In discussing good-to-great transformations, you say that they never happen "in one fell swoop. There was no single defining action, no grand program, no one killer innovation, no solitary lucky break, no miracle moment." How does this concept apply to marketing?
The process of becoming great really has to do with disciplined people who engage in disciplined thought and disciplined action. Marketing at its very best is about penetrating understanding of positioning, market conditions, products, etc., but essentially it is about that disciplined thought piece translated into disciplined action.
Always looking for the one big thing, the one big breakthrough, the one big idea, is contrary to what we found: To build a truly great company, it's decision upon decision, action upon action, day upon day, month upon month. ... It's cumulative momentum and no one decision defines a great company.
So is there a place for "big ideas" in your theoretical landscape?
It's not clear that big ideas are a differentiating principle. If you happen to have a really big breakthrough somewhere along the way, that's great. But what really matters is how well you make good on that idea systematically over time.
For example, Disney's moving into theme parks. That's a big idea. When Walt [Disney] made that decision, that did not make Disney great-that was one decision after thousands of decisions before it and thousands after it. It was the consistent, disciplined execution against that idea that made it work.
I think we would all agree that Wal-Mart, the way Sam [Walton] brought it to the world, was a big idea. (The essential insight: rural discount retailing where you use your increasing power to lower costs for the benefit of the customer.) But Sam copied many practices from other companies, and he wasn't the first to come up with that particular big idea. Ames Department Stores had the idea in 1958 and Sam got the idea in 1962. So both companies had the same idea; one was on the East Coast, Ames, and one was in the South-Wal-Mart. Ames went bankrupt. Sam learned from them, and yet who became the company [that succeeded]? Wal-Mart.
They were two companies with the exact same big idea and yet the one that was behind it ended up winning because what they did was execute against the idea brilliantly over such a long period of time.
The "hedgehog concept"/staying within the three circles and a big idea: one and the same?
The difference between the hedgehog and the fox: The hedgehog knows one thing; the fox knows many little things. The hedgehog tends to understand one big idea and do it well over a long period of time. They don't have to be the only ones with the idea, but they have to have a deep understanding of the idea.
Walgreens is the most convenient drugstore of steadily increasing profit per customer visit. It's [a case of] the big idea that meets three tests: one, that you are truly, deeply passionate about it. Two, it is something that you truly can be the best in the world at. And three, it has a powerful economic engine. And when you put these three things together, those are the three dimensions that your big concept has to fit.
By what process do you think the best ideas are brought to life?
Get great people, have a series of empirical experiments, then argue and debate with that council to test what the experiments are telling you and with that group you gain clarity on what that hedgehog concept means. Then assess the model you've come up with.
One of the biggest things that was a surprise to me was how good-to-great companies started first by getting the right people and then finding the best idea.
How much of big ideas should come from consumers, and how much should come from the marketers?
Over time the question isn't whether it comes from a customer or whether it comes from your own brain. The question is: Does it work? And there are lots of ways to determine if it works. It's an iterative process. It's never just listening to your customers, and its never just throwing something over the wall. Decision, autopsy, debate, discussion.
In your book you mention this concept of Level 5 leaders having no ego or self-interest; they are incredibly ambitious, but their ambition is for their companies, not for themselves. How does this concept translate for executives working to develop big ideas that bring success for their organizations?
The people featured in "Good to Great" were all part of a team. And to make the company great, they were always ambitious for the greater good of the organization and made their area a pocket of greatness. These are the people who were on the teams when the companies made the leap from good to great. They were the functional leaders. Many of them then went on to become CEO.
not always as they appear
"Here's what's important. We've allowed the way transitions look from the outside to drive our perception of what they must feel like to those going through them on the inside. From the outside, they look like dramatic, almost revolutionary breakthroughs. But from the inside, they feel completely different, more like an organic development process."
-From "Good to Great: Why Some Companies Make the Leap ... and Others Don't," by Jim Collins, HarperBusiness