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Sunday, February 26, 2006
THE HEDGEHOG DIGEST
In this exclusive Orange Net News investigative news series THE Hedgehog Digest, ONN will examine the Jim Collins “Good to Great” framework for both business and the social sector with a focus on how OUSD fits into the model. Is Good to Great a formula to once again making OUSD the premier district in Orange County as it once was in the 1950’s and 1960’s? Or is Good to Great just another slogan on a pen in the education “fad”- industry were “one day you’re in, the next day you’re out”? Will Good to Great be a feasible educational framework, or another distraction that will side-track OUSD administrators from the very real work at hand? Orange Net News’ special series, THE HEDGEHOG DIGEST, will explore slogan to framework of Godley’s attempt of “Taking OUSD from Good to Great”.
PART II: THE GREATEST FRAMEWORK ON EARTH?
Orange Unified School District has bought pens and distributed them to administrators with the slogan “Taking OUSD From Good to Great” and best selling Jim Collins’ book can be found throughout the district. Building principals devote valuable meeting times to Good to Great study sessions. OUSD Superintendent Thomas Godley has embraced the language and framework of Jim Collins’ best selling book for the Orange Unified School District. As Superintendent Godley devotes scarce educational resources to pursue the Collins framework for OUSD, Collins himself writes that it will take 10 years of research to know if the framework is applicable to social sector organizations like OUSD.
In his 320 page book, Good to Great: Why Some Companies Make the Leap…and Others Don’t (Harper-Business, 2001), management guru Jim Collins writes about his premise that “Good is the enemy of great”. In the book he offers a framework he developed after studying how companies accomplished his definition of “great”. For five years Collins’ research laboratory investigated companies’ public records going back 40 years. Beginning with 1435 companies, Collins came up with two groups of 11 companies, one group representing his criteria of good to great, and the other companies that fell short of his criteria.
The Collins investigation was formulated to answer the question: “Can a good company become a great one, and if so, how?” To answer the question Collins had to define great. Based on economic success, Collins defined great as:
1. A history of cumulative stock returns equal to or below the general stock market
2. Followed by a “breakthrough” point
3. Leading to performance with cumulative profit returns at least three times the general market over fifteen years following their breakthrough point
Using this economic performance definition of “great”, Collins and his team developed a framework of variables. Collin’s identified these eleven “elite” good- to- great companies as meeting his criteria: Abbott; Fannie Mae; Kimberly-Clark; Nucor; Pitney-Bowes; Wells Fargo; Circuit City; Gillette; Kroger; Phillip Morris; and Walgreens.
Since the 2001 printing, some of the “Great” have had their problems. It has recently become clear that in the age of Enron-like-accounting-tricks and the collapse of Enron’s veteran accounting firm Arthur Andersen Accounting, even “great” can be faked. This month, a member of the elite Collin’s group Fannie Mae has been racked by an $11 billion dollar improper accounting scandal involving top executives receiving multimillion dollar bonuses that involved the chief financial officer and company controller. Another Collin’s “great”, grocery giant Kroger, has faced economic problems from numerous grocery strikes since the book was published in 2001. To add to Kroger’s economic woes, in December of 2005 a federal grand jury returned an indictment against Kroger’s wholly owned California subsidiary Ralph’s Markets. Collins’ economic criteria gave the “great” title to Phillip Morris, a company that deals in very profitable products that unfortunately kill its customers- tobacco. Even as U.S. tobacco sales decline, Phillip Morris (that realizes over 70% of its profits from tobacco) has expanded its overseas markets especially into little regulated third world counties were advertising to new customers (i.e. children) is much easier than in the U.S. In addition, because of the numerous high profile tobacco lawsuits in the U.S brought and won against big tobacco and the image problem associated with big tobacco in the U.S., Phillip Morris changed its corporate name to shed the baggage of the big bad tobacco company to Altria.
The Good-to-Great Framework
Collins Good-to-Great Framework is divided into three areas: Disciplined People; Disciplined Thoughts; Disciplined Action. The Primary Concepts in each of the three areas are:
• Disciplined People: Level 5 Leadership and First Who…Then What
• Disciplined Thoughts: Confront the Brutal Facts and The Hedgehog Concept
• Disciplined Action: A Culture of Discipline and Technology Acceleration
Collins explains his framework: “every primary concept in the final framework showed up as a change variable in 100% of the good-to-great companies and less than 30% of the comparison companies during the pivotal years”.
In the initial buzz about the Collin’s book as it climbed to best-seller status and quickly became the latest fad-surfing boardroom talk. Soon, social sector leaders looked to it for greatness too. However, because the book’s “greatness” criteria are based on economic performance, its concepts did not transfer neatly to social sector organizations (like school districts). To address this, in 2005 Collins came out with a 35 page monograph to accompany his best seller called “Why Business Thinking is Not the Answer: Good to Great and the Social Sectors” (Collins, 2005). In it Collin’s writes “I do not consider myself to be an expert on social sectors…” but characterizes himself an eager student. While Collin’s writes in the monograph that his good-to-great principles “do indeed apply to the social sectors”, he concedes he lacks hard evidence. He writes that all his work on the social sectors is based on “critical feedback, structured interviews and laboratory work with more than 100 social sector leaders”. Collins writes that research “done right” in applying good-to-great to social sectors for the hard evidence will “require up to a decade to complete”. In the meantime, he is offering the monogram “as a small step”. In the Social Sectors Monogram, Collins synthesized his framework into five issues:
1. Defining “Great” – Calibrating Success without Business Metrics
2. Level 5 Leadership- Getting things done with a defuse power structure
3. First Who- Getting the right people on the bus within Social Sector constraints
4. Hedgehog Concept- rethink the Economic Engine without a profit motive
5. Turing the flywheel- Building momentum by building the brand
As Orange Unified pursues the Collins’ view of greatness through the Good to Great framework, it is not clear if OUSD leadership has distinguished between the business and the social sector frameworks. Apparently, OUSD Superintendent Godley is enough of a believer that he feels OUSD will be the first school district able to apply the theoretical concepts and move from “good to great” even as OUSD cuts student centered programs. Godley is apparently ready to devote scarce educational time, effort, and resources to a theory that even the author writes will take ten years of research to see if it applies to social sector organizations. Will OUSD wait 10 years to see Godley can lead it to greatness?
END of Part 2
TO READ PART ONE Good to Great: Good Slogan or Great Framework CLICK ON: http://greaterorange.blogspot.com/2006/02/hedgehog-digest.html
FOR MORE INFORMATION ON THE FOLLOWING CLICK ON THE BLUE LINK:
Fannie Mae Accounting Scandal: http://news.yahoo.com/s/ap/20060223/ap_on_bi_ge/fannie_mae
Ralphs’ Federal Indictment: http://www.ralphs.com/localpressreleases/Indictment.htm
Kroger profits down since strike: http://www.bizjournals.com/losangeles/stories/2004/06/21/daily12.html
Phillip Morris Name Change: http://www.infact.org/ajph403.html
WATCH FOR PART 3 of
THE HEDGEHOG DIGEST
An original news analysis report from
Orange Net News /O/N/N/