First "Who" then "What"

There are going to be times when we can't wait for somebody.
Now, you're either on the bus or off the bus.

                     - K EN KESEY,

                       from The Electric Kool-Aid Acid Test

                       by Tom Wolfe 1

Building up great companies passed through these stages. Initial buildup is then followed by breakthrough:

         1. Development of Level 5 leader
         2. “First Who” then “What”
         3. Confront the Brutal Facts
         4.“The Hedgehog Concept”
         5. Culture of Discipline
         6. Technology as accelerator


The findings from the research that has been conducted by Jim Collins and his team for the "Good To Great" book is as follows:

The executives who ignited the transformations from good to great did not first figure out where to drive the bus and then get people to take it there. No, they first got the right people on the bus (and the wrong people off the bus) and then figured out where to drive it. They said, in essence, "Look, I don't 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 we'll figure out how to take it someplace great."

The good-to-great leaders understood three simple truths. First, if you begin with "who," rather than "what," you can more easily adapt to a changing world. If people join the bus primarily because of where it is going, what happens if you get ten miles down the road and you need to change direction? You've got a problem. But if people are on the bus because of who else is on the bus, then it's much easier to change direction: "Hey, I got on this bus because of who else is on it; if we need to change direction to be more successful, fine with me." Second, if you have the right people on the bus, the problem of how to motivate and manage people largely goes away. The right people don't need to be tightly managed or fired up; they will be self-motivated by the inner drive to produce the best results and to be part of creating something great. Third, if you have the wrong people, it doesn't matter whether you discover the right direction; you still won't have a great company. Great vision without great people is irrelevant.

LEVEL 5 + MANAGEMENT TEAM (Good-to-Great Companies)	A "GENIUS W IT H A THOUSAND HELPERS" (Comparison Companies)
FIRST WHO Get the right people on the bus. Build a superior executive team. THEN WHAT Once you have the right people in place, figure out the best path to greatness.	FIRST WHAT Set a vision for where to drive the bus. Develop a road map for driving the bus. THEN WHO Enlist a crew of highly capable "helpers" to make the vision happen.

Paradoxical Values

Having paradoxical values in a person is not common. For those who manage to equip themselves with these paradoxical (good) values they will will be extra ordinary persons and will be capable to lead others.

The saying of one Caliphate in Islam:

To be the leader you have to be:

• Firm but not Hard
• Soft but not Weak
• Generous but not Extravagant
• Careful in spending but not Stingy

The real issue....

Yes. Now come the real issue.
How to become Level 5 leader?

The main problem here is the two paradoxical values that are available in Level 5 leader. It is usually difficult to find person to have paradoxical values...opposing each other. Usually the values that are available in each person are almost similar. In this study, the value of Level 5 leader is both Personal Humility AND Professional Will. In normal circumstances the person is either having personal humility but lacking of professional will. Whereas there are another group of people who have professional will, charismatic and strong but are lacking the personal humility component. Both of these two values are critical in becoming the real leader to bring greatness to the organization.

About me.....huh..

I just realized where I was.....now struggling hard to rectify and improve (with difficulty.....of course)

I just realized that I have been giving more emphasis on the personal humility component for so much and so long and neglecting the professional will. Probably 5-8 years...now repairing whatever damage that has happened and rectifying the situation. It is hoped that the conditions will be better.

What is the outcome when the focus is more on the personal humility and neglecting the professional will:

• The organization may be moving in the auto pilot mode. No clear and specific direction.
• The main component in the business is overlooked. Giving priority to the less important issues.
• Lost of respect from the direct subordinates. People may have creative ideas to run the organization without consulting (avoiding from consulting). On a long run people may think they know more than you......and after some time, try to challenge you.....
  
• Subconciously, the decision in the organization is not based on the business reason anymore...it can be due to many other unrelated reasons. i.e. to help people (with the sacrifice of the organization), personal or group related etc.
• No self development of other team members.

There are some more....but probably better not to mention here. Anyway, we are improving.

I will discuss on the effect of focusing on the professional will and neglecting the personal humility in the subsequent posting. Actually this group is more common.

Development of level 5 leaders

The discussion here is about the contents of the book "Good to Great by Jim Collins".

Development of level 5 leaders.

