Books like “Good to Great” clearly demonstrate the correlation between good business practices and organizational success through intense research and actual statistics. For example, Jim Collins talks about humble and strong leadership, getting the right employees and having the correct focus in terms of business strategy.
The “Good to Great” book used information from a set of companies that had made the transition from a “good” company to a “great” company, producing multi-fold increase in revenue, share price and profits. These companies were compared to other companies in their industries who were not able to make the transition. This methodology was also used in the previous book by Jim Collins, namely “Built to Last”.
For quite some time, I have felt a bit uneasy at the statistics relating to the comparison companies in both the studies. I don’t disagree with any findings – I wouldn’t even have the data to agree or disagree with them. But there are some question that arise from thinking carefully through the conclusions of the authors.
The comparison companies only did worse than the Good-to-Great (GTG) companies, but compared to the general market, they performed reasonably well. None of the practices that were followed in the GTG companies were followed in the comparison companies – that was the whole point of the study, anyways.
Does it follow logically that you may not be as successful as you could be, but you could still get along without following the guidelines? Does that imply therefore that you could run a company autocratically treating customers and employees badly and still make reasonable sums of money? Secondly, if the market analysis proved the opposite of the thesis put forward by Collins, would that justify bad behavior?
In my view, trying to correlate good behavior with good outcomes is a slippery slope path. This is similar to the tactics used by certain religious leaders – do good and you will be rewarded. The problem is: what happens if you are not rewarded? What happens if you are on your best behavior and pray every day and still God doesn’t do anything for you? Do you decide to abandon God then? Are your good deeds and prayers just a manifestation of your selfishness? How really sincere are you?
The right behavior come from the right set of values. Do you truly take pride in your work, product and service? Do you really love your employees and want them to have a great workplace? Do you want customers to enjoy using your product? Do it because that is what you want, not because it will translate into money, because then you corrupt your desire. To go back to the religious example, pray or do good because you love God and not because of some crummy materialistic or other-world reward.
As a last word, I don’t really object to such books. There are business leaders whose only desire in the business world is profits and their own bank balance. And there are millions of employees who have to work under them. If a few of them read this book and start developing quality products, treat their employees better and service their customers well, maybe that serves the purpose.