Jim Collins to CEOs: Lose the Charisma in Sg Online Casino



The Built to Last author’s new book extols the vast transformational power of the really dull executive.


As companies like Cisco (CSCO) and Yahoo (YHOO) precipitously fall out of fashion, management theorists have set out to find the new avatars of economic prowess. This time around, sexy is out, dowdy is in.


Take the 11 companies examined in Good to Great: Why Some Companies Make the Leap … and Others Don’t, by Jim Collins, co-author of the blockbuster Built to Last. His frumpy crew of new business paragons includes Gillette (G), Kimberly-Clark (KMB), Pitney Bowes (PBI), and Walgreens (WAG). Collins retraces their metamorphoses from mediocre to stellar, as measured in stock performance, and contrasts their progress with the performance of similar companies that haven’t produced such impressive stock results. (For details on how the companies were chosen, see “Making the Good-to-Great Grade,” on the next page.)


Collins doesn’t want for intensity; total immersion is his style. Good to Great, due out in October from Harper Books, was five years in the making and involved 21 researchers. (Collins calls them “Chimps.” He means it affectionately.) It took six months just to identify the “good to great” companies. Then Collins and his Chimps interviewed executives, sifted through press clippings, and methodically identified distinct patterns of success and failure.


Let’s pause here to acknowledge that, yes, Collins is a management guru, and as you may have read elsewhere in this issue, gurudom is fraught with peril. But the years of work that went into Good to Great yields some provocative and controversial insights. Such as: Charisma is a liability — something to be overcome, like a speech impediment. Executive compensation and company performance are not linked. And — brace yourself — technology has nearly zilch to do with sparking a company’s transformation from run-of-the-mill to top-of-the-hill.


So what does it take to go from good to great? One of the keys is what Collins calls the “Level 5” leader. This person, the CEO or top executive, tends to be a selfless individual who attracts like-minded folks and gets them to work thoughtfully toward a set objective. The model here is Abe Lincoln — stoic, iron-willed, and skilled in the art of moral suasion. The foil is a leader who lusts for the limelight and spends more time polishing a book proposal than refining corporate strategy. (Think Al Dunlap, former CEO of Sunbeam.) More about Sg Online Casino


Under the guidance of this modest but determined leader, a company must come to terms with three tough questions: What can it be the best at? What drives its economic engine? And what are its people passionate about? That’s roughly the pattern Darwin E. Smith followed when he became CEO of Kimberly-Clark in 1971. At the time, the company was a laggard. But during his 20-year tenure, Smith, who had been the mild-mannered in-house corporate lawyer, provided shareholders with cumulative returns 4.1 times the rise in the general market — far outstripping rival Scott Paper. Smith’s daring, company-redefining move came early on when he sold Kimberly-Clark’s beloved mills, abandoning the coated-paper business for investments in consumer products like Huggies and Kleenex.


The Smith parable of corporate rebirth replays itself in various forms throughout the book. Collins finds that corporations can reconstitute themselves as long as they have the right people and values. That idea seems simple, but it is at odds with theories touted by thinkers like Harvard Business School professor Clayton Christensen. He maintains that some corporate cultures simply cannot meet the challenges posed by innovation and must respond to threats from new technologies by building outside ventures. One of Christensen’s scariest examples is Digital Equipment, which squandered the opportunities presented by the PC revolution even though it was well equipped to build cheap PCs. But Christensen’s theory, taken almost as gospel in the late 1990s, often hasn’t panned out. Exhibit A: Walmart.com, a separate, venture-backed company that is now being yanked back under Wal-Mart’s (WMT) corporate roof.


Collins reconciles his work with Christensen’s this way: “We’ve known that companies couldn’t change, but we never knew why,” he says. “This book gives us some answers.” In Digital’s case, for instance, Collins says that Ken Olson, the former CEO, wasn’t the sort of Level 5 leader needed to effect dramatic change and make it work. “Change is really difficult,” Collins says. “But we’ve shown that it’s simply not impossible.”


Collins does butt up against some practical limitations, however. After all, how does one get an accurate assessment of a company’s success if its leaders are too modest to talk about it frankly? Collins and his merry band of Chimps often heard executives say things like “I guess we were just lucky” instead of delving into what really drove success. And there’s a sense that in many of these companies the essence of success can never be truly known — nor does it always last. Gillette, for example, had a great run under CEO Colman Mockler, but things fell apart soon after his untimely death.


Still, it’s true that great leaders aren’t always what we expect them to be. Corporate boards are often seduced by celebrity executives, opting to pass over the taciturn standouts in their ranks. That can lead to trouble: Consider the luck Kodak (EK) had with George Fisher or Hewlett-Packard (HP) with Carly Fiorina or Sunbeam (SOCNQ) with Al Dunlap. These companies were looking for what they thought a leader should be; they weren’t asking hard questions. Collins reminds us that great leaders are everywhere among us, easy to overlook and wonderfully serendipitous to find. Keep your eyes peeled.



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