Jim Collins, author of the best-selling business books, Built to Last and Good to Great: Why Some Companies Make the Leap... and Others Don't, has built his reputation on detailed data-driven analyses of what makes great companies stand out in the competitive field of business. In 2003, he turned his attention toward excellence in the social sectors. While many of the essential elements of a successful business apply to nonprofit organizations, Collins found an extra layer of complexity to the social sectors, including in the field of education, that requires unique responses. As a result, he published a monograph titled Good to Great and the Social Sectors in 2005, with the provocative subhead, "Why Business Thinking Is Not the Answer."
Collins spoke at the 2007 NAIS Annual Conference in Denver — delivering a keynote address on the implications of "Good to Great" principles in education. Afterwards, he joined a panel discussion of independent school leaders to field questions and consider the challenges facing independent schools as they strive to achieve their stated missions. We caught up with Collins after the conference to ask him about the experience — and to ask a few follow-up questions of our own.
IS: In Good to Great and the Social Sectors, you say that you're not an expert in the social sectors, but that you are very interested in applying "Good to Great" principles to social sector organizations to see what these principles tell us about highly effective nonprofits. What, if anything, surprised you in this process?
Collins: Well, actually a lot did. I would say that the first thing that surprised me is how much more complex the world of social sectors is than the business sector, and how difficult it was to wrap my brain around those differences. The social sectors monograph is only 36 pages long, or close to it, and it took two years to write. Two years for 36 pages is a long time, even for a writer as slow as I am. The slow process of writing this monograph reflects the fact that we really had to start from scratch and carefully consider the social sectors through the perspectives of its leaders — in light of the challenges they face daily.
IS: Although the primary focus of Good to Great, the original book, is on the business sector, you note that about 30–50 percent of your readers are actually in the nonprofit world. Does this say something about the leadership needs within social sector institutions?
Collins: Yes. The story behind the writing of the monograph on the social sector is interesting. In the months after the publication of the book, I received a lot of correspondence from people in the social sectors — police chiefs, folks in both public and private schools (precollegiate and higher education), people in different branches of the military, health care administrators, church administrators, athletic coaches, and so on. It was coming from all directions, which really got our attention. We realized that the book was reaching far outside the business community. This was our hope, of course, but we really didn't dare to expect as much attention as we actually received.
As we began to look at our correspondence data, it was somewhere between a third to a half of our readers. It was gratifying to discover that so many people were reading the book outside the business community. But it was also a challenge, because these people were asking really interesting questions. They were curious how the Three Circles concept — that the best results come when you focus relentlessly on the intersection of three circles, what you are passionate about, what you can be best at, and what best drives your economic engine — applied to their field, how the leadership approaches might be different in a nonprofit organization, and whether or not the idea of getting the right people on the bus differed for nonprofits. There was just a whole range of questions that kept repeating themselves.
Around this time, a friend of mine, Tom Tierney, who runs Bridgespan, a firm that helps improve leadership in nonprofits, said to me, "If you only had enough time to do one more piece of writing in your life, what would you do?" Before I had a chance to answer, he answered for me, "I tell you what I think you should do: a piece on the application of Good to Great to the nonprofit sector." That was the catalytic moment. Given the correspondence and questions from the social sectors, I realized that Tom was right. Of course, I hope to have many years of writing in front of me. But, at the time, it was clear that, if I only had two years, then this is the piece I should write. I had already started interacting with the social sectors; and I very quickly became passionate about how the Good to Great ideas transfer to the social sectors and about the challenges that social sector leaders face. As I write in the monograph, if we only have great businesses, we'll only have a prosperous society, but not a great one. To be a great nation, we need both the business community and the social sectors functioning together.
IS: It seems to me that there is a deep hunger for guidance in the social sector. Or maybe it's that there's a strong will and desire in the social sector to do well. Are you seeing this?
JC: It's an interesting question. I find that the hunger for grounded answers — for empirically driven, long-lasting perspective — is pretty strong in both the nonprofit and business communities. People in both arenas are looking for a substantive set of ideas that they can trust. But what is different in the social sectors is that the output variables are different. Business people, of course, are very interested in improving return on investment capital, cumulative returns, increasing profitability over time. They want to make the bottom-line numbers better. What is different in the social sectors is the desired outcome results. To say, for instance, that your "stock return," your outcome results, is that kids are going to read proficiently by the end of third grade, that's a very different kind of return than, say, the value a dollar invested relative to the general stock market. And so people who go into the social sectors, not surprisingly, do have a tremendous sense of mission that goes far beyond economics. You find that some of the sense of mission in business, but it's more pervasive in the social sectors.
IS: Is this why, in your monograph on the social sectors, you say that you "suspect we will find more true leadership in the social sectors than in the business sector"?
