Jim Collins, author of two landmark management books, Built to Last: Successful Habits of Visionary Companies (HarperCollins, 1994) and Good to Great: Why Some Companies Make the Leap . . . and Others Don't (HarperCollins, 2001), doesn't belong to the arm-waving school of management advice. His skill lies in performing powerful research that identifies the leaders, strategies and processes that make great and sustainable companies. Leaders who cannot sustain success tend to "sell the future to compensate for lack of results," he says.
Collins, a former McKinsey & Co. researcher, now runs a management lab in his hometown of Boulder, Colo., and says that technology matters to great companiesbut only after they've got all the other stuff working right. "Technology is an accelerator of mediocrity and decline as powerfully as it is an accelerator of greatness, but it's never the cause of either," he told Executive Editor Marcia Stepanek in a recent interview.
CIO INSIGHT: All of your work during the past 15 years has focused on one simple dichotomythe difference between good and great companies. How do great companies use technology differently?
COLLINS: When we were working on the research for Built to Last, we found that technology pioneers tended, over time, to become the good companiesbut not the great ones. In other words, there was an inverse correlation between early technological leadership and becoming an enduringly great company. Take General Electric Co. and Westinghouse Electric Corp. Westinghouse had the early technological lead and ended up with the superior technology. Yet it was GE that became the great company. In the creation of the Internet, the technology pioneer was not America Online Inc. AOL was a laggard. The early pioneers were CompuServe Interactive Services Inc. and Prodigy Inc.and where are they today?
In the Good to Great study, similar results surfaced. Consider Nucor Corp., a steel mini-mill. The conventional view is that Nucor pioneered mini-mill technology and used that as a torpedo to blow Bethlehem Steel Corp. and the others out of the water. But when we asked Ken Iverson of Nucor to name the top five factors that enabled Nucor to go from good to great, where do you think he put technology? Well, it wasn't first, it wasn't third, it wasn't fourth, and it wasn't even fifth. In fact, more than 80 percent of executives we interviewed for Good to Great didn't even mention technology in the top five factors.
The application of technology is neither the cause of greatness nor the cause of decline. Technology is an accelerator of greatness already in place, never the cause of it. Technology, as in the case of Bethlehem Steel, is an accelerator of mediocrity and decline, never the cause of it. What our data taught us is that technology cannot, does not, will not make a company great. But technology is necessary once you are already great to accelerate that greatness to another level.