culture of discipline

A ""culture of discipline"" is Jim Collins' description of what ""great"" companies have that makes them great. See good-to-great for an overview of what makes companies great. A disciplined culture is one that is rigorous, not ruthless, with rigor starting at the top.

The disciplines that make an organization great ... performing well beyond the norm, are --

• disciplined people --
  • Level 5 Leadership - Paradoxical blend of personal humility and professional will with incredible ambition first and foremost for the institution, not themselves. If things go well, they give credit to others. If things go poorly, they hold themselves responsible. Practicing the disciplines that follow helps the organization leaders to achieve level 5.
  • First Who - The right people, following the right disciplines, will make an organization great. These are the people who will develop and execute the plans to achieve greatness. Strategy development does not precede getting the right people to carry it out. The right people develop, own, and achieve the right strategy. This is the principle of ""first who, not what.""
  
  
  • Do --
  • get self disciplined people on the bus in the first place
  • when you know you need to make a people change, act.
  • put your best people on your biggest opportunities, not your biggest problems.
  • Don't --
  • try to discipline the wrong people into the right behaviors
  • hire when in doubt...keep looking
  
  
• disciplined thought --
  • Confront the Brutal Facts - Breakthrough results come about by a series of good decisions, diligently executed and accumulated one on top of the other. The tie to leadership: The moment a leader allows himself to become the primary reality people worry about, rather than reality being the primary reality, you have a recipe for mediocrity, or worse.
  • Retain faith that you will prevail in the end, regardless of the difficulties AND at the same time confront the most brutal facts of your current reality, whatever they might be. (Stockdale paradox).
  • Create a climate where truth is heard --
  1. lead with questions, not answers
  2. engage in dialog and debate, not coercion
  3. conduct autopsies without blame
  4. build ""red flag"" mechanisms - to turn information that is critical to competitive advantage into information that cannot be ignored.
  • Adopt a Hedgehog Concept --
    Hedgehogs simplify a complex world into a single organizing idea, a basic principle or concept that unifies and guides everything. This reduces a complex world, with all of its challenges and dilemmas to simple ideas. Anything that does not relate to the hedgehog idea holds no relevance. This approach keeps the organization focused on what it can best do to achieve greatness, a sustainable competitive advantage. Motto, see what is essential, and ignore the rest.
    A Hedgehog Concept is not a goal to be the best, a strategy to be the best, an intention to be the best, or a plan to be the best. It is an understanding of what you can be the best at. Focusing solely on what you can potentially do better than any other organization is the only path to greatness.
    Building a sound economic engine requires profound insight into the economics of the organization. This insight should be expressed in terms of the one economic denominator that is most critical to the organization. In a business, this is expressed as ""profit per __"". The search for this denominator forces a deeper understanding of the key drivers of the economic engine.
  • Form a council --
    The council exists to gain understanding about important issues facing the organization. It is made up of the leading executives of the organization. It is a standing body that exercises the principles and disciplines of a great company. They are the people at the core of the Hedgehog Concept. Guided by the three circles (strategic focus), they ask questions, dialogue and debate, make executive decisions, and perform autopsies and analysis, in an ongoing iterative process.
  
  
  • Do --
  • confront the brutal facts of reality, while
  • retaining resolute faith that you can and will create a path to greatness
  • persist in the search for understanding until you get your strategic focus (knowing what you are really good at, what you get paid well for doing, and what you love to do)
  • seek continual improvement
  • Don't --
  • Lose focus
  • Get distracted by growth opportunities outside your strategic focus
  
  
• disciplined action --
  • Freedom and responsibility within the framework of a highly developed system...manage the system, not the people.
  1. Build a culture around the idea of freedom and responsibility, within a framework.
  2. Fill that culture with self-disciplined people who are willing to go to the extreme lengths to fulfill their responsibilities. The will ""rinse their cottage cheese.""
  3. Don't confuse a culture of discipline with a tyrannical disciplinarian.
  4. Adhere with great consistency to the Hedgehog Concept, exercising an almost religious focus on the intersection of the three circles. Equally important, create a ""stop doing list"" and systematically unplug anything extraneous.
  5. We will not launch unrelated businesses, make unrelated acquisitions, do unrelated joint ventures. If it doesn't fit, we don't do it.
  • Discipline is required to find the Hedgehog Concept in the first place, not just to build consistently within it.
  • The most effective investment strategy is a highly undiversified portfolio when you are right. ""Being right"" means getting the Hedgehog Concept.
  • ""If you have Level 5 leaders
  • who get the right people on the bus,
  • if you confront the brutal facts of reality,
  • if you create a climate where the truth is heard,
  • and work within the three circles of the Hedgehog Concept,
  • if you frame all decisions in the context of a crystalline Hedgehog Concept,
  • if you act from understanding, not bravado -
  • if you have a Council with a cyclical management process involving the key strategic thinkers in the business that asks questions, dialogues & debates, provide executive decisions, and performs autopsies and analysis in order to define the strategic focus and stick to the strategic focus
  • if you act from understanding, not bravado
  • if you stop doing the wrong things
  • if you do all these things, then you are likely to be right on the big decisions.""
  • Once you know the right thing to do, will you have the discipline to do the right thing and stop doing the wrong things?
  
  
  • Do --
  • have a disciplined understanding of he strategic focus (economic value, best in world competency, and passion), and
  • a vision of what the firm is able to achieve
  • have both a stop doing list as well as a to do list
  • Don't --
  • jump to disciplined action without going through the first two steps.
  • disciplined action without disciplined people is impossible to sustain.
  • depend upon a disciplined leader at the top
  • launch unrelated businesses
  • make unrelated acquisitions
  • do unrelated joint ventures
  • do it if it does not fit your firm's strategic focus
  • hedge your bets

Source: Collins, 2001. See: jimcollins.com