JC: Actually, it's not so much the passion as it is difference in the leadership structures in both communities. When you study the business sector, you are really looking at a narrow slice of the world. There is a broad spectrum of industries — semiconductors are different from airlines, which are different from consumer goods, which are different from cellular phones, etc. — and all these industries have different sets of concerns. Nonetheless, all of them share certain commonalities by the very fact that they are profit-making enterprises. One of those commonalities is a rather concentrated power structure. This is very different from the diffuse power realities that social sector leaders face. As Sam Walton built WalMart, for instance, he had something like 98 of the 100 points of power in the company. He could do with WalMart what he wanted. If he wanted it to turn right, it would turn right. If he wanted it to turn left, it would turn left. If he wanted to move WalMart into a different part of the country, he could easily take it there. He really didn't need anyone else's permission.
Compared to social sector leaders, the business leaders have the advantage — and sometimes the disadvantage — of enough concentrated power and the ability to use that power to make things happen as they see fit. But this is not always a matter of leading. If I put a gun to your head, I can get you to do lots of things, but that doesn't mean I've led you anywhere. I've just simply used power to get something done. In the social sectors, the leadership structure is more complex and the power more diffuse. There are also significant sources of negative power. In other words, no single person has the power by himself or herself to get everything done, but there are a lot of people who have enough negative power to stop things from happening...
IS: Such as between college presidents and their faculty.
Collins: A classic example. A university dean rarely has enough power to simply say, "We're going to turn right," because members of the faculty have enough power to stop this from happening if they want.
So you begin to look at the power structure of nonprofits and you realize that you have to get things done without the sheer concentrated power to make them happen. James McGregor Burns says that real leadership only exists if people have the freedom to not follow. If people follow what they have the freedom to not follow, then you've led. So what that means in the social sectors is that you have to get things done with real leadership skills because you don't have concentrated power to rely upon. And you have to develop the capability to meet a range of different forces — to bring them together, to organize them, often in very complicated ways — in order to move the institution forward. That's why, in the monograph, we write about the difference between the Executive Level 5 leader, which you find in business, and the Legislative Level 5 leader, which you find in the social sectors.
We are starting to see the concentrated power of executives decline. So what you have is the need for a more legislative skill-set permeating over from the social sectors to the business sector.
IS: When we read about "fixing" the problems in precollegiate education today, we often find the focus is on the views of people outside the field of education, especially from leaders in the business community. The idea that these business and economic leaders — based on their business acumen and success, I suppose — have a lot to offer the field of education, especially in light of what you just said, seems flawed. I know that I'm being a little defensive here, but I think we might want to turn the tables once in a while and ask, "What can the business community learn from great schools?"
Collins: Well, just to look at the business sector for all institutional challenges doesn't make sense. There are a lot of mediocre businesses. So to say that everything in the business community is good… well, we know that's not true. We know that there's a real difference between the great companies and the good ones and the mediocre ones. The real key is to take the things that separate great companies from good companies, not to look at the average practices of an organization simply because it is in business rather than the social sectors.
But I'd also say that to focus on the tension, as you describe it, between the two sectors is not helpful. I'd say — and I think this is a really important point for trustees who come from the business world — that it's not helpful to believe that simply imposing business thinking on the social sectors will solve any social sectors problem. But it's also not helpful for social sectors people to resist the input of their business colleagues — some of whom can be quite valuable. What I really hope the monograph does is that it gets people away from thinking of it as an antagonistic relationship — you know, the feeling that the business sector is imposing its will and ideas on the social sectors and that the social sectors are stubbornly resisting everything that works in the business world. The critical question is not business versus social, but great versus good. And if I can get all trustees coming from the business world and all social sector leaders who are interacting with their business colleagues to jettison the us/them tension, I'd feel successful. Both groups should say, "We all agree that we need a culture of discipline to create a great institution, and that we need to embrace the disciplines that separate great from good." That kind of bridge thinking can be powerful. It turns out that this culture of discipline is not a business or social idea. You can find a culture of discipline in the Cleveland Orchestra. You can find a culture of discipline in the U.S. Marine Corps. You can find a culture of discipline in the truly great schools. You can find a culture of discipline in extraordinarily great companies. And you can find a lack of discipline at all the mediocre enterprises, regardless of their sector. There are certain disciplines that apply no matter what we're trying to build.
IS: In independent schools, there is often tension between what a school thinks it should do and what it can afford to do — everything from how much it should invest in new technologies or in new science centers or art centers to how much it should increase teachers salaries, etc. At the same time, there is the parallel question of what impact all this growth will have on tuition rates and the ability of a school to offer financial aid. In other words, it's a constant balancing act. So, is the wise, disciplined leader trying to keep tuition down and focus on slow growth that doesn't raise the anxiety level of a school community, or does the disciplined leader stay focused on the collective vision of what a school can be and push hard to get there?
