A CLIMATE WHERE THE TRUTH IS HEARD

74 Collins answer, surprisingly, is, "No" Not because vision is unimportant, but because expending energy trying to motivate people is largely a waste of time. One of the dominant themes that runs throughout this book is that if you successfully implement its findings, you will not need to spend time and energy "motivating' people. If you have the right people on the bus, they will be self-motivated. The real question then becomes How do you manage in such away as not to demotivate people And one of the single most demotivating actions you can take is to holdout false hopes, soon to be swept away by events. How do you create a climate where the truth is heard We offer four basic practices
1. Lead with questions, not answers. In 1973, one year after he assumed CEO responsibility from his father, Alan Wurtzel's company stood at the brink of bankruptcy, dangerously close to violation of its loan agreements. At the time, the company then named Wards, not to be confused with Montgomery Ward) was a hodgepodge of appliance and hi-fi stores with no unifying concept. Over the next ten years, Wurtzel and his team not only turned the company around, but also created the Circuit City concept and laid the foundations fora stunning record of results, beating the market twenty- two times from its transition date into January
1,
2000. When Alan Wurtzel started the long traverse from near bankruptcy to these stellar results, he began with a remarkable answer to the question of whereto take the company I don't know. Unlike leaders such as Roy Ash of Addressograph, Wurtzel resisted the urge to walk in with "the answer" Instead, once he put the right people on the bus, he began not with answers, but with questions. "Alan was areal spark" said aboard member. "He had an ability to ask questions that were just

Good to Great
75 marvelous. We had some wonderful debates in the boardroom. It was never just a dog and pony show, where you would just listen and then go to Indeed, Wurtzel stands as one of the few CEOs in a large corporation who put more questions to his board members than they put to him. He used the same approach with his executive team, constantly pushing and probing and prodding with questions. Each step along the way, Wurtzel would keep asking questions until he had a clear picture of reality and its implications. "They used to call me the prosecutor, because I would home in on a question" said Wurtzel. "You know, like a bulldog, I wouldn't let go until I understood. Why, why, why" Like Wurtzel, leaders in each of the good-to-great transitions operated with a somewhat Socratic style. Furthermore, they used questions for one and only one reason to gain understanding. They didn't use questions as a form of manipulation ("Don't you agree with me on that
.") or as away to blame or put down others (Why did you mess this up
."). When we asked the executives about their management team meetings during the transition era, they said that they spent much of the time "just trying to understand" The good-to-great leaders made particularly good use of informal meetings where they'd meet with groups of managers and employees with no script, agenda, or set of action items to discuss. Instead, they would start with questions like "So, what's on your mind" "Can you tell me about that" "Can you help me understand" "What should we be worried about" These non-agenda meetings became a forum where current realities tended to bubble to the surface.
2. Engage in dialogue and debate, not coercion. In 1965, you could hardly find a company more awful than Nucor. It had only one division that made money. Everything else drained cash. It had no culture to be proud of. It had no consistent direction. It was

76
Collins on the verge of bankruptcy. At the time, Nucor was officially known as the Nuclear Corporation of America, reflecting its orientation to nuclear energy products, including the Scintillation Probe (yes, they really named it that, used for radiation measurement. It had acquired a series of unrelated businesses in such arenas as semiconductor supplies, rare earth materials, electrostatic office copiers, and roof joists. At the start of its transformation in 1965, Nucor did not manufacture one ounce of steel. Nor did it make a penny of profit. Thirty years later,
Nucor stood as the fourth-largest steelmaker in the and by 1999 made greater annual profits than any other American steel How did Nucor transition from the utterly awful Nuclear Corporation of America into perhaps the best steel company in America First,
Nucor benefited from the emergence of a Level
5 leader, Ken Iverson, promoted to CEO from general manager of the joist division. Second,
Iverson got the right people on the bus, building a remarkable team of people like Sam Siegel (described by one of his colleagues as "the best money manager in the world, a magician) and David Aycock, an operations And then what Like Alan Wurtzel, Iverson dreamed of building a great company, but refused to begin with "the answer" for how to get there. Instead, he played the role of Socratic moderator in a series of raging debates. "We established an ongoing series of general manager meetings, and my role was more as a mediator" commented Iverson. "They were chaos. We would stay therefor hours, ironing out the issues, until we came to something.
. At times, the meetings would get so violent that people almost went across the table at each other.
. . People yelled. They waved their arms around and pounded on tables. Faces would get red and veins bulged
Iverson's assistant tells of a scene repeated over the years, wherein colleagues would march into Iverson's office and yell and scream at each other, but then emerge with a Argue and debate, then sell the nuclear business argue and debate, then focus on steel joists argue and debate, then begin to manufacture their own steel argue and debate, then invest in their own mini-mill; argue and debate, then build a second mini-mill, and so forth. Nearly all the
Nucor executives we spoke with described a climate of debate, wherein the company's strategy "evolved through many agonizing arguments and

Good to Great
77 3. Conduct autopsies, without blame. In 1978, Philip Morris acquired the Seven-Up Company, only to sell it eight years later at a The financial loss was relatively small compared to Philip Morris's total assets, but it was a highly visible black eye that consumed thousands of hours of precious management time. In our interviews with the Philip Morris executives, we were struck by how they all brought up the debacle on their own and discussed it openly. Instead of hiding their big, ugly mistake, they seemed to feel an almost therapeutic need to talk about it. In his book, I'm a Lucky Guy, Joe Cullman dedicates five pages to dissecting the UP disaster. He doesn't hold back the embarrassing truth about how flawed the decision was. It is a five-page clinical analysis of the mistake, its implications, and its lessons. Hundreds, if not thousands, of people hours had been spent in autopsies of the UP case. Yet, as much as they talked about this conspicuous failure, no one pointed fingers to single out blame. There is only one exception to this pattern Joe Cullman, standing in front of the mirror, pointing the finger right at himself. "It became apparent that this was another Joe Cullman plan that didn't work" he He goes even further, implying that if he'd only listened better to the people who challenged his idea at the time, the disaster might have been averted. He goes out of his way to give credit to those who were right in retrospect, naming those specific individuals who were more prescient than himself. In an era when leaders go to great lengths to preserve the image of their own track record-stepping forth to claim credit about how they were visionary when their colleagues were not, but finding others to blame when their decisions go awry-it is quite refreshing to come

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