Various level in leadership is explained in this diagram. The level 5 leader is the one who can lead his organization to become great and remain great.

Level 5 leader builds enduring greatness through a paradoxical blend of personal humility and professional will.

According to the book: "Level 5 leaders channel their ego needs away from themselves and into the larger goal of building a great company. It's not that Level 5 leaders have no ego or seld-interest. Indeed, they are incredibly ambitious - but their ambition is first and foremost for the institution, not themselves."

                                           

Level 5 leaders are a study in duality: modest and willful, humble and fearless.

HUMILITY +  WILL = LEVEL 5

Key trait of Level 5 leaders: ambition first and foremost for the company and concern for its success rather than for one's own riches and personal renown. Level 5 leaders want to see the company even more successful in the next generation, comfortable with the idea that most people won't even know that the roots of that success trace back to their efforts. As one Level 5 leader said, "I want to look out from my porch at one of the great companies in the world someday and be able to say, 'I used to work there.' "

         

Summary: The Two Sides of Level 5 Leadership

Professional Will	Personal Humility
Creates superb results, a clear catalyst in the transition from good to great.	Demonstrates a compelling modesty, shunning public adulation; never boastful.
Demonstrates an unwavering resolve to do whatever must be done to produce the best long-term results, no matter how difficult.	Acts with quiet, calm determination; relies principally on inspired standards, not inspiring charisma, to motivate.
Sets the standard of building an enduring great company; will settle for nothing less.	Channels ambition into the company, not the self; sets up successors for even greater success in the next generation.
Looks in the mirror, not out the window, to apportion responsibility for poor results, never blaming other people, external factors, or bad luck.	Looks out the window, not in the mirror, to apportion credit for the success of the company - to other people, external factors, and good luck.

Extract from "Good To Great"

Building up great companies passed through these stages. Initial buildup is then followed by breakthrough:

         1. Development of Level 5 leader
         2. “First Who” then “What”
         3. Confront the Brutal Facts
         4.“The Hedgehog Concept”
         5. Culture of Discipline
         6. Technology as accelerator


1. Development of Level 5 leader

The Level 5 Leaders have a combination of strong will and personal humility. The Level 5 Leader demonstrates an unwavering resolve and sets the standard for building great companies. In balance, he demonstrates a compelling modesty, relies on inspired standards and channels ambition into the company, and not into the self. The Level 5 Leader “looks in the mirror, not out the window” when focusing on responsibility and does just the opposite when apportioning credit for success of the company.

Basically Level 5 leaders will have two paradoxical qualities:


(a) Personal Humility and Humbleness
(b) Strong Professional Will

Level 5 Leaders are not charismatic, media types. They are humble, self-effacing and more concerned about the prosperity of the company than their individual success.

2. “First Who” then “What”

Priority is given to “choosing the right person into the bus (after removing the wrong person), then assigning the right person to the right seat. Following that the team will decide where to go”.  The “right” people is the most important asset.

Once we have the right people on the bus, the problem of how to motivate and manage people largely goes away. The right people don’t need to be tightly managed or fired up; they will be self-motivated by the inner drive to produce the best results and to be part of creating something great.

3. Confront the Brutal Facts

Priority is to be given to face the painful fact directly. Not to run away or trying to avoid the reality.

We have to maintain unwavering faith that we can and will prevail in the end, regardless of the difficulties that we are facing now, and at the same time we must have the discipline to confront the most brutal facts of our current reality – whatever that might be.

4. The Hedgehog Concept (Simplicity within the Three Circles)

This is a simple crystalline concept that flows from deep understanding about the intersection of the following three circles:


1. What we can be best in the world at,
2. What drives our economic engine, and
3. What we can be passionate about.

A critical point in the “hedgehog concept is not a goal to be the best; it’s a strategy to be the best, an intention to be the best, a plan to be the best. It is an understanding of what we can be the best at. The distinction is absolutely critical”.

5. Culture of Discipline

A Culture of Discipline – Having a disciplined culture is the opposite of having a controlled one. There is no need for hierarchy, bureaucracy, or excessive control. There is a blend between a culture of discipline with the ethic of entrepreneurship. This discipline, responsibility or integrity cannot come through control. It must come through agreement. There must be disciplined people who engage in disciplined thought and then take disciplined action. One of the most important disciplines is staying loyal to the hedgehog concept.