Collins: You have to start with the question of what defines any great institution. A great institution — it doesn't matter if it's a great company, a great hospital, a great sports team, or a great school — has to achieve three basic things. First, it has to have superior results relative to its mission. If you're talking about a financial institution, you have to have superior return on investment capital. In a school, it would be the achievement of stated educational goals. Either way, if you don't deliver exceptional results, that's like saying you're a great sports team when you're not winning games.
Second, you have to have a distinct impact on the world. That means you have to be able to answer the following question: "If we disappear tomorrow, would we leave a hole that would not be easily filled by any other institution?" If the answer is, "No," then you're not yet great.
Third, you have to be able to demonstrate that you have the ability to do this not just for a short burst of time, but over the long haul. Ultimately, you must be able to demonstrate that you can have multiple generations of governance and leadership that can sustain greatness. Once you are able to demonstrate superior results and distinctive impact for a long period of time — independent of who happens to be the head of school or on the board of trustees — then you've really made it, then greatness is truly institutional.
But, of course, as you were alluding to with your question, we have to ask, "What do we really mean by great results, and how do we know we are doing better?" The critical question is always about positive trajectory: "How do we get better… and better… and better again?" And even if we become the absolute best at something, the question is still going to be, "How are we going to do better?" It's a constant act of wrestling with the question of what we really mean by greatness. All the other stuff is just input designed to achieve the desired outcome. Budget is input. Money is input. New buildings are input. Teacher salaries are input. If you start to think in terms of, say, how you increase the endowment or reduce the budget so that the school stays in the black for X number of years… no, no, no. That's an input. You have to be very clear about what are the outputs you want to achieve.
IS: Maybe I'm thinking that it's a lot easier for schools that have reached a level of success over the years to build upon that success than it is for young schools to reach that point of sustainable success.
Collins: No doubt, it's a challenge. But probably the thing that most stands out in our research — the thing that separates great from good — is the fact that those who create something exceptional simply do not permit their circumstances to be excuses for why they can't achieve greatness. This came through in spades in a study of public schools that work with the poor Latino kids in Arizona. The researchers at the Center for the Future of Arizona found schools that delivered beat-the-odds results for poor Latino kids in public schools, in contrast to schools that did not deliver beat-the-odd results for poor Latino kids in public schools. (Further information on the "Beat the Odds" study can be found at http://www.arizonafuture.org/.) The interesting thing is that the beat-the-odds schools and the contrast schools had the same circumstances. They all had limited budgets. They all had too many kids. They all had the same language barrier problems. They all had issues with parental involvement. They all had issues with school boards. You go right down the list of problems, they all had them. And, yet, one set of schools delivered better results than the other schools in terms of kids reading by the end of third grade and doing well in the appropriate level of math by the end of eighth grade.
It's easy to make circumstances the excuse. Of course, if you had larger budgets, or you had more resources, you might make that upward curve go even faster. But in trying to understand the fundamental differences between those that do well and those that don't, it's really very hard to argue that the answer lies in the circumstances. Obviously, some independent schools have better circumstances than others — depending on history, location, and the population they serve. But, in all cases, they need to go back to their definitions of desired results and ask, "Given the circumstances we face, how are we going to improve?"
IS: I'm sorry to ask, but I have to. What is so great about great? Why can't a school just be "good" or perhaps "very good"? Why should it push beyond that toward greatness?
Collins: Everything that we've worked at is predicated on a giant "If–Then" clause. If you want to be great, then what do you need to do? I don't presume that you have to accept the premise. You certainly can choose to say, "We don't want to do that." But I tend to see organizations that accept the "If–Then" clause wanting to be the best they can be. I also don't see any evidence that building something great is any harder than building something that is not great. To the contrary, I see a lot of evidence that suggests it's not harder. So, if it's not harder and it's more fun, and the results are better and more satisfying, then why wouldn't you do it?
IS: Imagine you are a trustee at a good Colorado independent school. You have a good head of school. You have a good teaching staff. You have decent facilities. The families you serve are, by and large, happy with the education you offer. But they have brought you in because they want to get to the next level. What is your advice to them? How can the school get its flywheel spinning faster?
