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Collins in his book Good to Great wrote about the principles that would assist companies to improve from being good to being great in performance. The author used existing companies to come up with the selection and defined great performance as the company that demonstrated the growth pattern not only relative to the market, but also relative to its industry.
Analysis of the Five Principles
Level 5 Leadership principle requires executive capabilities of acting with quietness and not inspiring charisma to motivate. However, in today's world where business is more of relational than transactional, a leader of a company ought to be one who is not withdrawn or shy but able to mix and build relationships in order for the company to have a competitive edge. Standard Bank Limited requires a manager to have excellent communication skills, be able to connect with people, build relationships, and maintain them. In so doing, the Bank has been able to produce sound financial performance. The Level 5 leadership involves leaders that are modesty, visionary and public discussion on how an organization is excelling could only inspire employees who get motivated for the public acknowledgement, and the leader earns respect.
The Level 5 leadership aims at grooming successors and injecting a pool of talent into the organization, which is good for the continuity of the company. The boldness of level 5 leaders in retaining performers only even if it means firing a relation or a friend is an added advantage for the company to grow. In relation to this, Standard Bank Malawi believes in performance discussion strategy and the process often times ends with non-performers exiting from the Bank. Charity begins at home, and level five leaders tend to be loving parents, exemplary in their behavior and that has a positive effect on the organization's corporate image.
First Whoâ€¦Then What is a principle that involves having the right staff in the organization who are assigned to the right jobs and are committed to the vision of the organization. The author emphasized in having the right people in the organization since employees who have the zeal to work are easy to manage. However, the idea of not creating a vision beforehand could be tricky at times considering that the vision with room for change and improvements, dictates the type of candidates to recruit who are willing to accomplish the desired results and to alter the vision should need arise. The concept of giving room for everyone in the organization to have a say in decision making through answering questions is helpful as employees own decisions.
Cork Walgreen who was Chief Executive Officer for Walgreens had the courage and genius to employ the right people, positioned them in the right departments, and developed an outstanding successor. The executive team was the custodians of the company strategy through contact and dialogue. The approach made the company to excel and similarly in 2006, Standard Bank Malawi gave employees options to evaluate themselves if their personality requires them to work front office or back office. The exercise was a successful one and it added value to the organization. Six years later in the year 2012, Standard Bank Malawi registered profits that made it to be one of the biggest banks in Malawi in terms of recognized and trusted brand, strong balance sheet, profits, and assets.
Confronting the brutal facts is a principal that involves the company executive making decisions based on realities on the ground. This is quite a challenge in many leaders who prefer to do things the old-fashioned way because they do not prefer to struggle with the challenges that change brings along. The author recorded that such types of executives made the company fail. It is true as in the case of Press Group of Companies that comprised of Peoples Trading Center, Press Hardware, Press Produce, Press Clothing, and Press Bakeries among others that failed to compete on the market with the coming of Game Stores, Shoprite, Spur, and other leading stores. This was because of the introduction of democratic government in 1994 that discouraged monopoly and introduced liberalization of goods. The company executives of Press Group of Companies failed to build malls to accommodate all their products under one roof with plenty parking space, clean environment, Auto Teller Machines, and friendly staff. They did not build a red flag mechanism so that the information gathered could have worked as a tool to implement change. The executives of Press Group of Companies should have been in constant engagement with regional managers to appreciate what was going on in the market around them.
The Hedgehog Concept involves the leader to see what is essential and ignore the issues that matter less in taking the organization to greater heights. In the case of Walgreen that clustered nine stores on every mile, drew more customers and profits increased on each customer visit. The company made headlines by simply taking one simple concept that was straightforward, which the executives felt was a winning shield. They executed it with passion and excellence. The danger could be that if a competitor does likewise the company can experience intense challenges to cope without a back-up strategy. Similarly, Puma company the providers of fuel in Malawi have gas stations all over the country and they adopted the concept of a convenient grocery shop in all of their gas stations. The idea makes one to refuel at a Puma filling station when driving long distances and use their grocery shop. This one simple concept would in no doubt increase the company's profits per customer visit. The hedgehog concept requires the company to prune all that does not fit in the company that may consume human and financial resources of the company. It is therefore of great value if executives of companies could strive to ensure that departments that look flowery but do not make profits are closed down. Executives focus should be towards those areas that answer to the current market demands, appreciate what is driving the current economic engine of the company, and understanding what the company can be best at executing.
