W h y s o m e c o m p a n I e s m a k e t h e
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| C IR CUIT C I TY Value of $1 Invested, Number of Found December 31, 1972 - December 31, 1992 $31 I 64 $300 $200 $1 00 General Market $8 35 0 1972 1982 1992 For example, Ken Iverson and Sam began turning the Nucor flywheel in 1965. For ten years, no one paid any attention, certainly not the financial press or the other steel companies. If you had asked executives at Bethlehem Steel or US. Steel about "The Nucor Threat" in 1970, they would have laughed, if they even recognized the company name at all (which is doubtful. By 1975, the year of its transition point on the stock chart, Nucor had already built its third mini-mill, long established its unique culture of productivity, and was well on its way to becoming the most profitable steel company in Yet the first major article in Business Week did not appear until 1978, thirteen years after the start of the transition, and not in Fortune until sixteen years out. From 1965 through 1975, we found eleven articles on Nucor, none of them significant. Then from 1976 through 1995, we collected six articles on Nucor, forty of them being major profiles or nationally prominent features. Now, you might bethinking, "But we should expect that. Of course these companies would get more coverage after they become wildly successful. What's so important about that" 168 Collins Picture an egg just sitting there. No one pays it much attention until, one day, the egg cracks open and out jumps a chicken All the major magazines and newspapers jump on the event, writing feature stories-"The Transformation of Egg to Chicken" "The Remarkable Revolution of the Egg" "Stunning Turnaround at Egg!"-as if the egg had undergone some overnight metamorphosis, radically altering itself into a chicken. But what does it look like from the chicken's point of view It's a completely different story. While the world ignored this dormant-looking egg, the chicken was evolving, growing, developing, incubating. From the chicken's point of view, cracking the egg is simply one more step in along chain of steps leading up to that momenta big step, to be sure, but hardly the radical, single-step transformation it looks like to those watching from outside the egg. Its a silly analogy, granted. But I'm using it to highlight a very important finding from our research. We kept thinking that we'd find "the one big thing" the miracle moment that defined breakthrough. We even pushed for it in our interviews. But the good-to-great executives simply could not pinpoint a single key event or moment in time that exemplified the transition. Frequently, they chafed against the whole idea of allocating points and prioritizing factors. In every good-to-great company, at least one of the interviewees gave an unprompted admonishment, saying something along the lines of, "Look, you can't dissect this thing into a series of nice little boxes and factors, or identify the moment of 'Aha' or the 'one big thing' It was a whole bunch of interlocking pieces that built one upon another" Even in the most dramatic casein our study-Kimberl y -Clark selling the mills-the executives described an organic, cumulative process. "Darwin did not change the direction of the company overnight" said one Kimberly-Clark executive. "He evolved it over "The transition wasn't like night and day" said another. "It was gradual, and I don't think G o o d to Great I it was entirely clear to everybody until a few years into it' Of course, selling the mills was a gigantic push on the flywheel, but it was only one push. After selling the mills, the full transformation into the number one paper- based consumer products company required thousands of additional pushes on the flywheel, big and small, accumulated one on top of another. It took years to gain enough momentum for the press to openly herald Kimberly-Clark's shift from good to great. Forbes wrote, "When Kimberly-Clark decided to go head to head against . this magazine predicted disaster. What a dumb idea. As it turns out, it wasn't a dumb idea. It was a smart The amount of time between the two Forbes articles Twenty-one years. While working on the project, we made a habit of asking executives who visited our research laboratory what they would want to know from the research. One CEO asked, "What did they call what they were doing Did they have a name for it How did they talk about it at the time" It's a great question, and we went back to look. The astounding answer They didn't call it anything. Then it began to dawn onus There was no miracle moment. (Seethe table on page 170.) Although it may have looked like a single-stroke breakthrough to those peering in from the outside, it was anything but that to people experiencing the transformation from within. Rather, it was a quiet, deliberate process of figuring out what needed to be done to create the best future results and then simply taking those steps, one after the other, turn by turn of the flywheel. After pushing on that flywheel in a consistent direction over an extended period of time, inevitably hit a point of breakthrough. |