Page 6 - Volume 40-Number 02 02-28-17

In the words of Jim Collins: “Any journey from good to great requires… rigorously tracking
your trajectory on the output variables, and then driving yourself to even higher levels of
performance and impact. No matter how much you have achieved, you will always be merely
good compared to what you can become. Greatness is an inherently dynamic process, not
an end point. The moment you think of yourself as great, your slide toward mediocrity will have
already begun.”

To achieve greatness businesses have to “confront the brutal facts” of their situation. He calls
this the “Stockdale Paradox,” named after Admiral James Stockdale, who spent several years
as a prisoner of war in Vietnam but never wavered in his faith that he would get out SOMEDAY.
The Stockdale Paradox is to “stoically accept the brutal facts of reality, while maintaining an
unwavering faith in the endgame, and a commitment to prevail as a great company despite
the difficult current situation you may find yourself in.”

Each great business or organization needs to identity its “Hedgehog Concept:” What can
we be the best at, with a vibrant economic or resource engine, and for which we have
unbounded passion? According to Collins, hedgehogs simplify a complex world into a “single
organizing idea, a basic principle or concept that unifies and guides everything.” Hedgehogs
see what is essential, and ignore the rest: Think of Freud and the unconscious, Darwin and
natural selection, Marx and class struggle, Einstein and relativity, Adam Smith and division of
labor (all “took a complex world, and simplified it”).

Hedgehog Concept flows from deep understanding about the intersection of the following
three circles: At what you can be the best in the world—region, state, city, etc., and equally
important, at what you cannot be the best in the world? Worth remembering that just because
something is a “core competence/business” (and/or you’ve been doing it for years) does not
necessarily mean you can be the best in the world at it.

Another question Collins poses is “what drives your economic/resource engine?” This
requires piercing insight into how to most effectively generate sustained and robust cash flow
and profitability; “How can we develop a sustainable resource engine to deliver superior
performance relative to our mission?” How does focusing on what we can do best tie directly
to our resource engine, and how does our resource engine directly reinforce what we can do
best?

Very important to understand your Passion (and the passion of all those committed to your
theatre). Can’t manufacture or motivate people to feel passion; can only discover what
ignites your passion.

Once you’ve identified your Hedgehog Concept, they key is to have the relentless discipline
to say “no thank you” to opportunities that fail the hedgehog test. Good-to-Great companies
essentially have this mantra: “Anything that does not fit with our Hedgehog Concept, we
will not do. We will not launch unrelated businesses. We will not make unrelated acquisitions.
We will not do unrelated joint ventures. If it doesn’t fit, we don’t do it. Period.” It takes great
discipline to turn down big opportunities, and according to Collins “stop doing” lists are more
important than “to do” lists.

Some other fun/helpful insights from Jim Collins:
1. Level 5 Leaders: Leaders with “extreme personal humility--but NOT lacking confidence,
ambition--with intense professional will.” Such leaders channel ego needs away from
themselves and into the larger goal of building a great company.

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