Just over a year ago now Jim Collins shared his thoughts with me and my fellow Chairs in San Diego. Jim brought out some ideas that I had let drift in many years since I read his book Good to Great. As we confront potentially a defining moment in many business’ futures with the instability and uncertainty caused by the COVID-19 outbreak some of Jim’s messages are particularly relevant.
How does YOUR flywheel turn
He described a visit he made to a relatively small business in 2001 called Amazon. They had been significantly affected by the dot.com bust. Jim emphasized to the team that they had a choice - respond to the downturn as a crisis or treat it as a critical element in their strategy, which became the famous Amazon flywheel.
During January I asked all my members (some 40 companies) how Their flywheel turned. In early February, with the help of their group peers, all my members had a crack at defining this. From this they defined their priorities for the year. At the time, the COVID-19 issue was seen to be primarily a Chinese supply chain issue. Since then short term priorities have now taken over for many of my members. But they all know how they will respond and all can share with their staff how they will come through this. We meet monthly and share our responses in real time.
Brutal Facts and the Stockdale Paradox
There appears to be a paradox - focusing on a vision while at the same time the “Brutal Facts” of a crisis is brewing. Leaders who can communicate both vision while facing the brutal facts are adopting what Jim Collins calls the “Stockdale Paradox”. This is named after Admiral Stockdale who survived 7 years imprisonment and torture during the Vietnam war. An extract below from Jim’s keynote speech at the Drucker Centennial event brings this home.
It doesn’t take long to set out your strategic vision and for most of us we still are building a state of readiness for some of the shocks a potential pandemic can throw at us. While the initial focus has been on employee welfare and re-assurance, shortly followed by supply chain and credit issues and short to medium term recalibration of sales forecasts, the real survivors will be looking at the opportunities, the shifts in prospects as attitudes change.
While the rest of the world is going crazy, the best business leaders are calmly but urgently facing the facts, implementing actions to ensure they come through uncertainty. But they are clearly focused on the opportunities in the medium and long term.
