By Graham Starmer, President, Manitoba Chambers of Commerce
The Manitoba Chambers of Commerce (MCC) launched the “Making Manitoba a ‘Have’ Province” initiative in 2007 to get Manitobans thinking about the type of province they wanted Manitoba to be.
We knew inviting people to talk about provincial aspirations would also raise the specter of benchmarks as it makes little sense to set goals if we can’t measure our progress.
As a result, the MCC launched its own in-depth study of benchmarks.
Benchmarking has become quite the industry. Benchmark reports are regularly issued by a wide array of organizations from across the world, from the Conference Board of Canada to the World Economic Forum.
These reports rarely resonate in the public consciousness past the 24-hour news cycle immediately following their release.
They don’t resonate because the public is skeptical, and rightly so. They know a lot of these benchmarks give mixed signals – they look good on the surface but in reality trouble may be approaching. Even running off a cliff can give you a pretty good view; until you start falling.
Perhaps the best evidence that numbers aren’t always as they appear is the popping of the housing bubble (in the U.S. and, to a lesser extent, in Canada) and the recent financial crisis. Turns out a lot of those signs of prosperity (rising profits, rising housing values, growing rates of spending) were hiding some pretty dangerous and unsustainable activity.
Let’s call it the illusion of strength.
It’s an issue that prompted Jim Collins to look at why companies stumble.
Collins is the author of “Good to Great”, one of the most highly regarded business books of all time.
A CEO of a highly successful company sparked Collins’ interest in the illusion of strength. The CEO had approached him during a conference, posing a question that should haunt every CEO, government official, and policy maker:
“When you are at the top of the world, the most powerful nation on Earth, the most successful company in your industry, the best player in your game, your very power and success might cover up the fact that you’re already on the path to decline. So, how do you know?”
How do you know?
By the way, I think this issue applies to any organization, whether they are at the top or not.
Collin’s new book, “How the Mighty Fall and Why Some Companies Never Give In”, outlines his efforts to address this issue, and it comes to some surprising conclusions that confirm the problem with typical benchmarks.
If people had to guess why companies failed or faltered I bet most would say it is because they got lazy, lost ambition, stopped innovating, or stopped being strategic.
The amazing thing about Collins’ study is the companies that got into trouble had developed aggressive strategies. Writes Collins, “… we found tremendous energy – stimulated by ambition, creativity, aggression and/or fear…”
For example, one company that faltered increased its patents from 613 to 1,016 between 1991 and 1995. Another patented 1,933 new compounds from 1996 to 2002 – the most in the industry and 400 ahead of the second place company.
Typical benchmarks would have given these companies the thumbs up, but they were actually paving their road to ruin, or at the very least setting themselves up for tremendous struggles.
Collins says if you really want to know how a company is performing you need to get past the typical numbers associated with high performance. In his quest for a true test he came back to the matrix he developed in “Good to Great”.
Here is Collins’ matrix, and as you read on consider what role these factors play (or could play) in your organization’s success:
Stage 1: Disciplined People
Level 5 Leadership. Level 5 leaders are ambitious first and foremost for the cause, the organization, the work—not themselves—and they have the fierce resolve to do whatever it takes to make good on that ambition. A Level 5 leader displays a paradoxical blend of personal humility and professional will.
First Who … Then What. Those who build great organizations make sure they have the right people on the bus, the wrong people off the bus, and the right people in the key seats before they figure out where to drive the bus. They always think first about “who” and then about what.
Stage 2: Disciplined Thought
Confront the Brutal Facts—the Stockdale Paradox. Retain unwavering faith that you can and will prevail in the end, regardless of the difficulties, and at the same time have the discipline to confront the most brutal facts of your current reality, whatever they might be.
The Hedgehog Concept. Greatness comes about by a series of good decisions consistent with a simple, coherent concept—a “Hedgehog Concept.” The Hedgehog Concept is an operating model that reflects understanding of three intersecting circles: what you can be the best in the world at, what you are deeply passionate about, and what best drives your economic or resource engine.
Stage 3: Disciplined Action
Culture of Discipline. Disciplined people who engage in disciplined thought and who take disciplined action—operating with freedom within a framework of responsibilities—this is the cornerstone of a culture that creates greatness. In a culture of discipline, people do not have “jobs;” they have responsibilities.
The Flywheel. In building greatness, there is no single defining action, no grand program, no one killer innovation, no solitary lucky break, no miracle moment. Rather, the process resembles relentlessly pushing a giant heavy flywheel in one direction, turn upon turn, building momentum until a point of breakthrough, and beyond.
Stage 4: Building Greatness To Last
Clock Building, Not Time Telling. Build an organization that can adapt through multiple generations of leaders; the exact opposite of being built around a single great leader, great idea or specific program. Build catalytic mechanisms to stimulate progress, rather than acting as a charismatic force of personality to drive progress.
Preserve the Core and Stimulate Progress. Adherence to core values combined with a willingness to challenge and change everything except those core values—keeping clear the distinction between “what we stand for” (which should never change) and “how we do things” (which should never stop changing). Great companies have a purpose—a reason for being—that goes far beyond just making money, and they translate this purpose into BHAGs (Big Hairy Audacious Goals) to stimulate progress.
In the MCC’s extensive review of benchmarks no report has made us much sense as a true barometer of success as Collins’ eight principles.
If these principles work for individual companies imagine the strength, the prosperity, the resiliency of an economy that is built on business after business that lives these concepts.
A jurisdiction that celebrates and nurtures these ideas will be in the best position to thrive in a global, highly competitive, knowledge-based economy.
Developing benchmarks that measure our progress towards these principles would be a crucial ‘next step’ in making Manitoba a ‘Have’ province.
Indeed, it would give Manitoba a substantial advantage over all the other jurisdictions that are still struggling to find true measures of success.
*This article originally appeared in the 2010 Annual Magazine of Manitoba Heavy Construction. To access the magazine click here.
To access the website of Manitoba Heavy Construction click here.
To find out more about the Manitoba Chambers of Commerce initiative, “Making Manitoba a ‘Have’ Province”, click here.