Good to Great - but for how long?

The other day when I opened the newspaper and read that Starbucks was closing down 600 stores and shedding 12,000 employees it made me pose the question - “How does a great company get hit so hard?” I understand we are in the midst of an economic downturn and competition continues to grow, but I believe there are some core lessons or insights which can be pulled from this. Starbucks is not the only one though. In Jim Collins’ 2001 book Good to Great he studied 11 companies from 1965-95 which underperformed, transitioned and returned with exceptionally high growth.

However, let’s look at these companies today. Circuit City is in serious financial difficulty. Fannie May, Kimberly Clark, Walgreens, Kroger – all of these companies have done little to continue their transition and stay atop the market in the last decade. The point is that the companies he studied in 2001, have shown that their change was not sustainable. There has been so much change in the last 8 years, that 75% of these companies are slowly vanishing from marketplace prominence or drastically losing their dominate position.

Collins’ suggested that what led these companies from being good to being a great was level 5 leadership which was characterized by humility and drive for success. I agree that these characteristics are essential in leadership. However, I think that there is a key component missing to really understand how companies go from being good to great and sustain that change. This leader is one who will put in mechanisms that will renew and refresh in order to be continually aware of changes around them.

Today it seems everyone wants a quick fix solution – a one-time solution or a silver bullet. Well, there are none! You have to continuously renew where you are constantly adapting to change – because change is always happening.

If we look further at Starbucks, just an example would be how they got into selling books and CD’s when both of those markets are in decline. MP3’s and Kindle are the new wave. I don’t believe that Starbucks assessed the market to adapt to the change that was happening. Many competitors chose to offer free Wi-Fi services knowing this would be a major draw for customers needs.

The question then is “what are the mechanisms and processes” for continual renewal and refreshing? Where do we get our info about future trends and how do we integrate those into our decision making.

The wetware needed for this is creating the space for awareness, reflection and then situations to apply changed behavior. It is the solution for CONTINUED success.