Technology Acceleration
Good-to-great organizations think differently than mediocre organizations about technology and technological change. They avoid the fads and bandwagons that typically arise from new technology, instead becoming pioneers in the application of carefully selected technologies.
When used correctly, technology becomes an accelerator of momentum, not a creator of it.
Find the Right Technologies
Good-to-great companies never began their transitions with pioneering technology, for the simple reason that you cannot make good use of technology until you know which technologies are relevant — the ones that link directly to the three intersecting circles of the
Hedgehog Concept. Examples of this approach abound in the list of good-to-great companies:
● Circuit City pioneered the application of sophisticated point-of-sale and inventory-tracking technologies, both of which were linked to the concept of being the “McDonald’s” of big-ticket retailing, able to operate a geographically dispersed system with great consistency.
● Gillette pioneered the application of sophisticated manufacturing technology for making billions of high tolerance products at low cost with fantastic consistency. The company protects its manufacturing technology secrets with the same fanaticism that Coca-Cola protects its cola formula.
● Philip Morris pioneered the application of both packaging and manufacturing technology, including the technology to make flip-top boxes — the first tobacco industry packaging innovation in twenty years. The company also was the first to use computer-based manufacturing, making an enormous investment in a manufacturing center to experiment with, test and refine advanced manufacturing and quality techniques.
Don’t Overreact to New Technology
How a company reacts to technological change is a good indicator of its inner drive for greatness versus mediocrity. Leaders of good-to-great companies respond with thoughtfulness and creativity, driven by a compulsion to turn unrealized potential into results. They do not
take reactionary measures, defining strategy in response to what others are doing. They act in terms of what they want to create, and how to improve their companies, relative to an absolute standard of excellence. Mediocre companies, on the other hand, react and lurch about, motivated chiefly by the fear of what they don’t understand — a fear of watching others hit it big while they’re left behind. Never was there a better example of this difference than during the technology bubble of the late 1990s, when mediocre companies moved from one technological scheme to the next, always reacting, never pioneering. The great companies
acted with calm equanimity, taking quiet, deliberate steps forward, with great discipline. Those organizations that stay true to their fundamentals and maintain their balance will accumulate the momentum required to break through; those that do not will spiral downward or remain mediocre. ■
BUILDUP AND BREAKTHROUGH
The Flywheel and The Doom Loop
Good-to-great transformations often look like dramatic, revolutionary events to those observing from the outside, but they feel like organic, cumulative processes to
people on the inside. The confusion of end outcomes (dramatic results) with process (organic and cumulative) skews our perception of what really works over the long haul. Those companies had no name for their transformations; there was no launch event, no tag line, no programmatic feel whatsoever. There was, in other words, no miracle moment in the transformation of each company from good to great. Each went through a quiet, deliberate process of figuring out what needed to be done to create the best future results, then they simply took those steps, one by one over time, until they hit their breakthrough moments.
The Flywheel Effect
Their successes can be seen in the following illustration: Imagine an enormous, heavy flywheel — a massive disc mounted horizontally on an axle, measuring 30 feet in diameter, two feet in thickness and 5,000 pounds in weight. In order to get the flywheel moving, you
must push it. Its progress is slow; your consistent efforts may only move it a few inches at first. Over time, however, it becomes easier to move the flywheel, and it rotates with increasing ease, carried along by its momentum. The breakthrough comes when the wheel’s
own heavy weight does the bulk of the work for you, with an almost unstoppable force.
Each of the good-to-great companies experienced the flywheel effect in their transformations. The first efforts in each transformation were almost imperceptible. Yet, over time, with consistent, disciplined actions propelling it forward, each company was able to build on its momentum and make the transformation — a buildup that led to a breakthrough. The momentum they built was then able to sustain their success over time. These companies understood a simple truth: Tremendous power exists in the fact of continued improvement and the delivery of results. Point to tangible accomplishments — however incremental at first — and show how those steps fit into the context of an overall concept that will work. When this is done in such a way that people see and feel the buildup of momentum, they will line up with enthusiasm. This is the real flywheel effect. When a leader lets the flywheel do the talking, he or she does not need to fervently communicate the organization’s goals — people can just extrapolate from the momentum of the flywheel for themselves. As people decide among themselves to turn the fact of potential into the fact of results, the goal almost sets itself. People want to be part of a winning team, producing visible, tangible results.
The Doom Loop
Other companies exhibited very different patterns. Instead of a quiet, deliberate process of figuring out what needed to be done, then doing it, these companies frequently launched new programs — often loudly, with the aim of “motivating the troops” — only to see those
programs fail to produce sustained results. They pushed the flywheel in one direction, stopped, changed course and pushed it in a new direction, a process they repeated continually. After years of lurching back and forth, these companies failed to build sustained momentum
and fell into what could be termed the doom loop.
Are You on the Flywheel or in the Doom Loop?
How can you tell if your organization is on the flywheel, or in the doom loop? Consider the following: You’re on the flywheel if you—
● Follow a pattern of buildup, leading to breakthrough.
● Confront the brutal facts to see what steps must be taken to build momentum.
● Attain consistency with a clear Hedgehog Concept, staying within the three circles.
● Follow the pattern of disciplined people, thought and action.
● Harness appropriate technologies to your Hedgehog Concept, to accelerate momentum.
● Spend little energy trying to motivate or align people; the momentum of the flywheel is infectious.
● Maintain consistency over time. You’re in the doom loop if you—
● Skip buildup and jump right into breakthrough.
● Implement big programs, radical change efforts, dramatic revolutions and chronic restructuring.
● Embrace fads and engage in management hoopla, rather than confront the brutal facts.
● Demonstrate chronic inconsistency, lurching back and forth and straying outside the three circles.
● Jump right into action, without disciplined thought, or first getting the right people on the bus.
● Spend a lot of energy trying to align and motivate people, rallying them around new visions.
● Sell the future to compensate for lack of results in the present. ■