The Culture of Discipline is also a principle that gives room for companies to perform outstandingly. Bureaucracy kills entrepreneurial spirit in a company if not well managed and that freedom of responsibility within the framework yields greater results through employees who are motivated to work. It can be quite challenging to discipline employees who lack right behaviors, rather for the company to engage itself in the beginning with self-disciplined employees that are willing to improve themselves within selected arenas and seek continual improvement by the day. Top executives need to have financial discipline and refrain from lavish spending, rewarding themselves with huge bonuses, and having luxurious offices. Rather have a good working relationship with employees and bless them with better pay and incentives that make them feel important. Most top executives of leading tobacco companies in Malawi have a culture like that of Bethlehem Steel Company. They focus on social hierarchy and not necessarily, their customers who are tobacco farmers. Tobacco from farmers bought at a very low price and sold abroad in foreign currency; enrich the Malawi Tobacco companies that end up making huge profits. Currently the World Health Organization is lobbying for the ban of tobacco that has seen the tobacco companies in Malawi having to lay off employees, reduce top management and others merging.
The above five principles are realistic and if followed by an organization, it can improve from being good to great. They are principles that are well known in many organizations but the challenge becomes execution. My favorite principle is the First Whoâ€¦Then What. If companies recruited the right people and placed them in the right places, the work environment could have been conducive and organizational goals easily achieved. The five principles are accomplishable only if top executives could learn to practice humility, patience and have the welfare of staff at heart. They should have the courage to confront the brutal facts; the organization should have an idea on what it is passionate about, best at performing and what drives the economic engine of the company in order to have a competitive edge.
The most likely problems in the five principles outlined are that the modern executives ought to be outgoing and not shy so that in the process one can build relationships that will in turn grow customer base. Another challenge is that as human beings, we tend to favor our relations and friends, and the challenge could be to ensure that there is objectivity in the company.
The Chief Executive Officer of Standard Bank Group, Jacko Maree who has just retired exemplified most of the five principles. Maree joined the bank thirty-two years ago and made incredible contribution to the success of Standard Bank Group. Under his leadership, the bank share price increased from R21 to R118 and the Bank's market capitalization jumped from R30 billion to R190billion. In 1999, Standard Bank Group faced a fierce challenge when Nedcor bid to take over the Bank, and Maree managed the situation by appointing new and younger management team and requested everyone from senior executives to bank clerks to defend Standard Bank Limited against the takeover bid. In 2004, he accepted the challenging post to become the principal architect of the Financial Sector Charter and its vision was to promote a transformed, vibrant, and globally competitive financial sector that materialized.
Another achievement was the successful strategic partnership between Standard Bank Group and the Industrial and Commercial Bank of China that invested R36.7billion into Standard Bank Group, the largest foreign direct investment into South Africa. Maree touched the lives of many staff members and in 2007 to 2009, he was "The most trusted Chief Executive Officer in South Africa", by Ask Africa's annual Trust Barometer study. The Forbes Magazine named him as one of the 20 most powerful people in Africa business in 2012. Maree showed qualities of Level 5 Leadership through grooming successors and injecting a pool of talent. He practiced the principal of First Whoâ€¦Then What when he chose to work with the right people and placed them in the right departments. Maree used the principal of Confront the brutal facts when he acknowledged that the world around the Standard Bank Group was hostile and a takeover bid was likely to take place. He expanded and opened more branches outside South Africa. This concept made the Bank to yield good returns. Maree practiced A Culture of Discipline when he focused on providing quality customer service and growing staff to their full potential.
The five principles by Collins (2001) in his book "Good to Great" would greatly help to improve the leadership style in Women's Aglow ministry where I serve as National Treasurer, and again at my work place as a middle manager. In order to improve from "good" to "great" it will require first to acknowledging that some areas of my leadership style needs improvement and it will be ideal to apply some of the principles outlined in the book. Understand that there are no miracle moments and that change is a process. To be able to recognize that success emerge through arguments, debates, and it is advisable to always pause and reflect before embarking on a project. To instill a culture of self discipline and be able to see what is essential and ignore the rest that will not add value to the organization. Have the competence and humility when delivering results and ensure to have the right people in the right positions. The possible outcomes would be a branch that will be outstanding in terms of profits, and will have a motivated team. The challenges could be to have a buy in of executives on some of the principles that will need application.