6. Technology as accelerator

Technology is used to accelerate the available growth in the right direction.

The critical factors in doing business

The greatest mistake that entrepreneurs make (including me) is assuming that having a great product is enough to get the customers to buy. They fail to make enough effort and money to market, advertise and promote their products. In the end their business will fail because nobody ever heard about their products or were not convinced that their product/ service was the best.

There are six profit variables that determine the profits in any business:

1. Leads
Leads (also known as prospects) are the potential customers that your business is able to attract. Whenever someone contacts you, your staffs, your office, walks into your shops, visits your website, that person becomes a potential customer or a lead. The more the number of the leads you have the higher will be the chances that some of them will actually buy some of your products or use your services.

2. Conversion Rate
This is the rate on how many of the leads is converted to become customers. Profitable businesses are those who are capable to use various strategies to enable them to have the highest possible conversion rate.

Leads x Conversion Rate = Number of Customers

3. Average Dollar Purchase
This is the average amount that each customer spends with your business. Usually in every business, there are a lot of products with different prices for each of them. Some customer purchase some low-prices product while some will purchase the high-prices products. Making effort to make the customers to purchase the higer prices products will increase further your profit.

4. Number of Repeat Purchase
The mistake that many businesses do is to assume that all customers will come back to make repeat purchasing because they are happy and satisfied with their products/ services. Usually this is not the real things that happen. Efforts have to be done to bring strong loyalty to your customers.

5. Number of referrals

6. Net Profit Margin

Just came back

Just came back from a long leave. Hoping to continue writing in this blog. Many things happen lately. I have to face it strongly. There is no alternative to it. I need to face it head on. Otherwise many people will suffer. This is the side-effects of being a leader.

Latest book - "Good to Great"

Now I am reading the book with a title "Good To Great - Why Some Companies Make the Leap.... and Others Don't" by Jim Collins. Such a wonderful book. Full of useful contents. I read every words and sentences, not to miss a single one. It is a comprehensive book and covers the issues that I used to wonder and think about for quite some time.

This book is about the findings of the 5 year research which was done by the author and his  team. They started by identifying companies that made the leap from good results to great results and sustained those results for at least 15 years. They compared these companies to a carefully selected control group of comparison companies that failed to make the leap, or they did but failed to sustain it. They then compared the "good to great" companies to the comparison companies to discover the essential and distinguishing factors at work. The result of their research is very astonishing. Unbelievable.

The author mentioned (on page 5):
"Our five-year quest yielded many insights, a number of them surprising and quite contrary to conventional wisdom, but one giant conclusion stands above the other: We believe that almost any organization can substantially improve its stature and performance, perhaps even become great, if it conscientiously applies the framework of ideas we've uncovered" .

I will try to update the contents of the books together with my personal reflections from time to time.

Why Business?

Why I like to take business as the topic of my blog? Why business and not something else?

(i) This is my favorite topic. I enjoy reading, discussing, writing and thinking about this topic. But please don't misunderstand me! It is not about money. It is about business, management, leadership. Money is only the side effects of it. It can be the side effects of other activities also.

(ii) Business is the actual tool in determining other values. i.e leadership, management, team work etc. because in business we can easily measure it. We can determine the success and failure easily with the predetermined values and standards. For example if the leadership is poor, it would be difficult to find good results in the business environment. The result can be seen in dollar and cents. Nobody can hide it.
In other fields, a poor leader can still survive and perform his/her poor leadership skill for a long time before it can be realized (with full confidence). It takes longer time.
So, in business, it is a good training ground for us who wish to learn about leadership, management skills, accounting, finance, team building skills, motivational skills etc.

Welcoming notes

Dear friends! Welcome! This is just my personal blog. I have setup my own procedure for me in managing this blog. (1) I will write anything that come to my mind without worrying on its grammar or spelling errors. This is because I do not want that to inhibit the flow of my idea. If any errors are found later, I may edit it later. (2) This is my personal blog. ...that I allow others to see. All are invited to give their comments. However those who follow what is written, please do not blame me if the result does not materialize according to what is expected....