When I packed up my Aconex office a year ago, I filled at least a dozen boxes with books. For a young founder, wet behind the ears, reading business books in the early years was a great way to make up for lack of experience. And it’s a habit that has stuck with me, giving me the opportunity to learn from the lessons of others, who had done it before or worked through the challenges we needed to deal with.
Of course, for those hundred or more books that I kept over the years, there were probably just as many that I didn’t hold onto or didn’t even finish. I spent a lot of time finding the books that really spoke to me - to the challenges I was facing as co-founder of a fast-growing business, and to the decisions that would lie ahead. So, from time to time in this blog, I’ll discuss a book that I found particularly valuable and that I think has lessons every business leader can apply.
One of the key business books for me in thinking strategically about the way ahead for Aconex was Good to Great by Jim Collins. The book is quite a classic now. It was published in 2001 and I picked it up a few years later, just as we were starting to expand globally. I’d been familiar with Built to Last, also by Collins, and we had taken on his advice in that book around the importance of setting a company purpose and defining core values. However, I found it hard to relate his examples, mostly taken from the word of large corporates, to the start-up / scaleup world of Aconex.
Then, along came Good to Great. It almost perfectly addressed our stage of development and we adapted many of the concepts into the Aconex strategy. It became something of a business bible for us and made its way into our strategic and operational culture. I always gave a copy to new senior managers when they joined and would not be surprised if many well-thumbed copies are sitting on desks and windowsills of offices around the world today.
Collins identified common characteristics in companies that had made the leap from good to great, across three stages – Disciplined People (1 and 2), Disciplined Thought (3 and 4) and Disciplined Action (5 and 6), all building momentum though the Flywheel Effect (7).
Level 5 Leadership: Leaders who are humble, channelling their ego into the larger goal of building a great company.
First Who, Then What: Getting the right people on the bus, then figuring out where to go. This includes trying people out in different seats on the bus - different positions in the company.
Confront the Brutal Facts: This is the Stockdale paradox — confronting the brutal facts of your current situation, AND at the same time retaining faith that you will prevail in the end, regardless of the difficulties.
The Hedgehog Concept: What are you deeply passionate about? What could you be best in the world at? And what drives your economic engine and makes you money? The intersection of these three overlapping circles is where you should focus your energy and resources.
A Culture of Discipline: Building a culture of self-disciplined people who take disciplined action that is fanatically consistent with the Hedgehog concept’s three circles. There is a duality here, where people adhere to a consistent system but have the freedom to innovate and explore within that framework.
Technology Accelerators: Using carefully selected technologies to accelerate growth, within the three circles of the hedgehog concept.
The Flywheel: The cumulative effect of many small initiatives that build momentum, eventually hitting a breakthrough point.
The model is summarized in the graphic below:
Some of this seems obvious, like hiring the right people and building a culture of discipline. And I found that, while the flywheel is a good analogy, it is hard to know ahead of time exactly what is going to move it the fastest. Overall, though, Collins’ frameworks were extremely helpful in building – and communicating – a company-wide strategy.
The Hedgehog Concept was particularly important at Aconex as we thought about the intersection of our three circles:
Our passion to digitise construction projects,
where we believed we could genuinely become a world leader in Software-as-a-Service project collaboration,
and a scalable economic engine, subscription pricing based on project volume.
We continually revisited our progress against the purpose and vision that we had defined using that Hedgehog Concept.
To help us build a shared leadership culture, we reinforced the principles of Level 5 Leadership, especially humility and lack of ego, across our management layer. We were building on a strong base – I think that the people we hired embodied this style of leadership and we took every opportunity to nurture it. At our executive offsites, for example, we regularly reviewed our thinking and behaviours through the lens of Level 5 Leadership.
We also worked on our Culture of Discipline. We progressively improved our processes to manage the company through rapid growth, while providing teams with the freedom to innovate in how they achieved their goals.
And we embraced Technology Accelerators. Aside from continually building out the Aconex platform for our customers, we invested in SaaS tools to automate our internal and customer-facing processes – particularly in product development, marketing, sales and customer service. These technology accelerators helped us scale the company to support over fifty offices around the world from our Melbourne base and regional hubs.
Looking back, the frameworks from Good to Great helped inform and accelerate our strategic thinking, providing a common language to discuss how we could improve performance and build for the future. We applied the approaches learned from other successful companies to our own operational challenges, which helped us to address strategic opportunities in the market and accelerate our growth.
Aconex cofounder Rob rightly pointed out (more than once) that my thinking had been swayed by something I had just read in that weekend’s business book. It probably drove him nuts. Yes, that recency bias was something that I learned I needed to adjust for (and you can see more on decision-making biases here). But, whether as a young founder or as the (youngish) CEO of a fast-growing scaleup, reading business books pushed my strategic thinking and helped me develop as a manager and people leader.