One book that Ken Bado, the MarkLogic President and CEO, likes to talk about is Good to Great, (subtitled why some companies make the leap… and others don’t), a result of many man-years of meticulous research.
There’s plenty to think about in this book. It talks about the qualities of a “level 5” executive: the best have a paradoxical mixture of personal humility and iron will. It talks about getting the right people on the bus, and only then deciding where the bus is going. It talks about a culture where brutal facts surfacing is the normal and expected behavior, resulting in a culture of both discipline and faith in the future. Perhaps the key point of the book is the venn diagram that depicts “great” companies as focusing on the intersection of passion, what they can be the best at in the world, and what drives their economic engine.
The structure of the book is based on 11 key companies that passed several rigorous metrics, including an at-least-15-year period of good financial performance, followed by a turning point and an at-least-15-year period of greatness, that is, returns well above the general and industry markets. (Perhaps unfairly, companies that were in the ‘great’ bucket continuously, with no periods of merely ‘good’ performance, were excluded).
Two of the companies in the list: Fannie Mae and Wells Fargo, raised the eyebrows of this fresh reader. Both of them have been prominently in the headlines in the last few years, and not in a good way. In particular the depictions of Wells Fargo struggling with deregulation in the 80s seem galling to read with the hindsight of going through the Great Recession. Circuit City, another of the good-to-great companies, declared bankruptcy in 2009. The book itself cautions about tough times at Gillette and Nucor in the Epilogue section.
I bring this out not to be negative, but to emphasize that this is a soft discipline, not science. If there are companies that have consistently beat the market from the 80s until today with no serious hiccups, that would be truly remarkable. But there’s lots of hidden variables, the system is chaotic, and mere financial numbers are too shallow a measure by which to measure greatness. A company that can truly follow these principles will almost certainly do better than one that doesn’t. Just look at Yahoo for a negative example.
In particular, I’m thinking the three circles are a good way to approach life, though I sincerely hope an individual’s third circle isn’t about optimizing finances. What can you be the best in the world at, have pasion for, and drive your personal satisfaction engine? Maybe that would be a good area to focus your limited resources on. -m