Being a Scale Up certified coach I often refer my clients to Verne Harnish’s book Scaling Up, for insights and great business tools. In the Strategy section of the book he describes creating Strategic Thinking Teams (the council) and states: “Grab a copy of Collins’ Good to Great: Why Some Companies Make the Leap…And Others Don’t and read the three most important pages ever written in business – Pages 114 to 116”
In these pages of Good to Great Jim Collins starts by going through the “Hedgehog Concept” and the need for a company to deeply understand 1) What the company can (and, equally important, cannot) be good at; 2) What drives the company’s economic engine (profit per X); and 3) What the company is deeply passionate about (great companies do those things that ignite passion). This process is illustrated as three intersecting circles with the great companies executing at that sweet spot in the middle.
Collins goes on to describe the characteristics of the council in the three pages (who should be included, cadence for meetings, rules of conduct) but the lead in makes a critical point: any discussions on strategy should involve an iterative process guided by the three circles. Ask questions, dialogue and debate, implement decisions, and perform autopsies and analysis on what worked and what didn’t work all through the lens of what the company can be best in the world at, how to generate cash flow and profitability, and what the company stands for (the passion).
The guidance on the characteristics of the council is an excellent reminder that meeting regularly with the people who understand your business and/or industry is a fundamental requirement of success. The idea that the three circles should be a guide for questions, debate, and analysis is extremely useful.