audacious goals], cult-like cultures, evolution through experimentation, home-grown management, and continuous self-improvement — these are all proven methods of preserving the core and stimulating progress. But they are not the only effective methods that can be invented.
Companies will invent new methods to complement these time-tested ones. The visionary companies of tomorrow are already out there today experimenting with new and better methods. They’re undoubtedly already doing things that their competitors might find odd or unusual, but that will someday become common practice.
And that’s exactly what you should be doing in the corporations [and organizations] you work with — that is, if you want them to enter the elite league of visionary companies. It doesn’t matter whether you are an entrepreneur, manager, CEO, board member, or consultant. You should be working to implement as many methods as you can think of to preserve a cherished core ideology that guides and inspires people at all levels. And you should be working to create mechanisms that create dissatisfaction with the status quo and stimulate change, improvement, innovation, and renewal — mechanisms, in short, that infect people with the spirit of progress…. Use the proven methods and create new methods. Do both.
by Matt Perman
Jim Collins gives a very helpful, succinct, and profound definition of a great organization in Good to Great and the Social Sectors:
A great organization is one that delivers superior performance and makes a distinctive impact over a long period of time.
So there are three characteristics of a great organization. They are:
I think we ought to aim to build great organizations, and so it is helpful to have a good outline of what that means. It’s not enough to just say “we should seek to make our organizations great.” We need to know what that means. This is a good start.
Having this before us, though, also leads to more questions — such as “Why should you try to build something great?” and “How do you assess how your organization is doing on these qualities, especially when they are hard to measure?” I’ll address these questions in upcoming posts.
by Matt Perman
In Built to Last: Successful Habits of Visionary Companies, Jim Collins points out that the most successful companies do not exist first and foremost to maximize profits. He writes:
Contrary to business school doctrine, “maximizing shareholder wealth” or “profit maximization” has not been the dominant driving force or primary objective through the history of the visionary companies.
Visionary companies pursue a cluster of objectives, of which making money is only one — and not necessarily the primary one.
Yes, they seek profits, but they’re equally guided by a core ideology — core values and sense of purpose beyond just making money.
Yet, paradoxically, the visionary companies make more money than the more purely profit-driven companies.
by Matt Perman
Tom Peters writes in his classic In Search of Excellence:
Every excellent company we studied is clear on what it stands for, and takes the process of value shaping seriously. In fact, we wonder whether it is possible to be an excellent company without clarity on values and without having the right sorts of values.
Thomas Watson, Jr., of IBM, wrote an entire book on this long ago in which he summarizes what Peters (and, later, Jim Collins in Built to Last: Successful Habits of Visionary Companies) found to be true of all excellent companies: in order to be an excellent company (and an enduring one), the company must be founded on a coherent set of foundational beliefs. There must be a “core.”
The core is unchanging. Everything other than the core is open to constant change. As Collins points out, the single guiding principle for managing an organization is therefore this: preserve the core and stimulate progress.
Here is how Watson put it in his classic work A Business and Its Beliefs:
One may speculate at length as to the cause of the decline and fall of a corporation. Technology, changing tastes, changing fashions, all play a part. … No one can dispute their importance. But I question whether they in themselves are decisive.
I believe the real difference between success and failure in a corporation can very often be traced to the question of how well the organization brings out the great energies and talents of its people. What does it do to help these people find common cause with each other? And how can it sustain this common cause and sense of direction through the many changes which take place from one generation to another?
Consider any great organization — one that has lasted over the years — and I think you will find that it owes its resiliency not to its form of organization or administrative skills, but to the power of whqt we call beliefs and the appeal these beliefs have for its people.
This then is my thesis: I firmly believe that any organization, in order to survive and achieve success, must have a sound set of beliefs on which it premises all its policies and actions. Next, I believe that the most important single factor in corporate success is faithful adherence to those beliefs. And, finally, I believe if an organization is to meet the challenge of a changing world, it must be prepared to change everything about itself except those beliefs as it moves through corporate life.
In other words, the basic philosophy, spirit, and drive of an organization have far more to do with its relative achievements than do technological or economic resources, organizational structure, innovation, and timing. All of these things weigh heavily in success. But they are, I think, transcended by how strongly the people in the organization believe in its basic precepts and how faithfully they carry them out. (Cited in In Search of Excellence, 280.)
by Matt Perman
Malcolm Gladwell reviews Chris Anderson’s new book Free: The Future of a Radical Price. (Chris Anderson is the editor of Wired and the author of the 2006 best-seller The Long Tail: Why the Future of Business is Selling Less of More.)
(HT: JT)
by Matt Perman
Also in the latest Gallup Management Journal is an interview with Roy Spence called Your Company’s Purpose Matters Now. Its point is that “in this rough economic climate, it’s more critical than ever that you and your customers know why your company is in business.”
Here are a few excerpts:
Purpose is not just a crucial differentiator; it’s the strategic structure that pulls companies through the worst of times. Companies should determine their purpose — “a definitive statement about the difference you are trying to make in the world,” Spence says — then craft their leadership, management, operations, strategy, and tactics to further that purpose. What’s more, a purpose-based approach simplifies many difficult decisions and makes an uncertain future easier to navigate. …
While everyone in corporate America is cutting costs and trying to stimulate new revenues, organizations that have a clear purpose won’t be looking for silver bullets or grasping at straws or just cutting cost with no clear focus. Instead, they will have more clarity in their cuts and more certainty on how to stimulate revenues. For example, though Wal-Mart and Southwest Airlines are going through this economic Armageddon like everyone else, they know that all cuts in cost must translate into lower prices so people can live better or into lower airfares so more people can go and see and do things. These are not just cuts for their own sake.
The article has a helpful illustration from Southwest Airlines of the centrality of purpose to creating real value for people.