Collins: First, I'd ask everyone to look at the trend lines — at how we are actually doing on the variables that matter. Different schools will have different answers. But the first thing I would look at is how the students are performing in the areas we deem important. There's nothing more powerful than getting everyone to confront the facts about areas where we're not doing well, and, of course, about where we are doing well. Moving from Good to Great means to improve in the areas that matter. And as you begin to experience improvement, the momentum in the flywheel increases, and the excitement over this can be truly infectious. Where we can see the numbers improve, when the indicators show improvement, those are the clicks on the flywheel. The key is to experience what greatness looks and feels like, because that becomes self-reinforcing. And you can see the momentum build and build and build and build. A great example is Juli Peach, a principal at a school for poor Latino students in Arizona, who started the improvement process at her school by getting her teachers engaged in what needed to be done to improve the academic culture for these kids. She sat the teachers down and said, "Let's look at the data." From the data, they could see exactly how they were doing. When they started to work on improving the data, she would show them the results — and as the results started to improve, the teachers became swept up in the actual, visible outcomes. That's your flywheel.
The other important question for any institution to ask is, "Do we have the right people in all the key positions?" And this seems true for independent schools. You need to identify the key positions, and make sure you have the right people in them. Until you can say, "Yes, we have the right people in the key positions," there is really no higher priority. You can raise all the money you want, you can raise tuition all you want, you can have all the nice buildings you want, you can have all the great books you want, but all of that is secondary by a factor of a hundred, roughly, to the question, "Do we have the right people?" Once you have the right people, then you can begin to build on all the other things.
So, that's where I'd start, by studying the data and trend lines to see where we're doing well and where we need to improve. Second, I'd want to make sure we had the right people in the right positions to get us where we want to go. Once you have that, it's almost magical how things start to happen.
IS: I want to go back to the start of Good to Great: Why Some Companies Make the Leap and Others Don't.... In the first chapter, you use an epigram from Beryl Markham's West with the Night: "That's what makes death so hard — unsatisfied curiosity." I'm curious. Why would you choose this quote on death and curiosity to start a conversation on greatness?
Collins: First, I am increasingly convinced that the secret, not-often-discussed ingredient in exceptional leadership is curiosity. I had a conversation with one of the most successful chief executives of recent years who had just retired. I asked him, "Had it not been for the kind of mandatory retirement age of 65 in a Fortune 500 company, how long do you think you would have stayed in your position?" And he said, "As long as I remained curious."
I used to think of curiosity as my own particular vice and addiction, but I'm now beginning to realize that it is a central aspect of good leadership. This wasn't clear to me when I first chose the Markham quote, but it came clear to me later.
When we did the research for the book, Good to Great, we did it in my old first grade classroom, a red brick building in Boulder, Colorado. We had all of our research team meetings in my first grade classroom, with my first grade report card tacked on the wall. I guess it's symbolic in a way, since first grade is the time when you start to merge thematic learning with curiosity. To some degree, we all want to remain a first-grader — or at least when it comes to curiosity. I went to high school and college and graduate school and all that, but I try to retain that unbridled, first grade curiosity. In the end, Markham is right. I think that is what's so hard about death — unsatisfied curiosity. For a hundred of years of life, if we can get that long, we can only scratch the surface of learning. Fifty years from now — if I have my grandmother's genes for longevity — I'll look for the hospice person in my room and I'll ask him or her how some apparatus works? I want my last words in life to be a question, not an answer.
IS: It sounds as if unbridled curiosity is what drives your research.
Collins: Yes. If you stay curious, you'll never run out of energy. Of course, I'm motivated by other things. I'm motivated by impact as well — the desire to have a positive impact on the world. But even if you have a positive impact on the world, your satisfaction is only momentarily abated — and then you start to get curious again and start the process all over again.
When it comes to education, my feeling is that if you can have every single kid coming out of school with his or her curiosity intact, you've succeeded on a deeply important level.
IS: You mention that your experiences at the NAIS conference in Denver were insightful and engaging. Can you tell me what stood out about the experience — what insights you now have into the independent school community?
Collins: Yes. One is the increasing complexity of the work of the headmaster. It has always been a difficult role, but it strikes me that the demands are increasingly difficult and complex. The job is more like that of a university president. The challenges are broad — everything from fund-raising to faculty demands. Related to that is the tension between the way that parents generally define success in education and the way schools define success. To get back to the question of what do we really mean by greatness in schools. In the end, there's a fundamental tension here. Should parents be viewed as customers who drive how a school defines great results, or should the school basically say to parents, "This is how we define results — and you can choose to send your children here or not"? That fundamental tension is very interesting. But, I think, if schools managed to get all their students into the colleges they want, but the kids were not relentlessly curious, then I would say the school failed. Both groups, of course, think in terms of return on investment, but the question is how you bring those two views together. It creates a really interesting dynamic, and one that is very difficult to manage. The last thing I would say is that it was a real privilege to have a chance to interact with, and to have a chance to contribute ideas to, the independent school world. I just think the work that educators do is so vital. Whether it be in public or independent schools, the goal is still the same — to wire the brains of our young people in the best possible way, and that's a really, really hard thing to do.